1. Too many companies still use spreadsheets to keep
track of their sales compensation.In this book,you can
find out why you need more than a spreadsheet to
compensate your sales force properly.A dedicated sales
compensation application can drive the right behavior
among your sales representatives,resulting in increased
performance and profitability.
This guide walks you through the business and technical
aspects of evaluating various sales compensation
management solutions and transitioning your company’s
plan to take full advantage of the latest technologies
for today’s mobile sales force.
ISBN: 0-470-04598-1
Not resaleable
Mark L.Chambers
with ChristopherW.Cabrera
Find out how to
incent right and
sell more!
A Reference
for the
Rest of Us!®
@
ߜ Findlistingsofallourbooks
ߜ Choosefrommany
differentsubjectcategories
ߜ SignupforeTipsat
etips.dummies.com
Saygoodbyetospreadsheets—
start managing your sales compensation plan
in real time!
Xactly™
Sales Compensation
Praise for Xactly Sales Compensation
For Dummies
“Sales management needs to be informed buyers of advanced
automationtoolstosuccessfullymanagesalescompensationplans.
‘Xactly Sales Compensation For Dummies’ contributes to this
knowledge.”
—DavidJ.Cichelli,authorof“CompensatingtheSalesForce”
and senior vice president of The Alexander Group,
a leading sales consulting firm
FREE eTips at dummies.com®
Improve your spreadsheet-based
compensation plans
with an online solution
Improve your plan with
SPIFs,bonuses,and
rules-basedautomation
Provide real-time
reports to your sales
force
Use the Web —
securely! — to deliver
sales compensation
infoanywhere,anytime
Makeyourcompensationplan
astrategicweapon!
Compliments of
2. About Xactly™
Corporation
It’s a company’s mission and personnel that deliver success,and Xactly
Corporation,the leading on-demand sales compensation management
company,has both a clear mission and the best talent on board!
Xactly has a world-class management team. For example, Xactly’s
founder, president, and CEO, Christopher W. Cabrera , has almost
two decades of senior management experience. Previously senior
vice president of operations for Callidus Software,a leading provider
of enterprise incentive compensation management systems,he was
responsible for worldwide sales and marketing strategies that
contributed to the company’s growth of annual revenues from zero
to greater than $75 million.You can understand why Chris can predict
the sales incentive challenges of companies both large and small.
At Xactly, the motto is a simple one: “Incent right. Sell more.™
”
Motivating your sales force with a superior compensation plan is
the driving force behind the design of Xactly Incent™
. And it’s not
just the software,but the support offered by Xactly throughout your
company’s implementation of Xactly Incent.We offer this ForDummies
book to help you learn more about successfully managing sales
compensation and about the Xactly Incent sales compensation
management application.For more info about our training,consulting,
and implementation offerings check out our Web site:
www.xactlycorp.com
3. by Mark L. Chambers
with Christopher W. Cabrera
Xactly™
Sales
Compensation
FOR
DUMmIES
‰
01_045981 ffirs.qxp 3/17/06 6:50 PM Page i
5. Publisher’s Acknowledgments
We’re proud of this book; please send us your comments through our online registra-
tion form located at www.dummies.com/register/. For details about how to create a
For Dummies book for your company or organization, please contact dummiesrights&
licenses@wiley.com.
Some of the people who helped bring this book to market include the following:
Acquisitions, Editorial, and
Media Development
Project Editor: Janet Withers
Business Development Representative:
Karen Hattan
Editorial Manager: Rev Mengle
Cartoons: Rich Tennant
(www.the5thwave.com)
Composition Services
Project Coordinator: Kristie Rees
Layout and Graphics: Lynsey Osborn,
Heather Ryan, Michael Sullivan,
Erin Zeltner
Proofreaders: Joe Niesen,
Dwight Ramsey
Special Help: Desta Buchowski,
Gabriele McCann, Steve Noll,
Dan Rampe
Publishing and Editorial for Technology Dummies
Richard Swadley, Vice President and Executive Group Publisher
Andy Cummings, Vice President and Publisher
Mary Bednarek, Executive Acquisitions Director
Mary C. Corder, Editorial Director
Publishing for Consumer Dummies
Diane Graves Steele, Vice President and Publisher
Joyce Pepple, Acquisitions Director
Composition Services
Gerry Fahey, Vice President of Production Services
Debbie Stailey, Director of Composition Services
01_045981 ffirs.qxp 3/17/06 6:50 PM Page iii
6. About the Authors
Christopher W. Cabrera is founder, president, and chief exec-
utive officer of Xactly Corporation. He has over 20 years of
successful senior management experience at both early-stage
and public companies where he has managed sales, market-
ing, operations, and business development. Most recently,
Chris was the senior vice president of operations for Callidus
Software, a leading provider of enterprise incentive compen-
sation management systems to global companies. At Callidus
he was responsible for the execution of worldwide sales and
marketing strategies, customer advocacy, and strategic alliances
with companies such as IBM, Accenture, and Deloitte. Prior
to joining Callidus Software, Chris held senior management
positions at Silicon Graphics, a Unix hardware and software
vendor, where he was responsible for annual sales over $500
million. Chris earned a BS in business administration with an
emphasis in entrepreneurship from the University of Southern
California and a master’s degree in business administration
from Santa Clara University.
Mark L. Chambers (Columbia, Missouri) has been an author,
computer consultant, BBS sysop, programmer, and hardware
technician for more than 20 years. Mark has written over
15 computer books. His recent titles include Mac OS X Panther
All-in-One Desk Reference For Dummies, PCs All-in-One Desk
Reference For Dummies, 2nd Edition, CD & DVD Recording For
Dummies, 2nd Edition, Building a PC For Dummies, 4th Edition,
and Scanners For Dummies, 2nd Edition. Mark is currently a
full-time author and tech editor. Mark holds degrees in jour-
nalism and creative writing from Louisiana State University.
01_045981 ffirs.qxp 3/17/06 6:50 PM Page iv
7. Contents at a Glance
Introduction.....................................................1
Part I: The Sales Compensation Challenge ..........3
Part II: Understanding the Delivery Models......13
Part III: Using Xactly Incent to Manage
Real-World Compensation ...............................21
Part IV: Focusing on Xactly Incent...................29
Part V: Top Ten Advantages
to Choosing Xactly Incent ...............................39
02_045981 ftoc.qxp 3/17/06 6:50 PM Page v
9. Introduction
Sales compensation has become more sophisticated and
critical to a company’s success in recent years, and with
the ever-increasing complexities of compensation plans, com-
panies need a dedicated software solution to automate the
process. Perhaps you’ve already started looking beyond your
old-fashioned spreadsheet solution and are already bewildered
by the array of sales compensation and customer relationship
management options: enterprise, business process outsourc-
ing, application service provider, on-demand — how do you
know which way to go? This book is designed to help you cut
through the confusing hype and understand the advantages
and disadvantages of an array of current sales compensation
management approaches so that you can make a more
informed decision about how to choose a solution for your
company’s sales compensation program.
Later chapters of this book introduce you to an on-demand
compensation solution from Xactly Corporation: Xactly
Incent. You discover more about why the on-demand delivery
method is becoming such a popular solution for compensa-
tion management among companies of all sizes.
About This Book
This book describes several sales compensation management
software options from both business and technical perspec-
tives. Each part of this book leads you through a different
stage of seeking a solution to common sales compensation
challenges. You may want to read the book cover to cover to
gain a fuller understanding of sales compensation manage-
ment, or you may prefer to skip around to find what you need
when you need it. The book is arranged in five parts:
Part I: The Sales Compensation Challenge encourages you
to take a look at the big picture of sales compensation and
answer the question: Is your compensation plan really driving
profits? If you’ve been relying on a spreadsheet system, start
04_045981 intro.qxp 3/17/06 6:51 PM Page 1
10. Xactly Sales Compensation For Dummies2
here for some eye-opening surprises about how dedicated
sales compensation software can increase top and bottom
line revenues.
Part II: Understanding the Delivery Models provides a
sound survey of what various delivery models currently
available can do for your company’s sales compensation
plan management.
Part III: Using Xactly Incent to Manage Real-World
Compensation describes some real-world scenarios and
how Xactly Incent can address common concerns about
sales compensation management solutions.
Part IV: Focusing on Xactly Incent goes into more detail
about how Xactly Incent works and what it offers as a solu-
tion to your sales compensation dilemmas.
Part V: Top Ten Advantages to Choosing Xactly Incent gives
you a quick rundown of ten very good reasons to consider
Xactly Incent as your sales compensation solution. If you’re
sitting on the fence or want to help someone else who’s not
sure which way to go, start here!
Icons Used in This Book
Throughout this book, I occasionally use icons to call atten-
tion to material worth noting in a special way. Here is a list of
the icons along with a description of each:
Some points bear remembering. When you see this icon, take
special note of what you’re about to read.
This icon indicates technical information that is probably
most interesting to IT professionals.
This icon directs you to information that can help you do
something more efficiently and save costs.
This icon tells you when you need to be careful.
04_045981 intro.qxp 3/17/06 6:51 PM Page 2
11. Part I
TheSalesCompensation
Challenge
In This Part
ᮣ Asking the Compensation Question
ᮣ Looking past an Excel spreadsheet
ᮣ Adding up the advantages of proper compensation
ᮣ Considering the visibility of your compensation data
Sales compensation is one of those clever strategies com-
panies rely on to boost sales. Execs and analysts spend
hours tweaking the numbers, deciding who gets what bonus,
incentive, percent increase, or special parking spot for this or
that above and beyond sales performance . . . and it can get
pretty complicated fast. Then it’s up to someone, usually
many layers of someones to manage the plan and make sure it
works: Tracking the numbers becomes a logistical nightmare.
In this part, I start with some rather radical news: a discus-
sion of the limitations of the typical spreadsheet-based sales
compensation system. If you’re relying on a spreadsheet or
in-house system to track your compensation data, this may
help you wake up from the nightmare and look around for
alternative solutions.
Fortunately, I have good news as well! New tools in the form of
sales compensation management applications address many
of the traditional spreadsheet headaches. You can discover
how different people in your company can benefit from a
comprehensive sales compensation plan — not just your
sales force and compensation analysts, but your company’s
05_045981 ch01.qxp 3/17/06 6:51 PM Page 3
12. Xactly Sales Compensation For Dummies4
executives as well. I also introduce you to the importance of
compensation visibility, one of the keys to keeping your sales
representatives at their peak potential.
Does Your Sales Compensation
Plan Maximize Profits?
The first question you want to ask regarding any sales com-
pensation plan is whether it’s doing what you think it’s doing:
improving sales. I call it the Compensation Question, and it’s
extremely important to every company with an interest in
sales, no matter how many sales representatives you have on
your team. Ask yourself:
Is your company’s compensation program maximizing profits,
or is it falling short?
To be more specific, when you consider “maximizing profits,”
you want to be sure that your current compensation program:
ߜ provides your sales representatives with a clear and
timely method of tracking their performance.
ߜ helps your sales force hit your sales objectives.
ߜ enables you to quickly customize your compensation
program to keep pace with changes in the marketplace.
Seems like common sense, right? Yet you’d be surprised at
just how many companies — of all sizes — are falling short in
at least one of these areas.
If your company’s compensation plan drives success, from
your sales force all the way to management, then you will
sell more. And that’s the simple truth behind the
Compensation Question.
Isn’t Excel Just Dandy?
Many companies start out using Microsoft Excel to track
their sales compensation programs because, well, because
it’s there. It’s a handy tool, but sooner or later you may start
to wonder whether it’s the right tool for the job.
05_045981 ch01.qxp 3/17/06 6:51 PM Page 4
13. Okay, let me be honest: I’ve written entire chapters about
Microsoft Excel for several of my PC and Mac books, and it is
indeed dandy software! I like Excel. It’s a versatile applica-
tion, and it can be an extremely powerful business tool. The
folks in Redmond can be very proud.
But just because a task involves numeric data, that doesn’t
mean that Excel is perfect to the task. For example, when it
comes to managing a compensation plan, any spreadsheet-
based solution — including Excel — ranks right up there
with the manual typewriter and the telegraph. It’s outdated
technology . . . more trouble than it’s worth.
If you’re currently using Excel as the basis for your com-
pany’s compensation plan, I probably don’t have to list
what’s broken; you’ve likely suffered enough already. But if
you’re considering Excel as a solution for your company,
then consider these shortcomings with a spreadsheet-based
compensation program:
ߜ Complex and cumbersome. Creating even the most
basic plan within Excel involves hours of programming,
testing, and fine-tuning.
ߜ Limited reporting options. Custom reports are beyond
the reach of most spreadsheet-based compensation pro-
grams. Your sales representatives are likely in the dark
when it comes to timely feedback on how well they’re
performing.
ߜ Hard to update and automate. Be prepared to take care
of changes manually. Automation is minimal at best.
ߜ Restricted coverage. Looking to incent at different levels
according to the different products or services that your
company sells? Good luck, because a simple spreadsheet
application just can’t provide that sort of flexibility. (I’d
hate to maintain that beast of a document!)
Figure 1-1 is a good illustration of an overly-simplified stab at
compensation management using Excel. The data in this docu-
ment is hard to read, hard to retrieve, and hard to maintain . . .
and that’s the reason Excel misses the mark so completely as a
compensation application.
Part I: The Sales Compensation Challenge 5
05_045981 ch01.qxp 3/17/06 6:51 PM Page 5
14. Figure 1-1: A typical spreadsheet is far from the best solution for a com-
pensation analyst.
Understanding What Proper
Compensation Can Do for You
Success and profit may be uppermost in your mind when
evaluating your sales compensation program, but sometimes
you may find it difficult to measure with regard to compensa-
tion plans. That’s where a compensation management appli-
cation excels over Excel. You get specific answers to your
compensation questions.
In fact, in this section I go so far as to outline the benefits
of proper compensation for three different positions within
your company: your compensation analyst, your sales repre-
sentatives, and your management executives. (If this applies
to your position, all the better!)
A ticket to personal achievement
First, let’s consider the compensation analyst — naturally,
the person within your company who already wrestles with
Excel and your spreadsheet-based compensation plan on a
regular basis.
Xactly Sales Compensation For Dummies6
05_045981 ch01.qxp 3/17/06 6:51 PM Page 6
15. By moving away from a spreadsheet system, the compensa-
tion analyst:
ߜ Saves time and trouble. A commercial compensation
application doesn’t need to be built from the ground
up — and a dedicated application should offer built-in
automation and regular updates, so the headache of
keeping things current disappears.
ߜ Gains the ability to customize quickly. Interested in
modifying your compensation plan to match your
market and your products? Perhaps you’d like to com-
pare the effects of possible changes in your plan? You
can customize your sales incentives on-the-fly, doing in
minutes what used to take hours under the shadow of
Excel.
ߜ Adds profitability. With the right compensation plan in
place and immediate feedback available to your sales
force, your company will enjoy increased sales. Instead
of a single compensation plan restricted by a spread-
sheet, your plan can be based on factors besides raw
sales, including product margin or accounts receivable.
ߜ Avoids regulatory hassle. You probably already know
the name Sarbanes-Oxley — why spend your time fight-
ing Excel to make sure your plan meets federal regula-
tions? With a commercial compensation application, you
can rest easy while the application provides the
required auditing.
Of course, the bottom line is about profit; and with a cus-
tomized, easily-maintained compensation plan that addresses
your needs, your company sells more. Increased sales lead to
personal success for the compensation analyst!
How does my sales force benefit?
Your sales representatives will likely appreciate a move away
from a monthly cryptic spreadsheet printout of compensa-
tion data, but even more advantages are in store when you
escape the boundaries of a spreadsheet-based plan.
For example, consider these benefits for your sales force:
Part I: The Sales Compensation Challenge 7
05_045981 ch01.qxp 3/17/06 6:51 PM Page 7
16. ߜ Visible data that’s easily understood. I discuss what I
mean by visibility in the section “Visibility Explained:
Keeping Data within Reach” later in this part — for now,
think of what instant access to sales compensation data
can mean to every sales representative in your com-
pany? Common sense tells you: Sales professionals
perform better when they know how they’re being
compensated at this moment, not a month in the past
using last month’s data.
ߜ SPIFs that make sense. Does your company provide
Special Performance Incentive Funds (or SPIFs) for repre-
sentatives that deliver top sales of specific products or
services? It’s crucial for your sales force to track SPIFs
in a timely manner for such a program to be successful.
A sales compensation application makes it easy for
representatives to monitor their progress.
ߜ Answers to those “what-if” questions. With a
spreadsheet-based compensation plan, your sales
representatives are likely left in the dark about how
they can improve their incentive situation. Sales repre-
sentatives can calculate the figures for themselves with
a commercial application, forecasting how they can sell
more and improve their compensation in the future.
ߜ Error-free data on-demand. A compensation plan based
on a simple spreadsheet is more prone to errors. Not
trusting the system, sales reps lose valuable time track-
ing their own commissions instead of selling more. If
your sales force has a dim view of the accuracy of your
current plan data, a plan based on a commercial applica-
tion can boost your approval rating as it builds confi-
dence in your company’s incentives.
Did you know that most spreadsheet-based plans have been
proven to include a 7% to 10% error rate? Without the built-in
error-checking for data entry, conversion, and formulas pro-
vided by a dedicated commercial compensation application,
your data may be less dependable than you think.
No matter what the size of your sales force, their enthusiasm
and drive is all-important! Consider how valuable it will be to
each of your sales representatives when you offer real-time
access to compensation plan and SPIF data. That’s real incen-
tive, which translates into higher sales for your company.
Xactly Sales Compensation For Dummies8
05_045981 ch01.qxp 3/17/06 6:51 PM Page 8
17. What are the rewards
for executives?
Finally, let’s consider the advantages of a dedicated compen-
sation application for your company’s management. Your
company’s executives are looking at your plan data from a
different perspective than your sales force; therefore, cost sav-
ings and competitive advantage are foremost considerations.
Why discard your current spreadsheet-based compensation
plan? Here’s management’s take:
ߜ Maximum return on your compensation dollars. Your
company receives the full benefit of every incentive
dollar, because your compensation plan will encourage
the right behavior (while targeting the most important
products and services you want to sell).
ߜ Incentives based on the criteria you choose. With a
commercial compensation application in place, your
plan can be based on a wide range of criteria (instead of
simply the total products sold). For example, your plan
might focus on discount percentages, rewarding your
sales force for the behavior that maximizes your com-
pany’s profits.
ߜ Real-time information at your fingertips. Why wait for a
cryptic spreadsheet to load, or spend your time poring
over outdated printed compensation figures? With a
commercial compensation application, you’re immedi-
ately presented with easy-to-understand reports using
real-time data, any time you need them.
ߜ Fewer hours spent on plan maintenance. With the auto-
matic scheduling and easy updates offered by a commer-
cial application, your company’s compensation analyst
can spend more time improving your sales (rather than
simply maintaining a spreadsheet).
For company management, a commercial compensation plan
reduces the hassle, while adding value to your incentive data.
You can spend the time you gain on improving your long-term
incentive goals — instead of simply ensuring the accuracy of
your spreadsheet figures!
Part I: The Sales Compensation Challenge 9
05_045981 ch01.qxp 3/17/06 6:51 PM Page 9
18. Visibility Explained: Keeping
Data within Reach
Although keeping a high profile may be the goal of many
sales people, visibility in sales compensation management is
not about turning your salespeople into stars who have to
wear dark sunglasses to avoid being chased by paparazzi.
In the context of sales compensation, visibility refers to the
easy access and timely display of your incentive data to both
sales representatives and executives within your company.
Visibility for the sales crowd
Incentive visibility can have a significant impact on your com-
pany’s sales representatives. The real-time display of compen-
sation data is the lever your sales force can use to improve
their performance . . . and that’s immediately, rather than
“whenever your spreadsheet gets updated.”
Suddenly, your sales representatives can chart their own suc-
cess! The reports generated by a compensation application
can help your sales force to focus their time and energy on
the goals you have set (including the ability to generate
“what-if” scenarios for future improvement).
Figure 1-2 shows a typical real-time display from a company
using a commercial Web-based compensation application.
Imagine making your plan data available every morning for
each of your sales representatives . . . that’s the very defini-
tion of visible incentive!
Visibility for company
management
Management often considers visibility as the ability to
quickly calculate costs and evaluate sales performance.
Management needs to keep tabs on whether the plan is actu-
ally generating more sales overall. And the typical executive
needs to know now, not just at the end of the year.
Xactly Sales Compensation For Dummies10
05_045981 ch01.qxp 3/17/06 6:51 PM Page 10
19. Figure 1-2: Compensation data made visible through the Web.
Keeping your compensation data immediately at hand is a
real asset, giving executives the freedom to model and fine-
tune your current plan structure whenever time permits. To
be honest, if you’re currently using a spreadsheet-based com-
pensation plan, you’re not likely to find an executive who’s
enthusiastic about tinkering with complex formulas and cal-
culations! With a commercial compensation application, how-
ever, managers will find it far easier to reflect market trends
in your incentive plan.
Because your compensation plan is important to your sales
force and an integral part of your management’s sales strat-
egy to improve performance, don’t keep that crucial data
imprisoned within a spreadsheet or a homegrown in-house
compensation application only a handful can comprehend.
Make that data immediately visible to the people in your
company who will benefit the most!
Part I: The Sales Compensation Challenge 11
05_045981 ch01.qxp 3/17/06 6:51 PM Page 11
20. Compensation Applications:
Improving on Spreadsheet-based
Compensation
Because a spreadsheet-based compensation system is hard
to manage, automate, update, and make a global compensa-
tion plan with — if you don’t believe me, see the section
“Isn’t Excel Just Dandy?” earlier in this part — many new
application solutions are emerging to address the problems.
Following are just a few better-than-spreadsheet solutions
that companies are experimenting with:
ߜ Web-based, enterprise applications hosted by an outside
vendor (the Application Service Provider method).
ߜ Web-based on-demand applications hosted by an out-
side vendor (the On-Demand delivery method).
ߜ Local applications that you install and maintain within
your company (the Enterprise delivery method).
ߜ Third-party services that completely oversee your com-
pensation plan and your compensation data (the
Business Process Outsourcing delivery method).
Most of these also aim at making your compensation data
more visible. To find out what else distinguishes these varied
approaches to compensation management, turn to Part II,
where I discuss the different delivery models used by today’s
commercial compensation management applications.
Xactly Sales Compensation For Dummies12
05_045981 ch01.qxp 3/17/06 6:51 PM Page 12
21. Part II
Understandingthe
DeliveryModels
In This Part
ᮣ Evaluating how your compensation data should be stored and
retrieved
ᮣ Using an on-demand solution
ᮣ Accessing your compensation data through the Web
ᮣ Selecting a secure application host
ᮣ Ensuring the security of your Web connection
You know your sales compensation plan needs a way to
store data, but what about retrieving it? Are you working
with an outdated delivery model? If you’re not familiar with
the term, a delivery model sounds more like some sort of
high-tech Defense Department secret than anything to do
with your company’s sales compensation plan!
Actually, a delivery model is simply the method your com-
pensation application uses to store and deliver your incen-
tive data to your company’s sales force and executives. With
an old-fashioned spreadsheet, the storage you’re using is
likely a file on your computer, and the delivery is via a
printed report posted on a bulletin board, or perhaps a sum-
mary sent through e-mail. Convenient and easy? Hardly.
This part introduces you to the delivery models available
from today’s compensation applications, as well as the fea-
tures you need to consider to secure your data. It also dis-
cusses how a cutting-edge compensation application can
provide customized reports and compensation plans.
06_045981 ch02.qxp 3/17/06 6:51 PM Page 13
22. Xactly Sales Compensation For Dummies14
Delivering Compensation Data
Straight to Your Desktop
If you’ve made the decision to give your existing spreadsheet-
based compensation plan the boot, congratulations! (Start
planning what you’ll do with all that extra time, and how your
company can put those cost savings to work.)
The next step in your liberation is the selection of a delivery
method, which you need to consider a primary factor in
choosing a commercial compensation application. Here’s an
overview of the latest choices for a delivery method:
ߜ Enterprise: Nope, Scotty won’t beam your data aboard
a starship! An old-fashioned enterprise solution works
much like your company’s Windows software leasing
obligations to Microsoft — you run the vendor’s com-
pensation software on your company’s computers. Most
companies are moving away from the enterprise deliv-
ery model: You’re required to troubleshoot and update
the software yourself, you’re still responsible for the
security and backup of your company’s incentive data,
and you likely need a dedicated server to store that
data. (Come to think of it, the enterprise model isn’t all
that far evolved from an antiquated spreadsheet-based
compensation system.)
Oh, and did we mention the exorbitant cost involved?
Your company’s IT shop has to foot the bill for hardware,
software licenses, upgrades, maintenance . . . you know
the drill.
ߜ BPO (Business Process Outsourcing): This delivery
model isn’t particularly a favorite among compensation
analysts because you essentially turn over everything to
an outside service vendor, who takes your raw incentive
data and returns finished reports (either in print or via
the Web). As you might expect, a BPO solution is far
more expensive than any other delivery model, and you
can forget making quick changes to your compensation
plan! Everything is handled off-site, so you lose all con-
trol. (Go figure.)
06_045981 ch02.qxp 3/17/06 6:51 PM Page 14
23. ߜ ASP (Application Service Provider): This type of hosted
enterprise application is provided by an outside vendor;
in other words, another company stores and protects
your compensation data, which is an improvement over
the enterprise model. Unfortunately, you still have to
use their software application, and they factor in the
expense of dedicated computers to access it, so you’re
still forced to spend the bucks so that the vendor can
handle the hardware, software, and maintenance off-site.
There’s no real savings with the ASP delivery method.
ߜ On-Demand: For the purposes of this book, we refer to
real-time hosted delivery of off-site tools, reports, and
data as on-demand. The on-demand delivery model pro-
vides it all; like an ASP application, an on-demand vendor
keeps your compensation data off-site, where it’s safe and
secure. However, you don’t have to maintain any software
because everyone who is authorized at your company
can access your plan from a Web browser! Nothing to
install, update, or troubleshoot, so you save a bundle.
No separate computers or network server required, and
you still have the ability to immediately customize your
compensation plan (refer to Part I for a discussion of the
benefits of customization).
Don’t forget about the added security of off-site data
storage, which is often far better than your IT shop can
provide. (Find out more on this later in this part in the
section “The benefits of a secure host.”)
The on-demand delivery model offers the functional breadth
and depth of an enterprise application with the real-time con-
trol that you demand over your incentive data and your com-
pensation plan!
On-Demand Equals
Cost-Effective
Reality check: Always ask how much a dedicated compensa-
tion application costs. If you’ve resigned yourself to spending
every last dime of your company’s budget on new software,
here’s some very good news — depending on the delivery
Part II: Understanding the Delivery Models 15
06_045981 ch02.qxp 3/17/06 6:51 PM Page 15
24. model you choose, you can minimize the cost involved, while
providing all the advantages of a complete compensation
software solution (see Part I for details).
For example, consider the money you can save on an incen-
tive application that uses the on-demand delivery model:
ߜ Your company avoids the cost of purchasing new com-
puters or upgrading existing computers (both worksta-
tions and server machines).
ߜ Your time isn’t spent maintaining and updating hardware
and software.
ߜ You don’t need to worry about a 6- to 9-month imple-
mentation, or the new application releases that have to
be applied with an enterprise solution.
ߜ You don’t need to license multiple copies of an ASP
application.
These cost savings illustrate why an on-demand compensa-
tion application is fast becoming the solution of choice for
companies around the world. An enterprise application has
to run constantly in the background on your hardware, with
an IT shop to constantly baby-sit the system, “chewing up”
your company’s valuable resources. With an on-demand
system, the application itself and your sales data reside off-
site, and you access them whenever (and wherever) you like
using a secure network connection.
An on-demand application provides you with the compensa-
tion data you need and the reports you want in real-time,
without the hassle of installing and maintaining an expensive
enterprise application.
Putting the Web to Work
One significant advantage of an on-demand sales compensa-
tion application is how easy to use it can be — and not just
for some dedicated IT guy. You may be used to other kinds of
remote applications that require you to master special tools
or a complex interface. And you may rightly wince at the
thought of training all your company execs and sales reps
to use such a complicated system for sales compensation.
Xactly Sales Compensation For Dummies16
06_045981 ch02.qxp 3/17/06 6:51 PM Page 16
25. Enterprise applications are typically cumbersome and diffi-
cult to use, and may even require the user to learn a propri-
etary language. (Ouch!)
Prepare to be shocked: If your sales representatives and
executives can view your company’s Web site, then they have
all the tools they need! Most on-demand applications use
your computer’s familiar Web browser to display reports and
receive commands. Any computer with an installed copy of
Internet Explorer and an Internet connection is ready to go.
Of course, besides being a cinch to figure out, a Web site is
always accessible over any Internet connection: Employees
can view their incentive progress using a laptop or secure
wireless device from just about anywhere in the world! The
application is equally easy for comp analysts in updating and
customizing your company plan, even when they’re on the
road or working from home.
Securing Your Compensation
Data
Naturally, one of the greatest concerns your company likely
has about any compensation management solution is how
secure your data is. Every delivery model has some security
risks associated with it, and the on-demand convenience of
an online compensation application is no exception. If your
data isn’t well-protected, you could be inviting disaster, so
you want to find out as much as possible about the security
features of any compensation application you consider.
These security questions fall into two categories:
ߜ How secure is the host server or network?
ߜ How secure is the connection technology used by the
application provider?
The benefits of a secure host
Following are some considerations about the host security
you need to demand from your application provider:
Part II: Understanding the Delivery Models 17
06_045981 ch02.qxp 3/17/06 6:51 PM Page 17
26. ߜ A secure physical location. No one wants to entrust
their company’s data to a “basement business.” If you’ve
decided on an on-demand or ASP delivery solution,
make sure that your application provider stores your
data in a secure building, preferably with backup power
and on-site fire protection.
In fact, it’s a good idea that the provider maintains your
data in a facility that offers SAS 70, Type II security certi-
fication.
ߜ First-rate firewall security. Look for a provider that uses
the latest in networking protection, ensuring that your
data is safe from hackers or viral attack.
ߜ Regular, comprehensive backup coverage. One key
advantage to off-site data storage — someone else takes
care of maintaining a comprehensive backup! You need
to assure yourself up front that your chosen service can
safeguard the integrity of your compensation data, with-
out the hassle of doing it yourself.
ߜ Minimal data exposure. A top application provider
employs skilled technicians and programmers that take
care of timely updates and integrity testing off-site. You
experience little or no downtime (and no extra man-
power required within your company). You can actually
expect 99 percent uptime from a reliable vendor, which
no enterprise application could ever deliver! Security
consultants often refer to this guarded stance as mini-
mal data exposure. In plain English, that means that
direct access to your company’s incentive data is kept to
a bare minimum.
The practice of minimal data exposure does not become a
concern only because you implement a sales compensation
management application. You need to protect your data
regardless of the solution you choose. Consider this: How
accessible is that Excel spreadsheet holding all of your com-
pany’s incentive data, including raw sales figures? Is it on
your company’s network, perhaps on a PC protected by a
screensaver password? And how many of your coworkers
know its location? (Oops.) Compare such rudimentary (or
non-existent) security with the SAS 70, Type II certification
of a premiere off-site vendor that I mentioned earlier.
Xactly Sales Compensation For Dummies18
06_045981 ch02.qxp 3/17/06 6:51 PM Page 18
27. The benefits of a secure
connection
Without a secure Internet connection, even the best hosted
installation is practically useless! When shopping for a Web-
based compensation application, consider these critical
features:
ߜ Strong SSL data encryption. Would you buy something
from an online store using your credit card without a
secure connection? Certainly not! Figure 2-1 illustrates a
secure connection in Internet Explorer — notice the pad-
lock icon that appears in the right corner of the status
bar. With your data safely encrypted, an executive can
check company compensation figures from any public
unsecured wireless network, without risk of being moni-
tored. (In fact, with SSL encryption active, you can check
your e-mail on a regular basis from any wireless access
point using your ISP’s encrypted Web-mail system.)
ߜ User account and password protection. A robust user-
account/password-protection system ensures that every
user of your compensation plan observes security
levels. If you’re interested in providing different func-
tionality for sales representatives and executives, this
system may appeal to you: Each person who connects to
your compensation application automatically receives
the proper access level you’ve assigned.
ߜ Complete user logs for your records. With a secure Web
browser connection, you can track who’s using your
system and how often (including possible intrusion
attempts by unauthorized outsiders). A log can also
track the functions that are most popular with your
sales force and executives; armed with this information,
you can streamline your application’s menu system,
making it as user-friendly as possible!
ߜ Secure file transfers. If your compensation application
enables company employees to receive custom reports
or data files, a secure SSL-encrypted Web connection
offers the same security for file transfers as simple page
displays. (Some applications even provide basic messag-
ing functionality, allowing your sales representatives to
ask questions and request specific information from the
compensation analyst.)
Part II: Understanding the Delivery Models 19
06_045981 ch02.qxp 3/17/06 6:51 PM Page 19
28. Figure 2-1: An example of a risk-free encrypted Web connection.
Robust data encryption and host security are vital to any on-
demand compensation application! If an application you’re
considering can’t offer these safeguards, we highly recom-
mend you look elsewhere for a hosted solution.
Padlock icon
Xactly Sales Compensation For Dummies20
06_045981 ch02.qxp 3/17/06 6:51 PM Page 20
29. Part III
UsingXactlyIncentto
ManageReal-World
Compensation
In This Part
ᮣ Revamping a compensation plan to drive better behavior
ᮣ Providing real-time reports
ᮣ Reducing manual compensation hassle with Xactly Incent
ᮣ Completing an audit without losing your sanity
ᮣ Turning a complex compensation nightmare into a winner
This part presents five real-world examples of sales com-
pensation challenges that you may recognize from your
own experiences in the real world — where there’s never
enough time to complete manual tasks, and management
makes demands that seem nearly impossible. (Compensation
analysts know this environment very well.)
In each situation, you can see how a comprehensive compen-
sation application can snatch triumph from the jaws of
tragedy (or at least save you a tremendous amount of time
and labor, whichever comes first)!
07_045981 ch03.qxp 3/17/06 6:52 PM Page 21
30. Xactly Sales Compensation For Dummies22
Providing Versatility for
Varying Incentives
Does your compensation plan take a simplistic approach
because you don’t have the resources to incent the proper
way? In this section, I describe how you can add versatility
to your compensation plan without adding complexity.
For example, suppose you run a typical sales or service com-
pany that’s currently using a spreadsheet-based compensation
plan — nothing spectacular, and sometimes a considerable
headache, but it provides the basic incentive figures.
Perhaps your company offers a line of four products, and
sales representatives are currently being paid a simple com-
mission on raw sales, based on revenue. Last year, you added
a quota and multiplier system, but little improvement in rev-
enue has been realized. Examining your company’s products,
you see that two of the four products are worth twice as
much to the company in gross profit.
You may decide to explore one or more of these possible
avenues for better meeting your company’s compensation
needs:
ߜ Pay different commission rates on different quotas
for each product: By encouraging the sale of more
profitable products, you may realize a jump in company
revenue that can lead to your personal success.
ߜ Implement smart discount compensation: Basing your
compensation wholly on raw sales doesn’t incent your
sales force to change their behavior for the better. If a
sales representative discounts a product, that person
receives less. Conversely, if that sales rep sells closer
to retail price, he or she earns more. Unfortunately, the
reduced commission is not enough to get their attention,
but monitoring and adjusting compensation based on
each percent discount definitely will!
ߜ Introduce a special promotional SPIF (Special
Performance Incentive Fund).
ߜ Reward your top 10 sales reps with a bonus.
07_045981 ch03.qxp 3/17/06 6:52 PM Page 22
31. Consider how long these changes will take to implement if
you use a spreadsheet to manage your sales figures. (On
second thought, forget about it entirely . . . too much work.
Perhaps next year.)
With a dedicated compensation application such as Xactly
Incent, you can implement all of these changes in minutes —
and begin paying on your new plan structure instantaneously.
See Part IV for details.
Delivering Better Reports
Fine-tuning a compensation plan means nothing if your com-
pany’s sales representatives, sales managers, and executives
can’t actually track performance and follow the results! This
section brings the need for on-demand reports into focus.
Suppose your company’s sales manager is tired of the manual
effort and lag time that your spreadsheet-based compensa-
tion application requires. Plus, the results simply aren’t help-
ful. Specifically:
ߜ The constant e-mails to your company’s comp analysts
requesting reports takes too long for a sales team of
10 people (let alone the nightmare scenario of 500 sales
representatives).
ߜ Sales representatives on the road are effectively out of
the loop for reports, other than a simple download of a
PDF commission statement.
ߜ Team members have no idea how well they’re accumu-
lating SPIFs, or even how far they’ve advanced on their
quotas.
Unfortunately, with a spreadsheet-based compensation plan,
you really can’t improve this scenario much: What’s broke
simply stays broke.
Consider the results your sales team can get if your company
implements a real-time, on-demand compensation application:
Part III: Using Xactly Incent to Manage Real-World Compensation 23
07_045981 ch03.qxp 3/17/06 6:52 PM Page 23
32. ߜ Each sales representative gets his or her own commis-
sion report, in real-time, wherever there’s a Web browser
and an Internet connection handy. (Figure 3-1 gives you
an idea of what this report might look like in Xactly
Incent.)
ߜ The sales manager can drill down into team sales data
and check each salesperson’s progress, including SPIF
and quota attainment.
ߜ Those constant e-mail requests disappear forever
because all of these reports are available instantly, with
no manual work required from your company’s compen-
sation analysts.
Figure 3-1: A sales manager can see this information at any time with
Xactly Incent.
On-demand reports allow your company’s sales force to
improve individually and as teams; for more details on some
of the reports available within Xactly Incent, see Part IV.
Xactly Sales Compensation For Dummies24
07_045981 ch03.qxp 3/17/06 6:52 PM Page 24
33. Automating Compensation
without Breaking the Budget
If your company’s compensation analysts spend more time
maintaining your plan than improving it, automation is the
key to improving your compensation plan without adding to
the chaos inherent in a spreadsheet-based system! In this
section, you can find out more about the tasks that automa-
tion can handle for you.
Your company’s compensation analysts can appreciate
automation within a compensation plan more than anyone.
After all, consider this laundry list of chores they have to do
for each compensation plan provided to your sales force:
ߜ Analyzing, creating, and modifying the compensation
plan itself
ߜ Mailing out comp plans for signatures (and licking every
stamp)
ߜ Manually collecting sales figures
ߜ Determining which sales representative sold what prod-
ucts and services
ߜ Determining quota breakpoints
ߜ Checking for SPIFs and bonus eligibility
ߜ Creating a separate spreadsheet for each representative
ߜ Individually delivering each representative’s figures to
management
And the list continues (we just don’t have the room to cover
it all in this book). After they complete all these tasks, they
still face the chance of a mistake in the calculations, or send-
ing a representative the wrong commission report. These
things can happen with a manual system — often enough
that most compensation analysts take their phones off the
hook on payday just to avoid the onslaught of complaints
and clarifications. (How many times have you said, “I know
what’s coming, and it’s not pretty . . .”?)
Part III: Using Xactly Incent to Manage Real-World Compensation 25
07_045981 ch03.qxp 3/17/06 6:52 PM Page 25
34. With a dedicated compensation application, your analysts
can actually spend their time analyzing how to make your
plan better. Because applications such as Xactly Incent are
highly automated, they require far less manual intervention.
Who the Heck Is
Sarbanes-Oxley?
The Sarbanes-Oxley Act of 2002 requires publicly-owned com-
panies to fully disclose their financial status and their rela-
tionship with their auditing firm. Specifically, Sarbanes-Oxley
requires that public companies put in place and document
internal controls that relate to financial reporting. Full disclo-
sure includes sales compensation expenses because most
companies spend from 8 to 10 percent of company revenue
on compensation. If your company is publicly-owned, those
compensation expenses can represent a minefield for your
company’s compliance with Sarbanes-Oxley regulations.
If your company is privately-owned, or your company’s gross
revenue is under 70 million dollars a year, regulatory require-
ments such as Sarbanes-Oxley aren’t likely to affect you yet,
but you will still find the audit trail that Xactly Incent pro-
vides to be indispensable!
For example, consider this scenario: Your CFO walks into
your office and tells you that he suspects the sales force
missed their numbers because your commission accrual cal-
culations were wrong. He asks for a complete audit of com-
mission expense over the last quarter as soon as possible.
If you’re saddled with a spreadsheet, this request is the very
definition of the word nightmare. For the next several days,
you spend long nights hunched over your office PC and may
need to enlist the help of someone else, just to get the job
done on time.
In contrast, suppose you have available the audit logging fea-
ture in Xactly Incent: Every change to a plan is completely
logged and can be individually tracked, providing a complete
audit trail at the click of a mouse.
Xactly Sales Compensation For Dummies26
07_045981 ch03.qxp 3/17/06 6:52 PM Page 26
35. Figure 3-2 illustrates the on-screen results of a typical Xactly
Incent audit trail search, which you can generate securely at
any time, from anywhere in the world that offers an Internet
connection. ’Nuff said.
Figure 3-2: Following an audit trail is easy with Xactly Incent.
Gaining a Strategic Edge
with a Fine-Tuned Plan
Most companies using a spreadsheet-based compensation
system try to keep their compensation plans as simple as
possible, just to keep their manual chores more manageable.
Such companies often calculate commissions based on
simple raw revenue or units sold. But what happens if a com-
pany tries to implement a more complex incentive plan using
Excel?
For example, suppose the CEO of your company recognizes
that proper compensation drives better sales behavior and
improves performance. Rather than stick with commissions
based on raw revenue, this executive has implemented some
of the different components described in the section
“Providing Versatility for Varying Incentives” earlier in this
part into a spreadsheet-based plan, including SPIFs and com-
mission bonuses based on optimum discounting.
Part III: Using Xactly Incent to Manage Real-World Compensation 27
07_045981 ch03.qxp 3/17/06 6:52 PM Page 27
36. Those two incentives work well — but unfortunately, they
become a real headache to introduce within a spreadsheet-
based compensation plan. Suddenly, your company’s sales
manager complains that he needs five compensation analysts
simply to maintain all the intricacies of the plan! Worse, the
company’s sales representatives are “driving blind” in
between commission reports, and the compensation system
is so complex they don’t understand it.
The beauty of a dedicated compensation application such as
Xactly Incent lies in these advantages:
ߜ Your CEO can keep all of the existing plan components,
but the application eliminates the hassle and manual
work.
ߜ Your company’s compensation analysts now have enough
free time to actually analyze the compensation plan.
ߜ Your company’s sales representatives can access the
system and check their performance, 24/7.
The Xactly Incent strategic edge means making the most of
your company’s human resources rather than encumbering
them with the details of your compensation plan. Whether
your current spreadsheet-based compensation system is
overly simplified (to make things easier to handle manually)
or far too complex (to incent precisely the way you want),
Xactly Incent can meet your needs quickly and without tying
up your analysts.
Xactly Sales Compensation For Dummies28
07_045981 ch03.qxp 3/17/06 6:52 PM Page 28
37. Part IV
FocusingonXactlyIncent
In This Part
ᮣ Presenting Xactly Corporation
ᮣ Understanding why Xactly Incent is the right choice for you
ᮣ Considering specific features within Xactly Incent
ᮣ Producing customized rules and reports with Xactly Incent
ᮣ Forecasting performance using Xactly Incent
ᮣ Understanding how CRM works
ᮣ Integrating Xactly Incent into your current compensation workflow
When your company wearies of coping with an inade-
quate spreadsheet-based compensation system (see
Part I if you’re not sure why it’s wearying), you’re ready to
look around for a dedicated compensation application
(and Part II can help you understand the features you’re
shopping for).
In this part, I introduce you to a single compensation
application — Xactly Incent, produced by Xactly Corporation.
You can find out why Xactly Incent is the choice of successful
companies interested in boosting profits by providing benefits
to sales representatives based on their performance.
I also discuss a number of specific features within Xactly
Incent and why they’ve proven so valuable to Xactly’s
customers.
08_045981 ch04.qxp 3/17/06 6:52 PM Page 29
38. Tying Everything Together
with Xactly Incent
A good sales compensation application needs to deliver essen-
tial functions and features, and the more robust those features
are the more attractive the solution looks to your company’s
compensation analysts. Take a look at how Xactly Incent com-
bines the most attractive delivery method with the features
discussed in earlier parts:
ߜ Xactly Incent uses the on-demand delivery method.
Your company gets all the benefits of the on-demand
model that are discussed in detail in Part II: Your data is
stored off-site, yet is immediately available whenever you
need it, without requiring you to maintain or upgrade
local PCs or a local server! You can customize your com-
pensation plan’s rules and reports remotely, using a Web
browser.
ߜ Xactly Incent offers bulletproof security. No matter
where you go around the world, you can use any standard
Web browser to create a secure SSL-encrypted connec-
tion to your compensation plan — if you see the padlock
icon in the Internet Explorer status bar, you’re protected!
Likewise, Xactly provides a SAS 70, Type II certified telco-
grade hosting facility (think highly secure, with secondary
power on-tap) for your company’s incentive records,
with comprehensive data backup and physical security.
Your peace of mind is assured.
ߜ Xactly Incent reduces the errors hiding in spreadsheet-
based plans. Xactly Incent’s built-in data entry checks
and online data verification tools help ensure that your
compensation figures are as error-free as possible. Why
try to make changes to 10 (or 100) spreadsheets using the
Excel formula bar, when you can change things so easily
across an entire plan using a dedicated compensation
application?
ߜ You get real-time access to your compensation plan.
Your executives and sales representatives don’t have
to wait until the next time you juggle the spreadsheet
numbers, or the next time you receive copies of your
compensation report from a BPO vendor . . . instead, your
Xactly Sales Compensation For Dummies30
08_045981 ch04.qxp 3/17/06 6:52 PM Page 30
39. company’s employees can connect to your Xactly Incent
compensation plan at any time, day or night, using a Web
browser.
ߜ Sarbanes-Oxley is a done deal. Xactly Incent provides
the effortless regulatory record-keeping that compensa-
tion analysts dream about! Xactly Incent delivers the
auditing for you, with no hassle or late nights at your
desk required.
You can see how Xactly Incent covers all the bases of a supe-
rior compensation management tool, eliminating the hassle
of creating and maintaining a compensation plan using an
awkward spreadsheet — while boosting the visibility of your
compensation plan to everyone in your company.
Giving Xactly Incent’s Best
Features the Once Over
As you consider your choices in the compensation application
market, you’re likely to look for a number of features that
Xactly Incent offers. Xactly Incent’s standout features include:
ߜ Better IP login security. Typically, companies prefer to
use user ID/password combinations to provide access — a
good idea for those who will be on the road because you
can log in from any Web browser. However, if your com-
pany desires the next level of login security, you can also
require that an incoming login originate from a specific
network or Internet IP address; the combination of the two
virtually guarantees the identity of the user! (Refer to the
previous section “Tying Everything Together with Xactly
Incent” for more security features of Incent.)
ߜ Complete SPIF support. If your compensation plan uses
SPIFs (Special Performance Incentive Funds) to drive sales
of specific products or services, you can add those funds
within Xactly Incent and reflect them within your com-
pensation plan. Your sales force and executives have
real-time access to SPIF data.
ߜ Customize or create multiple plans. You can quickly and
easily create a completely new compensation structure —
or modify the specifics of an existing plan — within Xactly
Part IV: Focusing on Xactly Incent 31
08_045981 ch04.qxp 3/17/06 6:52 PM Page 31
40. Incent! No external application or cumbersome plan editor
required . . . enabling you to make changes to reflect chang-
ing sales factors from anywhere, even on the road!
ߜ Information that’s easy to understand and access.
Unlike other compensation applications that use propri-
etary software, Xactly Incent is designed for the Web:
That Web-friendliness results in plan data that’s dis-
played with colorful and easy-to-understand graphics,
using common Web browser HTML controls that every-
one in your company has used countless times before.
Your company avoids a steep learning curve and lengthy
training for your sales force!
ߜ Automation done right. Xactly Incent includes the tools
you need to automate the calculations required by both
individual incentive programs and your entire sales com-
pensation plan. Many common calculations and tasks are
immediately available when you’re setting up your plan,
while others specific to your products and services can
be easily added later as you need them.
Features like these have made Xactly the leading company on
the map when it comes to on-demand compensation applica-
tions like Xactly Incent.
If you’re going to bring your company’s compensation plan
out of the spreadsheet box and invest in a commercial incen-
tive management application, consider how much work these
features will save you — and how much profit you’ll reap from
a motivated sales force. That’s the answer to The
Compensation Question!
Rules and Reports
for Every Need
If you’re using a spreadsheet-based compensation plan right
now, ask yourself these two questions:
ߜ Have you ever demanded automated, rules-based com-
pensation criteria that your Excel worksheet simply
couldn’t provide?
ߜ How often have you wished for comprehensive reports
that are tailored to your needs?
Xactly Sales Compensation For Dummies32
08_045981 ch04.qxp 3/17/06 6:52 PM Page 32
41. In this section, you find out a little more about why Xactly
Incent can save you so much time and produce results that
are so much better than a simple spreadsheet can supply.
Rules-based compensation
done right
You may be wondering how Xactly Incent can supply the
needs of so many different companies selling diverse prod-
ucts and services: After all, a company selling energy and util-
ity futures and an insurance company have two completely
different takes on incentives, and two different structures for
their respective compensation plans. How can one application
fill in all the blanks?
The Xactly Incent screen shown Figure 4-1 reveals the answer:
rules-based plan architecture. With Xactly Incent, you can lit-
erally build your own plan from scratch, completely focused
on your core sales strengths (whether your company offers
products, services, or a mix) and using the criteria that you
deem most important.
Figure 4-1: Xactly Incent’s rules-based architecture makes it a most
flexible application!
Part IV: Focusing on Xactly Incent 33
08_045981 ch04.qxp 3/17/06 6:52 PM Page 33
42. Why limit your compensation to simple returns from gross
sales or unit sales? With Xactly Incent, you’re free to base
your compensation to your sales representatives on other
criteria, like profit margin, product quotas, appointments
arranged, rapid response or call time duration, improvements
in individual sales, and much, much more!
With this flexibility, you can design compensation plans that
include special sales incentive offers that are nearly impossi-
ble to include with a spreadsheet-based plan, such as
ߜ SPIFs that run for a specified length of time
ߜ Sales bonuses
ߜ Guarantees for sales representatives
ߜ Recoverable draw for commission reimbursements
You can save time with Xactly Incent as well — that’s because
you need only enter common company data into Xactly Incent
once. For example, this information can include:
ߜ people’s titles
ߜ names and incentive-related information for personnel
ߜ customer data
ߜ rate tables and quotas used within your company
As you can imagine, the automation features offered by Xactly
Incent come in handy when you need to update a quota, rate
table, or an incentive rule across multiple compensation plans.
Once again, imagine the work involved in updating information
across multiple spreadsheets . . . and then consider that Xactly
Incent requires you to make those changes only once.
The reports you want, on-demand
Figure 4-2 illustrates a typical Xactly Incent report configura-
tion screen. Of course, you can build your own reports easily
using the criteria you select from your plan, and you can make
custom reports available to specific users. But a number of
standard reports that have proved very popular with Xactly
customers are already available from the start:
Xactly Sales Compensation For Dummies34
08_045981 ch04.qxp 3/17/06 6:52 PM Page 34
43. ߜ Individual plan statements for each sales representative
ߜ Overall team rankings
ߜ Summary reports of sales performance for your
executives
Figure 4-2: You can easily create customized reports from within Xactly
Incent.
Naturally, reports can be viewed on-screen, or printed using
the standard print controls within Internet Explorer.
The What-If Calculator and the
Customer Relationship
Connection
Although we’ve discussed in the previous sections several
advantages of Xactly Incent that can revolutionize the way
you handle your incentive plan, two particular features within
this application are likely to drive your company’s sales force
to a new level of sales performance — and this section explains
how your company’s compensation plan can benefit from
both of them.
Part IV: Focusing on Xactly Incent 35
08_045981 ch04.qxp 3/17/06 6:52 PM Page 35
44. Forecasting something better
than the weather
A company using a spreadsheet-based compensation plan
typically supplies a printed summary to each sales represen-
tative on a regular basis, and that’s probably all it can do.
Such a report isn’t likely to drive better performance. After all,
it’s a report of past results, not geared towards the future.
What if you could motivate a sales representative to change
his or her selling habits to match your company’s overall
goals? Well, that’s the very definition of a sales compensation
“what-if” (or forecasting) tool, and Xactly Incent offers a spe-
cial What-If Calculator mode for every sales representative in
your company! As you can see in Figure 4-3, this calculator
enables any user to
ߜ Project future incentive earnings by changing the criteria
you specify, from units sold to profit margin or call times.
ߜ Create a sales goal that results in higher earnings (using
tables and quotas that you’ve customized).
ߜ Calculate breakpoints for different incentive levels,
including SPIFs and bonuses.
Figure 4-3: Using the Xactly Incent What-If Calculator to forecast earnings
based on performance.
Xactly Sales Compensation For Dummies36
08_045981 ch04.qxp 3/17/06 6:52 PM Page 36
45. Managing customer relations
A sales force handles more than sales; they maintain the rela-
tionship with the people buying your product or service, so a
really complete compensation plan looks to grow sales and
build long-lasting customers. Think of Customer Relationship
Management (CRM) as the other side of sales force automa-
tion. Where Xactly Incent provides your sales representatives
with compensation information, CRM software like that pro-
vided by salesforce.com and others gives your company’s
employees access to
ߜ Customer information. Your sales force can immediately
display all types of customer data, as well as use it within
Microsoft Office and Outlook.
ߜ Current sales figures. Your company’s sales managers
can use similar what-if tools to forecast upcoming trends,
or monitor the latest sales data in real-time (just as
Xactly Incent provides the latest compensation figures
on-demand).
ߜ Channel and product status. Track performance of your
channel sales, or display information on product cost,
quantities, and inventory.
Xactly has partnered with CRM application vendors like sales-
force.com to provide a complete package of Xactly Incent and
CRM software — the program is called the Xactly Partner
Program. More information on this complete solution is avail-
able on the Xactly Web site, at www.xactlycorp.com.
Xactly Incent links to Salesforce from the CRM software
provider salesforce.com. If you’re already a Salesforce cus-
tomer, you can leverage your existing investment to make it
even more valuable using Xactly Incent!
Integration through
Xactly Incent
A common misconception among companies contemplating
an upgrade to a compensation management application is that
Part IV: Focusing on Xactly Incent 37
08_045981 ch04.qxp 3/17/06 6:52 PM Page 37
46. they’ll have to scrap their entire compensation system to
implement the solution. This section explains that with Xactly
Incent, that’s definitely not the case!
In fact, Xactly Incent can simply take the place of your spread-
sheet in your workflow, eliminating the inefficiency and solving
the problems discussed in Part I. The remainder of your com-
pensation workflow continues to function as-is.
For example, consider these ties that you can make between
Xactly Incent and the working parts of your current spreadsheet-
based compensation system:
ߜ Keep your existing compensation data collection
method. Xactly Incent is designed to integrate with your
current compensation data collection system (whether
it’s based on a version of a Salesforce CRM application,
simple raw data from your ordering system, or some-
thing in-between).
ߜ Your payment function remains the same. Does your
company award bonuses separately? No problem!
Whether your compensation plan figures are currently
fed into your company’s accounting system, or are
processed as a separate account, Xactly Incent can
export the data you need.
ߜ You don’t need to change your current auditing or
regulatory practices. However, you’re likely to find that
your company’s compensation analysts have far less
to do to fulfill their audit and regulatory requirements!
(Everyone can agree that less work for the same results
is A Good Thing.) Xactly Incent can provide the same
audit trail — with fewer errors, of course.
In case you do want to revamp your entire compensation
workflow, Xactly has partnered with proven consulting firms
you can call upon to help streamline your company’s compen-
sation process.
Xactly Sales Compensation For Dummies38
08_045981 ch04.qxp 3/17/06 6:52 PM Page 38
47. Part V
TopTenAdvantagesto
ChoosingXactlyIncent
In This Part
ᮣ Finding out more about Xactly Corporation and Xactly Incent
ᮣ Summing up the Xactly Incent solution
In this final part, we provide you with the contact informa-
tion you need to connect with Xactly Corporation. This
part represents the traditional Dummies Part of Tens: Just
what you need to liven up small talk at your next departmen-
tal meeting — ten reasons to switch to Xactly Incent!
Rules-Based Flexibility
You can easily customize your compensation plan to make it
an exact match for your company’s needs.
Real-Time Visibility,
Guaranteed
Your sales representatives and executives can access com-
pensation figures from a Web browser in real-time, making
your compensation plan a visible resource to help promote
better sales behavior.
09_045981 ch05.qxp 3/17/06 6:52 PM Page 39
48. Xactly Sales Compensation For Dummies40
Affordable, Maintenance-free
Convenience
Xactly Incent is a truly low-cost compensation solution,
requiring no local computer applications and no dedicated
workstations or server. (Plus, your compensation analysts
don’t have to double as IT experts.)
Rapid Deployment
Why wait months for an enterprise application to be
deployed? With Xactly Incent, most deployments take place
in a matter of days, and your company can quickly realize a
return on its investment.
Complete Reports
Xactly Incent can provide your sales force with on-screen
compensation reports, using a number of criteria that you
specify. (If your local PC has a printer connected, they look
great on paper too!)
Xactly Incent’s What-If
Calculator
Your sales representatives can forecast their incentive totals
based on future performance, which helps reinforce the
proper sales behavior.
09_045981 ch05.qxp 3/17/06 6:52 PM Page 40
49. Integration with Customer
Relationship Management
Systems
Integration between Xactly Incent and Customer Relationship
Management systems such as Salesforce enable your sales rep-
resentatives to easily build commission and bonus estimates.
Familiar Web Interface
Your company’s employees use Web controls to control and
customize Xactly Incent.
Fast and Easy Customizing
You can rapidly make changes to your compensation plan
using your Web browser, allowing quick plan updates to
match changing market conditions.
On-Demand Security
Your company’s compensation data remains in a high-security
SAS 70, Type II certified telco-grade hosting facility, and the
Web connection you use to access your compensation plan is
encrypted for protection.
Convenient to Contact
The eleventh reason to consider Xactly Incent is that the
company is easy to reach. You can find out more about Xactly
Incent, including the consulting, training, and support serv-
ices offered by Xactly, in any of these ways:
Part V: Top Ten Advantages to Choosing Xactly Incent 41
09_045981 ch05.qxp 3/17/06 6:52 PM Page 41
50. ߜ The Xactly Corporation Web site, www.xactlycorp.com,
offers a number of animated walkthrough videos and fea-
ture descriptions that describe Xactly Incent in more
depth. You can find e-mail contact information there
as well.
ߜ You can call Xactly at 866-GO-XACTLY (866-469-2285), or
408-977-3132.
ߜ You can e-mail the Xactly Sales department at
sales@xactlycorp.com, or request general company
information from info@xactlycorp.com.
ߜ The company’s mailing address is
Xactly Corporation
400 Race Street, Suite 201
San Jose, CA 95126
Xactly Sales Compensation For Dummies42
09_045981 ch05.qxp 3/17/06 6:52 PM Page 42
51. Too many companies still use spreadsheets to keep
track of their sales compensation.In this book,you can
find out why you need more than a spreadsheet to
compensate your sales force properly.A dedicated sales
compensation application can drive the right behavior
among your sales representatives,resulting in increased
performance and profitability.
This guide walks you through the business and technical
aspects of evaluating various sales compensation
management solutions and transitioning your company’s
plan to take full advantage of the latest technologies
for today’s mobile sales force.
ISBN: 0-470-04598-1
Not resaleable
Mark L.Chambers
with ChristopherW.Cabrera
Find out how to
incent right and
sell more!
A Reference
for the
Rest of Us!®
@
ߜ Findlistingsofallourbooks
ߜ Choosefrommany
differentsubjectcategories
ߜ SignupforeTipsat
etips.dummies.com
Saygoodbyetospreadsheets—
start managing your sales compensation plan
in real time!
Xactly™
Sales Compensation
Praise for Xactly Sales Compensation
For Dummies
“Sales management needs to be informed buyers of advanced
automationtoolstosuccessfullymanagesalescompensationplans.
‘Xactly Sales Compensation For Dummies’ contributes to this
knowledge.”
—DavidJ.Cichelli,authorof“CompensatingtheSalesForce”
and senior vice president of The Alexander Group,
a leading sales consulting firm
FREE eTips at dummies.com®
Improve your spreadsheet-based
compensation plans
with an online solution
Improve your plan with
SPIFs,bonuses,and
rules-basedautomation
Provide real-time
reports to your sales
force
Use the Web —
securely! — to deliver
sales compensation
infoanywhere,anytime
Makeyourcompensationplan
astrategicweapon!
Compliments of
