Ride the Economic Wind…Don’t Get Blown Away in ‘09

It’s been a wild economic ride—slide, many would call it—this past year. And the only thing certain about the coming year is that it will be shaped, squeezed and knocked around by continued consumer uncertainty. Because buying cycles promise to be so unpredictable in 2009, companies need to equip their sales organizations to be able to move smoothly and productively with the dynamics of the business and with the gyrations of local and global markets.

This means acting right now to put in place highly adaptable sales compensation plans for 2009 that enable sales and finance to align with corporate objectives, both long and short term, and clear a path for meeting them. Today more than ever, to hesitate is to lose.

Nonetheless, despite the enormous stakes, experience tells us that only half of all 2009 sales plans will be ready for primetime come January. And if that isn’t dismal enough, regardless of whether they’re delivered late or on time, the vast majority of these plans will be dumbed-down or else overly complex and confusing. Either way, they’ll be ineffective at a pivotal time.

But experience also shows us a way out of this dilemma. Here, distilled into seven key practices, is what you need to do in order to arm sales to make the most of the coming uncertain year:

1. Automate. It worked for CRM. Now try it for sales compensation management. Companies still using spreadsheets to manage compensation are pouring scarce administrative dollars down the drain. Worse, they’ll never be able to achieve top sales performance because they lack the requisite visibility, flexibility, scalability and accuracy that come with automation. You should wish this problem on your competition, not yourself.

2. Model. Don’t rush blindly into implementing new plans or plan changes. This is no time to experiment. Model your plans and plan changes up front to gauge their impact. If you’ve automated, modeling shouldn’t be hard to do.

3. Keep it simple and consistent. If you have more than four key performance indicators, or 10 or more conditions to determine credit allocation and payment release, then your plan is too complex and risks confusing your reps. By the same token, as lead-to-sales times invariably lengthen in 2009, try to keep the long-term mainstays of your plan consistent, to keep reps focused on selling, not calculating.

4. Keep it visible. Give the troops in the sales trenches real-time visibility into plans and compensation processes so they can see how they’re doing towards plan, and how much more they stand to make if they do “x,” “y” or “z.” Once you’ve automated, this kind of visibility via the Web becomes easy.

5. Keep it flexible. Plans should ultimately drive long-term behavior, but you want the flexibility to drive short-term activity as well. Make sure you can react to sudden opportunities and challenges through SPIFs and contests without altering the long-term framework of your plan.

6. Analyze. Knowledge is power. Automating compensation provides a bonanza of useful data on who bought what from whom and for what price and conditions. Leverage this data through analytics for insights into selling patterns, commission spend, plan effectiveness and how to further drive sales performance.

7. Measure constantly. In turbulent times, it helps to use all your senses all the time. Don’t wait until the end of 2009 to measure your plan’s effectiveness. There are bound to be numerous bumps and sudden shifts along the way that will impact your business. You need to stay on top of them with mid-year, quarterly and even monthly sales performance reality checks accompanied as necessary by fine-tunings of quotas, commissions, territories, etc.

While 2009 isn’t likely to yield blow-away financial results for all that many companies, there are key steps that can be taken to keep a business from being blown away altogether - and even to help it prosper in a challenging environment. More closely managing sales performance is one of those steps. Late, confusing, hard-to-manage or overly simplistic compensation plans are roadblocks to optimal sales performance, in both good years and bad.
Why wait for a good year to find out how much of a roadblock your plans have been?

Upcoming Business Finance Webinar: Leveraging the Power of On-Demand Analytics to Drive Finance and Sales Performance

This upcoming webinar expands on one of our previous posts:
The Power of Analytics


Utilize "Post-Sales" Data to Gain Key Business Insights

Register to learn more.

In this Webinar, Xactly’s Christopher Cabrera and IDC’s Henry Morris will discuss how post-sales analytics can provide new and strategic insight into an organization’s selling patterns, commission spend, product performance, sales rep and team performance, and sales plan effectiveness. They will examine how post-sales data – traditionally scattered across a variety of disparate systems including ERP/order entry, HR, Pricing and Product – can be now be integrated, modeled and analyzed with an eye towards enhancing business strategies, changing sales rep behaviors, and super-charging sales organizations.

Participants will take away:

* How aggregating data for on-demand analytics can be streamlined efficiently
* Best practices for driving financial and sales performance with analytics
* Best practices for modeling and analyzing post sales data to optimize finance and sales performance
* A view of finance and executive dashboards and custom analytic capabilities for sales performance analytics

Featured Speakers:
Christopher W. Cabrera, Founder & CEO - Xactly Corporation
Henry Morris, Senior Vice President Worldwide Software & Services Research — IDC

Date: September 18, 2008
Time: 1:00 p.m. EDT

Register to learn more.

Business Intelligence Network (podcast) - Automate Sales Performance Management as Software as a Service

Karen Steele discusses Xactly's ability to automate sales performance management as software as a service.

Listen to the podcast here.

The Power of Analytics

In recent years, prices for raw metals and minerals have skyrocketed. Mining companies have fanned out to all corners of the globe, conferences have been convened to discuss the topic, and all the while prices continue to rise.

But did you know that right now, at this very moment, there are tens of billions of dollars worth of iron ore and other valuable metals and minerals just sitting on the floor of every ocean on earth? Scientists have known about manganese nodules for decades (as a matter of fact, geologist A.A. Archer estimated that the sea floors and abyssal plains of the ocean contain something like 500 BILLION TONS of untapped metal ore). Iron prices should be dirt cheap!

So what’s the problem? Why has this vast natural resource lain undisturbed for decades? The issue is that no one has been able to successfully come up with a way to mine it cost-effectively.

This got me thinking about the difficulties of different kinds of mining, specifically DATA mining.

For a long time, many companies have been talking about the ability to provide Analytics. And I will admit that there are some phenomenally cool, whiz-bang products out there in the business intelligence space. However, there has always been one inherent problem with this: Analytics are only as good as the data they’re analyzing.

Those whiz-bang B.I. solutions can only do their cool stuff once you have the underlying data.

Getting at that data traditionally has been harder than stripping iron ore out of a manganese nodule eighteen fathoms below. This is the dirty little secret around why more than HALF of all data warehouse projects fail.

You see, first a company needs to figure out where the data IS, and more importantly, how to get at it. This usually involves getting IT involved and purchasing an ETL tool to extract and cleanse the data.

Then comes the hard part: aggregating the data into one place which requires architecting the data schema and building a data mart or data warehouse. Then, a presentation or (BI) layer must be selected in order to view and analyze the data. Of course, you will need to do a lengthy requirements phase to talk about what you want to see, etc., reports will need to be built, multiple constituencies need to be involved. There are a lot of moving parts.

Lots of money has been spent just analyzing why these massive data warehousing projects fail – you can read just a small subset of some of the findings here and here.

What about analyzing your CRM data, you may ask? You could certainly do that, but what are you really analyzing? Pre-sales data entered by sales reps, complete with equal measures of sand-bagging on one side and pie-eyed optimism on the other.

No self-respecting CFO would run his or her business on such data. I’m talking about true POST-sales data – getting to this rich data is what will make Analytics truly sing.

What if a company could streamline this entire process and make it fantastically simple – giving you access to ALL your post-sales data without any intervention from IT, tedious consulting projects or ETL tools?

Well, don’t despair, Xactly to the rescue! But don’t just take my word for it…

If you speak to Henry Morris (SVP Worldwide Software & Services Research at leading research firm IDC) he’ll tell you: "I always thought business intelligence [BI] on demand would have difficulty taking off, since the application has to get its data from an outside source. But Xactly already has your data.“

As a byproduct of solving the variable compensation problem for companies, Xactly has pre-built a sophisticated data warehouse that contains every bit of this rich data. Not only that, but because of our fixed data schema (just one of the innumerable benefits of being a true on-demand company), every company can get access to this data.

We then layer a wonderful Analytics engine over the top of it, complete with all the tools you could ever need, and now you’ve got something companies have thrown millions of dollars at, usually ending in frustration and tears.

Let us tell you more about it – you’ll wonder where we’ve been all your life.

Now that we’ve got this problem licked, I’m off to tinker with some ideas on these manganese nodules. I may have a few tricks up my sleeve.

Webinar Recording Available: The Business Case for On-Demand Sales Performance Management Analytics

CRM applications have revolutionized the selling process, organizing pre-sales data that reps and management need to manage the sales pipeline. But what about “post-sales” data? There is a ton of information produced at the time of sale that is effectively orphaned—information on what a customer actually bought, the final price, the commission paid, the territory where it was sold, etc. This is data that, if collected and cleansed, can be used to increase sales performance and maximize profits going forward.


In this Webinar, Xactly’s Karen Steele and THINKStrategies’ Jeff Kaplan will discuss how post-sales analytics can provide new and strategic insight into an organization’s selling patterns, commission spend, product performance, sales rep and team performance, and sales plan effectiveness. They will examine how post-sales data—traditionally scattered across a variety of disparate systems including ERP, HR, and Payroll—can be now be integrated and analyzed with an eye towards enhancing business strategies, changing sales rep behaviors, and super-charging sales organizations.

View Webinar

Upcoming Webinar: The Business Case for On-Demand Sales Performance Management Analytics

The Business Case for On-Demand Sales Performance Management Analytics with Xactly and THINKStrategies

Tuesday, July 29, 2008 10:00 AM - 11:00 AM PDT

Register to learn more:
https://www1.gotomeeting.com/register/415893690

CRM applications have revolutionized the selling process, organizing pre-sales data that reps and management need to manage the sales pipeline. But what about “post-sales” data? There is a ton of information produced at the time of sale that is effectively orphaned—information on what a customer actually bought, the final price, the commission paid, the territory where it was sold, etc. This is data that, if collected and cleansed, can be used to increase sales performance and maximize profits going forward.

In this Webinar, Xactly’s Karen Steele and THINKStrategies’ Jeff Kaplan will discuss how post-sales analytics can provide new and strategic insight into an organization’s selling patterns, commission spend, product performance, sales rep and team performance, and sales plan effectiveness. They will examine how post-sales data—traditionally scattered across a variety of disparate systems including ERP, HR, and Payroll—can be now be integrated and analyzed with an eye towards enhancing business strategies, changing sales rep behaviors, and super-charging sales organizations.

Participants will take away:

• Best practices for integrating and analyzing post-sales data to optimize sales performance.
• An understanding of how post-sales data can be leveraged daily by reps within their CRM applications to maximize profits – for the company and for themselves.
• A view of the broad scope of business processes that benefit from post-sales analytics – from sales compensation management to territory and quota management to pricing management and sales forecasting/planning.

Speakers:

Karen Steele, Vice President of Marketing, Xactly Corporation
Karen Steele is responsible for managing all aspects of Xactly's worldwide marketing.

Jeff Kaplan, Managing Director, THINKstrategies
Jeff Kaplan is the founder and managing director of THINKstrategies (www.thinkstrategies.com), a strategic consulting firm that helps IT enterprise decision-makers with their sourcing strategies; solution providers with their marketing strategies; and venture firms with their investment strategies.

Register to learn more:
https://www1.gotomeeting.com/register/415893690

SaaS 2.0? Predictions for the year ahead.

2007 was a momentous year for Software as a Service (SaaS), as it emerged as a disruptive force in an increasingly complacent industry. And while it would be easy to say that growing customer interest will propel SaaS to new heights in 2008, I believe there’s something going on right now that is about more than mere market momentum. From my viewpoint, SaaS is becoming increasingly savvy, and it isn’t too far-fetched to think we’ll soon being talking in terms of SaaS 2.0.

Here’s what I mean. In 2007, we were still witnessing the first generation of many SaaS solutions. Their limited functionality led to criticism that they weren’t as robust as their enterprise software counterparts. In 2008, we will see more SaaS companies building out or partnering to provide more robust solutions and platforms, along the lines of salesforce.com’s Force.com platform.

This is already happening in the market in which Xactly competes, as Incentive Compensation Management (ICM) offerings are morphing into full-blown Sales Performance Management (SPM) solutions, with rich analytics and functionality such as territory and quota management.

Just as exciting to me, SaaS will breathe new life into struggling enterprise software sectors in 2008, and will create entirely new sectors by lowering the cost of entry vis a vis traditional software models. This is huge. And the fast-expanding SPM segment is proof that it is starting to happen.

At the same time, SaaS will create entirely new ecosystems. In 2007, we witnessed the delivery of mash-ups combining data and SaaS functionality via single sign-on. In 2008, we will see SaaS companies supporting end-to-end processes and seamless user experiences through deep integration, software suites, or partnerships.

And through it all, SaaS vendors will only get smarter about customer needs. The advantage of managing all customer deployments under a single umbrella, as SaaS vendors do, is that we are better able to find common threads across customer problems, needs and desires. And customers don’t have to wait for the next release cycle—which, in the enterprise software world can mean waiting a year or more—for a SaaS vendor to implement major fixes and changes across the board. In fact, SaaS vendors are free to be innovative and practically impelled to deliver ever more value, because we are developing a single line of code for one platform shared by all users.

Finally, in 2008, Wall Street will increasingly wake up to SaaS as we witness an up-tick in SaaS IPOs, despite the down market predicted for the first half of the year. The recent successful IPO of Xactly partner and customer, SuccessFactors, is likely a harbinger of things to come. Along these lines, Wall Street bankers, investors and enterprise customers will come to see the distinction between tactical SaaS applications that conveniently automate non-mission critical business functions like recruiting versus truly strategic SaaS applications like SPM, which are at the center of driving business growth and profits.

Okay, I admit to a bias. But, as the SaaS industry matures, I firmly believe it will continue to burn a hole right through traditional software models throughout the rest of this decade and beyond. Whether we call it SaaS 2.0 or not, the SaaS we’ll come to know in 2008 will be light-years ahead of the SaaS we knew in 2007— in terms of functionality, robustness and appeal and, most importantly, in its ability to game-change a customer’s competitiveness and profit picture.