MDS Pharma Services Powers Sales Performance with Xactly Incent

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“Xactly’s real-time transparency is just tremendous. Before, our reps had difficulty tracking which specific studies and deals they were being paid on. But now they easily see the source of their commissions, what has been paid, and what is being held back. It’s highly motivating that they now clearly see the biggest, most-profitable deals and how they’re being paid on them.”

- Lee Ronald, Director of Commercial Operations, MDS Pharma Services

With facilities strategically placed around the globe, MDS Pharma Services is the world’s premier provider of innovative early stage drug discovery and development solutions to the pharmaceutical and biotechnology industries. The company’s business development team sells within multiple lines of business along the drug-development process, from lead optimization and pre-IND research, through early clinical research and bioanalysis.

Challenge
A global business with numerous service offerings, MDS Pharma Services has five major lines of business, each with its own unique sales compensation plan. Previously, administrators had laboriously worked on spreadsheets for each plan, dealing with versioning, tracking and multicurrency calculation headaches; emailing plans out to reps for approval; and struggling to avoid errors in the commissions payment schedule. Yet while the administrative burden was excessive, the missed opportunities to compensate and sell more strategically were just as troubling.

“Our dilemma was clear, costly and common to many companies,” explains Lee Ronald, director of commercial operations, MDS Pharma Services. “Because we relied on manual processes with no centralization of efforts, we were unable to deploy the kind of sophisticated compensation plans that would motivate more strategic sales behaviors. At the same time, the sales compensation environment we did have was sufficiently complex as to overtax our administrative resources.”

The first step MDS Pharma Services took to escape this bind was automating its CRM practices with salesforce.com, while removing sales responsibilities from each line of business and centralizing them. The company then began looking for ways to leverage the same type of automation to solve other pain points, such as sales compensation management.

“We wanted to find a solution, preferably Software-as-a-Service, that does for sales performance what salesforce.com does for CRM, with the same levels of automation and visibility into operations,” claims Ronald. “And we wanted this solution to seamlessly integrate with our salesforce.com CRM implementation to create a unified environment for our reps.”

Solution
MDS Pharma Services’ search brought the company quickly to the Xactly Incent on-demand sales compensation solution, which met its criteria for close integration with Salesforce CRM, real-time visibility into sales compensation plans and attainment, commissions accuracy, and a pure SaaS architecture.

MDS Pharma Services went live with Xactly Incent towards the middle of 2008, just in time to develop and deploy its 2009 sales compensation plan. Along with Xactly Incent, MDS also licensed Xactly modules for modeling and analytics. Now the company can model plans and plan changes prior to rolling them out, and also analyze post-sales data gathered as part of the compensation management process to help fine-tune sales operations and optimize future sales performance.

“We liked what we saw up front, including modeling, the accurate rules-based compensation engine, and easy Web-based visibility for reps and management,” says Ronald. “Because Xactly is a SaaS solution, we were able to get rolling quickly without a large capital expenditure. And the training was pitch-perfect, enabling us to come away with a good knowledge of the system in a short period of time.”

Single sign-on with Salesforce CRM
Right from the start, MDS Pharma leveraged Xactly Incent’s close integration with salesforce.com. Data from Salesforce CRM flows automatically into Xactly Incent, while MDS Pharma Services reps can access the Xactly application directly from a tab in the Salesforce application. Thus, without ever leaving Salesforce, reps can view potential commissions, where they stand on commissions attainment, and even perform “what if” calculations against live Salesforce opportunity data to determine which deals will deliver the best commissions payout.

“Xactly’s real-time transparency is just tremendous,” says Ronald. “Before, our reps had difficulty tracking which specific studies and deals they were being paid on. But now they easily see the source of their commissions, what has been paid, and what is being held back. It’s highly motivating that they now clearly see the biggest, most-profitable deals and how they’re being paid on them.”

Single system of record
The integration of Salesforce CRM and Xactly Incent, and its resulting gains in visibility, have brought equally important advantages to field management and administration. In the past when compensation-related queries arose from the filed, it would take weeks of investigative time, digging into spreadsheets, to come up with answers. Now, questions can be answered and issues resolved almost instantly.

“From a field-query standpoint, we’re all on the same system of record and see the same information to address questions much more quickly and authoritatively,” says Ronald. “We see in real-time what is in Xactly Incent and what is in Salesforce CRM, and the question is decisively answered.”

Business Benefits

More effective, lower risk compensation plans
With spreadsheets now literally off the table, MDS Pharma Services is free to create and deploy more sophisticated and effective sales compensation plans, modeling them first with the Xactly Modeling module to assess their impact and reduce risk. Once modeled, plans can be deployed immediately into Xactly Incent for “go-live.”

“Liberated from the burden of manual calculations, we kicked off 2009 with a more sophisticated and effective compensation plan,” claims Ronald. “We were able to introduce more motivating factors, additional tiers and the like. As a result, the plan has been an incentive for reps to sell beyond their quotas and align their efforts with the company’s strategic goals.”

Faster, more accurate commissions processing
Xactly Incent has also enabled MDS Pharma Services to greatly reduce the time it takes to accurately calculate and process commissions, providing reps with yet another motivational factor and further reducing the back-end administrative burden.

“We’ve gone from processing commissions on a quarterly basis to doing it monthly,” explains Ronald. “It now takes just a few days to get the right information to payroll and to get the check cut. We also can provide more accurate and timely information to Finance for accounting, planning and compliance purposes, which is a major plus. And we don’t have to worry about payment errors – over and under – any longer.”

Simplified multi-currency processing
MDS Pharma Services deals in six contract currencies: U.S. and Canadian dollars, British pounds, Chinese Yuan, Swiss francs and Euros. Meanwhile, payouts are made in eight local currencies. The challenges of dealing with volatile exchange rates frequently led to disputes in the past. With Xactly’s multicurrency support, this is no longer the case.

“Xactly Incent has made selling globally so much easier,” claims Ronald. “Current exchange rates are all integrated into the system now, and accurately applied. It’s all automatic. Consequently, there are no more disputes or timeliness issues.”

More effective use of sales and administrative resources
Xactly’s real-time visibility into incentive compensation and fast, accurate commissions processing has enabled MDS Pharma Services reps to concentrate more on selling and less on compensation issues. At the same time, the administrative overhead of compensation management has been slashed by as much as 60 percent, freeing up sales operations and finance resources to be applied to more strategic tasks.

“On the front end for reps, shadow accounting is way down and trust in the commissions process is way up,” says Ronald. “On the back end, the entire compensation management process has been streamlined and simplified. As far as sales and administrative productivity goes, we’re far, far ahead of where we were before Xactly.”

Cost-effective, highly responsive SaaS solution
Based on its experience with Xactly Incent and Salesforce CRM, MDS Pharma has become a firm believer in the multi-tenant SaaS model, and is increasingly interested in applying it to address other business challenges.

“Xactly and salesforce.com really show off the usefulness of SaaS,” says Ronald. “The low capital investment, easy rollout to end users, and the flexibility and easy integration of these two complementary solutions are extremely beneficial to companies like ours. New features roll out quickly, and it’s so easy to make the kind of changes that present major challenges with legacy systems.”

Concludes Ronald: “Everyone touched by Xactly Incent likes it. Sales compensation management has ceased to be an administrative sinkhole and cost center, and is now the prime motivator of sales performance that it ought to be.”