Procuri Leverages Strategic Compensation, Enhances Competitiveness with Xactly Incent

Printer-friendly version

“ Since going with Xactly, the silence from the field has been deafening as our representatives now go directly into Xactly Incent to see precisely and indisputably where they stand. That takes a huge burden off of everyone, and gives reps more time to sell and more information to determine where best to put their efforts.”

- Jeff Wilson, Procuri, Senior Vice President of Worldwide Sales

Procuri leads the on-demand supply management industry with more than 360 customers of all sizes and a nearly perfect record of customer retention. Customers include Eastman Kodak, The McGraw-Hill Companies, Newell Rubbermaid, Rio Tinto, Air France – KLM, and Sun Microsystems. In Q4 2007, Procuri was acquired by publicly held Ariba, a global leader in the spend management category.

Challenge
Procuri provides its on-demand supply management solutions and services via a cost-effective subscription model. Up until 2007, the company paid its sales force on bookings. But in that year, the company decided to move to a cash receipt structure, in line with what much of the industry was doing. Suddenly, a compensation program that had been moderately intricate looked to become immensely complex—with unique deal structures, committed and uncommitted bookings, out-clauses, and the need to calculate and release commission payouts across monthly, quarterly and annual timeframes.

It was immediately clear that there was no way that Procuri’s traditional spreadsheet-based method of managing compensation was going to keep up with the new complexity. Time-consuming errors and disputes were already the norm, despite hours of administrative effort; and management and the field force battled with inconsistent reporting and a lack of timely visibility into the compensation process. And it seemed like the situation was on its way to becoming even worse.

“As soon as we stopped paying everything upfront, it was obvious that something radically different had to happen in the way Procuri managed its compensation process,” explains Marshay Robers, Procuri sales operations manager. “Moreover, there was a need to automate the entire order intake and management process. It was felt that the right automated sales compensation management solution, providing the proper levels of visibility into credits and commissions, would be a valuable component of that overall process.”

Solution
The solution Procuri opted for was Xactly Incent™, the pioneering on-demand sales performance management application from Xactly Corporation. According to Robers, “That Xactly Incent was an on-demand solution was a big driver of our decision, coupled with the fact that salesforce.com is an Xactly customer. We use Salesforce CRM and have a clear understanding of the power, flexibility and economic advantages of the on-demand/SaaS model for sales performance management. We were also excited by the opportunities for leveraging synergies between Xactly Incent and Salesforce as we reengineered our order management process.”

Procuri deployed Xactly Incent in April 2007, giving its sales team immediate real-time visibility via the web into precisely how, what, and when they are being paid without having to ring up finance or wait for reports. These timely insights, coupled with the ensured accuracy of commissions payments provided by the Xactly Incent rules-based compensation engine, led the sales team to enthusiastically embrace the solution. Sales reps also quickly began taking advantage of the Incentive Estimator™ function within Xactly Incent to project how much they would make on various deals and deal structures. This in turn dovetailed with management’s efforts to use compensation more strategically and focus reps on the most profitable sales opportunities.

“Accurately calculating and reporting commissions is key to running a motivated sales organization, and Xactly Incent is providing us with what all salespeople want at their fingertips— accurate, real-time visibility into what will be paid and when, without waiting for spreadsheets and reports from finance,” says Jeff Wilson, Procuri senior vice president, worldwide sales. “Since going with Xactly, the silence from the field has been deafening as our representatives now go directly into Xactly Incent to see precisely and indisputably where they stand. That takes a huge burden off of everyone, and gives reps more time to sell and more information to determine where best to put their efforts.”

Sales managers have also greatly benefited from the use of Xactly Analytics™, an optional module of Xactly Incent. Xactly Analytics enables self-service analytics, which Procuri field managers leverage via the web to help run their respective operations.

“With Xactly Analytics, everyone can run their own reports,” explains Robers. “It’s an extra step in visibility, taking it to a more detailed level. You can quickly see what bookings, revenues, margins, etc., are by sales rep, period and customer. It’s been the extra kicker the sales management team was looking for.”

And in the executive suite, top management is able to log in to see where the company stands, view rankings, and better understand how sales teams are performing. “They’ve been very positive about the increased visibility and new accuracy,” claims Robers. “These are things we just couldn’t do quickly or easily before.”

Benefits

Strategic compensation that supports competitive business model
Through Xactly Incent, Procuri has been able to move away from paying commissions solely on bookings and has successfully instituted a cash-in payment model. This not only has had a positive impact on cash flow, but also has enabled the company to structure unique deals, which in turn has increased its ability to stay competitive in its industry. “Could we have handled this kind of complexity using spreadsheets?” asks Robers. “Not likely. Xactly Incent has been the enabler.”
Adds Wilson, “Xactly immediately understood the ins and outs of our business model and how it effects sales compensation, and was able to apply extensive compensation domain expertise, as well as technology, to our particular challenges.”

Streamlined order management process
As the replacement for the company’s previous manual method of compensation management, Xactly Incent is enabling Procuri to automate its order intake process, something that was not possible before. As part of this initiative, Procuri will integrate Xactly Incent with its salesforce.com CRM implementation in order to create a seamless CRM, order entry and compensation management process that is automated end-to-end.

Consistent, timely visibility that drives sales performance
Around-the-clock online visibility into compensation plans and attainments, coupled with the forward-looking visibility provided by Xactly’s Incentive Estimator, has given sales reps a comprehensive understanding of how they are being compensated, and how they can maximize their payouts through certain strategic actions. This has increased the efficiency of the sales reps as well as their motivation. “Knowing what they are being paid and what they’re being credited, by customer, has been a huge motivator for the sales team,” says Robers. “They’re able to see at a glance what’s pending and what’s possible—and that contributes significantly to enhanced performance. The feedback has only been positive.”

Lower administrative costs
With spreadsheets out of the compensation management picture, Procuri’s compensation administration costs and efforts have decreased substantially. At least one finance analyst’s time has been redirected 100 percent to other, more strategic tasks due to the automation that has come with Xactly Incent. “And that has happened even as our compensation program has gotten much more complex,” explains Robers. “We would have been buried in spreadsheets and would have burned up many more hours a month if we had continued trying to manage the process by manual methods.”

Rapid implementation
As all compensation-related transactions and decisions are captured and archived in Xactly Incent, Procuri now possesses a complete sales compensation audit trail. With the company’s acquisition by Ariba, compliance has become a greater issue and time- and date-stamped records can be called up to answer compliance-related questions as they emerge.

Because it is an on-demand solution, Xactly Incent is quickly deployed and adapts easily to customer changes. Procuri leveraged the ability to have a dedicated Xactly engineer onsite as it went live with its Xactly Incent implementation. “This was a big help as we were able to make changes on the fly as our internal people got up to speed,” concludes Robers. “Xactly understood our complex plans and helped us configure the solution appropriately. And they have been great in terms of support response time, returning calls within 30 minutes. Overall, it has been a very, very positive experience.”