Xactly Study Finds Incentive Compensation Errors Costing Enterprise Companies Millions

Annual Best Practices Survey Shows Over 80 Percent of Companies Have Inaccuracy Rates of Higher than Five Percent, Representing a Huge Revenue Cost
Aug 21, 2018
3 min read

CHICAGO – August 21, 2018 – Today, at the WorldatWork Spotlight on Sales Compensation conference, Xactly, the leading provider of cloud-based sales performance management (SPM) software, announced findings from its annual 2018 Sales Compensation Best Practices Study. Co-sponsored by OpenSymmetry, this year’s study found that organizations spend, on average, 10 percent of revenue on sales compensation; however, 83 percent of companies have payment inaccuracies, at an average rate of higher than five percent. For enterprise companies with revenues of $100 Million, even just a one percent error rate in compensation payouts can cost up to millions of dollars.

“With a tenth of revenue being spent on incentive compensation, leaders have an obligation to ensure that this money is being spent appropriately,” said Christopher W. Cabrera, founder and CEO of Xactly. “Errors in commission payments represent a huge business cost – in terms of revenue attainment, as well as employee trust, motivation, and performance.”

As a result of delayed and inaccurate payments, lack of program visibility, and overly complex compensation plans, the survey found that the vast majority of organizations don’t maximize the ROI of their sales incentives. However, according to the survey, best-in-class companies are turning this around through incentive compensation management (ICM) technology and simplified plan design – streamlining administrative processes, decreasing error rates, and increasing sales force trust.”

Standing Apart from the Competition with ICM Technology

ICM is the foundation of sales performance management (SPM) and has the highest payback for businesses. By automating audit checks and errors, ICM technology allows organizations to quickly investigate and correct calculation discrepancies. Moreover, by linking reward and behavior, real-time ICM processes generate trust and motivate team behaviors that are aligned with corporate goals.

The new survey findings show how ICM technology drives value through shorter payout cycles, increased accuracy and improved workflow efficiencies. Specifically, the survey found that:

  • 71% of organizations using ICM technology complete payouts in less than three weeks – 20% higher than those organizations using spreadsheets or homegrown solutions
  • Organizations using automated ICM technology have up to 3x higher efficiencies than organizations using manual processes
  • Companies with automated ICM processes improve the visibility and timeliness of compensation reporting with daily or near real-time data - compared with just six percent of organizations administering compensation manually

See Xactly at Spotlight on Sales Compensation 2018

Xactly will be sharing the complete findings this week at the WorldatWork Spotlight on Sales Compensation 2018 conference in Chicago. Attendees can stop by Xactly booth #15 to get a complimentary copy of the Executive Guide highlighting additional findings. Organizations can also request a copy here.

Survey Methodology

Conducted by Xactly and OpenSymmetry in May and June 2018, this year’s Sales Compensation Best Practices Survey polled more than 200 companies across all major industries, including a third with revenue larger than $1 Billion.

About OpenSymmetry

OpenSymmetry is a global consulting company that specializes in the planning, implementation, and management of sales performance management solutions supported by the industry’s leading technology suppliers. Since 2004, OpenSymmetry has enabled over 1,100 customers, ranging in size and industry, to achieve greater operational efficiency and get better sales results. OpenSymmetry is headquartered in Austin, Texas, with offices in London, Chennai, and Pune. To learn more, visit opensymmetry.com.

About Xactly

Xactly delivers a scalable, cloud based enterprise platform for planning and incenting sales organizations, including sales quota and territory planning, incentive compensation management, and predictive analytics. Using this powerful sales performance management (SPM) portfolio, customers mitigate risk, accelerate sales performance, and increase business agility. Combined with Xactly Insights, the industry’s only empirical big data platform, Xactly empowers companies with real-time compensation insights and benchmarking data that maximize the bottom line. With an open, standards-based architecture, Xactly seamlessly integrates within an enterprise’s existing infrastructure, with the ability to work with any ERP, CRM, or HCM application, while meeting the highest enterprise standards in security, reliability, and privacy.

To learn more about Xactly and the latest issues and trends in SPM software, follow us on TwitterFacebook, and the Xactly Blog.

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Neil Torres

Blanc & Otus Public Relations

Tel: 415-856-5140

Email: neil.torres@blancandotus.com