SPM News – Big News for Callidus, Varicent and OpenSymmetry

Varicent Software Announces Strategic Partnership with OpenSymmetry
Varicent Software, an innovator and provider of the only comprehensive application for sales performance management (SPM), recently announced a strategic partnership with OpenSymmetry, a largest independent consultancy specializing in sales performance management.

Other partners of OpenSymmetry include Actuate, Callidus Software, nGenera, Oracle, Sungard, TerrAlign and Xactly.

Callidus Software Broadens Performance Management Capabilities with Introduction of TrueTarget
The new SaaS-based software module, TrueTarget™, combines SPM and Employee Performance Management (EPM) capabilities to deliver Pervasive Performance Management (PPM) across the entire enterprise. The concept of PPM offers a single, business-wide, pay-for-performance solution for companies.

Pervasive Performance Management goes beyond standard incentive compensation management and includes objectives alignment, goal management, bonus allocation and employee evaluation.

I could be wrong, but as far as I know the only other major vendor currently offering a similar end-to-end solution is SuccessFactors. [Disclaimer: I have not seen Callidus TrueTarget or any of SuccessFactors’ solutions yet]

Tweak your Sales Compensation Plan – A Tale of Diverging Opinions

In case you are not familiar with it, the Canadian Professional Sales Association (CPSA) has an excellent magazine called “Contact”. The best part is that this magazine is entirely available online, for free, and without any registration. Today I wanted to bring your attention to an article by Jay Somerset called “The Compensation Challenge” which appeared in the Contact Spring 2008 edition.

“It may be time to change – or tweak – your sales compensation plan to better compete in today’s employee-driven market, but if it is done incorrectly you could send your sales team packing. “

Indeed, tweaking a sales plan is tricky business. Stats mentioned in the article back this up: Less than 10% of North American sales organizations redesign their comp plans in a given year, while the other 90 percent only perform minor tweaks. I think ideally, closer to 100% organizations should only perform minor tweaks. Redesigning a plan could be a sign that it had not been planned out properly, and sometimes organizations are compulsive about trying new plans rather than improving their existing plans by tweaking them.

Diverging Opinions
Greg Blysniuk, president of TopLine Sales Compensation Solutions in Toronto advocates simplicity. He says that sales managers often believe their compensation plans must be sophisticated and complex to compete; Greg believes one or two quantitative measures is all what is required to incent people and to ensure the plans are easy to understand.

David Johnston, president of Sales Resource Group Inc in Oakville, Ontario believes compensation plans should factor in qualitative metrics. “Qualitative metrics can be measured according to milestones or key events”.

ICM Applications:
Greg says the main barrier to adopt an ICM application is their cost. He is in favor of using Excel spreadsheets for compensation data collection and analysis. He says that “Spreadsheets are simple to use, inexpensive and they do the basic job”.

David does not agree; he says that spreadsheets are “too basic and error-prone”. He also says that “sales is much too complex for a spreadsheet”. He concludes that there is a middle ground with smaller-scale on-demand ICM applications such as PlanIt (which I reviewed previously), that do not require a large upfront cost.

The Bottom Line:

No matter which approach is used, I’m sure we can all agree that the goal is to make the compensation plans as straightforward as possible. If there is a valid reason for a plan to use some “complex” measurement, fine… as long as it’s easy to understand and clearly communicated to the payees.

As for the need for an ICM application; if an organization is small enough with a low enough order volume and is happy with their current spreadsheet, and if they don’t see any benefits in real-time analytics and dashboards, auditability, modeling, forecasting, and all the other benefits provided by an ICM solution, then there probably no incentive to replace the spreadsheet by such an application.

I agree with Greg that spreadsheets do the “basic job”, but in my experience it does not take very long even for small organizations to realize that the “basic job” is not enough anymore to keep a competitive advantage.

Xactly Incent 4.0 – Effective Dating and Other New Features

Xactly will be releasing the new version of its On-Demand Sales Compensation Management application in the next week or two.

The main changes in Incent 4.0 will include an improved user interface and reports, “effective dating”, improved organizational management and advanced searches.

User Interface and Reports:

The interface looks good and most of the changes were made around the new functionalities for effective dating. The reports look prettier and also have new security/privacy features. More reports are available and they work “out-of-the-box”. As far as I know these reports are still not very customizable, so it will be important to make sure they satisfy the reporting needs.

Effective dating:

This is a feature I described earlier when discussing versioning. Effective dating allows to give a certain value to an object between certain dates, and a different value between other dates. This can be used to track changes to teams and reporting releationships, job or role changes, promotions, name changes, targets, etc.

For example, if a person’s salary goes up from $50,000 to $60,000 on March 31st, the original version will show a salary of $50,000 and a new version will be created with an effective date of March 31st and a salary of $60,000.

Effective dating is extremely useful because rather than scrambling to make changes before a payroll date, changes can be done at anytime. Since these changes can be tracked, effective dating also improves auditability (it is easy to see how historical commissions were calculated).

Note: Effective dating in Xactly is currently limited to people, positions, hierarchy and relationships. Hopefully a future version of Incent will allow effective dating of other objects such as plans, rules, quotas, etc.

Organizational Management:

Without effective dating, organizational management was a bit tricky in previous versions. Changes in hierarchy and relationships are now much simpler and much cleaner.

Advanced Search:

Advanced searching makes the process of finding the right object or result much quicker. It was also a needed add-on to be able to search for effective dated objects.

I have seen a few minor upgrades of Xactly (3.x) and with the scope of these changes, this new release (version 4) clearly deserves it’s own number. Lets just hope that effective dating will be applicable to all objects in the near future.

Callidus Software Launches Operations Center in India

Sales Performance Management Leader Partners With Sierra Atlantic to Support Aggressive SaaS Product Strategy and International Growth

Callidus Software Inc. (NASDAQ: CALD), the leader in Sales Performance Management (SPM), today announced it has opened a new operations center in Hyderabad, India. The center enables Callidus Software to add capacity in the critical areas of product development, consulting services, and technical support through a strategic alliance with Sierra Atlantic, the leader in offshoring enterprise applications and outsourced product development.

Xactly On-Demand Analytics

Xactly Analytics is a new application from Xactly which delivers strong data mining and analytics capabilities, which are easy to leverage by business users and are available through dashboards and reports. It is currently in Beta release and is scheduled for general availability in June 2008.

[Disclaimer: I have not seen Xactly Analytics in action yet and will provide more information when I can]

Xactly Changes the Game in Sales Performance Visibility With On-Demand Analytics

Xactly Analytics stands out as market’s first on-demand application enabling visibility into reliable post-sales data to better measure and maximize sales performance.

Xactly Analytics is a fully on-demand, Web-based application delivering a complete range of data exploration and analysis capabilities that would ordinarily require significant time and IT resources to develop. Xactly Analytics provides unified, authoritative views of key sales performance management metrics, including sales incentive analysis, product performance analysis, and sales performance analysis by sales team, product or region. It includes automated data-workflow processes that transform and aggregate business data brought together by Xactly Incent to provide executives, sales managers and finance managers with better visibility into incentive spend that has not previously been possible with traditional Incentive Compensation Management (ICM) products.

nGenera – The Birth of a new nGen Company

I blogged about BSG Alliance when they purchased Iconixx 2 months ago. Today BSG Alliance was reborn as nGenera, a business innovation platform for Next-Generation Enterprises.

Another news which did not get much attention is that BSG Alliance/nGenera recently acquired Ncent, a fully integrated Sales Performance, Bonus and Salary Management software company. The cached version of Ncent website can be found here.

Mark Hall wrote a bit more about nGenera on his blog at ComputerWorld.

Here is more information about nGenera, straight from their website:

We’re a different kind of company – built to enable our customers’ journeys toward becoming a Next Generation Enterprise – and our innovative core is made of three distinctive capabilities:

• A business platform and components that create an agile mechanism for identifying, creating and configuring our assets
• Collaboration software that enables community-driven innovation (Wikinomics) and interconnects the new global workforce
• An on demand framework that turns Big Ideas into reality for leaders, employees and customers 10x faster than traditional means

Our customers plug-and-play into our platform to enable:

• Revenue growth without additional costs
• Significantly greater utilization of employees and resources
• Breakthrough responsiveness to opportunities & threats

The agility of our platform enables us to configure product offerings directed at our customers’ most pressing challenges and opportunities. Currently, nGenera offers three core products:

nGen Leadership gives companies the tools to understand, orient, define and plan their company’s transformation into a Next Generation Enterprise. Capabilities include Enterprise 2.0 training, leadership development, management chain automation, strategy on demand and simulation on demand, all powered by Web-based software.

nGen Talent enables enterprises to identify, source and retain key resources anywhere in the world, and to provide an attractive, compelling work environment for the new workforce. Major capabilities include recruiting and on-boarding, learning and development, performance management, total compensation and collaborative culture.

nGen Customer gives companies the means to turn customer insight into compelling, differentiated products and services – to co-create complete customer experiences. Key capabilities include customer experience assessment, emotion mining, community-driven innovation, customer experience design on demand, multi-channel interaction, knowledgebase management, and Web monitoring and analytics.

Callidus On-Demand as a Solution for SMBs – Part III of III of my Interview with Callidus

In this last part of my interview with Paul Turner and Jock Breitwieser from Callidus Software, we discussed about the suitability of Callidus as a solution for small to medium-sized enterprises.

Are Callidus Solutions / TrueComp only for Big Enterprises?
“Absolutely not!” exclaimed Paul. It’s true that Callidus offerings were traditionally on-premise complex solutions for large clients, but with the On-Demand solutions this is not the case anymore. Several small companies have chosen Callidus as their Sales Performance Solution and are very satisfied.

Pauls also comments that the small to medium sized enterprises is still a very un-tapped market. “SMBs present great challenges, but also the greatest opportunities for Callidus Software”.

Are On-Demand and On-Premise Solutions Identical?
On-demand and On-premise versions of TrueComp, the “core” compensation tool from Callidus are identical to each other. However there are add-ons and packaged elements which helps speed-up the On-demand deployment, such as packaged reporting elements and spreadsheets to facilite data integration.

So how Long does it Take to Deploy the Callidus On-Demand Solution?
It is hard to say as it depends on so many factors such as the complexity of the implementation, the number of plans, the number of rules, etc. However, Paul noted that a recent small client completed the entire implementation cycle – from design to integration – under only 90 days, others in as little as 60 days.

SalesForce.com
Sales Managers and Account Executives can access reports directly through SalesForce.com. Sales person can access their up-to-date compensation statement and other reports directly as well, and drill-down on key elements when required. Below are a few screen captures illustrating some of the dashboards available for Callidus On-Demand through SalesForce.com.

More information about SalesForce.com and Callidus integration is also available on the Callidus website.

With emerging On-Demand solutions geared towards small to medium sized enterprises, perhaps they will all drop their archaic Excel spreadsheets to adopt such a solution… much like they adopted the web as an essential element of their marketing campaigns 10 years ago.

[Part I of my interview with Callidus]

[Part II of my interview with Callidus]

Thanks again Paul and Jock for your time and for sharing your insight.

Callidus On-Demand as an Enterprise Solution – Part II of III of my Interview with Callidus

Traditionally, On-Demand, or Software as a Service (SaaS), was geared towards smaller enterprises. Recently there has been a strong and growing interest in On-Demand solution as an enterprise solution for large businesses.

Major Concerns to adopting an On-Demand Solution
There are several concerns shared by clients when considering a SaaS solution. The two main concerns which I have heard repeated time and time again are scalability and security.

Scalability
A typical concern for large enterprises to adopting an on-demand solution is its scalability. How well can it really work with 5000+ sales people today, how well could it scale up to 20,000+ sales people tomorrow. When I asked this question to Paul Turner, Director Product Marketing, and Jock Breitwieser, Director Public and Analyst Relations at Callidus, the answer was that their on-demand solutions could be considered MORE scalable than their traditional on-premise solution.

How so? Callidus On-Demand solutions use Sun grid computing to extend the hardware as much as required by the clients. This means that an enterprise does not need to maintain their own grid computing facility, nor do they need to purchase expensive servers to anticipate future growth. The service is ‘on-demand’ and so is the hardware.

Security
Another major concern shared by large enterprises is security. Large enterprises rightfully do not want their sensitive data at risk of being exploited.

The Callidus On-Demand solution was architected with security in mind. From secure FTP data staging, to the use of state-of-the-art data centers to host the data, to individual database instances and dedicated hardware to meet specific security requirements, the Callidus On-Demand is a security fortress. Paul and Jock also noted that security has not been a deterrent for many large clients to adopt Callidus On-Demand offerings.

Other Benefits of On-Demand Applications

Lower Cost of Ownership
With an On-Demand solution, after the initial fee to configure the application, the cost is typically determined per payee; there is no need to purchase expensive hardware and software licenses. Not only is the cost lower upfront, but when considering the overall cost associated to an on-premise solution including upgrades, license renewal, maintenance, support, etc, an on-demand solution may be the most economical solution period.

Availability of Resources
With On-demand solutions, the Vendor is responsible for managing the software and the hardware and any related issues. Clients can focus in their business core focus rather than having to deploy and support the application and hardware.

Accessibility
On-demand applications can be accessed from anywhere in the world, at any time, from a web browser. This not only enables compensation consultants and executives to view sales performance data; it also enables individual sales people to login the application and monitor their own performance.

Paul concluded that with all the benefits of On-Demand solutions, it is easy to see why large customers are so interested by these offerings

[Part I of III of my Interview with Callidus]

[Part III of III of my Interview with Callidus]

Xactly’s Perspective on Recession and Sales Performance Management

Early last week, I received an e-mail from Christopher Cabrera, the founder & CEO of Xactly Corporation. I’m sharing it now because it goes well with my last post regarding the impact of a slow-down in the economy on the sales performance management and SaaS markets.

Hello Julien,

I hope this message finds you well. With recession alarm bells going off all over the world, it got me to thinking about the effects it might have on my company and the overall software industry. And an interesting point struck me…Software-as-a-Service (SaaS) wasn’t an option during the last recession. So, why does that matter?SaaS has established a strong track record over the past several years, proving its value in cutting costs and increasing flexibility. And what’s valuable in the best of times can prove priceless in the worst of times.

You know the litany. In contrast to on-premise enterprise software, SaaS means no upfront hardware and software costs, no worrying about costly ongoing software maintenance, and no vendor lock-in. Instead of being tied to an expensive software infrastructure, you’re free to quickly implement changes. And if a SaaS vendor doesn’t perform, you’re free to immediately choose one that will and be up and running in a matter of weeks. Believe me, savvy SaaS vendors know this! Subscriber retention is one of our key success metrics, along with speedy initial implementation and the ability to quickly deliver new functionality.

So, while SaaS delivers lower costs and enhanced flexibility, where does that leave employee and business productivity? Obviously, not all software applications—SaaS or on-premise—deliver equal boosts to productivity, at least not of the kind that directly impacts the bottom line.

Yet some categories excel in their ability to do so, including Sales Performance Management (SPM) applications. In a recession, businesses need to invest in getting the most profit possible out of their front-line employees. SPM applications do this by helping align sales behaviors to corporate objectives, focusing reps on the most strategic sales, maximizing agility in the face of market change, and providing visibility into key sales-success drivers. The last recession was a boom time for early-generation SPM applications—and that was even before the advent of SaaS. Today, thanks to the SaaS model, the SPM arena is expanding in scope like never before, and SPM functionality such as on-demand sales compensation management is finally affordable to companies of any size.

In short, SaaS plus SPM delivers a double whammy in the face of recession: SaaS economic value combined with SPM strategic business value. It just makes good business sense, whether you are managing in a recession or in a vibrant, high-growth economy.

If you’re interested in discussing this topic further, please let me know.

Cheers,
Chris

Christopher W. Cabrera

Founder & CEO
Xactly Corporation
35 S. Market Street
San Jose, CA 95113

Recession is Brewing… Impact on Sales Performance Efforts: Part I of III of my Interview with Callidus

I had a very insightful conversation yesterday with Paul Turner and Jock Breitwieser from Callidus Software. We talked about several topics and I will share their insight in my next few posts.

Paul Turner is Director of Product Marketing at Callidus Software. He has over 13 years experience in enterprise software focusing on sales and business performance management, business intelligence and incentive compensation. Prior to joining Callidus, Paul was Director of Product Marketing at Hyperion Solutions. Paul holds a BSc in Computer Science from Lancaster University, England.

Jock Breitwieser is the Director Public and Analyst Relations at Callidus Software. He has extensive experience in public relations with a strong international background and expertise. Before joining Callidus, Jock was an account manager at The Hoffman Agency.

I recently read several articles talking about the impact of a slow-down in economy on sales performance efforts, both from a SaaS and CRM/On-premise perspective. I used this occasion to bombard my two guests with questions on this topic and several good arguments came out of the conversation.

General Thoughts on the ICM Market:

• The selling point of ICM solutions is to achieve a good return on investment.
• Measuring the actual return on investment can be hard to do, but looking at the potential cost savings alone can justify a sales performance system.
• With a proven Return on Investment, ICM solutions can be justified regardless of market conditions.
• A slower market can actually contribute to an expansion of the Sales Performance Management market.

Market outlook for Callidus SaaS Offerings:

• While Forrester predicted a slow down in the SaaS market, Callidus has seen phenomenal growth in this area – In Q4 of 2007, Callidus On-Demand annual contract value (ACV) increased 150% to $.6 million.
• Callidus has also seen a much greater adoption of their on-demand solutions by enterprises of all sizes including Incentra and Lenovo.
• The integration of key Callidus components with SalesForce.com is also an aspect which encourages small to medium-sized businesses to adopt Callidus as their Sales Performance Management system.

Market Outlook for Callidus On-Premise Offerings

• Callidus continues signing on new clients and growing in this area.
• In 2007, overall revenues were up 35% vs. 2006 ($100 million versus $76 million).
• License revenues were also up by 3% to 28.6 million.
  With the acquisition of Compensation Technolgies, Callidus will generate additional consulting revenues from Callidus implementations and adds new offerings for strategic services.

Additional Thoughts

• Callidus recently announced more growth in the European market. They have increased their headcount to 50 employees in the Europe, Middle East and Africa (EMEA) region.
• Callidus has also opened a new EMEA headquarters in London.
• Getting more clients in Europe offsets the lower US dollar.
• One notable new client is npower, a leading UK energy company.

Overall, Paul and Jock were very upbeat about what is coming up in 2008, both from a Callidus perspective and for the Sales Performance industry in general.

[Part II of III of my Interview with Callidus]
[Part III of III of my Interview with Callidus]