Monday, March 10, 2008

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

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About Me

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Ottawa, Ontario, Canada
Julien Dionne is a well-rounded consultant with global business management experience and outstanding technical, business and leadership skills. He earned a Bachelor of Applied Science in Software Engineering from the University of Ottawa, Canada, and he is a member of the Canadian Professional Sales Association. The views posted within this blog do not reflect the views of Julien’s current or previous employers and clients. Julien can be reached at julien.dionne@gmail.com