I recently had the pleasure of interviewing Chris Cabrera, CEO of the wildly successful SaaS start-up, Xactly Corporation
It must have been quite an epiphany for Chris Cabrera, CEO of Xactly, when he realized, while employed at another company, that the sales compensation software that he was selling for hundreds of thousands (sometimes millions) of dollars a pop was ripe for innovation. When he founded Xactly, Software as a Service (SaaS) was just starting to gain respect as a viable business model thanks to the growth of companies such as Salesforce.com.
As I asked Chris about the early years at Xactly, I couldn’t help but draw parallels between that business context and the one that we’re living right now in Latin America. As Chris mentioned, at the outset, data security was a real concern, but as the SaaS model became better understood, conversations with prospects have turned towards the business benefits of adopting the solution. I’d say that Latin America is still at that initial phase that Chris described in the US when executives still had qualms about hosting their data outside their company walls and we’re probably at an inflection point in Latin America where these fears will begin to dissipate (as they have in other regions).
Xactly has amassed an impressive (and enviable) record with about $60 million in funding dollars. Their offering is available in 18 languages and they have over 250 customers in almost every continent with 90% using more than one currency. The company’s offering, Xactly Incent, allows companies to change sales force behavior through adjustments in compensation. Companies are just now understanding the power of employing specialized software such as this to better manage a key component of their revenue equation: their sales force’s compensation.
As Chris explained many large and mid-size companies, amazingly, still use spreadsheets to manage sales force compensation even though millions of dollars depend on these employees’ performance. Using Xactly Incent, both employees and managers can view progress on a series of metrics in real-time. Depending on the company’s objectives, sales force behavior can be managed to increase cross-selling opportunities, improve collections (important in this economy) or even promote strategic offerings, all managed from the net or from a smart phone.
Even more, activities such as discounting can benefit immensely by giving sales people clear visibility into their compensation structure relative to different discounting scenarios. This is important, because, for some companies, even one percentage point of a discount can mean the difference between millions of dollars to the bottom line. With so much hanging in the balance, managing this through spreadsheets makes little sense.
Before the SaaS era came into its own, purchasing, installing and using such specialized software cost an order of magnitude more than it does today and took much longer to achieve its ROI goals. Today, Xactly can get a customer up and running in a matter of days (or weeks) with substantial increases in profitability in a relatively short period of time at cost an order of magnitude less than what was possible through the traditional software model.
Now, how does all of this impact the Latin American market? I was pleasantly surprised to hear from Chris that his father, Eduardo Cabrera Micolta, comes from Colombia, South America (as does mine). Moreover, Latin America is certainly one of the markets where he sees growth potential. Even though the CRM wave is just hitting in full force here in Latin America, the opportunity to leapfrog competitors and adopt more sophisticated sales force compensation software (such as Xactly’s) is available and ready to be exploited.
In terms of advice for Digital Innovators in Latin America, Chris offered an excellent suggestion. With players such as Salesforce.com offering incredible cloud computing platforms on which to develop solutions, it behooves companies in the region to offer solutions on such platforms and gain access to an audience of over sixty five thousand potential customers (in Salesforce.com’s case). Coming from someone who’s at the forefront of software innovation (and Latin American descent to boot), it’s worth heading his advice.