Research indicates that well-designed incentive compensation plans produce a 112.5% ROI—increasing productivity by 18%. This is a game-changing figure, but your ROI potential may be even higher with the right compensation planning system and effective strategic incentives.

At Canidium, we help educate clients on their potential returns before they invest in new software solutions. Based on our extensive expertise in Xactly implementations, this guide explains how to estimate your potential ROI. 

• The Average Xactly ROI
• 5 Factors That Determine Your Xactly Returns
• How to Estimate Your Costs

The Average Xactly ROI

Your ROI is not just a product of Xactly itself. The margin of improvement within your organization's current sales cycle, the potential earnings from your sales strategy, and external market volatility all impact potential revenue growth, just to mention a few factors at play. As a result, no singular figure covers all business scenarios. That said, it is possible to estimate your potential ROI based on your understanding of how your organization fits into the costs and benefits presented in this article. However, before diving into the factors that impact your ROI, it helps to have a benchmark against which you can measure your prospective returns. 

Xactly and Salesforce commissioned Forrester Consulting to perform a Total Economic Impact (TEI) study to explore the potential ROI of Xactly Incent.

The study found the composite organization representative of interviewed companies that use Xactly Incent experienced an ROI of 328% over three years.

Moreover, the research yielded the following results:

• Efficiency: 60% decrease in time needed to configure payment plans and calculate commission payments; streamlined process due to integration with Salesforce
• Accuracy: 99% payment accuracy; 90% average reduction in overpayments
• Productivity: Reduced payment inquiries and disputes by 83% with 24/7 visibility into performance & expected commissions.

5 Factors That Determine Your Xactly Returns

The simplest way to calculate your estimated ROI is tallying up your potential gains, before subtracting your losses. Based on our experience, the following list covers five critical factors that impact the scale of your returns. The degree to which these factors apply to your organization, or your potential room for growth in these areas can help determine your ultimate estimated ROI.

1. Implementation Efficiency

The success of a project doesn't depend solely on selecting the right software—it also hinges on choosing the right implementation partner. The software implementation process is just as important as the solution itself.

The quality of your software implementation project determines how well the solution is integrated into your operations. If the project of integrating Xactly into your existing infrastructure is not performed adequately, the solution will not be able to yield its maximal potential value. In fact, poor implementation projects can result in numerous challenges, such as shelfware, logistical issues, training difficulties, and workflow disruptions. 

Because the ROI of your implemented solution depends on how well the system was designed, configured, tested, and implemented, many companies choose to work with an SI partner. These partners are third-party solution and implementation experts who manage the process of installing Xactly. They bring deep expertise, effective communication, and tailored solutions that address unique business needs, ensuring the software delivers its intended value.

2. Adoption Rates

Adoption rates are a key determinant of ROI because they measure how effectively users embrace and utilize the implemented software. High adoption rates indicate that employees are actively engaging with the software, integrating it into their workflows, and leveraging its features to enhance productivity and efficiency. When adoption is strong, the company is more likely to realize the full value of the software, including cost savings, operational improvements, and better decision-making capabilities.

Conversely, low adoption rates suggest that the software is underutilized or poorly integrated, which can result in wasted investment, inefficiencies, and unrealized benefits. By driving high adoption rates through effective training, change management, and user-friendly design, organizations ensure that the software generates tangible returns and contributes meaningfully to their strategic goals, directly impacting ROI.

Xactly is a highly user-friendly system. It boasts an intuitive user interface that is easy to navigate. As a result, with the right support and training in place, solution adoption can be painless. 

Xactly University offers a comprehensive way to prepare users. It is an online training platform tailored for users of Xactly's incentive compensation management software. Courses are self-paced, with role-specific training resources to ensure users—from administrators to sales teams—are proficient and confident in using the software. The offerings include interactive courses, certifications, and regularly updated content to align with software enhancements.

You can increase adoption rates by training users during the implementation process. This approach helps familiarize users with the software, encourages feedback, reduces resistance to change, and empowers users to actively contribute to a smoother, more effective implementation. Certification programs boost user expertise and organizational value, while re-certification ensures continued alignment with software updates.

3. Sales Performance Improvements

Sales performance improvements directly impact ROI. Xactly is designed to facilitate better incentive and sales planning, overhaul time-consuming and error-prone compensation processes, and ultimately generate better sales outcomes. Essentially, the solution ensures that sales teams are performing to their maximum potential; they close more deals, meet quotas, and contribute to greater profitability. 

Xactly also increases the visibility of compensation plans among sales teams. This added compensation visibility can improve sales team motivation, according to 85% of surveyed incentive compensation management professionals.

Xactly provides the following tools to facilitate better sales performance:

• Increased Revenue: Improved sales performance leads to higher deal closures and larger deal sizes, boosting top-line growth and ROI.
• Cost Efficiency: High-performing sales teams work more efficiently, reducing wasted resources and time spent on unproductive activities.
• Enhanced Motivation: Well-structured incentive plans drive motivation and focus, leading to consistent achievement of targets.
• Improved Forecasting: Accurate sales performance data helps leadership allocate resources strategically, optimizing ROI on operational spending.

The degree to which you leverage the tools Xactly provides will determine the scale of your solution returns. The more you use sales performance management features to enact targeted strategic initiatives, the greater your ultimate investment outcomes. 

4. Error Reduction in Compensation Calculations

An estimated 80% of spreadsheets contain errors; and one of the key benefits of incentive compensation software is error reduction. Automated commission calculations can handle diverse and complicated compensation structures without increasing payment errors, thereby minimizing financial waste.

Correcting compensation errors often requires extensive administrative time for recalculations, dispute resolutions, and adjustments. Reducing errors frees up time for both HR and sales teams, allowing them to focus on value-adding activities instead of fixing mistakes. Moreover, when sales teams trust that their commissions are calculated correctly, they remain motivated and loyal, reducing turnover costs and ensuring consistent productivity.

Canidium's custom Xactly Extend applications can also contribute to Xactly Incent's capacity for error reduction. The Disputes Workflow App simplifies and accelerates the resolution of commission disputes, ensuring timely and accurate payments. At the same time, the HR Automation App automates data validation, minimizing errors in employee setup, which could otherwise lead to compensation inaccuracies or onboarding delays. Finally, the Manual Adjustments App allows administrators to make direct corrections, eliminating lengthy approval processes, saving time, and improving the accuracy of commission payments. You can increase your ROI by opting for additional features or apps during your implementation process. 

5. Administrative Cost Savings

Administrative cost savings directly impact potential ROI by reducing the time, resources, and expenses associated with managing processes like data entry, dispute resolution, and manual corrections. Xactly helps cut these costs to free up your budget and employee time for more strategic, revenue-generating activities. 

Automating routine tasks, such as onboarding new employees or resolving commission disputes, minimizes the need for manual intervention, thereby lowering labor costs and increasing efficiency. Tools like the HR Automation App and Dispute Workflow App streamline these processes, ensuring faster, more accurate outcomes while reducing the administrative burden. Improved accuracy also prevents costly errors, reducing time spent on rework and boosting operational productivity.

As administrative costs decrease, you can scale operations without proportional increases in overhead, further driving ROI. By reinvesting the savings into growth-focused initiatives, it is possible to amplify your financial and operational benefits, ensuring that automation delivers both immediate and long-term returns.

How to Estimate Your Costs 

There are three components of calculating your ROI, the first being the returns, and the second, of course, being the investment costs. 

While ongoing maintenance fees and managed services may also come into play to some degree, the two main cost components of implementing Xactly are:

• Software Licensing Fees: These are ongoing costs paid for using the Xactly software.
• Implementation Fees: These are one-time costs that cover the setup, integration with existing systems, and initial training required to get Xactly up and running.
• Long-term Solution Maintenance: These are ongoing costs associated with updates, troubleshooting, and general maintenance. While many companies opt to contract with a managed service provider to ensure that their solution is maximally performant, Xactly is intuitive enough to facilitate in-house maintenance.

While specific numbers may vary based on the scale of implementation and the specific needs of a business, understanding these cost categories is essential for planning and budgeting.

Your software licensing fees will be paid directly to your solution provider. Your specific licensing fee amount depends on factors unique to each company's business goals and desired solution configuration. 

To understand how much installing Xactly costs, here is a guide to estimating your implementation costs:

Similarly, your Xactly implementation costs will also depend on your project's size, complexity, and ultimate goals. To understand the full scope of an Xactly implementation project, check out this Buyer's Guide.

How to Mitigate Xactly Costs and Increase Your Returns

To mitigate costs and increase ROI when implementing Xactly, focus on efficient implementation and optimizing adoption rates. The quality of implementation directly affects how seamlessly Xactly integrates into your existing systems and operations. Partnering with experienced implementation experts, such as Canidium, ensures the process is smooth and avoids common pitfalls like shelfware, logistical delays, and workflow disruptions. A well-executed implementation minimizes costs related to rework or underutilized features and maximizes the software's potential. Additionally, effective training through resources like Xactly University enhances adoption rates, ensuring that users can fully leverage the system's features to drive productivity and efficiency. 

Xactly's built-in tools and Extend applications amplify ROI by streamlining processes, reducing errors, and cutting administrative costs. And finally, by reducing administrative burdens and errors, you can free up resources for more strategic initiatives, directly boosting your ROI. 

If you are interested in learning more about successfully implementing Xactly, check out these best practices for solution adoption.