Analyst Perspectives

Retaining talent and managing financials related to compensation should be a top priority for the HR and finance functions of companies, and many of them realize this. In our recent benchmark research in total compensation management, 72 percent of participants said it’s important or very important to have a compensation system aligned to their processes. One newer provider to the market, Excentive, started in 2002 in Europe and expanded globally in 2009. Its Excentive Compensation Cockpit supplies more than just a managerial view of compensation; it’s a total compensation management application that enables users to design and model compensation across an entire workforce or for the specific needs of the sales and service lines of business.

Excentive has customers that operate across multiple countries, such asVodafone, Mercedes-Benz and Stryker. Its software supports the strategy of using compensation to retain talent and not just an obligation. As many organizations seek simpler methods to deploy sales incentives for agents and dealers, Excentive has made its software easy to set up and deploy in distributed organizations. In addition, Excentive uses the performance benchmarks of its customers to develop a range of metrics concerning calculation, communication, reviews and disputes, comparing results before and after using its tools.

Its application has a range of functionality with a good level of usability and manageability. They make it easy to access and integrate transactions across existing systems to recognize deals and link to individual employee compensation plans. The software includes a managerial dashboard that provides access to detailed reporting that can be used to assess to a performance index. It addresses compensation auditing and governance, which has become a key priority to ensure that appropriate compensation is given. The auditing capabilities offer easy navigation to the rules underlying a bonus or incentive, which helps in resolving disputes that can affect an organization’s ability to address issues in a timely manner.

While the product name’s focus on a cockpit is not entirely descriptive of what it offers, it can provide a view of sophisticated compensation plans covering merit pay, variable compensation, incentives, stock options and other forms of compensation. The compensation modeling environment provides flexibility to handle the rules and workflow required to operate divisions and varying currencies. In addition it provides integration back into payroll systems that can be tracked through the system. Excentive also can help in bonus management, salary review and equity management, activities that are not always considered part of compensation management.

Our research  indicates the importance of integrating compensation management into talent management; more than one-third of organizations indicated this is very important, and two-thirds ranked lack of integration as the top barrier impeding compensation planning. Excentive should work to provide integration points to such systems with its application, and maybe even partner with providers that need a more sophisticated approach to compensation, such as Cornerstone, Saba and Ultimate Software; some providers already have an integrated compensation management application. Excentive also should be considered in areas like sales compensation and incentives where companies have complex compensation models related to sales quotas and products across customers and territories. The sales compensation management  market includes suppliers such as Callidus Software, Merced Systems, Varicent and Xactly, but Excentive is demonstrating that it can compete in what are now two different markets with only one product, which depending on the alignment of compensation and sales operations could give it an advantage in the next couple of years.

We could not include Excentive in the 2011 Value Index for Total Compensation Management because the company had fewer customers and company efforts operating in North America in 2010, but it will be part of our 2011 evaluation for publishing in 2012, after its large growth in this part of the world. Excentive has a good opportunity to shake things up in the compensation application market. Organizations should consider its application and the successes of its customers as part of their own research.

Regards,

Mark Smith – CEO & Chief Research Officer