WHITE PAPER. 10 Reasons to Get your Support Software as a Service

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1 10 Reasons to Get your Support Software as a Service Software-as-a-service (SaaS) is vastly changing the way companies do business. Among the many benefits the on-demand model provides, one of the most marked is the ability it gives every company, large and small, to better compete. Serving as the delivery platform for key business applications, the Web is leveling the playing field: Small to mid-sized businesses get to leverage key applications that affect both top- and bottom line financials applications they may never have been able to afford otherwise TOWERS CRESCENT DRIVE, SUITE 800 VIENNA, VA USA GO.PARATURE FAX Copyright 2007 Parature, Inc. All rights reserved Various trademarks held by their respective owners.

2 Even the largest of companies are finding that on-demand software is a sound investment. In some cases, corporate departments are opting for the efficiency of on-demand tools because they need to automate business processes that aren t core competencies and can t get approval from IT for specific purchases. To date, the on-demand market has been largely driven by software geared toward customer relationship management (CRM). By choosing to get their customer support software as a Web service rather than deploy applications themselves, companies are able to offload the many headaches associated with an in-house implementation. SaaS is seeing obvious success in this space, as on-demand applications continue to do their share to power CRM software growth. According to recent research from Gartner Inc., CRM revenues worldwide will surpass 7.4 billion this year, which represents a 14% increase over 2006 s $6.5 billion tally. Responsible for 12% of total worldwide CRM software revenues last year, SaaS offerings are expected to represent 14% or $1 billion of total CRM software revenues by the end of The growth rate in on-demand CRM, says Gartner, is more than double that of the overall CRM software market. Initial perceived barriers that kept some companies away or hesitant to explore the model security concerns, data control issues, customization constraints have largely been addressed. In cases where on-demand might not have every attribute of a costly in-house implementation, companies consider the benefits worth any tradeoffs. Companies cite many reasons why they opt to get their CRM functionality on-demand rather than implementing software in-house. The top 10 reasons you should get your software as a service: 1. Lower Launch Costs Recent history abounds with stories of big-bang CRM implementations gone awry. Numerous companies have purchased costly application suites, paid exorbitant professional services fees, and undergone months or even years of deployment only to see their efforts fail to deliver the customer management advantage the business sought. The failures and unmet expectations have many possible sources: processes that weren t adequately automated, inabilities to integrate legacy customer data, employees poorly trained to use the new systems, and customers finding self-service channels not user-friendly. Whatever the barrier to success, the result is the same: unacceptable returns on a costly CRM investment. By getting your customer support software as a service, you don t need to have a complex IT infrastructure or an army of dedicated IT personnel in place. With on-demand applications, you pay a monthly per-seat licensing fee. This arrangement allows you to accurately budget for your CRM technology costs over time, rather than face the very real possibility that your costs will rise as implementations go past deadline, requirements change, new integrations are needed, or software requires reconfiguration. Moreover, you don t need to concern yourself with hardware and software purchases, implementation expenses, and other infrastructure costs. In an in-depth analysis of a SaaS implementation vs. an in-house software deployment conducted this year, Network Computing placed the first-year costs of acquiring and deploying a CRM solution for a user base of 105 people at $142,000, while the cost of a subscription-based application for 105 users came in at $81,500. Though years two and three of the SaaS deployment cost more than the on-premise solution, the on-demand option, according to the analysis, would still cost from $95,000 to $135,000 less over the first three years. 1

3 As a leading on-demand software provider, Parature charges a monthly per-seat license fee for its customer support and help desk software suites, as well as offering professional services and training to ensure customers leverage their applications fully. The company handles all management and maintenance of its applications, so you don t have to worry about uptime or upgrades. And with an average deployment time of just three to five weeks, Parature s offerings can ensure you re immediately improving your customer service delivery, while eliminating the risk that you ve under- or over-provisioned for your IT needs. Instead, you ll have predictable CRM software expenditures. It s an approach that allows you to enjoy immediate rewards, while making necessary adjustments and improvements to your processes and strategy over time. 2. Speedier Return on Investment When a company deploys an on-premise front-office solution, such as an integrated CRM suite, they have to make a number of difficult decisions. These include which vendor s software to purchase, what hardware it will run on, what back-office applications will be integrated, and how many IT personnel will be needed to deploy and manage it. Not only do corporate users have to wait for the new functionality while the IT department and the application vendor deploy the software and hardware, they need to weather interruptions when upgrades are rolled out. With a SaaS implementation, the service provider is essentially providing its customers an off-the-shelf solution, especially if those customers aren t in need of a great deal of customization and third-party integration work. According to a 2006 study of more than 600 companies conducted by Aberdeen Group, the average implementation time for an on-demand CRM application was less than two months. More significant was the average time to ROI realization: On average, ROI was reached in fewer than six months for those companies Aberdeen surveyed. Building on years of on-demand expertise, Parature provides you with a hosted solution that covers your customer service application needs with a feature-rich set of modules. For maximum uptime and reliability, Parature runs its applications at Qwest s state-of-the-art data center facilities. Within weeks of contracting with Parature and defining your business needs, you can have their new applications up and running, and, most importantly, improving your help desk or customer service delivery. Further, by leveraging Parature s self-service and knowledge management functionality, you can start driving down costs both by maximizing customer support agents productivity and, where applicable, pushing problem resolution and other transactions to your customer base. This kind of rapid ROI is a boon to customer service managers, who need to show as quickly as possible that they re seeing a financial impact from their IT investments. Though big-bang in-house implementations used to be the order of the day, many companies who took this route failed to realize returns, and even those who chose to stay with on-premise solutions began to move toward iterative implementations that sped deliverables and ROI. With Parature s SaaS offerings, you ll see your CRM implementation paying dividends in improved service immediately, while giving you the flexibility to make strategic improvements and add functionality as needs make themselves known. One of the reasons Parature has grown the way it has is the ease of use of its solutions and its on-demand model. They can get you up and running in a short amount of time. Nancy Rubin Florida Atlantic University 2

4 For details on how Parature customers are realizing ROI and business benefits from their on-demand investments, see sidebars: SaaS Gets Top Grades, page 4 Scaling Service to New Heights, page 6 The Fast and the Serious, page 7 3. Competitive Ongoing Costs Parature had the out-of the-box functionality we needed to get up and running quickly. Terry Gates CenterStone Technologies The debate has long raged over which model on-premise vs. on-demand costs less over the long term. Because there are so many variables, the answer depends on the company, the industry it operates in, its IT needs, its compliance requirements, and other factors. In a 2006 report entitled "Comparing The ROI Of SaaS Versus On-Premise Using Forrester's TEI Approach, Forrester Research maintained that smaller companies those with 100 to 249 employees and 50 users will find significant cost advantages with on-demand models. Specifically, these companies will see a better total economic impact (TEI) over a 10-year timeframe and incur lower absolute costs: a SaaS deployment would cost $1,680,000 and have a value of $882,500 over that time period, while installed software would cost $2,008,000 and have a value of $429,500. While the cost question is the foremost consideration for many companies, experts say the decision of SaaS vs. in-house should take other factors into account. Company size, need for IT control, the role of IT in the organization, IT resources, and core business competencies should all factor into the discussion. For instance, a business that operates in a static vertical industry might implement an in-house solution and keep running it in much the same incarnation for a long period of time, having to make few adjustments for many years. Other industries, such as those that must respond to dynamic market conditions, might need to quickly change product and service strategies to take advantage of new opportunities, and appreciate the nimble nature of a SaaS offering. 4. Global Availability A big IT concern for every customer service executive is that customer support agents and customers have access to critical applications whenever they need them, from wherever they are. For customer service workers, it s paramount that they be able to access key applications and consistent, high-quality knowledge sources throughout their workday. For a company s customers/constituents, the need is just as critical: If they can t find the information they need from a specific application, they want service and support to be at their fingertips, wherever they happen to be located. Here, Web-enabled software has a distinct advantage over the client/server software still running in many large enterprises. Certainly, many large companies are global entities, and have painstakingly extended their infrastructure to offer the capabilities of their customer service and support applications to users and customers in various locations around the world. Some have done so using the Web as a platform for their in-house applications. But many others, given the investment they made in the 90s and later in front and back-office applications running in client/server architectures, haven t adopted Web-native software delivery for a number of reasons. Instead, they have to configure their security infrastructure and server platforms so they can comfortably extend their application use to audiences outside their firewalls. 3

5 With SaaS-based delivery, employees and customers alike need only use Web browsers to access their customer support applications. Because on-demand providers entire business depends on being able to support and scale their services for multi-tenant architectures, they ve adopted best practices for their security and accessibility. 5. Less Stringent Lock-In Because they pay monthly subscription fees, rather than making long-term capital and other IT investments, companies who ve chosen to get their front-office customer support applications as a service simply have more options. They re more able to react to a hot business opportunity by adding more license seats for any hiring they might need to do to handle the rush. Or, they might be relying on a business application that, while important, is so antiquated it no longer has a maintenance contract to protect it. If it fails, and no one s built this contingency into the budget, they may be left without its functionality. In such situations, where companies have to make quick decisions, on-demand models thrive. Or perhaps a company s growing rapidly, and managers needs to make quick and significant improvements to their service delivery in order to handle the customers they re acquiring by the day. They might look at an in-house application and realize they can t afford the time it will take to implement a customized enterprise application in-house. A SaaS implementation could be the solution that lets them quickly and efficiently support that growth spurt, as well as take them into the future. And, if for some reason their application decision doesn t work out, they aren t saddled with costly shelfware they can simply part ways with their service provider. This last fact serves as a positive business driver for service providers, as they understand that the lack of capital investment means their customers have more flexibility to switch on-demand application providers. Parature welcomes the challenge of helping companies quickly and vastly improve their customer service or help desk delivery, and deliver that ever-important ROI in a timely manner. Saas Gets Top Grades Florida Atlantic University When Florida Atlantic University executives decided they needed to deploy a Web-based help desk and support portal in order to reach all their constituents, they initially tried to migrate their existing campus-wide customer support application. They soon discovered, however, that they simply didn t have the IT skills in-house to undertake the transition. The Boca Raton, Fla.-based university turned to Parature, whose knowledgebase they were already using as part of their Blackboard learning system implementation. Their decision was based on the fact that, immediately after they implemented Parature s support portal as part of the Blackboard rollout, 90% of constituents needing help with the distance learning system were solving their own problems and finding their own information. These were all issues that would have resulted in phone calls to the understaffed help desk. From the initial implementation, which had around 100 users, FAU migrated in 2003 to a campus-wide implementation used by 25,000 constituents. The decision to go with Parature for their entire help desk and customer service needs saved FAU significant time and money, says Nancy Rubin, instructional designer at the institution. It wasn t that our older system couldn t be Web-enabled; we just didn t have the skills in-house to do it. And with the platform it was running on, it wasn t being utilized properly. Here, she credits Parature s expertise in SaaS implementation and delivery. One of the reasons Parature has grown the way it has is the ease of use of its solutions and its on-demand model. They can get you up and running in a short amount of time. She adds, I ve found them to be one of the best companies I ve ever had to deal with it s been a very positive experience. 4

6 6. Frequent and Painless Upgrades, Translating to Continuous Innovation Enterprises locked into contracts for large-scale in-house applications are at the mercy of their vendors as to when major new versions or even point upgrades get released. SaaS vendors, conversely, are continually working on upgrades to their software, as they serve numerous customer needs and are regularly releasing updates to ensure those needs are addressed. In addition, an upgrade from a SaaS vendor causes little or no disruption to the customer except to improve the functionality they have at their fingertips. With onsite software upgrades, it s not simply a matter of installing the new software and hitting a button. There s the work of porting the new application to whatever operating systems the customer runs, as well as to its application servers and databases. Because the on-demand service provider owns and operates the infrastructure that supports its software, upgrades are streamlined significantly. 7. Better Ability to Budget for Software Investments A number of the vendors we looked at seemed to promise a lot. But Parature was able to quickly narrow its focus on what our needs were. Matthew Pisarek ExtendMedia Corp. It s well-documented that large-scale CRM implementations often run over budget and far past their deliverables deadlines. In the past, it was a common practice for businesses to attempt massive rollouts an approach that offered little visibility into problems until IT was well into the implementation, and at that point, had little choice but to invest more money to complete the project. Among the lessons learned from such efforts was to be more iterative with implementations, choosing smaller deliverables that offered a higher rate of accomplishment. The average implementation time for an on-demand CRM application is less than two months. The average time to ROI realization is fewer than six months Aberdeen study of 630 executives With Parature s on-demand model, decision-makers don t need to budget for a lengthy software and hardware rollout and hiring spree. By paying a monthly licensing fee for each user seat, customers get the functionality they need out of the gate, and always know what their budget will be, greatly easing their strategic planning and technology approval processes. If service executives see a market condition that will cause an ebb in business, they need simply reduce the number of licenses. And if the better scenario arises one where they predict significant growth over a certain period they can add seats accordingly. 8. Ability to Reallocate IT Budget to Core Competencies For most companies, customer service and support might increasingly be a competitive differentiator, yet still not a core competency. In order to continue growth and retain customers, businesses need to provide quality, multi-channel service and support functionality, but it s probably not the primary focus of their business. Instead, their IT departments are charged with finding the best technologies to, for instance, successfully run their manufacturing operations, or effectively streamline their retail supply chain inventories, or maximize their pharmaceutical development efforts. 5

7 By turning over the personnel and IT requirements for their service technologies to Parature, you save the money you would need to allocate to maintain an infrastructure and hire additional IT people, allowing you to redirect that money to competencies more central to your business. In addition, if you deploy self-service and knowledge management modules, you realize additional savings from directly within your customer support operations, allowing you to put the financial savings toward other key CRM initiatives. 9. Faster Vendor Support Response Unlike in-house application vendors, a SaaS vendor is dealing with a lot fewer variables in a downtime situation. They have an intimate understanding of the environment that their systems are running in because they re responsible for managing them. They ve also developed their applications to run on a specific platform, so any trouble with the application is typically a much simpler issue to address than it would be for a vendor whose customers are running their applications in any number of configurations. In addition, because an on-demand software vendor upgrades all its customers when a new version is released, they re not saddled with supporting numerous versions. Additionally, because delivering software in a multi-tenant, on-demand infrastructure is their business, SaaS vendors pay a great deal of attention to the kinds of application, infrastructure and security issues that affect uptime. Parature has adopted the security standards dictated by the financial services industry, including 128-bit VeriSign SSL Certification and 1024-bit RSA public keys. To host its award-winning services, Parature uses Qwest and its secure data center facilities. With its Internet Service Exchange technology, Qwest is a leader in delivering connectivity to the high-demand applications it runs. The company provides 24/7 physical security, palm print and picture identification for facility access, redundant electrical generators, redundant data center air conditioners and other back-up equipment designed to ensure server uptime. All networking components, SSL accelerators, load balancers, Web servers, and application servers have a redundant configuration, while all customer data is duplicated to a redundant database server. With these best practices in redundancy, Qwest provides Parature s customers uptime and availability that an onsite IT department is unlikely to provide, as most don t have the resources to completely build a redundant infrastructure across all their networks and applications. Scaling Service to New Heights CenterStone Technologies Inc. Just three years after implementing Parature s on-demand customer support and help desk offerings, CenterStone Technologies Inc., a Denver-based provider of sales order management solutions, is saving approximately $130,000 annually, according to CIO/COO Terry Gates. Not bad for a company with a workforce of around 30. The deployment has enabled the company to support customers much larger than itself, and allowed it to experience strong growth without adding headcount to its service department. Specifically, says Gates, they ve avoided hiring two full-time equivalent call center positions by streamlining customer support delivery and enhancing management efficiencies. Gates and team turned to Parature after trying unsuccessfully for a year to implement customer support technology from RightNow Technologies. They abandoned the RightNow effort, says Gates, because the product was too complex, with too much of a ramp-up. Parature had the out-of the-box functionality we needed to get up and running quickly, says Gates. In addition, the system needed very little customization to meet CenterStone s requirements, and has readily scaled as growth demanded. As for implementation time? It took Gates less than a week to ready Parature for use by both CenterStone employees and customers. 6

8 10. Scalability and Flexibility Unlike with in-house implementations, which are largely dependent on the strength of the company s enterprise network, on-demand providers consider scalability a non-issue it s a hallmark of their business. Their business depends on allowing customers to readily grow their own business, and they must enable them to adapt as business needs change. If you re in the kind of business that experiences a lot of flux in customer service workforce needs, you simply need to add licenses during more prosperous periods and drop subscriptions when conditions settle down. If you re experiencing strong growth and have multitudes of customers hitting your site for self-service, Web-native SaaS offerings can accommodate them. Further, if you re not happy with your provider and its service, or don t feel you re getting a sufficient ROI from your implementation, you re not thwarted from exploring other options. Need any more reasons? Here s one, and it s a significant one: Choosing to get your CRM software as a service makes you, as a service or IT executive, look good. With Parature, you ll have a much easier time convincing the executives that approve your budget to sign on, because the risk vs. reward ratio is a strong one. You might also have the satisfaction of going to them just months after going live and showing them your expenditures and customer metrics, proving that your decision to go with Parature has already shown a strong ROI and improved customer satisfaction. The Fast and the Serious ExtendMedia Corp. Like many customers who opt to get their customer service and support software from a SaaS provider, ExtendMedia Corp. had a real need to get its new support operation running quickly. The company was experiencing rapid growth growth that was seriously taxing its support personnel and homegrown support application. It therefore needed a support application that, one, would be available to users very quickly, and two, would provide customer self-service functionality. That way the company could give customers the option to help themselves to technical information, and also support growth without significantly increasing headcount, says Matthew Pisarek, a senior support analyst at the Boston-based provider of digital content software and services for media companies, network operators and retailers. The company went through the analysis process with different SaaS providers, while simultaneously developing support processes and mapping workflows. A number of the vendors we looked at seemed to promise a lot. But Parature was able to quickly narrow its focus on what our needs were. Even though we re a technical company, we didn t want to be overly technical on the content we offered for support services and the portal available to the customer, says Pisarek. After choosing Parature, Pisarek and team were able to quickly populate the knowledge base and start extending self-service to customers. 7

9 ABOUT PARATURE Parature is the global leader in on-demand customer support and help desk software. Our web-based support suite enables organizations to fundamentally change the way they support their customers while significantly reducing costs. The Parature suite of modules empowers associations, businesses, academic institutions, gaming/interactive media, and government with the ability to provide critical service information on a 24/7 basis while reducing the inbound support load through customer self-service. As a Software-as-a-Service (SaaS) provider, we deliver our solutions over the Internet using a secure, scalable application and system architecture, which allows our customers to eliminate expensive up-front hardware and software costs and to quickly deploy and adopt our on-demand software. Parature helps support over 8,000,000 end-users worldwide and is headquartered in Vienna, VA. For more information about Parature please visit or call GO.PARATURE TOWERS CRESCENT DRIVE, SUITE 800 VIENNA, VA USA GO.PARATURE FAX Copyright 2007 Parature, Inc. All rights reserved Various trademarks held by their respective owners.