WHITEPAPER. Why Software as a Service for CRM

Transcription

1 Why Software as a Service for CRM

2 Contents The Future of Software... 2 Faster Return on Investment... 2 Startup Costs...2 Startup Risks...3 Ongoing Costs...3 Time to Benefit...3 Economies of Scale...4 Stronger Focus on Customer Success... 4 Subscription-Based Pricing Model...4 Customer Success Imperative...4 Customer Usage Drives Innovation...4 Greater Synergy between IT and Business Users... 5 Availability and Performance...5 Open Platform for Building and Deploying Applications...5 Preintegrated Components from an On-Demand Directory...5 Conclusion... 5 WHY SOFTWARE AS A SERVICE FOR CRM 1

3 The Future of Software Until recently, companies that wanted enterprise-class customer relationship management (CRM) software faced an uphill climb. They had to make major investments to buy, build, and maintain computing infrastructures. They had to purchase expensive CRM software. And then, they had to weather a long, resource-intensive implementation. Once the CRM vendor released a new version of the software, they had to suffer through an upgrade cycle that was often as much of an ordeal as the original implementation. In comparison, on-demand CRM software from salesforce.com is a refreshing alternative. Now, you can quickly subscribe to CRM services delivered via the Internet yet still enjoy the advantages of enterprise-class software built on a world-class infrastructure. This Web-based, on-demand delivery model is known as software as a service (SaaS). Salesforce.com helps companies such as yours dramatically decrease the effort and reduce the cost of installing and maintaining CRM software. With SaaS, companies are saving up to 90 percent in time and expenses compared to traditional on-premises software solutions. When asked why their organizations were transitioning from a current on-premises solution to a SaaS solution, respondents consistent message was that the TCO was becoming too financially onerous. Gartner, User Survey Analysis: Software as a Service, Enterprise Application Markets Worldwide, 2008 A record number of companies in every industry and across all market segments have selected Salesforce CRM over competing on-premises CRM products. The reason is simple: salesforce.com has devised the most effective and cost-efficient model for delivering enterprise software. Because Salesforce CRM is subscription-based, you don t have to invest in a massive software package that needs to be installed and maintained. You simply sign up for the number of seats and functionality you need, and we deliver the software at a surprisingly low cost. Three-year TCO for a 100-seat system heavily favors the Web services approach. The total for salesforce.com is comparable to the first-year costs alone for the premisesbased system. Ziff Davis, Customer Relationship Management Software: True Cost of Ownership, 2007 This paper explains three key ways that customers are benefiting from our on-demand software platform: 1. Faster return on investment 2. Stronger focus on customer success 3. Greater synergy between IT and business users Faster Return on Investment When you investigate the incredible momentum of Web-based software as a service (SaaS), you discover that it s rooted in real, tangible customer benefits. Chief among them are significant cost savings over traditional, on-premises systems and shorter time to value for many lines of business. Taking a closer look at the hidden costs of on-premises software compared with the affordability of an on-demand CRM system will help clarify these benefits. Startup Costs Salesforce.com customers typically deploy their CRM solutions for about half the cost of comparable on-premises solutions. Startup costs for on-premises software vary, depending on the sophistication of each customer s existing infrastructure. In addition to software licenses, typical costs include servers, data center space, system monitoring software, licenses for the database, licenses for third-party reporting tools, and costs associated with building a testing environment. This level of investment often proves to be a roadblock to successful deployment and widespread adoption. Salesforce.com lets customers deploy CRM software quickly at a low cost. Not only are startup costs lower for salesforce.com customers but they re also more predictable. SaaS customers pay 2 WHY SOFTWARE AS A SERVICE FOR CRM

4 a monthly or yearly subscription fee and are protected from the escalating implementation and customization costs that typify on-premises software deployments. Siebel would have cost me $30 million to $40 million and taken a year to deploy. With salesforce.com, we did it in 4 months at less than $1 million. Executive Director, Kaiser Permanente Startup Risks On-premises software projects have historically carried a high risk of failure due to their tremendous financial impact on an organization. The traditional model of running software on site and purchasing perpetual licenses creates huge up-front costs and potentially years of effort before a company can achieve a return on its investment. With Salesforce CRM, customers can substantially reduce up-front costs and risks, receive immediate benefits, and realize a fast return on their efforts. After decades of application failures and cost overruns, most customers welcome this change. Salesforce.com had the expertise we needed to get CRM running and adopted in our organization. Salesforce.com s pay-as-you-go licensing model makes it feel more like a partner invested in our success with CRM, as opposed to merely another vendor. VP Sales, Chorus Ongoing Costs Many customers that have experienced on-premises software failures later adopt Salesforce CRM and then marvel at the large and sometimes unforeseen costs incurred while maintaining their previous deployments: :: :: Infrastructure Maintenance On-premises CRM deployments require support from the IT department. These costs typically include database experts and systems administrators on a fullor part-time basis. :: :: Report Generation Generating reports from an on-premises system typically requires expertise in third-party reporting and business intelligence tools as well as multiple iterations to generate the right reports. :: :: Customizations Tailoring CRM applications to meet specific needs requires technical resources with targeted expertise. Companies often hire additional development personnel or contract with consultants to keep up with ongoing customization requirements. :: :: Localization Global deployments require additional effort to deal with all the local variations. Rolling up data for executive visibility may be difficult or impossible. :: :: Upgrades Upgrades typically occur every 2 years. Sometimes, they entail a major effort for the business stakeholders and the IT department. This timeframe creates an innovation gap between new and old functionality and consumes IT budgets that could be spent on new projects. :: :: Performance Tuning CRM projects are often put at risk because of low user adoption due to slowly performing applications. IT professionals liken finding the root cause of these performance issues to finding a needle in a haystack. Time to Benefit Traditional software implementations are expensive and time-consuming. With Salesforce CRM, customers leverage our infrastructure, reducing or eliminating implementation hassles, customization headaches, and upgrade chores. Salesforce CRM can be deployed in weeks versus months or years for on-premises software. This rapid implementation cycle means quick time to value, with no innovation gap while you wait to deploy new capabilities from the latest release. We needed a cost-effective yet powerful CRM system quickly. After reviewing all available options, it became clear that traditional client/server CRM packages would take too long to implement and have a much higher TCO. Salesforce.com s ease of use and flexibility allowed us to get our users up and running quickly and efficiently. Böhler-Uddeholm WHY SOFTWARE AS A SERVICE FOR CRM 3

5 Economies of Scale Salesforce.com s application architecture is state of the art arguably more secure, scalable, and robust than what individual customers are likely to create. We guarantee security, privacy, and reliability. Plus, we ve made provisions for disaster recovery, failover, and redundancy, so your CRM investments are always safe. Some of the most security-conscious companies in the world including Cisco Systems, SunTrust Banks, and Travelocity base their business on our software. Today, salesforce.com supports more than 51,000 companies, 1 million subscribers, and 100 million transactions per day. We have hundreds of examples of how customers have cut costs and increased ROI with salesforce.com software. You can find more examples on our Web site: Stronger Focus on Customer Success At salesforce.com, we pride ourselves on building customer satisfaction and driving customer success. According to a recent third-party study, 94 percent of our customers said they would recommend salesforce.com to a colleague. One of the primary motivators for these customers is the ease and simplicity of the on-demand SaaS model, which provides clear advantages over the onpremises CRM model. This section lists a few of the key benefits. Subscription-Based Pricing Model Salesforce.com s business model is built solely on subscription-based pricing. This model provides deployment flexibility by letting our customers buy licenses incrementally and cancel their subscriptions at any time. That possibility puts the responsibility on us to consistently prove the value of our CRM software and offer ongoing innovation for our customers. Customer Success Imperative On-premises vendors quickly move to the next prospect after closing each deal because they are driven by revenue from new software sales. Salesforce.com s success depends on customer renewals, which means that we re constantly striving to improve our offerings. [Salesforce.com] outpaces all midmarket contenders in company direction and scores for customer satisfaction. CRM Magazine, The 2005 CRM Market Leaders, October 2005 This customer success imperative has led us to pioneer several innovations: :: :: Customer Success Managers This team establishes proactive relationships with each customer. The objective is to understand each company s priorities and goals for succeeding with salesforce.com s software. :: :: Online Community Available to all salesforce.com customers, this community offers more than 1,000 best practices contributed by product managers, implementation experts, and customers. You can find these, getting started guides, tips, and more at :: :: Personalized Account Reviews This team creates customized reports and sends them to Salesforce CRM administrators each month. The reports include detailed usage metrics and recommendations to help each customer maximize its use of the software and successfully meet its business goals. :: :: World-Class Support and Consulting Our Professional Services experts help small and midsize businesses get up and running quickly. Salesforce.com also offers enterprise-level expertise, including business planning, architecture review, integration services, and custom development services. Customer Usage Drives Innovation All salesforce.com customers use the same system, giving us a tremendous base of experience to determine which features the community uses, which they don t, and where there may be potential problems. This knowledge facilitates a fast and effective feedback loop from the user base to developers. As a result, product enhancements are always relevant to customer needs and they occur more frequently than with on-premises solutions. The Release Preview that details the 4 WHY SOFTWARE AS A SERVICE FOR CRM

6 features in each upcoming release also notes which features were developed in response to requests from the salesforce.com community. Greater Synergy between IT and Business Users Being forced to depend on the IT department for routine application-management requests is frustrating for business users and IT personnel. Salesforce.com lets business users manage many aspects of their CRM solution: :: :: Customization The Force.com platform allows users to make point-and-click customizations that respond to new business challenges without engaging IT personnel. :: :: Reporting and Dashboards Salesforce CRM users can create reports and dashboards relevant to their specific business needs without having expertise in a third-party reporting tool. :: :: Territory Management and Forecasting Our territory management and forecasting capabilities are built with business users in mind. For example, regional management tasks can be handled by regional managers or anyone else chosen for the job without needing to keep IT in the loop. Availability and Performance CRM is our business. Salesforce.com s software is fast, reliable, and always available unlike many on-premises applications, which are plagued by poor performance, frustrating users and decreasing productivity. Most important, we make our uptime and performance statistics publicly available 24/7 at Salesforce s constant availability and reliable uptime have been critically important to us. DoubleClick Open Platform for Building and Deploying Applications The Force.com platform is setting a new standard for managing and sharing information. Companies can use Salesforce CRM as a hub for all sorts of business processes from product development and partner relationships to recruiting and expense tracking. Applications built with the Force.com platform leverage the Salesforce CRM user interface, data model, and security model, which means that we ve already solved some of the most difficult problems customers face when building custom applications. [The Force.com platform] is the future. It makes it cheaper and easier for all kinds of companies to build apps, whether you re talking about enterprises or small businesses. Dennis Pombriant, Beagle Research Group Preintegrated Components from an On-Demand Directory You can customize, integrate, and extend your CRM software with preintegrated components from the Force.com AppExchange development community, located at The AppExchange offers hundreds of pre-integrated applications from our partners, along with many useful CRM components that can be installed directly into your Salesforce CRM interface with just a few clicks. Compare that simple business model with what you ll face when you try to customize an on-premises solution, which generally requires an expensive consulting engagement. Conclusion Salesforce.com has successfully reshaped the CRM market and, in the process, changed the dynamics of enterprise computing. It s no wonder that more than 1 million subscribers at more than 50,000 companies of all sizes in just about every industry depend on salesforce.com to manage their sales, marketing, and customer service activities. Since deploying Salesforce, we ve been within 2% of our sales forecasts. Salesforce s instant and constant visibility into sales has made us extremely agile and efficient. Polycom Salesforce.com creates a competitive advantage for our customers through game-changing technology. Our subscription-based pricing and multitenant SaaS architecture testify to our commitment to customer success. Not only is this commitment much deeper than that of typical WHY SOFTWARE AS A SERVICE FOR CRM 5

7 client/server vendors, it results in better cooperation between IT and the line of business and a higher return on investment. Software as a service offers several advantages to buyers, including more frequent (and potentially less painful) upgrades, a lower cost of ownership (30 percent less for a CRM implementation), and a higher level of service from vendors that must become more responsive to customer needs or risk losing subscription revenues. The McKinsey Quarterly, Delivering Software as a Service, May 2007 Contact a salesforce.com representative to learn how our on-demand software can help you manage customer information quickly, easily, and intelligently and discover the power of the on-demand SaaS model today. For More Information Contact your account executive to learn how we can help you accelerate your CRM success. Corporate Headquarters The One Market Suite 300 San Francisco, CA, United States Latin America Japan Asia/Pacific Europe, Middle East & Africa NO-SOFTWARE Copyright 2009, salesforce.com, inc. All rights reserved. Salesforce.com and the no software logo are registered trademarks of salesforce.com, inc., and salesforce.com owns other registered and unregistered trademarks. Other names used herein may be trademarks of their respective owners. WP_OnDemandvsOnPremises_012609