G00255286 Reduce Risk and Increase Speed Using Gartner's Guide for Salesforce.com Implementation Partners Published: 21 August 2013 Analyst(s): Frances Karamouzis, Patrick J. Sullivan The adoption of salesforce.com has continued at a rapid pace. Over 80% of implementations for initial deployment and integration services are through service providers. This analysis allows sourcing managers to evaluate providers across the broad ecosystem of salesforce.com implementation partners. Key Findings Buyer options for salesforce.com (SFDC) implementation partners are diverse, they include business consultancies, CRM consultancies, traditional global application service providers, global technology integration specialists, SaaS CRM specialists, regional SFDC integrators and SFDC technical specialists. Decisions on which implementation partner to hire should be based on enterprise-specific demands, coupled with the proven capabilities of a partner. The top selection criteria are business process competencies, technology/integration competencies, geographic reach and a track record with SFDC. SFDC is a SaaS solution and typically demands speed and agility in deployment with a modular phased approach and smaller targeted implementations. Recommendations Sourcing managers must: Determine the depth and breadth of competencies required, especially business consulting and technology integration. Use this assessment to determine the category of provider that fits your needs best and identify candidates from the lists included here. Consider the partner's culture and work style, which influences the success of your implementation. Engaging a pure-play firm, large global service providers or CRM specialists is
a distinct experience, so choose the category and firm that fits your culture and governance maturity. Use a standard template of criteria to evaluate all potential partners to ensure a consistent, structured and repeatable methodology for evaluation and selection, as well as a team process to discuss and decide on the criteria and weightings. Table of Contents Analysis...2 How to Evaluate and Select an Implementation Partner...3 Framework to Identify Types of SFDC Service Provider... 4 Targeted Salesforce Guidelines for Selection Within Categories...10 Recommended Reading...12 List of Tables Table 1. SFDC Implementation Provider Categories and Capability Guidance...8 Table 2. Selected SFDC Providers and a Gartner Estimate of SFDC Dedicated Staff...12 List of Figures Figure 1. Enterprise Self-Reported Shifts in Applications Portfolio... 3 Figure 2. SFDC Service Provider Categories and Positioning... 6 Analysis The adoption of many types of SaaS products continues at a brisk pace (see Figure 1) and SFDC is one of the primary sources of this rapid adoption. 1 Over 80% of SFDC implementations use some type of external professional services for initial deployment and integration services. 2 As a result, it is critical to make the right choice of partner. This analysis guides sourcing managers through a structured framework, as well as best practices for evaluating providers across the extensive ecosystem of salesforce.com implementation partners. Page 2 of 14 Gartner, Inc. G00255286
Figure 1. Enterprise Self-Reported Shifts in Applications Portfolio Percent 100 90 80 12 25 28 70 60 50 45 37 35 SaaS Packaged Applications 40 Customized Applications 30 20 10 43 38 37 0 2011 2012 2017 Source: Gartner (August 2013) How to Evaluate and Select an Implementation Partner Gartner has published extensive research on the evaluation and selection of all types of service providers. The core focus of this research is that organizations should use a structured, disciplined approach when selecting a SFDC implementation partner. SFDC is a SaaS solution and typically demands speed and agility in deployment with a modular phased approach and smaller targeted implementations. These are not characteristics that historically match up with the large Siebel or SAP deals that were often the mainstay of traditional service partner portfolios. In addition, incorporating a repeatable, consistent approach to all types of evaluations and selections for service providers can result in a 20% reduction in evaluation efforts and extensive benefits related to reducing risk. For example, a large multinational manufacturer implemented nine different SaaS offerings across four different business units. 3 Some business units implemented the same SaaS offering at different times in different geographies. Given some of the false starts and inability to achieve certain benefits in a short time frame, after the first four efforts, the company conducted a post-evaluation and selection analysis, including service providers' abilities during the execution of each project. After adjusting its approach and applying more rigor, the company recognized a 46% reduction in the time taken to secure a service provider, as well reaping cost-saving benefits four months ahead of schedule. Gartner, Inc. G00255286 Page 3 of 14
The evaluation and selection phase is often the earliest point in the risk management plan for governance and management of the IT services relationship. A summary of several best practices across published Gartners research include: Documented business goals detailing the overall objective and impact on the related business processes (in this case, the customer experience). Verified and validated business cases, including an assessment of traditional options vs. the applicability of alternative options such as SaaS offerings (specifically, SFDC) (see "Toolkit: Business Case Model for Total Cost of Ownership Analysis of SaaS Versus Traditional Application Software and Services"). Defined evaluation and selection team that includes personnel from the primary business areas (sales, marketing and customer service), IT, sourcing and legal (see "Outsourcing Advisory: Roles and Responsibilities in the Evaluation and Selection Phase"). Definition of key scoping activities and measurements, including statements of work, servicelevel objectives, operating-level objectives and the allocated funding. Application of a structured, disciplined methodology to comprehensively compare various options with a focus on netting out the benefits and risks of the final recommended solution (see "Toolkit: Vendor Evaluation Model Scorecard for IT Services Provider Selection"). Risk assessment for recommended selection (see "Toolkit: Interactive Sourcing Risk Register"). Framework to Identify Types of SFDC Service Provider SFDC has rapidly become the largest global CRM software provider, having surpassed both Oracle and SAP in new CRM software revenue 4. Consulting, integration and implementation services for SFDC are in high demand and being provided by a wide variety of application services providers. The identification and selection of a salesforce.com implementation provider must be done in a manner that ensures there is a match between the needs and objectives of the organization with the capabilities and focus of the provider. There are currently hundreds of application services providers with salesforce.com practices. These providers come from a wide range of backgrounds, have different focus areas and also approach solutions from different perspectives. This research offers a structured framework to organize major categories of SFDC service providers and a perspective on how to understand the market. SFDC customers can use this framework and research to identify the best types of provider to support their needs within each category. SFDC implementations can be very simple and straightforward if they are stand-alone, singlefunction deployments. However, in most cases, these implementations have become more complex over time and not within the configuration of SFDC software. Instead, it is related to three other dimensions tied to how the implementation is designed to achieve broader business and technology changes. Page 4 of 14 Gartner, Inc. G00255286
These three dimensions are: Business complexity relates to the extent to which the implementation is tied to business change and transformation, as well as the breadth of impact on business operations. It's imperative to understand that SaaS software in general, inclusive of SFDC, brings a predefined set of functions, processes and implied workflows to which a business must compromise and adapt. The level of compromise, number of systems interfaces, business units and users, in addition to the amount of workflow redesign, all contribute to complexity. Technical complexity. SFDC is rarely implemented as a stand-alone application, rather it is integrated with other on-premises applications and SaaS applications. Additionally, the data needed for CRM applications comes from many sources and formats and the information architectures, extraction, cleansing, migration and interfaces are just as critical and complex as other applications. As part of larger implementations, mobility, analytics, business process management and e-commerce technologies are often included as part of the solution, requiring a broad range of technical skills and competencies. Geographic complexity. Many large CRM implementations cut across multiple regions. Each region and country will need to be supported from a change management, regulatory and information integration perspective. Multi-regional implementations may require multi-regional service capabilities. These three complexity factors provide a good framework for identifying the most appropriate type of provider. SFDC customers should conduct a critical assessment of the amount of complexity along these three dimensions to manage the risk (as well as costs). SFDC service providers can also be viewed, relative to their capabilities and scale along three dimensions; business process competencies, technical competencies and geographic scope. SFDC customers can identify potential providers that align to their requirements through this mapping. Given the market dynamics related to the various types of SFDC opportunities, these complexity factors also help to determine which providers are best aligned to enterprise needs. Those providers with their strengths in technology complexity, as well as in SFDC technology integration and implementation, are well suited for SFDC consulting and implementation market opportunities. Providers capable of addressing both business complexity and technology complexity should be considered for business-driven, front-office transformation market opportunities. We have defined six categories of SFDC service providers based on business and technical complexity factors. These categories are shown in Figure 2 and are grouped along various dimensions. Gartner, Inc. G00255286 Page 5 of 14
Figure 2. SFDC Service Provider Categories and Positioning High Business Consultancies Traditional Full-Services Application Service Providers Business Complexity SaaS CRM Specialists Global Technology Integrators Salesforce.com Implementation Specialists Low Low Salesforce.com Technology Specialists Technology Complexity High Source: Gartner (August 2013) Figure 2 helps to identify the category or categories of SFDC implementation providers that align with the complexities of business and technology requirements. The placement of each category name is approximated and some variation may exist (particularly through acquisition or development of expertise), so a thorough assessment of each provider's expertise is necessary. Once the best-fit categories have been identified, Table 1 can be used to identify a set of providers. Geographic reach is also shown in Table 1, for example, multi-regional providers with a presence in North America and Western Europe and in some cases, Asia. Table 1 identifies a wide range of providers within each category. This listing can be used to develop an initial list of providers, as there are many additional and fully competent providers within most of the categories, which in some cases are the most appropriate. Table 1 illustrates Gartner's categorization of SFDC service providers, along with a high-level indicator of capabilities through a simple numeric scoring system (4 = high and 0 = low). Given that there are a number of vendors in each category, the scores should be used as a general starting point. There may be vendors within the categories that score higher or lower than the average scores shown. Organizations should check specifics before contracting with a provider. Page 6 of 14 Gartner, Inc. G00255286
Examples of providers are included as being illustrative of the category and not as a comprehensive list. They are not intended to be exclusive or indicative of service quality. Gartner, Inc. G00255286 Page 7 of 14
Table 1. SFDC Implementation Provider Categories and Capability Guidance Category Business Consulting Skills SFDC Technical Implementation Skills Large- Enterprise Clients SMB Clients Multi- Region Coverage Comments Provider Examples SFDC technology specialists 0 4 4 2/3 3 Direct services to drive adoption and deployment of SFDC solutions. Predominant focus is on complex architecture design and implementations supporting customers and partners. Salesforce.com Services, Persistent Systems Business consultancies 4 2 2 0 3 Focus is on business transformation with solid SFDC competencies, but limited in broad-scale technical transformation. BearingPoint, Ernst & Young, KPMG, PA Consulting, PwC, West Monroe Partners Traditional full-service application services providers 4 4 4 2 4 Proven expertise in complex, global business solutions and application life cycle services, with a practice focused on CRM and SFDC. Accenture, Atos, Deloitte, Capgemini, CGI, CSC, HP, IBM GBS, NTT Data Global technology integrators 2 4 3/4 3 3 Technology integration focus with significant a SFDC-focused practice. Geographic focus in North America and Western Europe (and some global). Approach is mostly from a technology and application implementation services perspective. Most leverage global delivery models for cost-efficient implementations. Business & Decision, Ciber, Cognizant, Fujitsu, HCL, igate, Infosys, Syntel, Tech Mahindra, TCS, Wipro SFDC implementation specialists 2 4 2/3 4 2/3 Specialists in SFDC, with a significant focus on SFDC implementations. They are usually SaaS application implementation specialists, with either a total focus or significant focus on SFDC. Multiple Regions Appirio, Cloud Sherpas, Sererra Western Europe Page 8 of 14 Gartner, Inc. G00255286
ABSI, CloudSense, Fluido, Nefos, Parx, Tquila, Westbrook International North America Acumen Consulting, Aptaria, Idea/Astadia, CoreMatrix, Force by Design, Riptide, SDG, Solient Consulting, Sonoma Partners Asia/Pacific ProQuest Consulting Multi-Region Bluewolf SaaS CRM Specialist 3 3 2/3 4 2/3 Boutique firms that focus on complex CRM transformations and CRM strategies in addition to a SFDC practice and a presence in one or two countries. Western Europe H&W Consulting North America Idealist Consulting, Sakonent SMB = small or midsize business Source: Gartner (August 2013) Gartner, Inc. G00255286 Page 9 of 14
Targeted Salesforce Guidelines for Selection Within Categories Once a category of provider is determined and candidate providers are identified, a shortlist is needed. As organizations embark on the evaluation and selection efforts, the core activities within the methodology involve identifying a shortlist of potential providers, detailing the key evaluation criteria, weighting them and then scoring each of the providers accordingly. All of these detailed steps are documented extensively in published Gartner research. At the core of this work are the evaluation criteria used to assess the vendors. Gartner best practices guidelines provide a comprehensive list of evaluation criteria (see Table 1). All of these criteria apply to SFDC deals. The targeted criteria for SFDC deals most often cited as primary distinguishing elements among providers include: Geographic scope and strength. Each provider has focused geographic scope and coverage. This is particularly true for the smaller regional technology integrators and SaaS specialists. Additionally, if multiple geographies are needed in the service, ensure that they adequately cover all geographies. SFDC bench strength. Given the relative market size, maturity and overall footprint of the SFDC product, the quantity, quality, depth and industry expertise of service provider resources vary significantly among the landscape of providers. Table 2 gives some guidance on the scale of operations for the set of providers mentioned in Table 1. SFDC's implementation track record. SDFC project size, scope and industry-specific adoption varies widely across geographies. This also applies to service providers, so track records carefully and diligently request and check references for implementations of similar size and scope to the deal that your organization is undertaking. If your industry is highly regulated or has unique features that require special treatment, request specific references that highlight this feature. Configuration vs. a customized knowledgebase. SFDC is a SaaS offering, so the core architectural premise is that the software is configurable (not customizable). This means that it is essential for service providers to have a thorough understanding of the overall design structure of the software. The ability of a service provider to quickly document and communicate a gap analysis that details the key areas where the organization must change, adapt and keep customization to a minimum is of key. This typically requires business users to adapt to the constraints of SFDC software and the provider to be fluent in business change management. A service provider's expertise in the configuration vs. customization of the knowledgebase often makes a significant difference in the time, success and acceptance levels of a new solution by the organization's stakeholders. Data and system integration capabilities. The single biggest cost factor that drives the largest variability in the overall total cost of ownership is the level of data and system integration required. All SFDC implementations typically require both data cleansing and migration work, as well integration with other business applications to ensure end-to-end business processes and mobile workflow. Given the potential costs and variability, it is critical that organizations Page 10 of 14 Gartner, Inc. G00255286
diligently evaluate service providers' depth of understanding and experience with their particular technology solutions and datasets. Depth of integration with SFDC methodology and tools. All service providers have their own methodology, tools, accelerators and intellectual property related to SFDC implementations. Above and beyond their own investment, many providers have also blended their own proprietary approaches with SFDC methodology. This iterative methodology is designed for the SFDC product and has been tested over many implementations. However, it is still evolving, so a clear understanding of what will be incorporated in your deal is critical. Gartner, Inc. G00255286 Page 11 of 14
Table 2. Selected SFDC Providers and a Gartner Estimate of SFDC Dedicated Staff > 1,000 Staff 500 to 1,000 Staff 100 to 500 Staff 50 to 100 Staff < 50 Staff Accenture Appirio Acumen ABSI Aptaria Deloitte SFDC Services Bluewolf Capgemini Cloud Sherpas TCS BearingPoint Business & Decision Cognizant CGI Ciber CoreMatrix Persistent Systems Ernst & Young H&W Consulting Idealist Consulting PA Consulting CloudSense Fluido SDG CSC Fujitsu KPMG Parx Sonoma Partners HP ES IBM GBS Idea/Astadia igate ProQuest Consulting Riptide Solient Consulting West Monroe Partners Infosys Sakonent Nefos NTT Data Force by Design PwC Sererra Syntel Tech Mahindra Tquila Westbrook Intl Wipro Source: Gartner (August 2013) Recommended Reading Some documents may not be available as part of your current Gartner subscription. Page 12 of 14 Gartner, Inc. G00255286
"Toolkit: Business Case Model for Total Cost of Ownership Analysis of SaaS Versus Traditional Application Software and Services" "Assessing System Integrator Risks and Track Record in Package and SaaS Implementations" "Hype Cycle for Application Services, 2013" "How to Manage salesforce.com Orgs for Optimal Benefit" "Competitive Landscape: salesforce.com CRM Services, North America and Western Europe" Evidence 1 Data from Future of IT Services Survey (September 2013). Extensive analysis of full results published in "Survey Analysis: Business Buyers and Nexus Technologies Are Critical to New Growth in Application Services." 2 Gartner inquiry data of 140 SFDC customers (March 2012 to June 2013). 3 Gartner interviews and 34 references as part of CRM market analysis for Magic Quadrants. The overall reference database included 240 references for large CRM projects related to primary software. Vendor project percentages were as follows: 21% Oracle 21% SFDC 14% SAP 13% Microsoft 4 Enterprise software market share analysis for 2012 for CRM-related software revenue was as follows: SFDC $2.5 billion (14% market share). SAP $2.3 billion (12.9% market share). Oracle $2.0 billion (11.1% market share). Microsoft $1.1 billion (6.3% market share). For further details, see "Market Share: All Software Markets, Worldwide, 2012." Gartner, Inc. G00255286 Page 13 of 14
GARTNER HEADQUARTERS Corporate Headquarters 56 Top Gallant Road Stamford, CT 06902-7700 USA +1 203 964 0096 Regional Headquarters AUSTRALIA BRAZIL JAPAN UNITED KINGDOM For a complete list of worldwide locations, visit http://www.gartner.com/technology/about.jsp 2013 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. or its affiliates. This publication may not be reproduced or distributed in any form without Gartner s prior written permission. If you are authorized to access this publication, your use of it is subject to the Usage Guidelines for Gartner Services posted on gartner.com. The information contained in this publication has been obtained from sources believed to be reliable. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of such information and shall have no liability for errors, omissions or inadequacies in such information. This publication consists of the opinions of Gartner s research organization and should not be construed as statements of fact. The opinions expressed herein are subject to change without notice. Although Gartner research may include a discussion of related legal issues, Gartner does not provide legal advice or services and its research should not be construed or used as such. Gartner is a public company, and its shareholders may include firms and funds that have financial interests in entities covered in Gartner research. Gartner s Board of Directors may include senior managers of these firms or funds. Gartner research is produced independently by its research organization without input or influence from these firms, funds or their managers. For further information on the independence and integrity of Gartner research, see Guiding Principles on Independence and Objectivity. Page 14 of 14 Gartner, Inc. G00255286