This review applies to all companies interested in implementation of on-demand solution for sales force automation, marketing and support using salesforce.com

Our Recommendations

Our recommendations are coming from the many types of consultants: business, technology, partners, etc. Most of their recommendations are placed in our internal CRM Center of Excellence. Below are a few pros and cons on using Salesforce.com CRM software:

Pros:

1. Very user friendly and capable application
2. Large community of developers
3. Standard application is relatively easy to implement
4. Cheaper at the beginning

Cons:

1. Customization can be expensive
2. Personal Identification Information could be at risk
3. Proprietary development language and platform
4. After 2-3 years cost is higher then on-premise implementation

Analysis Salesforce Market Place Review

More than any SaaS CRM vendor in the past three years, Salesforce has sparked renewed interest in the Sales Force Automation (SFA) market (over 1.100.000 subscribers and over 38.000 customers). The combination of its SaaS model and intuitive UI has enabled sales organizations to increase control of their SFA deployments and expand user adoption. Salesforce is able to deploy from small to large (more than 25,000 users, in case of Merrill Lynch) organizations successfully; however, its SFA functionality remains limited primarily to opportunity management and supporting capabilities, such as activity and contact management. Salesforce provides basic contact management and supporting capabilities, but it hasn’t been proved in environments with complex processes and workflows except Thomson, Dow Jones and incoming Bloomberg Services.

Salesforce strong market presence has enabled to attract partners in multiple domain areas, such as sales configuration, compensation management and e-mail marketing, through AppExchange. Companies in AppExchange have integrated with Salesforce at the UI and data level. This can help fill functionality gaps, but companies will need to deal with multiple vendors. Any sales organization with core opportunity management willing to use SaaS model should consider Salesforce.com

Business Drivers:

• Provide Support for Increasing Growth with Lower Unit Cost
• Improve the Customer Experience
• Drive Improvements in Retention and Revenue
• Reduce Operational Risk
• Reduce Operations Costs

Business Requirements:

• Deliver a best in class customer care experience across the lines of business across the touch points
• Reduce delivery channel costs; create barriers to entry for competition: Move customers and transactions from high-cost infrastructure to low-cost on-demand solutions.
• Leverage the ubiquity and real-time availability of the web to deliver a new breed of business applications that offer greater collaboration and productivity features via a subscription service on a pay-as-you-go basis (SaaS also meets the variable demands of today’s organizations.)
• Enable organizations to avoid the added cost and disruption of migrating to new software versions, or loosing their custom features in the migration process.
• Minimize cost of implementation and a time to market
• Desire to implement a CRM application without many of the costs and complexities normally associated with traditional software products.
• Facilitate ONE view of the customer or broker
• Opportunity and renewal management
• Producer management
• Forecasting by product line, sales rep, brokerage firm, individual broker, region, etc.
• Facilitate collaboration and account/broker coverage within AIG profit center or across profit centers
• Activity management
• Integrate marketing and sales on one platform
• Mobile access to customer data
• Easy to reporting facility that clearly outlines the health of a business
• Track and report on the ROI of marketing campaigns
• Track and manage customer service inquiries

Technical Requirements:

• Zero Infrastructure
• Another reason that traditional software implementations fail is that they force a company to build and manage its own application infrastructure. Of course, most corporations are no longer willing to pay a premium to attempt to build complex and resource intensive competency as CRM application that falls outside of their core business objectives. An on demand architecture eliminates the need for corporations to do this.

Product Overview

Salesforce offers the following key functions (among others) natively within the web environment, with (APEX Platform) or without any third-party tools (standalone saleforce.com software).

Salesforce eliminates the unproductive, non-strategic activities of system installation, 24-7 maintenance, system upgrades, backups and replication, and being constantly “on call” in case the system bogs down or shuts down. The Salesforce platform also provides all the strategic flexibility and results of expensive enterprise software without the extremely costly nature of in-house application management.

Note that each of the features below require no programming, scripting, or outside coding whatsoever, and all configurations are forwards-compatible with future Salesforce versions. Salesforce is designed so developers can provide more strategic value to their companies.

As part of the enterprise infrastructure, Salesforce delivers a robust and versatile suite of enterprise-class integration options, making it easy for business units of small to medium size or complexity to integrate Salesforce with other key enterprise applications — such as ERP, HR, and data warehouse systems.

Built on a native XML-standard platform, Salesforce offers both data and business process integration via enterprise Web services integration, an open XML-based API. With an integration partners such as Data Junction, Informatica, TIBCO, and Grand Central, Salesforce allows companies to choose from a wide range of pre-packaged and custom-built solutions for XML-based integration, depending on their business needs.

Integration utilities are available with the standard Salesforce solution package. These include Web integration links for accessing up-to-the-minute information in other Web-based or Web-enabled applications, and import-export utilities for simple data import and export in CSV format.

Appendix A - Cost Comparison

Financial Model (Compare SaaS vs. on-premise TCO)

Appendix B - Salesforce CRM Functionality (Details)

The right edition and which CRM components required depends on the size of business unit team, and the level of customization and integration required.

Unlimited Edition

Unlimited Edition offers flexibility to meet the most complex requirements. In addition to exclusive features available only in Unlimited Edition, this package bundles several add-ons at significant cost savings over adding them separately. Unlimited Edition includes all Enterprise Edition features, plus new levels of customization and extension possibilities, no limits on application installations from the AppExchange, Salesforce Sandbox environment, mobile accessibility with Apex Mobile, Premier Support with Administration, and more storage.

Enterprise Edition

Enterprise Edition has advanced CRM features, including: extensive customization and integration capabilities; a platform for IT teams to extend CRM and create new applications; support for multiple divisions and processes; workflow automation; sophisticated security and sharing functionality; the Salesforce PRM option, for complete SFA/PRM integration and visibility across your company’s entire direct and indirect sales pipeline; and much more.

Professional Edition

Professional Edition offers companies of all sizes a comprehensive CRM suite for managing every aspect of the customer lifecycle. With unlimited scalability plus essential customization, security, and sharing controls, Professional Edition provides enough functionality to start CRM initiative.

Team Edition

CRM for small numbers of users (up to 5 users)

Team Edition is the best way for small teams to collaborate and manage customer relationships. All users share important customer data, making it the perfect solution for basic sales automation, account management, and reporting.

Total Cost of Ownership and Predictability of On-Demand CRM

A primary advantage of the Salesforce on demand model is a large reduction in total cost of ownership (TCO). Projects based on the old software model have hidden costs that can add up to be many times greater than the initial software license fee. As the hidden costs and complexity of old IT projects have more widely reported and understood, executives are demanding more predictability and accountability for the total project costs of business application deployments. The savings of this on demand application service are substantial for management seeking ways to minimize costs. Note that in the pricing section, the hidden costs that plague traditional software projects are eliminated with Salesforce.

Additionally, Salesforce offers its clients total cost predictability. With a single, consolidated, contracted, price per user, per year business unit will always know the full extent of its CRM costs.

TCO calculations must include all the ancillary costs associated with the solution. With standard on-premise software, those additional costs are a substantial multiple of the cost of the software itself, and they are sometimes hidden so that companies do not realize they will need to spend money in these areas. Companies must also remember that on-premise software is not a one-time investment, as it is sometimes simplistically portrayed; you will need to upgrade the technology over time, and each upgrade costs nearly as much, or more, than the initial investment.

-Both TCO curves include software and associated human costs

-On-premise includes hardware, middleware, infrastructure, maintenance, upgrade, additional staff, and higher change management and training costs

-On-premise should also include, but it does not in this graph, the opportunity costs associated with on-premise software (e.g., operational cost of downtimes, lost opportunity because customer cannot have latest technology)

As the marketplace begins to understand the difference, companies are less willing to justify the added operating expense of installed, on-premise software.

Time to Value

Beyond TCO, the true financial value of any corporate investment is determined by the return on investment (ROI). Hundreds of variables can go into a ROI calculation, but the single variable that most powerfully affects ROI value (i.e., how long it takes business unit to realize benefits from the solution). The longer it takes companies to experience positive benefits from an investment, the more likely the return is negligible, or even negative.

This diagram shows the typical time to value for traditional software:

In contrast, the time to value for Salesforce’s on demand CRM is much shorter. With Salesforce, AIG business unit can meet its business needs far more quickly. Because Salesforce can be implemented in 30-90 days, most Salesforce customers achieve significant ROI within months, not years.

TCO Figures (Provided by Salesforce)

Siebel on Demand

Salesforce.com