Software as a Service (SaaS) is not for everyone. In fact, some organizations that invested in SaaS are now looking for a way to move their CRM projects on-premise.

That’s the case for Projectline, a Seattle-based company that helps tech companies find and manage reference customers. It’s currently running Microsoft Dynamics CRM Online, but is in the process of moving that deployment back in-house.  “We’re still, in the next six months, going to run a hybrid model, using SaaS for certain things and internal reporting will be done on premise,” said David Jones, chief operating officer.

Projectline wants to move its CRM in-house in part to facilitate its reporting and analytics. And it’s not alone, according to Rob Desisto, an analyst with Gartner, speaking at the Customer 360 event here this week. He’s seen a number of Gartner clients express interest in moving from on-demand to on-premise.

“There are fundamental challenges that the general architecture features when doing SaaS,” Desisto said. “The Internet pipe is only so big. Any heavy analytics or large data set is very difficult.”

Running heavy analytics loads aren’t the only thing leading some to rethink SaaS. Some organizations are finding that SaaS isn’t as inexpensive as some SaaS vendors would have you believe. According to Gartner, the total cost of ownership (TCO) can indeed be lower with SaaS versus on-premise software, but it must meet a few conditions.

The IT staffing myth

For example, if a SaaS application project means reducing head count for things like database administration, system administration, software engineering and patch management that can mean savings, but it comes with a caveat. Saving just a part of someone’s job seldom equates to actual savings.

“If you’re a small business with no IT staff then the math is a lot easier. You need to buy the hardware. With a larger company, the math doesn’t always work out in favor of SaaS.”  Rob Desisto, vice president and distinguished analyst, Gartner

“I say head count, not [full time equivalency],” Desisto said. “Users are saying ‘this SaaS thing was going to save me money on? head count. We saved 10% of FTE with this.’ That doesn’t work with the CFO. The idea that there’s opportunity costs, doesn’t work for the people crunching the numbers.” 

SaaS can also mean lower TCO if an organization can avoid purchasing new hardware, databases and applications licenses. However, while it may seem obvious that an on-premise software purchase would require new applications licenses, many organizations have CRM already because it was bundled with their ERP licenses, Desisto said.

The hardware, software and IT resources question is dependent largely on the size of the organization.

“If you’re a small business with no IT staff then the math is a lot easier,” Desisto said. “You need to buy the hardware. With a larger company, the math doesn’t always work out in favor of SaaS.”

The myth of the rapid release advantage

SaaS vendors often tout the frequent updates and new functionality that comes with their deployment model, but this does not always work out in the customer’s favor, Desisto said. For example, SaaS upgrades, typically two or three times a year, usually happen on the vendor’s schedule, not the customer’s.

“If you’re a company that has a lot of Six Sigma processes around releases and testing, with this sort of rhythm of every three months or every six months you have to check integrations and do some level of regression testing,” Desisto said.

Companies that don’t necessarily need all the latest functionality and lag behind on upgrades may find on-premise a better fit, he said. The release schedule for upgrades is something that needs to be discussed in contract negotiations, he warned. Some vendors provide sandboxes and testing environments to facilitate the process.

“These are some of the questions you need to talk about,” Desisto said. “What is your sandbox? How quickly can I get access to a release before it comes out?”

The shelfware myth

SaaS vendors, and their sales reps, like to promote the idea that SaaS deployments remove on-premise software’s shelfware problem — software licenses that are paid for and require maintenance and support fees, that no one is using. Again, this is not necessarily always the case, Desisto said.

Take as an example a company that is deploying SaaS CRM to 2,000 users at $60 per user per month. Since most SaaS vendors require a contract agreement for everyone up front and the organization is going to roll the implementation out in phases, it will still wind up paying rent on software it’s not using. If it takes six months to roll out the deployment, that’s six months of subscription fees its paying for software it’s not yet using. If the company starts out with a pilot program of 300 users after the first six months, it’s typically still paying subscription fees for the other 1,700 licenses.

That’s essentially shelfware, Desisto said.

The pay for what you use myth

Many SaaS vendors tout the “utility model” of SaaS, suggesting organizations pay only for what they use. Yet, SaaS contracts are typically rigid. If business conditions change and an organization needs to lay off workers, it still winds up paying for licenses.

“They do not allow you to dial down the number of users,” Desisto said. “Not only are you committed, in many cases you’ve paid up from the anniversary of year one.

However, some movement has been made on this front. RightNow recently enacted a Cloud Services Agreement, a standard service level agreement (SLA) guaranteeing uptime, the ability to dial up or down with licenses and a renewal price cap.

The TCO myth

SaaS is not necessarily cheaper than on-premise.

“Over the first couple years, SaaS is less expensive typically because it’s an operating expense that starts flat and stays flat,” Desisto said. “On-premise has the [capital expenditure] up front.” 

Upgrades to on-premise software applications will usually push on-premise costs back above SaaS, but only for companies that stay on the most current versions.

“If you’re a company that doesn’t upgrade that frequently on premise, then clearly the SaaS number exceeds on-premise,” Desisto said.

More SaaS purchasing considerations

Gartner research has revealed a number of reasons companies are moving off of SaaS. Security is one, though that’s often due more to internal policies or national laws that require customer data to be stored in the country’s borders and not due to weaknesses of the applications themselves.

Performance can, at times, be an issue. While a SaaS vendor can point to sub-second server response times, organizations need to consider the entire process. How long does it take to go from inside a firewall in London, to the data center in California, back to London and through the firewall again? Latency issues are something that needs to be identified up front, Desisto said. 

“It’s not realistic for [SaaS vendors] to commit a response time to you because there are a lot of factors, but they should submit their strategy on latency,” he said.”This is the level of detail you need to get into when evaluating these SaaS vendors.” 

In fact, Gartner advises organizations to create a SaaS policy and governance document. Since SaaS is often times purchased without IT’s involvement, governance can be a challenge. Companies should determine who owns things like configuration change management, vendor management and ownership of internal contracts. 

Contracts should include up-time reliability clauses with well defined penalties, a data ownership provision and disaster recovery provisions.

“I guarantee 90% of you do not have RTO [Recovery Point Objectives] in your contract, if something happens physically to that data center,” Desisto said. “Very few vendors will provide it.” 

Companies should also carefully consider what happens if they end their relationship with a SaaS vendor. What format will their customer data be returned in, the vendor’s or the company’s? Running multiple SaaS applications also can complicate deployments. Upgrade cycles will not be synchronized.

Sean Sullivan, senior business system consultant at a Midwest financial services firm and an attendee at the conference, is thinking carefully about SaaS. The company runs Salesforce.com for its B2B business but is considering other options for its B2C operations.

“We’re making sure the business side is aware of the complexities of the issue,” particularly the reporting and analytics, Sullivan said. “It’s matter of putting more numbers behind it.”

Gartner Debunks SaaS CRM Myths

Use Newsletters to Communicate Regularly with Customers

• Make them relevant, valuable, timely and tailored to your customers’ needs
• Design your e-mails so they are easy to read and provide information clearly
• Know the type of device on which your emails are received and design accordingly
• Send on a regular schedule so messages are expected
• Keep subject lines short; less than 50 characters is ideal
• Use a consistent ‘from’ address; customers open e-mails they are expecting to receive

Give Options and Set Expectations

• Kick off the relationship with a welcome letter where you can set terms and expectations
• Look to provide customers only information they need or would like to receive
• Find out when and how frequently they would like to receive it
• Tell them how frequently they’ll hear from you and stick to your promise
• Segment lists to best match your customers’ needs

Make Your Emails Work for Your Customers

• Know your audience
• Make your customers’ lives easier with valuable information and reminders
• Keep customer motivation as your main focus

Keep it Personal with Triggered Communications

• Send date-based triggers to remind customers of action needed to continue providing uninterrupted service.
• Recommend products or information that might meet their needs
• Recognize milestone dates, such as birthdays, anniversaries, or thank them for time as your customer

Interact

• Whenever possible, encourage your customers to interact with you. Ask for their opinions; offer surveys or polls
• Listen to feedback–and use it

Make Sure They Still Want to Hear From You

• Maintain good list hygiene: remove hard bounces or registered complaints
• If a customer hasn’t opened an email in a certain amount of time, send them an email asking if they would like to continue receiving your communications.
• No matter what, always remove and respect unsubscribe requests

Sage SalesLogix v7.5.2 now offers integrated E-marketing, an on-demand email campaign service.  Sage SalesLogix E-marketing, is a cloud-based marketing automation solution powered by Swiftpage that integrates with and extends the e-marketing capabilities of Sage SalesLogix.  Not on version 7.5.2?  No problem, SwiftPage is available as a standalone, yet fully integrated e-marketing tool.

Either way, you can reach out to your contacts, grow your customer base, nurture and qualify leads, and automate sales and marketing practices. This fully integrated e-marketing solution that lets you create campaigns and view history, interactions, and results — all from within Sage SalesLogix. Reports show open and click rates and trends over time so you can understand which campaigns bring the most success.

To learn more about Sage SalesLogix E-marketing powered by SwiftPage, contact us today.  Or, start your free SwiftPage 60 day trial by clicking here. http://www.swiftpage.com/partners/partnerall.asp?Partner=CRMPlusConsulting

• Deploy a full-featured, secure CRM solution rapidly
• Reduce IT capital expenditures and operating costs
• Simplify software management
• Easily retrieve your valuable data
• Have full control of upgrades
• Integrate easily
• Tailor for unique business needs  

For a more robust, customizable solution, a hosted version of SalesLogix might be right for you.  And, there has never been a better time thanks to special incentives including Easy Pay and Switch and Save.

If you are ready to learn more about the CRM Solution that is right for you (and our special incentives), contact us today to take advantage of any of our FREE offerings to help you make the best decision, including:

• Guide on “How to Choose a CRM System”
• Web-Demo
• Free trial version
• 30 Minute Phone Consultation

It’s free. There’s nothing to lose. It’s easy to request any of our free offers.. Just 30 seconds of your time could save you thousands of dollars or months of implementation time on the wrong solution. Don’t hesitate, call us today. The Easy Pay and Switch and Save offers are for a limited time. Call (813) 343-2173 e-mail us at: information@crmplusconsulting.com or visit our website at www.crmplusconsulting.com.

Join us for a FREE webinar and learn the top reasons to deploy a full featured CRM (Customer Relationship Management) System to:

1. Increase staff productivity and do more with less
2. Provide more effective budgeting and forecasting
3. Increase your sales win ratio
4. Sell smarter – understand what’s working and what’s not
5. Keep the customers you have
6. And more ….

Thursday, July 29th at 2:00 p.m. Eastern

This webinar is FREE and there’s no obligation.  Register today as space is limited. 

Call (813) 343-2173 x 20

e-mail ckemmerer@crmplusconsulting.com

or visit www.crmplusconsulting.com/register

Windows and even remote databases running on the Windows platform will require more resources to deploy and support than either Web-based or Cloud deployed. The Windows software will need to be installed on the remote computers, a database will need to be prepared and attached. If your organization is fairly straight-forward and you do not have extensive security built into your network, then deployment will not be difficult. If you have a complex IT infrastructure with different networks, VPN access points and paths to the data, then deployment can be quite challenging to get all the firewalls properly configured.

One difference between deploying a Web-based versus a Cloud-based solution should be the initial set up of the Web site, servers and firewalls. Cloud-based solutions tend to deploy more rapidly because the environment is already built and configured. So the initial deployment will take a little longer and may cost a little more.

Another difference between Web-based and Cloud-based deployments could be in the development platforms for the different implementations. If the CRM solution uses standard .Net and well-documented APIs then most any developer should be able to, or be easily trained to, create your customizations. If the solution uses a proprietary language and a non-standard platform, then the availability of resources or the cost for training internal resources can be great. Specialists on the non-standard platform will probably charge more per hour than a .Net programmer. This supports the case for a well-defined scope prior to selecting a solution. A good idea of the customizations that might be required can prevent a costly mistake. You may select what appears to be the less expensive solution only to find out that it will cost substantially more to modify the solution to meet your requirements later.

Regarding on-going resource requirements, the Windows deployment will be more costly. Every time a new computer is added or a user gets a new computer, there will be an installation.

The difference between Web-based and Cloud-based deployments should be insignificant. Both are essentially web servers. It is often argued that the Web-based still requires IT and Database manager support whereas the Cloud-based does not. That is not entirely accurate. Both require the support. The customer may have to provide or contract for the support in the Web-based deployment. This would be for routine backups (which are usually automated) and periodic performance monitoring. While there is no direct correlation to the Cloud-based deployment, the cost for those services is incorporated in the monthly fees for the Cloud solution

Read the CRM Resource Requirements document on our website.

• Cloud Computing 101
• Cloud Computing 102

While attending Sage Insights Partner Conference last month, the big CRM buzz was focused around the cloud version of SalesLogix scheduled for release later in June.  What surprised me was the strong messaging not only for new clients, but for existing SalesLogix customers.  In fact, existing on-premise SalesLogix customers can migrate to the cloud for only $35 per user, per month.  This is an unbelievable value for clients who haven’t customized their SalesLogix systems, and could represent a significant IT savings.  The cloud version of SalesLogix is yet another solution to our growing arsenal of tools to help our clients with their CRM needs. Additionally, special incentives were announced to get former SalesLogix customers back to SalesLogix and back on track with their support plans.  Special financing terms were announced for brand new SalesLogix clients.  There has never been a better time to take a new look at your CRM system, and we look forward to walking you through that evaluation process.

The implementation starts: evaluate the processes and business requirements, design customizations, decide on implementation methods, assemble prototypes, convert data, and create integrations.  Then, the work with the users starts so that we can try to get a solution that provides all people in the organization value: the sales people have a tool to manage their prospects and customers, sales managers have a tool to forecast and evaluate their direct reports and the sales VP has a tool to see what is going on in his/her organization from a high level view. It’s the ultimate, all in one solution to everyone’s prayers.

During training the users extol the virtues of the new system and all it will do for them. The managers are promising accurate forecasts, customer service is promising to improve response to customer’s issues.

Then go-live and, nothing! A week later and only three people have started scheduling a few appointments. Six weeks later, there are only a hundred entries in history and 50 to 60 activities scheduled. No opportunities, no tickets. What’s going on?

At some point, someone comes to us and says, “They aren’t using the system  … why did we buy it?”

Back in the ‘80s, I was consulting in the medical equipment maintenance management industry. During my stent in the industry, we saw all kinds of quality improvement programs for hospitals. It seemed that every year, there was a new trend. I recall an article that was published in a business journal entitled ‘Why Quick Fixes Fail’.  The article outlined a scenario similar to the one above. An organization makes a substantial commitment to make a change, to improve productivity, to improve customer satisfaction, to improve employee morale; they bring in the consultants, do the evaluations and set up the training sessions. Everyone is on board and starts using their new-found procedures and knowledge and all works well until someone upstream has to change the way they work. The article concluded that quick fixes work until the boss has to change what they are doing.

We see a similar phenomenon with CRM solutions. We carefully craft our solutions to provide management with the information that they need to make informed decisions. We are much attuned to the end users, though. A hard to use solution will not be used. We have even recommended against customizations because we knew that the end-users would not cooperate and management would not get what they want. “Let’s hold off on that one and see how it goes. We can always add it later”.

Our goal for an initial implementation is to give everyone something; a tool to make their job easier or information to better manage the business. But everyone must do their part. 

Look at a simplified example: ABC Company has no CRM in place. They have five regions nationally with five reps in each region. Key performance indicators include number of on-site visits and pipeline activity. Any out-of-box CRM solution can meet these requirements. We need to count completed meetings and have an opportunity forecasting module. Three months after roll-out, there are no meetings and no opportunities in the system. 

The problem is not with the sales people. They will do what they have to do to increase their compensation. However, if the regional managers are not reviewing the reps’ pipelines and schedules with them on a regular basis and don’t make using the system a priority, then the reps will continue to work the way they have always worked. If, however, the regional manager developed the habit of reviewing completed meetings (from the CRM solution) and reviewing pipelines (from the CRM solution) then the reps would quickly learn to use the system. Likewise, the Sales VP should be reviewing pipeline statistics with the regional managers.

 I’ve heard that it takes three weeks to break or develop a new habit. If your sales reps have been using Daytimers for ten years, it is going to be a life-changing event for them to change. If there is no reason to change – i.e.: their boss isn’t using the information in the CRM system, then the change will never occur.

 Some people think that a new CRM solution will make everything work better. It won’t. Only people can make everything work better. It takes a team effort, with everyone at every level committed to the change. But the change has to come from the top. Without management buy-in and participation, you cannot expect more than about 30% utilization of your solution. The adopters will tend to be younger, more technologically savvy individuals. They will make great use of the system and even find ways to export the information to give to their boss the spreadsheets and Word documents that he wants for routine reporting. The remainder of the solution will go unused. 

To break this cycle, everyone must make a three-week commitment to fully embrace the solution. It will be very hard at first. Make sure that everyone throughout the organization understands what is expected. If the number of on-site visits is a key indicator, then the sales staff must at least schedule on-site visits in the system. During sales meetings, the regional manager should have the schedules available and discuss the visits. The reps will start getting the idea that if it isn’t in the system, then it doesn’t exist. Likewise, the VP of sales should be holding the regional managers accountable for meeting their numbers as recorded in the system. Throw away all other reporting. Do not accept spreadsheets or documents listing the activities. Commit for three weeks. 

At the end of three weeks, carefully review what is working and what isn’t working. You might even want to invite your business partner to the meeting. Additional training might be required or you might need to tweak the solution to improve the process. 

Regardless, if you haven’t made this level of commitment, then you have wasted your time and money. If you are considering a CRM Solution, realize that it will take this level of commitment to make it work. Software is not a magic pill that will cure all your ills. It is hard work. Once implemented and adopted, though, you should realize substantial improvements in productivity and information management.

http://www.crm2day.com/content/t6_librarynews_1.php?id=50637

The rules for success have changed dramatically. Today’s chief marketing officer needs to be a “test and learn” person relying on a strong infrastructure of data, tools, and analytics to make CRM work. With an average tenure of twenty-four months, chief marketing officers need to move beyond historical, traditional issues and rise to a new set of five challenges–fast:

1.      Gain value by understanding real costs.
At a micro level, understanding the ROI of a single marketing promotion or campaign is important, but it is also essential to see the forest for the trees and understand that the cost of the forest is not the price of each tree added together. A macro view of marketing costs helps CMOs understand the true cost of all the technology needed to run marketing, and then consider new advances such as software as a service (SaaS) which can dramatically reduce costs while providing bundled functionality.

2.      Get the most complete view possible, as it evolves.
It seems like every day there is another new and powerful channel to communicate with customers. First there was the internet, then texting, and now Twitter–what next? The challenges these new channels represent are magnified by the fact that things happen in warp speed as opposed to the “boring” traditional channels such as direct mail, outbound telemarketing and even email. Again, to effectively market to suspects, prospects, and customers, a company has to be able to create a complete view of their constituents.

3.      Combine traditional programs with the new wave of campaigns.
Traditional batch outbound campaigns are still very popular; particularly email campaigns where the costs are extremely low as compared to direct mail. Companies need to master the new wave of campaigns — including inbound driven, event-driven, online, and multi-channel — and combine them for maximum effect.

4.      Know which channels are making you money.
John Wannamaker’s quote is relevant today: “I know half of my marketing dollars are wasted…I just don’t know which half!” Marketers today need to know which channels are more effective or less wasteful in terms of marketing spend; they need to allocate scarce marketing dollars to the most appropriate, highest return channels. How this is accomplished can dramatically improve an overall marketing program.

Keep it customer-centric with the right metrics.
CMOs must continue their customer-centric journey by focusing on the customer-access, industry-relevant metrics that provide a compass for future journeys, campaigns, and programs. Metrics need to be stated in terms of the customer, readily accessible at very frequent intervals, or in real time, such as “average revenue per customer” and “revenue per customer segment.” Most metrics can be anchored around three main goals: customer acquisition, customer development (cross sell/up sell), and customer loyalty (churn/retention). By laying out plans based on customer segments, CMOs can use these metrics for course corrections.