There is an interesting phenomenon happening in the small and medium business segment. The widespread adoption of on-demand or software as a service (saas) CRM, led by Salesforce.com, and followed by companies such as NetSuite and RightNow Technologies.
Well, that’s not really new.
What is new is the expanded use of saas CRM software within these mini-enterprises, whether independent businesses or smaller divisions or departments of larger corporations, as their principal business platform. Since saas CRM manages the lifeblood of the business, sales and customers, and is increasingly more user friendly and flexible, it is becoming the preferred method for companies to manage their business.
As a result, it is also becoming the de facto integration hub, or SOA enabler, for the smaller enterprise.
A case in point is the experience of a well-known educational products sales company. It’s parent company sells educational toys through retailers. However, it launched a division that sells education-oriented items to schools and school districts, such as a handheld screen-based interactive tool that uses story narratives to teach English proficiency to non-native English speakers. This newer division established a territory sales model, with geographically-based sales executives selling to school districts in their area.
The main corporate entity has only a handful of account managers who sell to large retailers such as Wal-Mart and Toys’r'Us. Whereas it is geared towards a retail sales model and related B2B IT infrastructure, the newer division had the infrastructure needs of a territory-based direct sales model. They required a CRM application to track leads, opportunities, and closed sales, and because of the reduced bandwidth of this smaller business unit, they required the efficiency gains of an automated commission calculating application.
With no dedicated IT resources (IT resources are tied to corporate and are available “on-loan” to the new division), and a need to ramp-up quickly, the division chose to bring the CRM and commission calculation functionality of the on-demand model. They chose Salesforce.com and Xactly Corporation, respectively, to fulfill these functions. The one on-premise application they had access to was Oracle Financials for accounting.
The missing piece was to integrate these applications together. They chose to go with a packaged integration platform, adopting their subscription-based pricing model and on-premise software.
In addition to being the CRM platform for the new division, Salesforce.com is also serving as the de facto “enterprise service bus” to incorporate the accounting functionality of Oracle Financials, and to trigger Xactly to do it’s job of calculating sales commissions.
This use of Salesforce.com as a de facto on-demand ESB platform was noted in an August 2007 white paper entitled “Busting Myths of On-Demand Integration,” by Peter Coffee, Director of Platform Research.
“On-demand platforms exhibit the growing capability to provide a foundation for integration,” he said, citing a May 2007 announcement of the Salesforce.com SOA technology that enables the exposure and consumption of web services.
In the same paragraph he notes:
“This is not to say, however, that a move to a Web services protocol strategy (such as that of using a saas application such as Salesforce.com) is a prerequisite for on-demand integration…there are options available for use with the salesforce.com platform” such as custom coding or a third party integration platform.
In other words, on-demand applications, Salesforce.com being the most prominent, are quickly establishing themselves as integration hubs the way ESB providers such as Sonic Software, IBM’s Websphere, and BEA’s Weblogic were formulated to be.
These SOA solutions, however, are cost-prohibitive for smaller companies, divisions or departments, and are often managed by enterprise IT staffs who are unresponsive to the needs of the department. These smaller enterprises have to fend for themselves, and are adopting on-demand applications that require little to no IT involvement.
IT typically has to get involved when it comes to integration, according to Coffee. Such was the case with the educational products company. Their IT department provided the input that the newer division needed to give the technical “thumbs-up” to the integration solution. But due to human bandwidth issues they decided to go with a fully delivered integration solution as opposed to the traditional toolset that is typically sold to IT departments.
Tying together Salesforce.com, Oracle Financials and Xactly Corporation was done in the span of four months and cost less than $50,000. Why did it take that long? Because they had to take a breather between deciding on an integration vendor and a commission calculation vendor.
Compare that with enterprise application integration projects which typically take nine months or more and cost hundreds of thousands of dollars, and you can see why Salesforce.com, together with fully configured integration solutions, are quickly becoming the “integration hubs” or systems of record for the smaller enterprise.
Fernando Labastida is an account executive with Pervasive Software, and serves the Northern California, Pacific Northwest, Southwest Canada, Minnesota, and all of Latin America. He can be reached at http://www.labastida.com
or 512-945-9273.
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Microsoft recently (in September 2005) renamed its ERP product: Great Plains ? Microsoft Dynamics GP, Navision ? Microsoft Dynamics NAV, Axapta ? Microsoft Dynamics AX, Solomon ? Microsoft Dynamics SL, Microsoft CRM ? Microsoft Dynamics CRM. The idea is probably nice ? to unify future concordance product under Microsoft Dynamics name. There are multiple possibilities, however in getting all MRP systems merged into one Microsoft Dynamics and what should be taken as base and what should be phased out. We can not be judges ? we will give you some facts for you to take into consideration. This article is planned as a first entry point to look ?under the hood? of Microsoft ERP applications and probably compare the facts with the competition: SAP (especially SAP Business One if you are small or mid-size company or international branch of multinational corporation), Oracle E-Business Suite/Oracle Financials, also referred as Oracle Applications.
? Microsoft Dynamics GP 9.0/Microsoft Great Plains. This ERP was initially architectured by Great Plains Software ? Great Plains Dynamics and Great eEnterprise hit the market in earlier and middle 1990th. If you remember those old-good-days of IT boom ? nobody knew which operating system will win: Unix/Solaris, Microsoft Windows, Apple MAC OS. This is why ? the traditional (and pioneering way) for those days was to create a shell, written in C language to abstract you from Graphical platform. Great Plains Dexterity was this shell, programming language (sanscript). The second fundamental idea was to abstract Great Plains Dynamics from database platform, however the abstraction was done on the level of ?budget? database platforms: Ctree/Faircomm, and Btrive, later on Pervasive SQL 2000, for Microsoft SQL Server 6.5/7.0/2000 Great Plains used atomic stored procs approach to speed up database access. Nowadays Microsoft Dynamics GP/Great Plains versions 5.5, 6.0, 7.0, 7.5 are available for Ctree and Pervasive, however since version 8.0 Microsoft Great Plains is available on MS SQL Server/MSDE platform only. Currently Microsoft Great Plains 9.0 is offered in USA, Latin America, Canada (including French Canadian version for Quebec), UK, Australia, New Zealand, South Africa and other countries where official language is English ? such as South East Asia, for instance.
? Microsoft Navision/Navision Attain/Microsoft Dynamics NAV. Some ERP analytics believe that Microsoft Great Plains Business Solutions (later renamed into Microsoft Business Solutions) bought Navision Software (est. in 1984). The fundamental ideas of Navision come to its own shell ? C/SIDE, database proprietary platform: C/SIDE, etc. Navision was designed to be flexible and grow with your business ? from small to upper mid-market. Navision Software had its own marketing plans prior to be purchased by Microsoft and expanded in continental Europe, UK, USA (competing with Great Plains Software and Solomon Software). When Navision was bought by Microsoft ? Microsoft Business Solutions offered and promoted Navision in East Europe: Russia, Romania, Bulgaria, Hungary, etc. Plus it tried Navision in Brazil (over 100 implementations – 2005). Navision is more flexible to localization challenge (than Microsoft Great Plains)
? Microsoft Axapta/Microsoft Dynamics AX ? it seems to be rising star for Microsoft and it can compete with upper ERP/MRP mid-market. Axapta has modern design and its ability to expand is still in its architecture modern model (versus Great Plains or Navision ? where we see integrations with MS Office, Web Fronts/Business Portal/eConnect/eCommerce type of improvements). In late 2005 we see US and UK MBS VAR activity to sign for Axapta and consultants training.
? Microsoft Dynamics SL/Microsoft Solomon ? this ERP is for project-driven organizations.
? Microsoft Dynamics CRM 3.0/Microsoft CRM 3.0. This CRM solution from Microsoft is abreast of the majority of Microsoft recent ideas and innovations: Microsoft Exchange, Active Directory, XML Web Services driven MS CRM SDK with C# and VB.Net sample code. Currently MS CRM 1.2 and 3.0 has integration to Microsoft Dynamics GP 7.5, 8.0 (with service patch) and 9.0 (coming?)
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CRM and How it Intersects With Social Media
No one seems to be talking about it, but surely it is the next step. The intersection between social media and CRM tools. How do we leverage the conversation we are now having with the customer and the use of our customer relationship management engine?
CRM + [SOMETHING THAT INTERACTS WITH/MANAGES SOCIAL INTERACTION] = CRM 2.0. Paul Green’s Blog does have a great article on how CRM and how it has evolved from CRM 1.0 basically a tactical software platform to manage customer data or transactions to the era of CRM2.0 a customer engagement strategy. Vendors like SAP CRM 7 and Oracle Social CRM have been proclaiming CRM 2.0 for a while now, but according to Paul they still have a while to mature.
Jeremiah Owyang an analyst from Forrester Research is a web strategist and in his latest blog talks about in his article When Social Media Marries CRM Systems
“brands will be able to track, manage, and monitor who enters the community, determine if they are a prospect, customer, partner, or even inactive. Secondly, brands will be able to develop intelligence on how effective communities are for bringing customers closer such as integrating existing social networks like LinkedIn to the corporate intranet. In a theoretical sense, brands could determine which customers have the best reputation, and how to keep and reward them. But perhaps, most importantly, customer experience will improve as companies now have a better understanding of them throughout their life cycle -and beyond.”
I think there are some definite leverage points that today small business and others can take advantage of.
1. As Jeremiah suggests using the interaction that our customers have now with us through social media and building a better understanding of them and their life cycle as a customer will allow us to further customising our offerings to our customers needs. How you inter-grate all the channels of communication to do this, I don’t know but I am sure there is some agitator tool out there. The future CRM without new Internet technologies such as Web 2.0 does not work anymore. There are lots of new opportunities to collect information on customers in this new social interactive environment. Recruitment firms are already leveraging this by using Linkedin.
2. As customers start to collaborate the use of CRM tools can be more influential further up the lifecycle as we test the ideas for new products and services and build them together. Using CRM platforms as a feedback mechanism would be an ideal scenario particularly if we have the customer details like email, twitter id, or facebook name. As Jeremiah explains SalesForce is a CRM example where collaboration is starting to happen as Salesforce offers community insight tools. It offers IdeaExchange, which powers Dell Ideastorm and My StarbucksIdeas. As Paul Green explains “it extends the company’s value chain to the customer and incorporates the customer into the pores of that value chain in addition to allowing them to tap the unstructured information that is out there for the picking on the web.” There is a great opportunity to actually engaging the customer in the interactions and not many companies are using their CRM to do this yet.
3. Information on competitors, feedback on companies, customer reviews are all fare game now with the customer controlling the conversation. This information can provide a great deal of insight and an opportunity if collected and trends identified to intersect the conversation with key pieces of valuable information either to protect a brand that might be the victim of some unfair blogging or to capitalise on the groundswell of a viral campaign. As the CRM tools become more sophiscated at digesting this information companies will be able to leverage this to proactively meet the needs of their customers and protect their brand reputation.
4. Customer escalation. Hilary from Lithium makes a great comment on a blog about how CRM and community forums can assist call centre agents. Customers can search once and get combined results from forum posts and the company’s knowledge base. And customers are more likely to get their questions answered if questions posted on forums are escalated to customer support when not answered in a set time frame. For customer support agents, they get a (closer to) 360-degree view of the customer if forum activity is integrated into their CRM desktop. Hilary explains Lithium is doing this today. Helpstream is another example.
5. Adam Needle makes some interesting comments on his blog that current CRM vendors that largely cater for ” demand generation (Eloqua, Market2Lead, Marketo, Silverpop, etc.), marketing automation/EMM (Aprimo, Neolane, Unica, etc.) and advanced CRM (today prob Oracle, Salesforce, etc.) — collectively, what I refer to as integrated marketing management — are building on (and integrating with) existing CRM and are positioning both to be able to broker and to measure/nurture and find ROI in customer dialogue.” Adam states that these vendors aren’t in the best position to understand the customer dialogue because they operate in a data rich database environment but they are coming around. He believes that they are coming around and will begin to integrate social media and other such ‘unstructured’ data/communication capabilities into their platforms. So as marketers and small business the landscape will change with regards to the tools we have and how they intersect to have conversations with our customers and manage that data as part of a marketing intelligence.
SMALL BUSINESS TAKE AWAY:
So as a small business you might be just starting to collect names in a database and that is a great start but perhaps start to monitor the conversations your customers are having with you on your blog or about you on social forums or product reviews to see if you can join the conversation or identify trends where you can improve your service and your competitive advantage. A good way of starting to do this is follow google alerts and maybe some competitors just for fun or have a look at Marketingvox for some good tips.
Relevant Books:
The art of strategic Listening by Robert Berkman
The Age of Engage: Reinventing Marketing for Today’s Connected, Collaborative, and Hyperinteractive Culture by Denise Shiffman
Groundswell: Winning in a World Transformed by Social Technologies by Charlene Li Josh Bernoff
Danielle MacInnis
Marketing consultant
MacInnis Marketing
website: http://www.macinnismarketing.com.au
blog:http:// http://www.macinnismarketing.wordpress.com
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