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The paper you are about to read was produced by CSO Insights in June 2006, and was based on input provided by firms who had implemented a commercial CRM application and/or a combination of a commercial and internally developed applications. As you will read in more detail, the emerging On-Demand contender was the clear winner with higher ratings in projects completing on time, within budget, enjoying higher levels of user adoption and satisfaction.
Since the release of the original paper two questions have consistently been raised: 1) Is On-Demand for real? And 2) In addition to core CRM capabilities (contact management, opportunity management, forecasting, etc.) what other functionality are firms looking to enhance their CRM platform?
The verdict is in and while not unanimous it is clearly beyond reasonable doubt: On-Demand is for real. In the early years of hosted solutions, arguments could be made about lack of access, speed, security, customizability, uniformity or affordable carriers. Essentially all of these have been addressed by enhancements to the applications and the ubiquity of high-speed, relatively low cost and wireless Internet access.
Further, the introduction of disconnected clients, that is, the ability for users of hosted applications to access customer contact information and histories essentially swamped the most frustrating aspect of on-demand applications. And recent purchases (i.e., implemented in the past year) favor on-demand over on-premise by at least 2:1. So the answer to the first question is yes, at least until something bigger than the Internet is invented on-demand applications are for real.
The broadly accepted acronym SaaS, for Software as a Service, is now being used to include all on-demand offerings, including those that attach to traditional CRM applications. Which brings us to the second question: What's next?
On-Demand Versus On-Premise CRM: Are There Performance Differences?
Based on CSO Insights' 2007 Sales Performance Study data we see in figure 1 that 70% of CRM users plan to enhance their current CRM application, be it On-Demand or On-Premise, with additional functionality. Indeed, it is increasingly recognized that CRM is not one static solution but really a dynamic solution that continues to evolve.
As seen in the chart above, sales knowledge management, forecasting, channel and incentive management are just a few of the enhancements significant numbers of companies are planning to add. However, we see an especially potent 1-2 Punch in the first two categories: CRM/Sales Process Integration and Sales Management Analytics.
CRM applications provide an enormously flexible and powerful technology for capturing and storing data?customer contact information, past purchases, current opportunities, call reporting, appointments are all examples. However, data is not all that useful; what sales reps and their managers need is actionable information. What converts data to information is analysis. That is, someone or something has to look at the data, analyze and interpret its meaning(s), and then provide recommendations based on this.
The first step lies in a clear and consistent definition of sales process(es). Using the example of sales forecasting, managers must set standards that clearly identify where in the sales cycle an opportunity lies. This avoids the all too common scenario of ?Bill's 60% to close is not the equivalent to Carl's 60% to close? ? which leads to unreliable forecast data.
However, once this goal has been met, a critical challenge for the organization still remains: equipping their sales team with reporting tools that provide insight into their key metrics, as well as a method of quickly and securely sharing this information amongst managers and colleagues. Eliminating as many bottlenecks in the CRM cycle via intelligent sales management analytics must be a primary focus of any success-minded sales organization.
With these challenges met, the super powerful computing and analytic capabilities available today can finally be brought to bear on such vexing questions as forecast accuracy, best practices, most productive lead sources, to name just a few. This is not insignificant. To the contrary, it is our opinion that the ~30% of firms realizing significant performance improvement from their CRM initiatives and 57% average quota attainment--both of which have been consistent the past four years--are unacceptable.
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