Hosted CRM Solution Delivers Quick Payback
Updated · Apr 09, 2003
Keeping tabs on sales opportunities and maximizing leads is a business necessity. But when a company grows at an accelerated rate through worldwide acquisition, the task of keeping track of sales efforts becomes all the more difficult, especially if newly bought companies are using different sales force automation or customer relationship management tools.
That’s why SIRVA, a Westmount, Ill.-based leader in relocation and logistics services, decided to streamline its sales monitoring efforts. In the process, the company added customer relationship management capabilities by turning to a hosted solution that runs at a fraction of the costs of some hosted solutions.
Prior to the move to enterprise CRM, the company’s sales groups were collecting sales data with Microsoft ACT, SalesLogix and salesforce.com. The variety of tools made it difficult to have visibility into the sales pipeline, according to Eric Dirst, CIO of relocation and sales and marketing at SIRVA. The process alone of getting full accurate sales reports involved painfully merging spreadsheets, providing 20-20 hindsight of activity for executives who really needed real-time answers to take corrective action — especially at month-end.
Not knowing which customers were being called on occasionally resulted in having sales groups hitting up two different people inside the same customer organization.
“We no longer have that problem,” said Dirst, who helped to identify a uniform solution that is gradually being rolled out to all company divisions.
Evaluating the options
In order to integrate the system quickly, Dirst decided to go with a hosted CRM — salesforce.com’s Enterprise Edition, a tool with a total cost of ownership one-seventh that of a Siebel integration, according to Kaiser Mulla-Feroze, director of product marketing at salesforce.com.
SIRVA, which says it expects to see payback on its investment within the year, declined to state actual project costs. But salesforce.com is priced at $125 a month per user. Integration can cost 15% to 20% of a first year’s licensing fee.
Along with salesforce.com, Dirst evaluated Saleslogix, Salesnet and Pivotal. Other competitors include Upshot and hosted solutions from SAP, Siebel and PeopleSoft, noted Denis Pombriant, director of research at Aberdeen Group.
To start the evaluation process, Pombriant recommends looking at a company’s real CRM needs. For instance, companies should ask:
Along with these questions, companies should also look into what’s being promised in a hosting solution. Not all “hosted solutions” are created equal, cautioned Mulla-Feroze. Some providers of “hosted” solutions may be simply shifting the hosting of a client server application away from the customer. So set-up times could be just as long as if a company hosted the solution itself and maintenance and uptime would still be an issue.
In SIRVA’s case, the company had a long laundry list of evaluation points:
Benefits of a hosted CRM
One of the benefits of going with a hosted solution is that companies don’t need to add additional technical staff to babysit or maintain the system. Start-up costs are also kept to a minimum because the tool relies on a company’s existing desktop or mobile hardware, browser software and network connections.
And although saleforce.com shifts start-up and maintenance expenses to a monthly licensing fee, Pombriant said ongoing costs are 80% on average less for hosted solutions. Financial risks associated with long CRM integrations are minimized under a hosted application because, in most cases, companies can sign up and start using the hosted CRM almost immediately.
Citing a Gartner study, Kaiser said traditional client server CRM’s have a 27-month breakeven period and can take 12 months to role out.
“Some companies even take 18 to 24 months,” he said.
What can go wrong
To a great extent, SIRVA avoided the common pot holes that let the air out of many a company’s CRM efforts. Snafus include ill-defined process improvement goals, inappropriate metrics, and poorly planned configuration and training. CIOs can add to the fiasco if they under budget long-term maintenance costs in the case of client-server applications, said Pombriant.
Despite a few challenges, SIRVA’s CRM integration rolled out in its first phase to its moving and relocation divisions in early December after only about six weeks of effort. As these two groups presented a significant opportunity for cross-selling and packaging services, they were the first to get the tool.
The largest hurdle SIRVA faced — common to many data migrations — involved the difficult process of cleansing data. According to Dirst, SIRVA under estimated the amount of time it would take to load and scrub the data from various systems. Automated tools could only identify duplications and similar sounding names within only a character or two.
The remainder of the duplicates had to be dealt with through human intervention. The remainder of the integration involved customizing salesfoce.com with SIRVA’s business processes and then training staff in how to use it.
To help with training, SIRVA hired an outside training provider to conduct classroom instruction for day to day users. Less frequent users, such as sales support staff and executives, got trained using Web-based delivery methods.
As incentive for using the tool, this year’s staff bonuses are partly tied to using salesforce.com. It doesn’t hurt that the CEO first asked for and then insisted upon having access to reports, either, said Dirst. This has increased adoption to 100% as well as raised the level of competition among sales groups.
“With visibility that high, they want to make sure that they’re performing because if they’re not, it’s right there on the screen for everyone to see,” said Dirst.
David Needle is an experienced technology reporter, based in Silicon Valley. He covers big data, mobile, customer experience, social media, and other topics. He was previously the news editor for Enterprise Apps Today, TabTimes editor, and West Coast bureau chief of Internet.com.