50+% of CRM will be deployed as SaaS by 2015. We anticipate that SaaS deployments of CRM will reach a maximum of 80% to 85% by 2025. – Gartner (Source: The Gartner CRM Vendor Guide, 2014)
You’ve all heard about public cloud CRM solutions, and the benefits such as:
- Greater Flexibility and Agility
- Cost Savings
- Competitive Differentiation
- More Business Process Innovation
- Faster Deployment
And many of you have great ideas and a strategy on WHY and HOW to leverage public cloud CRM solutions to improve your business. But some are still questioning why exactly they should leverage public cloud solutions for customer engagement – and improve the business in sales, service or marketing. Why should public cloud CRM solutions replace legacy or home-grown CRM tools, complement existing enterprise CRM solutions, or provide a first-time professional CRM solution to the business?
Public cloud CRM solutions is no longer just for smaller companies, but for large enterprise alike – globally. They provide significant advantages to companies, and in some cases are the only way to roll-out a next generation enterprise CRM solution. Hiding complexity and making it simple to consume CRM means that Discrete Manufacturing Industries, including High Tech companies, ask for Integrated Industry Cloud solutions, covering their end-to-end and industry-centric processes of increasing complexity in the cloud – secure and reliably.
For all of you who already know WHY you should leverage cloud solutions for sales, service and marketing, this blog won’t be news to you – but all the others do read on.
Two years ago, TCO had been the hottest conversation I’d had with customers regarding public cloud CRM solutions. Today this has fundamentally changed! Of course, TCO is still an important topic, but there are other even more important advantages in public cloud CRM discussions today:
Today, companies are interested in a fast-time-to-value rollout when it comes to CRM solutions, since many of them want to simplify a project with different vendors and implementation partners. Or, they may have failed with the traditional approach – with weeks of blue printing resulting in a long, complex and expensive project. Public cloud CRM projects are much shorter, even if company-specific enhancements in sales, marketing or service are required. A public cloud CRM rollout can still be as fast as 4 weeks, however it typically takes 10 to 12 weeks for an enterprise-level rollout – at least for the 1st phase. It might take even many months for a complete cloud CRM roll-out, but it is shorter than a traditional on-premise implementation.
Especially when a company wants to roll-out a CRM solution to its smaller subsidiaries or units, public cloud solutions have significant advantages over on-premise deployments. A project to rollout the CRM solution to 10-30 smaller subsidiaries requires less time and much fewer IT resources for the rollout. Public cloud CRM is the enabler in that companies would skip smaller locations in a CRM project if IT resources are procured over months or years. Obviously, focusing on the larger units with 80+% of the revenue stream makes more sense. Please check back for more details on this important case of “CRM rollout to smaller subsidiaries” in my next blog.
IT independence is another important reason why lines of business professionals prefer public cloud:
- to get a next generation CRM solution short-term or at all if the IT team is booked for important projects or would not have the resources to maintain the solution after the roll out
- to rollout without a delay – if an IT team lacks the skills and expertise required to rollout and run a new CRM solution, especially when considering that next generation CRM solutions require a broader technology skillset (a complexity which is hidden by public cloud CRM solutions)
- no IT dependency for future upgrades and renewals of the solution, to keep the UI and capabilities up-to-date
- flexibility, e.g. regarding report creation, on-boarding of new user etc.
Continuous Innovation – always get the latest Updates
A top benefit of public cloud CRM solutions for the business user is the fact that innovation comes continuously and without a delay. Software updates are handled by the cloud CRM vendor and occur several times a year – at no additional cost to the customer. This ensures that the user interface remains modern and the solution’s functionalities up-to-date – independent of the company’s IT resource situation. This is especially beneficial for all users who have complained about access to a CRM tool which is up-to-date in usability, functionality, analytics, collaboration, social, mobile etc. A notable challenge with on-premise solutions is that when the software vendor provides an update, the company’s IT organization requires resources (and budget) to apply these updates.
This can be a double-edged sword – some users might find four updates a year inadequate. However, this wouldn’t be the case in a successful marketing, sales and service organization – where customer experience is a key differentiator.
OPEX instead of CAPEX
Consuming CRM as a pubic cloud solution on a subscription basis and covering it through OPEX is the only way to avail some companies of a next generation CRM solution. This is the case for large and small companies, alike – especially when the IT budget is shrinking, or in cases e.g. where a financial investor is the key stakeholder.
Let’s be frank: many enterprises have struggled with CRM projects in the past. They’ve enhanced a packaged CRM solution to cover their company-specific requirements spending significant effort and IT experts, and at the end of the day, the business teams are still not happy with the result. As we all know, adoption is a much bigger challenge in sales than in service, order management, financials etc. So, it’s not a surprise when CIOs prefer public cloud CRM rollouts, focusingon the integration of the public cloud solutions into the enterprise solution landscape. This allows them to leverage IT teams for other topics where the CIO and IT team can be more successful at providing innovation and benefits to the business.
No operations is also an important topic for companies where IT struggles to get or keep the required IT experts for maintaining a packaged CRM solution – not necessarily the most attractive task for IT experts.
If done right, TCO for public cloud CRM solutions will be lower than traditional on-premise deployments and operations, considering subscriptions, rollout costs (incl. customer-specific adjustments/enhancements, master data, reports), training & documentation (don’t think you can skip training / documentation just because it’s an easy-to-use cloud solution) and ongoing costs for operation. An important factor in the rollout and operations costs could be the integration. Don’t discount integration costs if you integrate public cloud solutions from different vendors with your cloud or on-premise CRM, ERP, Financials, SCM etc. – for the initial integration as well as for maintaining the integration.
Cloud solutions with subscription-based cost models provide an “easy out” – if the customer is dissatisfied with the product. Therefore, the business risk is in the hands of the public cloud vendor and not the company itself.
In addition to these 7 top criteria, there are more decision-relevant topics to be considered, such as agility regarding on/off-boarding user, access from everywhere, increased speed in responding to unforeseen events etc., plus inevitably customer-specific topics.
In any case when you decide to go with a public cloud CRM rollout, you need to consider your short-, mid and long-term objectives and systems architecture – and avoid falling back to an IT landscape with isolated, siloed public cloud solutions. So, develop your Cloud or Hybrid Cloud strategy and road map, with a clear picture of your future solution architecture across public cloud, private cloud and on-premise solutions, and with a well-defined integration plan to support your end-to-end processes in a productive way. Check out which vendors could offer you an end-to-end service level along your entire value chain – a key point to keep the TCO on an affordable level! Always have an integrated cloud in mind, and consider that not all public clouds are created equal!
One of the top concerns of cloud skeptics is the fear of sacrificing data security when allowing company data outside the company’s firewall. When it comes to security and data privacy, don’t just assume that your own data center is the most secure place on earth. All vendors of enterprise public cloud solutions will provide you the required answers and details on their security – depending on your company-specific requirements. Security may need to increase when using public cloud solutions due to ISO security standards that cloud providers must adhere to, in addition to the regular security audits. However, don’t forget to consider the public cloud vendor’s data center situation as a key point here.
I hope this helped you get a better understanding of why a public cloud CRM solution should be your preferred choice.
You want to read HOW you could build public cloud solutions ON TOP of your EXISTING investments? Stay tuned for my next blog where I will share my experience from other companies on this topic.
If you want to know more about how a modern public cloud-based sales tool could improve your sales business, check out my previous blog “CRM: What’s Your Next Step? From Sales Efficiency to Increasing Your Sales Effectiveness” with a link to the Forrester TEI Study “The Total Economic Impact of SAP Cloud for Sales”.
In case you are interested in why a move from a legacy cloud sales tool to a modern cloud-based CRM solution could be beneficial to your sales business, read “Has Your Cloud Sales Application Gone the Way of the Dinosaur?” with a link to a whitepaper from Evan Quinn, EMA Research, “A Winning Cloud Sales Solution”.