CUSTOMER RELATIONSHIP MANAGEMENT HEADS TO THE CLOUD

Salesforce.com is the most successful enterprisescale software as a service (SaaS) and the undisputed global leader in cloud-based customer relationship management (CRM) systems. Users can access Salesforce applications anywhere through an Internet-enabled mobile device or a connected computer. Subscriptions start as low as $15 per user per month for the pared-down Group version for small sales and marketing teams, with monthly subscriptions for large enterprises ranging from $65-$250 per user. Salesforce has over 100,000 customers. Small businesses find the on-demand model especially appealing because there are no large up-front hardware and software investments or lengthy implementations on corporate computer systems. Fireclay Tile, a 37-employee environmentally friendly sustainable tile manufacturer, adopted Salesforce and realized multiple benefits. Salesforce's e-mail and Web-to-lead capabilities helped the company quadruple new sales leads. (Web-to-lead automatically adds leads collected from the Web to the company's master database). A task feature automatically generates specific tasks based on the type of lead ( architect, contractor, dealer, or homeowner) and the stage in the sales process. The system automates customer service functions including order confirmations, follow-up customer satisfaction surveys, and shipping notifications Salesforce's social tools enable Fireclay to compete successfully against large flooring manufacturers and other custom tile producers by providing superior customer service. The company uses Salesforce.com to maintain customer profiles, so its sales, service, and production teams have complete customer views as soon as leads come in from the Web. Fireclay's internal social network based on Salesforce Chatter helps employees track orders and work closely together to meet customer needs. Customer satisfaction has increased 90 percent. But Salesforce.com also appeals to large companies. Dr. Pepper Snapple Group adopted Salesforce CRM to replace an outmoded Excel application that required extensive manual data input to compile reports on more than 50 beverage brands and to track sales performance against objectives in real time. The system now tracks field activities for more than 10,000 accounts, with automated reports and dashboards monitoring key performance indicators, sales calls, and sales volume. The Wall Street Journal, Pitney Bowes, Kimberly-Clark, and Starbucks are among Salesforce's other large corporate CRM users. Not to be outdone, established on-premise enterprise software companies such as Oracle have moved into cloud software services. Pricing starts at $70 per month per user. Oracle's CRM on Demand system has many capabilities, including embedded tools for forecasting and analytics and interactive dashboards. Subscribers are able to use these tools to answer questions such as "How efficient is your sales effort?" or "How much are your customers spending?" GRT Hotels & Resorts, a leading hotel group in South India with 10 hotels, used Oracle CRM on Demand to create a centralized CRM system for all of its properties. The system makes it possible for all the hotels in the group to share customer data, such as room and rate preferences, and to create unified marketing programs that eliminate unnecessary price competition between the company's hotels. GRT believes that by making customer behavior data available for forecasting sales and by creating more targeted marketing campaigns, the CRM system has increased productivity about 25 percent. Managers are able to monitor the number of customer calls that employees answer each month regarding bookings and general hotel information to identify underperformers. GRT management believes that using a hosted CRM service with a monthly fee costs 65 percent less than if it had purchased and maintained its own CRM software. Moreover, Oracle's centralized, secure Web-based CRM application ensures that confidential data, such as promotion plans, cannot be removed by GRT employees when they leave the organization. While traditional enterprise software vendors like Oracle are using their market-leading position to penetrate the cloud-based application market, newcomers such as SugarCRM have found success, even among larger companies. Thomas Cook France, a subsidiary of the worldwide Thomas Cook Group Travel plc, is an example. Thomas Cook France has 1,700 employees and is the second largest travel company in France, providing leisure travel programs for groups of 15 travelers. The company is able to distinguish itself among competitors and Internet travel services by providing an outstanding customer experience. Thomas Cook France had been using pen and paper to track most of its calls and other customer interactions, so its customer data were fragmented and redundant, and could not be used by management to analyze agent productivity and revenue opportunities. SugarCRM monthly subscriptions range from $30-$100 per user. Thomas Cook France found SugarCRM to be a user-friendly yet scalable system that could be customized, deployed quickly, and managed without a large internal information systems staff. With the help of Synolia consultants, Thomas Cook had its SugarCRM system up and running within 15 days. Cook's agents are able to manage leads with integration and importation into their system. The system allows for team and role-based access and the ability to attach documents to contacts. In addition, Thomas Cook France is using the CRM software for high-level outbound e-mail marketing efforts, FAQ modules, and dashboards that drive immediate business activities and also analyze high-level business issues. Not all companies experience gains of that magnitude, and cloud computing does have drawbacks. Many companies are concerned about maintaining control of their data and security. Although cloud computing companies are prepared to handle these issues, availability assurances and service level agreements are not always available. Companies that manage their CRM apps with a cloud infrastructure have no guarantees that their data will be available at all times, or even that the provider will still exist in the future, although CRM vendors have taken great pains to address these issues.

Case Study Question

1. What types of companies are most likely to adopt cloud-based CRM software services? Why? What companies might not be well-suited for this type of software?

2. What are the advantages and disadvantages of using cloud-based enterprise applications?

3. What management, organization, and technology issues should be addressed in deciding whether to use a conventional CRM system versus a cloud-based version?