Logo
BodyBGTop
To SaaS or Not to SaaS?
That is the question. (The answer may surprise you.)
For the rest of the May 2009 issue of CRM magazine please click here
Page 1



For the rest of the May 2009 issue of CRM magazine, please click here.

[Note: This is the first part ("Trade-Offs: The Business Side") of a two-part series. The conclusion, "Servicing Software-as-a-Service," can be found in the August 2009 issue of CRM.]

With the advent of CRM delivered “through the cloud,” software deployment can be easier than ever. But for large organizations, strategy and planning may be tougher than ever. For these organizations, traditional on-premises software packages may remain the most suitable platforms for meeting some or all CRM needs. The question therefore arises as to which software to deploy to which parts of the organization. [See related columns by this author in the February, May, July, and October 2008 issues, as well as February 2009’s Recession Issue. –Ed.] Whatever the answer, trade-offs are likely. The organization that fails to address and resolve these trade-offs may find itself making CRM mistakes that are as costly as ever.

Idealism versus Realism: For leaders on the business side, the key to arriving at a practicable CRM strategy may be to accept that trade-offs will be necessary. Stated simply, CRM delivered on the software-as-a-service (SaaS) model will not be a panacea to the challenges that have beset your CRM initiatives in the past. Your organization remains complex. Transformation and change will therefore remain difficult. And as will be discussed in my next article in this space, the challenges facing your technology staff remain formidable. Thus, you need to set expectations—your own and those of your organization—realistically.

Adoption versus Functionality: The main expectation to temper involves the depth and breadth of functionality in the current generation of SaaS CRM applications. For small and midsize organizations, the functionality will likely be highly satisfactory. But for large organizations, the functionality will likely present gaps for some key tasks or requirements. For example, in the sales force automation (SFA) space, where SaaS CRM applications are most mature and have found highest adoption, the leading applications are highly likely to be able to handle the core tasks of sales producers in the field: management of accounts, contacts, tasks, calendars, and opportunities. But for the relatively complex activities of managing quotes and forecasts, the SaaS CRM applications are likely to present gaps in functionality.

Those gaps can be closed. The question is how to do so, and at what cost—in both the short and long term. At a certain point in such cases, the traditional on-premises software packages will become compelling for part or all of a large organization’s CRM platform.

That said, the value to be had from SaaS CRM when deployed with sensible expectations and a practicable strategy can be…well, exciting. The reason is that SaaS CRM solutions have generally found high adoption by their end users. So, whatever they may lack in terms of functionality, SaaS CRM solutions may recompense in terms of adoption. For example, a vice president of sales may find that she can only partially redress the quoting and pricing issues for her organization with SaaS CRM, but she may find that by obtaining high adoption from her reps in the field, she obtains a more reliable and actionable pipeline than ever. She can manage her business, and she can do so in relatively quick order at relatively low initial cost, as compared to implementations of traditional CRM packages. She can happily accept some gaps in functionality.

Dynamism versus Discipline: Another expectation for senior business leaders to temper involves the speed and frequency with which they can implement changes to their SaaS CRM applications after initial deployment. Make no mistake, changes can be made at will with little to no dependency on your technology department. But even for small organizations, well-intended changes can quickly lead to an unwieldy application that compromises adoption by end users. And as just discussed, adoption can be the compelling reason for deploying a SaaS CRM application in the first place. [See Reality Check, page 10, for more on adoption.]

Take, for example, the head of sales for a defense contractor with annual revenues of hundreds of millions of dollars. Under his leadership, the company adopted a leading SaaS CRM application for SFA. The application enabled visibility into and management of accounts and opportunities, as had been desired. But as the weeks went by, first one manager, then another, made changes to tailor the functionality to their needs. After just a few months, the usability had become sufficiently degraded that a re-implementation became necessary.

For large organizations, even a single seemingly innocuous change can cause problems. In these cases, the SaaS CRM application will almost certainly be integrated with other enterprise applications, such as the back-office systems for order management. Should someone within, say, the sales operations group decide that adding a new value to the list of account types would help with account planning and pipeline management, the addition might very well break the logic in the interfaces that synchronize accounts across the front- and back-office systems.

SaaS CRM can indeed make implementation easier than ever. But for large organizations, the question of whether to deploy CRM applications in the cloud or in your own data center can make strategy and planning more difficult than ever. For CRM business leaders, the key is to recognize that trade-offs will likely exist—trade-offs that an experienced partner can help in identifying and resolving. But however you decide to proceed, make sure to approach your SaaS CRM journey with a mindset of realism and pragmatism.

[Note: The second part of this series will appear in the August 2009 issue of CRM magazine.]

J. David Lashar (dlashar@us.ibm.com) is an associate partner in the CRM practice of IBM Global Business Services and the leader of the IBM CRM Center of Excellence for SaaS.

Every month, CRM magazine covers the customer relationship management industry and beyond. To subscribe, please visit http://www.destinationcrm.com/subscribe/.

Page 1
To contact the editors, please email editor@destinationCRM.com
Every month, CRM magazine covers the customer relationship management industry and beyond. To subscribe, please visit http://www.destinationCRM.com/subscribe/.
Learn more about the companies mentioned in this article in the destinationCRM Buyer's Guide:
{0}
Related Articles
Trade-Offs, Part 2 — The Technology Side: "The end of software" doesn't mean the end of software headaches.
Undercutting conventional wisdom, a recent Forrester Research report raises the possibility that a SaaS deployment can outperform an on-premises one for as long as five years -- or more.
 
Search
Popular Articles
 

BodyBGRight
Home | Get CRM Magazine | CRM eWeekly | CRM Topic Centers | CRM Industry Solutions | CRM News | Viewpoints | Web Events | Events Calendar
DestinationCRM.com RSS Feeds RSS Feeds | About destinationCRM | Advertise | Getting Covered | Report Problems | Contact Us