The New Breed of CRM Consultant

Article Featured Image

When Mark Benioff cofounded Salesforce.com, in 1999, he loudly declared that the software-as-a-service (SaaS) model would drive into obsolescence the exorbitant installation-and-maintenance fees once commanded by consultancies. On-demand software could be up and running in a matter of days without putting a huge dent in budgets. SaaS vendors have stuck to the promise in many respects, providing low-cost, viable options for even the largest of enterprises. But pity the poor consultants! (Well, OK—maybe not.) Seriously, though: How are consultants faring in the changing software landscape? In the Age of SaaS, has the need for consultants evaporated alongside expensive license fees?

It’s clear that the professional services field hasn’t just packed up and faded away. Part of that is due to the continued existence of on-premises CRM implementations, which many analysts say will always have a place in the industry. However, as organizations ease away from on-premises software and look more favorably upon SaaS solutions, large-scale consulting and implementation lightens up, too. The consensus seems to be that the demand for professional services is still high—it’s just coming in a different form nowadays. With the emergence of Web services, consultancies are reshaping their offerings to meet the changing frontier. As services-oriented architecture (SOA) continues to blossom, organizations are emphasizing integration and flexibility.

So, was Benioff’s boast one of foresight or fantasy? Is there a need for CRM consultants in the cloud-computing world of Web 2.0?

Morris Panner knows a thing or two about consultancies. As chief executive officer of OpenAir, a Boston-based professional services automation company that was acquired by NetSuite in June, Panner has noticed a shift in the industry over the years. Many clients, he says, now come to OpenAir for help with scheduling and billing solutions. “I think there is a revolution taking place in how consultancy services are delivered, both in the U.S. and globally,” he says. “What’s pushing these trends is the ability to focus on value-added services—[that] has really differentiated consultancies that are providing high-end services [over] those services that are getting commoditized.”

Panner’s view is echoed by Woody Driggs, managing director of the Accenture CRM service line. Accenture positions itself as a company that specializes in global management consulting, technology services, and outsourcing—and it’s the largest consulting firm in the world. Accenture’s clients include 94 of the Fortune Global 100 and more than two-thirds of the Fortune Global 500. As CRM director, Driggs sees his role in the true sense of the word “consult”: He advises companies about creating and maintaining profitable customer relationships and building superior brand value to foster greater customer satisfaction and loyalty. For Driggs and his fellow consultants at Accenture, the professional services industry is not a matter of on-demand or on-premises segmentation—it’s about keeping customers. The main distinction, according to Driggs, is between companies pursuing emerging markets and those dealing with existing customers. He says the ultimate underlying message for consultants to impart, no matter the company type, is to be more customer-centric.

“The competition for customers is huge,” Driggs says. “The need to be more customer-centric is there. At the same time, customer-satisfaction ratings are not improving and companies are struggling to keep pace.” As satisfaction wanes, the economy weakens, and customers jump ship, a company’s needs change. Driggs says a CRM consultant’s focus has to shift from technology to more of a top-down operational evaluation.

“Whether it’s SaaS or a niche application or a large [enterprise resource planning] module, you have to figure out how that fits into your current technology environment—into current data, into the overall process and operating model environment,” Driggs offers. “The key message is that when you’re implementing these technologies, you’ve got to think about all three of those pieces.”

“Business process” seems to be a popular catchphrase among vendors and analysts these days. But Jodi Cicci, who started her own consulting firm in South Riding, Va., in October of last year, says there’s a reason why. Cicci formed Top Step Consulting after extensive work with OpenAir products. Although skilled at implementation and development, Cicci says a different need was visible in the marketplace. “I saw a lot of people wanting to get business consulting on the best way to use [a given] tool in [a given] business model.” With her experience as an OpenAir user, Cicci saw that many users didn’t know how to use the offerings to the extent that she did.

While Cicci anticipates Top Step will broaden its horizons to include other CRM and project management providers within the next few years, for the moment she consults solely on OpenAir implementations. The two-pronged approach to how Top Step essentially “gets gigs,” she says, is that OpenAir either recommends her services to its clients, or else customers seek Cicci out, now that she has an established reputation in the niche field. She explains that, before she even digs into a new client’s technology, she spends a good day or two sitting down with the organization’s executives, inquiring about what the daily grind looks like for the employees. “I say, ‘Tell me about how you run your business. I don’t want to know about OpenAir yet.’ I look at their system, and say, ‘Is it configured the way you need it to be configured?’ [Then I] come back with a recommendation list of what [the company] should be doing, and say, ‘This is the type of training you should give your employees.’ ”

Matthew Goldman, a vice president at Gartner, says that he sees a noticeable reorientation within consultant services. With SaaS solutions on the rise, the need for systems integrators has significantly declined. Consultants now spend less time technically configuring an actual implementation and more time on consulting. “I think where a buyer used to look at consulting to understand the technology and make it fit, now [consulting provides the] buyer an understanding of how it fits,” Goldman says.

Aside from helping to spawn a rise in business consulting, SaaS has shortened each implementation job, a factor that has forced many consultancies to adjust their operations.

“On-premises [implementations] could take two to three years,” says Corinne Sklar, vice president of marketing for Bluewolf, a consultancy specializing in Salesforce.com projects. Today, the bulk of those multiyear gigs are history. Consultants can finish an installation job within a matter of weeks, which frees them to focus more on integrating solutions throughout the enterprise, rather than having to spend months (or years) making one bulky technology work. (See Market Focus: Professional Services, “Consultants Adapt to Changing CRM Landscape,” February 2008, for another view of how SaaS has changed the game for consultants.)

“Organizations are not static—they change in two to three years,” Sklar says. “By the time they fully implement, their business has changed.” She says one reason companies now tend to seek operational advice is because of this shorter time frame, but also because of the newfound flexibility within their consulting budgets—another benefit the speed of SaaS provides over the old on-premises consulting scene. “When the project was going for two years [and companies] didn’t have any more hours left—they didn’t have the budget—[they’d] cut the training hours,” she says. “Today, companies aren’t spending all the time on up-front costs. They have a nice bucket to focus on training and adoption.”

Goldman, however, says that those cuts in integration and configuration have meant less revenue for consultancies. “For an integrator, the time spent configuring is notably less,” he points out. “So it does erode earnings—and for [similar] implementations, you have less configuration and customization.” With that in mind, some consultancies are upping the ante with overall business consulting, helping organizations to see the bigger picture by promoting the kinds of training programs that help drive user adoption and ensure the technology doesn’t go to waste. Analysts also note that, with SOA, there is more emphasis than ever on seeing the entire ecosystem. In addition, Web services and on-demand technology often involve an operational shift that consultants can help identify and administer.

Goldman notes that the business model for consultancies can get out of whack as the drive toward shorter, briefer implementations perpetuates. Those accustomed to dedicating months—or sometimes years—to one project may find the bar being raised, and the need to develop an entirely new approach. Goldman, though, says that many of the core skills remain the same. If they try hard enough, consultants can find the connective tissue linking the old and new projects. And, as Driggs notes, the drive for customer centricity is something that has not changed—and it’s not likely to change anytime soon.

Sklar stresses that adoption is too-often overlooked—training is glossed over, with users simply expected to adopt new software and tools. “At the end of the day, if you don’t have people using [an] application, it’s failed.” Even with SaaS’s easier implementation, there’s still a learning curve—employees need to understand the value of anything new.

Goldman notes that one segmentation trend is starting to appear: Consultancies are popping up to offer specific expertise with a particular vendor or solution. Bluewolf and Cicci’s Top Step Consulting are examples of the vendor-specific firm, and Bluewolf’s Sklar says that the need—and the firms opting to specialize—will become especially prominent as more partnerships emerge.

Goldman says that, while this wisely targets a very niche audience, these consultancies might struggle down the road. Cicci says she’s aware of this looming change, and that competition will become increasingly fierce. She says she hopes to expand the company in the next few years, slowly adding services for other project management vendors—a move she admits is partly due to NetSuite’s acquisition of OpenAir.

Some also worry that offshoring services pose a threat to consultancies, but Panner, for one, remains convinced that there will continue to be a place for face-to-face consultation. “Even though [there’s a] tremendous amount of offshoring, salaries [of consultants] are still relatively high,” he says. “If you are willing to travel and you are able to perform reasonable consulting...you can pick your job right now. The demand is overwhelming.”

So with some consultancies offering solutions for every need, others specializing with one kind of software, and even some vendors offering professional services of their own, how are you supposed to know what to choose?

“Any enterprise that wants to get it right will take time to sort through project objectives and work backward to think of skills and criteria: ‘Who has the best skills to help us achieve that?’” Goldman says. “It’s a best-for-the-need world.”

It’s also good to ask for a return-on-investment (ROI) estimate before choosing a consultancy. Accenture, for one, often uses a methodology to deliver not just estimated ROI calculations but also human performance ROI, says Kevin Bandy, the firm’s global lead for sales and marketing transformation within the electronics and high-tech industries. (Bandy was also named one of CRM magazine’s 2008 Influential Leaders; see the September 2008 issue.) “Consultancies used to focus on systems integrations, outsourcing, and cost reduction,” he says—services, he adds, that are “not aligned to profit or the revenue-growth side.” But today’s CRM consultants can help companies fix problem areas such as sales processes. (Bandy estimates that up to 20 points in revenue can be lost by companies that can’t police sales processes on their own.) And, echoing his Accenture colleague Woody Driggs, Bandy suggests that the modern CRM consultant best serves the client by aiming for customer centricity: “If I fix [a broken process] at the point of the customer, [the] business would be healthier,” Bandy says. To that end, he says, Accenture’s long-running partnership with Salesforce.com means the consultancy has SaaS capabilities to deliver high-performance sales transformation.

Gartner’s Goldman agrees that ROI’s important to the business case for hiring a CRM consultant—but it’s only one part. “Look at the assumptions that are used in the model,” he cautions. “If you don’t agree on the assumptions—or values—then the model won’t tell you some [things].”

And sometimes ROI is hard to gauge, even with SaaS. “When the [SaaS] consultant leaves, the end client has the SaaS product with features turned on—[but] with no real process or adoption practices,” Cicci says, adding that the client may “fumble initially out of the gate.” She says the key is to ask basic questions before deploying: What’s your business model? What are you trying to manage? Where are the tools?
Opting for plain-vanilla SaaS likely means less-than-full customer support, Cicci says, which means it’s critical that the tool adhere to your practices. “You have to introduce it to your staff and understand why you’re implementing the tool,” she says.

Sklar says Bluewolf’s approach relies on the sort of agile methodology typically seen in software development—an iterative approach that sets measurable goals for each small two-week-to-four-week segment of an engagement: Instead of looking at what a client will gain far down the road, success is measured in short increments. The old consultancy framework, she says, just doesn’t fit in today’s SaaS environment. Instead, some clients get a bucket of hours to continually innovate on any efforts—it’s a relationship that grows with the client.

In the end, though, does SaaS make organizations more or less likely to enlist the help of a professional services firm? Goldman says that the switch from on-premises to on-demand can save anywhere from 40 percent to 60 percent of implementation costs, but he says it’s difficult to gauge whether the consultancy industry has picked up or dropped off dramatically. Consultants and analysts say the best of the firms pitching in on a CRM implementation—SaaS or not—are those trying to develop a positive customer experience. So, in the hunt for a CRM consultancy, look for one that engenders loyalty—and one that’s not too hard on the user. Any consultancy effort needs to work with other parts of the enterprise, not create a silo of its own.

But does any of that answer Benioff’s decade-old boast? Perhaps not, but Salesforce.com itself may provide an insight: In its most recent quarterly financial report, the original “no software” vendor’s line item for “professional services and other revenues” came to $23.4 million, an increase of 41 percent on a year-over-year basis.

Perhaps “the end of software” isn’t the end of professional services after all—just a shift in cost from implementation expense to business process consulting.

Contact Editorial Assistant Lauren McKay at lmckay@destinationCRM.com.

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

CRM Covers
for qualified subscribers
Subscribe Now Current Issue Past Issues

Related Articles

An Adaptive CRM Strategy Pays Off

Adjust your vision to deliver business value during changing times.

Consulting the Gartner Magic Quadrant for CRM Service Providers

Magic Quadrant for CRM Service Providers '09: The market for CRM consulting and solution implementation services grew in 2008, but the next year will bring challenges for all providers, including the foursome Gartner rated tops: Accenture, Capgemini, Deloitte, and IBM Global Services.

NetSuite's OpenAir Opens Up to Salesforce.com

The provider of professional services automation -- now a NetSuite company -- announces closer integration with Salesforce.com.

HP Now Serving NetSuite to Order

The hardware-and-services vendor inks a partnership with NetSuite to resell CRM.

Buyer's Guide Companies Mentioned