The 2014 CRM Market Leaders
SALES FORCE AUTOMATION
According to data collected by Nucleus Research, if salespeople are spending more than 8 percent of their time entering data into their CRM system, their performance is suboptimal. While many sales force automation (SFA) vendors have focused on adding feature after feature, these features take salespeople away from what they should be doing: selling.
Well-executed mobile versions of sales force automation may be one way to achieve that mix of usability and adoption. Two out of three firms with a sales force automation or CRM solution are giving salespeople access to corporate data via mobile devices, according to the Sales Performance Optimization Study conducted by CSO Insights. With mobile devices, sales reps can quickly look up information about a client, and jot down thoughts afterward instead of firing up a slow Internet connection in their hotel room and entering reams of data.
As managing partner of CSO Insights, Jim Dickie is also seeing companies integrate their sales processes into their sales force automation application. When the processes and the SFA system are combined, the system "can serve as virtual coaching, helping reps not only know what to do, but how to do it."
For the first time, BPMonline appears on the leaderboard for sales force automation. The vendor is known for its strong focus on process and rules-based approach, which is excellent for sales teams trying to tie their sales processes to their software. "The newest version of their product is strong and cool and UI friendly," Paul Greenberg, president of The 56 Group, says. Nucleus Research Vice President Rebecca Wettemann praises BPMonline for having "a very intuitive and easy to use application that requires limited configuration and training." Analysts seem bullish on the outlook for the company, with Wettemann citing a success story for a telemarketing firm that had a huge ROI with BPMonline "after struggling with other competitors' applications and adoption issues."
Microsoft Dynamics CRM continues to gain market share with customers who seek better Outlook integration, XRM, deeper industry functionality that partners provide, and its on-premises option, says Ray Wang, founder and principal analyst at Constellation Research. Wettemann also sees Dynamics benefiting from being part of a larger ecosystem. "Microsoft has continued to extend its capabilities for SFA by taking advantage of the broader Microsoft portfolio with Office 365 integration and embedded analytics to make sales teams more productive," she says.
Oracle's Sales Cloud is having a "renaissance," according to Wettemann, "with key value-adds like coaching, SPM [sales performance management], incentive compensation, territory management, and rich analytics within the core app." Oracle's Sales Cloud tightly integrates with Oracle's Marketing Cloud, and has features around social collaboration as well as a sales prediction engine. Its 4.5 score in depth of functionality puts it on par with Salesforce.com.
Zoho is a bit of a workhorse for smaller businesses. Leslie Ament, senior vice president and principal analyst at Hypatia Research Group, praises Zoho for its "highly flexible, budget-friendly pricing combined with ease of configuration and robust software functionality." Still, it has battled comments about its marketing. Ament says that its "go-to-market approach is a bit less sexy" than Salesforce.com's; others find company direction lacking and its huge library of products confusing. One thing they do agree on is price. Zoho outscored all other companies in the cost category, earning a 4.4, making it especially attractive for companies trying to minimize costs.
For the ninth year in a row, Salesforce.com leads the sales force automation category. Wang calls it the "industry standard" and hails Salesforce1 for "improving the mobile experience." Its "recipe" of a partner ecosystem and the Force.com platform is one that "sales teams in the SMB and lower midmarket favor," Ament observes. It also draws raves from analysts, who gave it a sky-high 4.7 score in company direction. "Salesforce.com continues to invest in key features, driving greater usability for SFA including mobile capabilities, Data.com, and integration," Wettemann says. "Additional value is driven by the Salesforce.com ecosystem of applications that deliver more value for sales in areas like [configure, price, quote] and SPM."
One to Watch
"SugarCRM has done a good job bringing an alternative to Salesforce.com for cloud-based solutions," Wang says, and customers are excited about Sugar's mobile interface and the sleeker Sugar UX. Still, he cautions that "more needs to be done on functionality to remain competitive in the market."
Just 12 percent of companies use a commercial incentive management tool, according to CSO Insights' Incentive Compensation and Performance Management Study. Most companies are still in the Excel era: Fifty-three percent use spreadsheets to calculate rewards for salespeople. Still, the area is growing, as the power of incentive management tools is realized. "Companies are seeing that they elicit the sales behaviors that they reward. So if they want reps doing more to improve margins, sell new accounts, or minimize customer churn, they need to implement more robust compensation management plans," says Jim Dickie, CSO Insights managing partner.
There's also a growing trend to align compensation with other tools. Sales forecasting and incentive management tools may be linked. Sales performance management tools are also being integrated with incentive management, making it easier for managers to manage their team.
Callidus Software has been around the longest, and recently broadened its focus to "a lot of things that would be helpful to a sales manager," including sales performance management, creating "a good, broad package for people who want to get into overall sales management," Dickie says. That helped Callidus score a 4.1 in company direction. Paul Greenberg, president of The 56 Group, has also observed Callidus' expansion into other areas, including marketing, which makes the company "more diverse but untested."
With a "main competency within contact centers," according to Dickie, NICE Systems (through its acquisition of Merced) has a positive reputation within its area of expertise, but analysts don't see signs the company will branch out. If anything, "the product is becoming more niche-focused than broad market," Ray Wang, founder and principal analyst at Constellation Research, says. With a company direction rating of 4.2, analysts seem on board with that decision. Greenberg sees NICE as "smart and well-managed," though finds its overall portfolio "diverse but not entirely focused."
Synygy offers module solutions, which has both benefits and downsides. "Salesforce.com attach rates remain the key reason [customers include] Synygy in short lists," Wang says. While companies like Xactly have pursued partnerships with consulting firms that design incentive management programs, Synygy hasn't gone that route, Dickie explains. "Their modular solutions are a plus, but their lack of consulting partnerships" makes Synygy better for companies that can self-serve their own incentive management.
"Rock stars in their world," according to Greenberg, Xactly was just barely knocked out of the winners' circle this year, due to its revenue score. Xactly can take credit for "getting incentive management out of the dark days of Excel, and not having IT have to do it," Dickie explains. Its software offers "robust incentive management with capabilities already built into it." In Excel, giving salespeople more commission for new customers versus existing ones is near impossible. With Xactly, that functionality is easy, Dickie says. Wang praises Xactly for having "grown its vision and focus," and sees it as being on a short list for many of his customers.
IBM's Varicent outmaneuvered Xactly to grab the top spot on the leaderboard this year. Varicent is able to handle variable revenue calculations for organizations that may be selling 30,000 products, Dickie says. That custom coding ability makes it a good fit for large and complex sales organizations. Within IBM accounts, Wang sees Varicent "making traction" in competitive deals. IBM's Varicent also improved its scores from last year, posting solid 4.0s across the board, only dipping lower in the cost score. "IBM's acquisition and investment in Varicent, one of the first software companies to develop incentive compensation and sales performance management solutions, has paid off for both customers and IBM," says Leslie Ament, senior vice president and principal analyst at Hypatia Research Group. "Customers benefit from the ever-evolving enhancements, resources, and investment provided by its corporate parent, while IBM added a robust and well-respected solution to its immense portfolio of offerings."
One to Watch
While VUE Software focuses on the insurance industry, its "effective targeting" has made it a "no-brainer for this sector," according to Ament. Wang agrees. "VUE is still a key short list contender in insurance." Still, its excellence in this vertical begs the question of "whether the company plans to specialize in this domain or branch out into additional industries...and with what competitive differential?" Ament asks.