Welcome to our CRM Analysis of Salesforce.com

This semester as part of the Information Systems and Analytics course which is a core component of the MBA major at Chatham University, our group analyzed Salesforce.com as a customer relationship management system and recorded our finding this team blog site: http://salesforcecrm14.blogspot.com. In order to analyze Salesforce we used a fictional company called IVK Corporation which is chronicled in Austin and Nolan’s book, The Adventures of an IT Leader(2009). In the book we follow IVK and its’ first year with a new CEO, Carl Williams, and new CIO, Jim Barton, both are fictional characters but the story is based on several Harvard Business Review cases. 

Wanying Wu, an MBA major with a concentration in Project Management, says: I learned data management from this course using Microsoft Excel, Microsoft Access and SQL Server, especially Access. The course gave me a basic idea of how to manage data easily, which will help me analyze data in the future. I really want to say thank you to my CRM teammates and appreciate their efforts, I love the feeling of getting works done earlier.”

“This project really taught me so much about leadership.” Says Lisa Sobel-Berlow, an MBA major with a concentration in Entrepreneurial Leadership and Strategy. “I’ve never worked with team members who do not speak languages that I’m familiar. While, I learned a lot about different data management strategies and programs, the team work aspect will really impact my every day life.”

Janessa Parks, who is finishing her Master of Accounting reflects on the course, “I learned all about the various systems companies use to manage data and how critical they are all in running your business, whether it is a CRM, ERP or other. I accomplished help writing a white paper and aided in delivering a sales presentation to promote the use of salesforce, including a cost analysis portion that may be useful in my accounting portfolio. As far as this project benefiting me professionally, the cost analysis section relates directly to my profession in accounting. However, I did learn about ERP's which is most directly related from another group which is what I will be using in my career in terms of accounting information systems.”

“Through this project, I learned how to do an analysis for a company and how to evaluate software. We did it step by step and did research in weekly sections. We can now evaluate or assess different information systems well. That gives me important experience about analyzing. And I really appreciated our team leader, she did so many things for group and helped me a lot,” said Huaijin Huang, an MBA student with a concentration in Supply Chain Management, a brand new concentration being offered for the first time in Fall 2014.

Competitive Analysis

The major systems that we have identified to be considered Salesforce alternatives are Microsoft Dynamics CRM, Oracle, and Sugar CRM. These three systems are all well -known for using cloud CRM solutions.

Microsoft CRM is a global CRM system that delivers localized capabilities in 40 regions and 41 languages, and it has rich features yet easy to use. It could be easily accessed without getting IT involved. The SFA software can run within an Outlook client and gives the look and feel of a Microsoft Office environment. Office users can integrate with the CRM database. Microsoft CRM offers choice in software delivery in the cloud, on premise or with a hybrid combination and customization and platform software integration tools, which increase product flexibility and extensibility. Microsoft CRM is hosting neutral, allowing customers to select among a plethora of hosting providers or bring the software in -house. A combination of deep features and the lowest subscription pricing among CRM vendors, makes Microsoft CRM the best value proposition in the industry. (CRM Landmark)

Oracle is the first cloud CRM vendor that has experienced marketing and lead management software, which includes digital tracking, lead scoring, nurture campaigns and distribution of sales ready leads. Oracle CRM on Demand provides the best Business Intelligence in the cloud. Beyond dashboards which all vendor deliver, the Answers on Demand analysis tool enables easy creation of custom reports. CRM data can be analyzed among multiple dimensions, manipulated and modeled in real time for learning and insight. In terms of hosting, Oracle CRM offers customers a choice, which means customers, can select the multi-tenant hosting option or can choose to upgrade to a single-tenant hosting option. And they provide an attractive total cost of ownership. Its subscription fee is one of the lowest in the cloud CRM industry. (CRM Landmark)

The SugarCRM development framework, customization tools and open source code offer the most flexible and extensible software customization in the CRM market. It can be customized at various levels, such as the data model as well as objects, columns, fields and user interface. It is one of the few SaaS CRM vendors to offer cloud portability. Customers have the choice to select the public or private cloud that best meets their reliability, performance and service level agreement needs. The SugarCRM development community, SugarForge, is the most mature open source community in the business software applications industry. Sugar CRM offers a compelling CRM software acquisition cost and one of the lowest total cost of ownership CRM applications in the marketplace. (CRM Landmark)

Cost comparison

As we can see in the table above, they all have different pricing policies for their CRM system. Salesforce is currently available in four different editions, which range in price from $25 per user per month to $300 per user per month. It is very detailed, and gives different user specific features and functionality. However, there is a high service fee. The most popular edition, Enterprise has a fee of $125 per user per month, which is much higher than any the other competitors.

From a cost perspective, Sugar CRM is a stronger competitor. They also provide three editions for customers and their features are similar with SalesForce. However, the price of their software is about half when compared with Salesforce prices Especially the Ultimate only charges $150, just like the price of Enterprise in Salesforce.

As for Microsoft Dynamics CRM, their pricing is simple. They charge $65 for CRM online per user per month. It means they don’t have any price discrimination and is equal to all the customers. Another substitute is Oracle CRM, but they don’t have straightforward price and its based on customers’ demand.

Value comparison

Sugar CRM is an affordable and easy to use customer relationship management platform, especially designed to help your business communicate with prospects, share sales information, close deals and keep customers happy. Sugar is easy to customize and adapt to your changing needs and ideal for small and medium-sized companies.

Oracle's Complete CRM solutions offer the broadest and deepest capabilities that help organizations drive sales, marketing, loyalty, and service effectiveness. However, their function items show all the basic services that each competitor could have.

Microsoft Dynamics CRM can help reduce costs and increase profitability by organizing and automating business processes that nurture customer satisfaction and loyalty in the sales, marketing, and customer service fields. CRM solutions can deliver ROI through marketing automation. Particularly, they offer the mobile CRM apps and platforms that enable you to manage your customer relationships on your mobile devices, along with tools that integrate data and reporting from social media directly into your CRM application.

SalesForce is similar with Microsoft Dynamics CRM, and its functions cover almost all services that other substitutes provide. Also it works well for small and medium-sized companies, large enterprises and government organizations, which allowed them to achieve market leader dominance in this industry. We can easily find the leader Salesforce in this picture.

Risk Comparison

As we have discussed in our Risk Assessment for SalesForce, we presented that there were two primary risks of buying, leasing or subscribing to the SalesForce system. The first concern was the privacy issues; which included IVK’s own confidential paper as well as the staff information. This could take place if IVK were under attack by a hacker or someone within IVK releasing sensitive data. In this case, their privacy rights might be violated. Also, the data of customers, and suppliers could also have been compromised by hackers, which could result in distrust between customers and suppliers.

Another problem is security, which is a hot topic due to the fact that SalesForce has already experienced an outage a few different times and their users cannot do anything during this outage. This situation is very detrimental to the customers. Additionally, a software upgrade will most likely cause data to be lost or system breakdowns. Although they have Data Safety detection, it still poses a risk.

For more comparisons and customer reviews for SalesForce.com, Sugar CRM, Oracle CRM, Microsoft Dynamics CRM and other CRM systems visit: https://www.g2crowd.com/compare/sugarcrm-vs-salesforce-crm-vs-oracle-crm-on-demand-vs-microsoft-dynamics-crm?id=196


Sources:

CRM Landmark. (n.d.). Crm software overviews for cloud customer relationship management software . Retrieved from http://www.crmlandmark.com/software-compare.html

Compare Sugar, Salesforce, Oracle CRM On Demand, Dynamics CRM. (n.d.). Retrieved November 17, 2014, from  
https://www.g2crowd.com/compare/sugarcrm-vs-salesforce-crm-vs-oracle-crm-on-demand-vs-microsoft-dynamics-crm?id=196

Risk Assessment

There are two primary risks of buying, leasing, or subscribing to the SalesForce system. One is the privacy issues; it includes IVK’s own confidential paper and the information of their staff. This would occur if IVK is under attack by a hacker or someone from IVK gives their files away. Their privacy rights might be violated. Also, the data of customers and suppliers have possibly been stolen by hackers. That will lead to the distrust between them.

Another problem is security which is a serious matter because SalesForce already experienced the outage several times. And their users cannot do anything during this outage. It’s no question this could be harmful to the users. Additionally, the misoperation or upgrade of software will cause the issue with losing data or system-breakdowns. So, there is still a risk in it although they have Data Safety detection.

It’s essential to have customers, employees, vendors and any other individual’s privacy safe with IVK. The potential privacy issues have two parts; both internal and external aspects. For the internal aspect, IVK should carefully think about the access right of the customer’s highly private information. The access right should be limited and approved by the director of the department. If customer’s information were accessible by every employee in the company, the information would be at a potential risk of exposure. In this case, we suggest encrypting partial customer data as well as other confidential information. In terms of the external aspect, Salesforce’s product and service doesn’t have issues of customer’s information exposed.  Therefore, the key point is internal decisions of taking care of privacy issues. IVK should limit the employees to access the complete information of a customer. Or assign the customers’ information management to different departments to avoid this issue.

While there has been lots of discussion about the vulnerability in cloud computing, SalesForce.com has invested in several layers of security for their clients. They use SSL, individual username’s and passwords, and hosts everything on a secure server with several layers of firewall protection. By using the two step identification at log in, Saleforce makes it more difficult for a virus like the heartbleed virus to gain access to data on the SalesCloud. Salesforce has an entire team dedicated to the security of it's customers. To read more visit: https://trust.salesforce.com/trust/security/ and http://www.salesforce.com/company/privacy/security.jsp

Given the risks as mentioned above, Salesforce is pretty safe when it comes to privacy and security issues. There are the potential risks of hackers and inside members at the IVK company releasing confidential data. The nature of what Salesforce does, is to provide customer information instantly to the sales team in order to build long lasting relationships among the potential clients. That is essentially what we need for the IVK Company in terms of a CRM system. Not to mention all of the other features that Salesforce offers (which IVK needs) since they are very valuable and beneficial as well. These beneficial features include:

• Accounts & contacts

• Task & event tracking
• Outlook sync
• Salesforce1 Mobile App
• Content library
• Customizable reports
• Chatter — company social network

The chance of Salesforce being hacked into in relation to all of the benefits we are getting out of this CRM system is a pretty small risk as well as the risk of someone from inside the company releasing sensitive data. Since we are getting a lot of value from the use of the system, we are willing to take the small risk of it being hacked, but otherwise it is a pretty safe system to use.

Value Assessment

For IVK, a CRM like Salesforce.com is an inevitable expense due to its size and needs. However, it is an equivalent trade-off that IVK can gain many more benefits and features to enable the customer service department, loan operations department and any other department to acquire and keep customers.  

Salesforce.com offers different levels or editions of their products and services with an annual billing cycle.  Each business can choose to either be a subscriber or an owner of the content. For salescloud, there are editions of group, professional, enterprise and unlimited. All editions have the common benefits as following:

·         Accounts & contacts

·         Task & event tracking

·         Outlook sync

·         Salesforce1 Mobile App

·         Content library

·         Customizable reports

·         Chatter — company social network

Group is for basic sales & marketing for up to 5 users, it costs $25/user/month. In addition, it provides opportunity tracking, lead scoring, routing and assignment, email templates and tracking, case management, standard dashboards, and web-to-lead capture. The Professional level, which we recommend IVK to choose; enables complete CRM for whatever size team. It costs $65/user/month, has more features of Mass email, Campaigns, Customizable dashboards, Outlook Side Panel, Collaborative, forecasting, Real-time quotes, Role permissions. ("salesforce.com," 2000-2014)

Since IVK is a big company, we did not choose the standard level of desk.com, which is designed for small business.  We chose the enterprise level of the SalesCloud for its extensive benefits, although it costs more ($135/user/month). The features we have at the professional level include: Case management, Computer Telephony Integration (CTI), Web and email capture, Salesforce1 Mobile App, Reports & analytics, Customizable dashboards, Sales features such as opportunities & customizable forecasting. The plus enterprise features are: Service Cloud Console, Service contracts and entitlements, Knowledge base, Web chat, Salesforce Communities for Service, Social customer service, Salesforce Identity, Salesforce Private AppExchange. ("salesforce.com," 2000-2014)

There are many intangible benefits that IVK could get if they are buying, leasing or subscribing to SalesForce. And we can do a qualitative estimate about that.

1. They can save a lot of money and just hire a few employees to manage all kinds of resources. Also they don’t need to buy any hardware. For example, IVK’s customer service department may need many employees to manage  their business and customers without SalesForce. But if they use the Sales Cloud, they could accomplish the same work with fewer employees.

2. Dispense with any upfront input, which means they can just use SalesForce after paying. In consideration of IVK’s IT budget, it could reduce their risk in this project.

3. The useful functions will improve their working efficiency so that they can complete more tasks during the designated time, while simultaneously earning more benefits for IVK.

4. Web chat and web customer service strengthen the internal communication and also get connected with customers. It will bring about two benefits, the first one will let them acquire  more business opportunities. Another one is making business units get more syncronized.

5. The last intangible benefit is that it could be a director; SalesForce will make a decision for IVK’s market strategy. Marketing Cloud could do an intelligent prediction according to their data or chart, and then provide the best solutions.

Despite the high overall costs to implement Salesforce at the IVK company, it does prove to be very beneficial to the firm in the long run. Given all the direct benefits, as outlined above combined with all of the intangible benefits, the company will be more successful in the future with this new and improved Customer Resource Management. The overall benefits of Salesforce both tangible and intangible will certainly outweigh the costs, and for a large company such as that of IVK, half a million dollars will certainly not hurt the company financially. Instead it will be a long lasting investment for their continuous expansion in the future.

In this day in age, Social Media can tell companies like IVK so much about their clients.  As we see in the TED Talk video by Jennifer Golbeck, “The curly fry conundrum: Why social media “likes” say more than you might think,” companies can hire analysts who can ”quite accurately predict things like your political preference, your personality score, gender, sexual orientation, religion, age, intelligence, along with things like how much you trust the people you know and how strong those relationships are.” (Golbeck, 2013)  Companies like Saleforce.com can use this data along with their internal analytics to determine if a client should recieve the loan that they have applied for.  They can create more personal touches when they answer a clients customer service call (no matter who answers the phone). They can create a customer for life by personalizing the clients experience through their shared information in Salesforce and from the data salesforce can gather for them.  This is an invaluable tool in this day in age and would also allow them to connect with their clients through social media in new ways and to generate new customer bases.  Using analytics they can figure out if they are reaching their target markets effectively and if their clients are satisfied.

Companies interested in using Salesforce.com are able to see their extimated Return on Investment (ROI) by usings Salesforce’s CRM Value Calculator which can be found at: http://www.salesforce.com/roi/.

References:

salesforce.com. (2000-2014). Retrieved from http://www.salesforce.com/service-cloud/overview/

Golbeck, J. (2013, Sept). The curly fry conundrum: Why social media “likes” say more than you might think. [Video File] Retrieved from: http://www.ted.com/talks/jennifer_golbeck_the_curly_fry_conundrum_why_social_media_likes_say_more_than_you_might_think/transcript?language=en#t-145382

Cost Analysis

According to the book, “The Adventures of an It Leader,” we assumed that IVK is a mid-sized institution based on the ten departments within their organization. (p.18)  For analytical purposes, we assumed there are 500 people working at the IVK company, and estimated the number of staff in different departments based on our assumption as the table below indicated indicates. We based our assumptions about the size of  IVK and the following departments on the facts that IVK is funding large amounts of loans and based on their budget for compensation.

Department	IT	Customer service	Loan operations	Collections
Employees	10	100	200	50

To manage their customer resources well, and build a strong relationship with customers, we recommend that IVK needs the following services from Salesforce which we have analyzed as being fixed in terms of their cost: Service Cloud and Sales Cloud. We suggest that IVK chooses the professional level of sales cloud, enterprise level of service cloud, which would cost them $65/month, $135/month per user respectively. Therefore, the fixed costs would show as below pillars by different department.

Image: L.Sobel-Berlow, 2014

Based on IVK’s needs concerning there customer service department, we would recommend buying two services which we have identified as being variable in cost. The two services are: Chatter and Data.com. We chose data.com at the Corporate clean level, rather than at the Corporate Prospector level so that IVK can utilize it on an as-needed basis. Data.com costs $25 per user per month; billed annually.

        The second service we are recommending is Chatter, which is a free service with the purchase of one CRM license for up to 5,000 employees. This service only provides basic collaboration, however, should the company expand, they may want to consider upgrading to Chatter Plus, which is $15 a month per user.

Image: L. Sobel-Berlow, 2014

Image: L. Sobel-Berlow, 2014

Salesforce.com is delivered solely as a SaaS, which means there are no server fees or additional maintenance charges. However hidden fees include adding mobile access to your users which is $50 per month per user billed annually and integration with back-end systems such as SAP can cost around $12,000 per year.

Image: L.Sobel-Berlow, 2014

System Overview

The primary intended purpose of the Salesforce CRM system is to help companies expand their business by systematically managing their customer resources. In addition, it would also allow companies to modify their business models and help them to achieve a high-level of business performance.  “Software as a service (SaaS) refers to software that is made available by a third party online...Firms using SaaS products can dramatically lower several costs associated with the care and feeding of their information systems, including software licenses, server hardware, system maintenance, and IT staff. ...The most iconic SaaS firm is Salesforce.com, an enterprise customer relationship management (CRM) provider. This “un-software” company even sports a logo featuring the word “software” crossed out, Ghostbusters-style.”  Gallaugher, J. (n.d.). The Software Cloud: Why Buy When You Can Rent? In Information Systems: A Manager's Guide to Harnessing Technology (Vol. 2). Flat World Education.

“Salesforce has been quite aggressive with its push to mobile in fiscal 2015, particularly with the Salesforce1 platform that was launched in November 2013. The new Salesforce1 offering is engineered to connect various apps and a multitude of devices across on a single platform and greatly increases mobility for sales representatives. The platform has been built on an API first philosophy and includes added tools for developers to create and deploy enterprise-level applications across mobile devices.The rapid shift towards mobile and tablet devices from employees at the workplace bode well with Salesforce’s bet on the mobile CRM platform.”  Salesforce Launches New Offering To Strengthen Mobile CRM Push. (2014, September 4). Retrieved September 16, 2014.

SalesForce Logo (SalesFroce.com)

The main feature of this system is that it runs on the cloud. Users can access it anywhere and anytime; all they would need is the website browser or the mobile device to access. The sales cloud of Salesforce is an instant connection to user’s leads, contacts, accounts, and critical business information. Salesforce lets companies who purchase their software to share customer related data and information such as sales leads and other information; for example job openings. The new tools also have an update function to keep data in sync across companies.” Kanaracus, C. (2007, December 5). Salesforce Lets Customers Share Data With Each Other. Retrieved September 21, 2014.

They help track every movement of user’s customers or partners. In addition, the user has a clear idea of their tasks, meetings, presentations and are able to find many details and data of their clients. This enables the company to build a deeper relationship with customers.

Salesforce is useful because the customer resource management is primarily about managing the relationship with the customers, and this system facilitates users with their company to achieve the organizational goals by obtaining and maintaining customers, helping them learn about customer’s behavior and develop stronger, lasting relationship which would benefit organization including non-profits. "Connect enables nonprofits of all sizes to now manage their fundraising, event management, volunteer management and more—all in one place, from any web-enabled device. Nonprofit organizations no longer have to build these modules themselves or rely on disconnected third party solutions; with NGO Connect they can now benefit from the sector's emerging best practices and accelerate their ability to manage their greatest asset—a lifetime relationship with their constituents." Salesforce.com Foundation Expands Salesforce1 for Nonprofits with Launch of NGO Connect. (n.d.). -- SAN FRANCISCO, Sept. 16, 2014 /PRNewswire/ --. Retrieved September 17, 2014, from http://www.prnewswire.com/news-releases/salesforcecom-foundation-expands-salesforce1-for-nonprofits-with-launch-of-ngo-connect-275340541.html

Photo: CIO-Today.com

“Salesforce.com officially rolled out a new and improved version of its enterprise chat product ..., a tool it calls Community Cloud. And it wants to take on, or at least mimic, LinkedIn with the new product. Community Cloud is like a custom, private version of LinkedIn for businesses, it says. It lets companies connect with customers, employees, and partners to chat, share files, and so on. It also [links] them to apps, news, and other things that people need to do their jobs and help customers.” Bort, J. (2014, August 28). Salesforce.com Wants To Be The New LinkedIn. Retrieved September 16, 2014. http://www.businessinsider.com/salesforcecom-the-new-linkedin-2014-8#ixzz3DUpuoNxg

Image: Ashish Agarwal - Independent Salesforce.com Architect, Consultant & Trainer 2014

Salesforce.com would be beneficial for the future success of IVK for a number of different reasons. The first reason being that Salesforce.com is the largest provider of customer relationship management software. In addition, companies of all sizes, including IVK can utilize these innovative services through mobile, social or cloud technology. If IVK can use this cutting edge software, they will better manage their customers while at the same time build and maintain strong relationships with their clientele. Given the fact that IVK provides financial services, the customers are key to their success in this industry. In the long run, IVK can potentially increase their bottom line, market share, stock prices and achieve their overall organizational goals.