Nucleus Research, a technology research and services provider, found that hosted CRM solutions have the potential to deliver significant returns and that it has been both difficult and uncommon to achieve positive ROI using CRM software packages. In its report entitled ‘CRM is Dead Long Live CRM’ published today, Nucleus Research has examined the ROI delivered by numerous CRM vendors during the past 12 months, including Siebel, SAP, Onyx, Microsoft, Peoplesoft, Salesforce.com, and UpShot, and found many companies didn’t maximise ROI because of long deployment times and excessive costs.
Nucleus also released the latest in its series of ‘Real ROI’ reports: ‘The Real ROI from UpShot’ and ‘The Real ROI from Salesforce.com.’ Nucleus found that more than 80 per cent of both Salesforce.com and UpShot customers interviewed achieved a positive return on their investment.
“We’ve found that many companies deploying in-house CRM solutions have faced significant challenges in managing consulting and development costs, ensuring user adoption, and achieving positive ROI,” said Rebecca Wettemann, vice president of research at Nucleus Research. “The results of Salesforce.com and UpShot customers show that to maximize ROI, companies should look to hosted CRM and solution strategies that address those challenges.”
Organisations using hosted CRM solutions experienced numerous tangible benefits including increased sales force productivity, reduced sales support costs, reduced IT costs, increased marketing productivity, and improved sales management.
The traditional model of delivering CRM software fails to deliver a positive ROI because of several pitfalls, including high initial and ongoing software costs, high initial and ongoing consulting costs and long deployment times.
However, not all of the blame rests on the CRM software vendors, consultants, and integrators. CRM deployments also suffered as a result of mistakes by the customers themselves. These mistakes include unclear business goals, lack of effective user adoption, poor management and flawed strategic alignment.
In its research of the ROI achieved by customers of two hosted CRM vendors, Salesforce.com and UpShot, Nucleus found differences in the hosted model and specific deployment strategies enable users to maximise ROI by matching the application to the specific business need, ensuring ongoing engagement from the solution vendor,
maintaining simplicity in features and functionality, so the solution is easy to use; and managing financial risk since not all of the costs are upfront.
Nucleus also found that many traditional CRM vendors are moving to reflect these strategies in their solution development and delivery, either by providing a hosted option or by delivering solutions that are more straightforward to implement and use.
As old CRM fades and customers face more options, careful ROI analysis is needed to ensure maximized ROI. This ROI analysis needs to go beyond technology costs and anticipated benefits and also include the timing of cash flows, the politics of adoption, and the alignment of technology with current and future strategic directions. With a detailed ROI examination, customers can learn not only which type of CRM solutions is right for them, but also learn how to maximize the ROI from their deployment, added Rebecca Wettemann.
Nucleus found that 85 per cent of companies interviewed by Nucleus had achieved a positive ROI from their Upshot (recently acquired by Siebel) deployment, and 82 per cent of Salesforce.com customers interviewed achieved a positive ROI.
Nucleus analysts contacted Upshot and Salesforce.com customers without the vendors’ knowledge to analyse the return on investment achieved by its customers. For these reports, Nucleus conducted 17 in-depth interviews with Salesforce.com customers who agreed to participate in the study, and 15 customers from Upshot.
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