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An overview of cloud customer relationship management
Businesses are confident about buying customer relationship management (CRM) software as a cloud-based service. Computer Weekly looks at the main players
There’s no doubt the future of customer relationship management (CRM) lies in the cloud. IDC predicted the value of new, on-premise installations would drop from 65% of the market in 2013 to 38% ($12.1bn) in 2018.
From 2016, software-as-a-service (SaaS) in the cloud is set to support the majority of deployments.
At the same time, a specialist cloud supplier, Salesforce.com, has become the largest player in the CRM market, in value terms, according to Gartner.
Although most of the major suppliers of on-premise CRM also provide solutions hosted in the cloud, differences in heritage, product features and architecture are important when businesses come to selecting the right tools to help them interact with existing – and potential – customers.
Every CRM solution should provide a set of basic features which support its implementation across a number of specific business requirements. Contact management provides a way to manage prospects, leads, clients, and other important contacts, all from one place.
Sales force automation tracks the processing of leads to payment. Marketing automation helps build campaigns and turn responses into workable prospects. Service and support directs inquiries and complaints to the right people, be that over email, phone, or dedicated web or social media channels.
Reporting should help managers and executives measure performance across the whole process with easy-to-understand dashboards.
Read more about cloud CRM
- The Microsoft Dynamics CRM 2016 spring wave is about to hit, offering social engagement features, integration with recently acquired technologies and more.
- Virgin Media is using Salesforce to offer a single customer view irrespective of the channel the customer uses to talk to the company.
- The future customer experience might be personalised, but there is a long road ahead yet.
Beyond the basics, the main vendors have built quite different solutions based on the heritage of their technologies, their business models and the other products they offer in the market.
Sheryl Kingstone, research director for business applications with analyst firm 451 Research, says: “A lot of people don’t realise the range of products on the market is very broad and the vendors can be very different in their approach.”
“If you take sales force automation, as an example, there will be common capability everyone will have, and you can check those boxes from the list of functions you need. However, where the difference come into play is in usability and the flexibility of the data model for your specific industry,” she adds.
Kingstone says potential customers should carefully consider how the workflow is mapped into the solution and how much flexibility exists in the system. If it cannot be customised to fit existing processes, some business change will be necessary and that could add costs.
Meanwhile, if businesses have an existing data model they may also need to change if the solution cannot be adapted.
Since solutions started to appear on the market in the 1990s, businesses hoped CRM would provide a 360-view of all their interactions with existing and potential customers, from marketing, to service, to invoicing, says Marcin Malinowski, director at consultancy PwC.
“This is the Holy Grail. It is still the case, but now it is also about customer experience. How your business interacts with customers across multiple channels. Naturally, customer have used Facebook, Gmail or Amazon, so then they expect more. They want the same friction-free journey,” he adds.
The Salesforce approach
The company started with the ambition of building applications in the cloud which could be easily connected to existing application software and other cloud solutions using a set of open application programing interfaces (APIs).
This architecture has allowed Salesforce to create a cloud platform on which independent software vendors could build a set of add-on, loosely coupled features and new sets of specialist applications.
“That is Salesforce.com’s big advantage,” says Kingstone. “It is in the power in ecosystem of other vendors using the platform. There is always a new company building functionality for vertical industries or specific processes that could benefit a prospective customer.”
Saleforce CRM and sales force automation starts from £20 per user, per month, but its most popular package – which is “deeply customisable” – works out around £120 per user, per month.
Carl Dempsey, Salesforce vice-president of solutions engineering, says a lot of early CRM solutions were simply databases for recording customer details and a few basic interactions with them, but business are now looking for much more.
“They want systems to become much more predictive and help their people do a job better,” he adds.
As such, Saleforce has created SalesforceIQ, which can create plug-ins to other applications, such as Microsoft Outlook, which feed sales team prompts based on intelligence from the CRM while they interact with the customer.
Although Saleforce (with customers including European engineering giant ABB, Coca-Cola Germany and GE Aviation) is purely cloud-based, it has APIs to extract data from virtually an in-house business application, such as ERP or financial systems, says Dempsey.
Microsoft Dynamics CRM
Microsoft offers its Dynamics CRM solution in the cloud as well as on-premise. However, wherever customers chose to host the software, it offers the advantage of tight integration with Microsoft email and desktop applications, which are used in almost every business, says Chris Rothwell, Dynamics business group lead at Microsoft UK.
“We hear that the way we surface information about customers is helpful for great user experience. With the integration with Outlook, we can present data and information about the customer within the email client, where the user is already working,” he says.
Dynamics CRM can also integrate unstructured data from Microsoft’s Skype, Office applications and OneNote, which can record typed or handwritten notes from meetings.
“When you’re managing an opportunity in B2B sales, for example, there is more than one person involved,” says Rothwell.
“OneNote can capture meeting notes from whoever is interacting with the customer, such as a sales agent or service engineer, and present that when the user opens up the opportunity.”
Kingstone, of 451 Resaerch, says integration with existing Microsoft applications will appeal to some users. “Microsoft has a depth in task and process management that make it strong in collaboration. Some organisations are very Microsoft-centric and this will be a pull for them.”
The most popular bundle of Dynamics CRM is priced around £40.50 per user, per month. Customer of Dynamics CRM in the cloud include business consultancy Grant Thornton, Marsden’s Pubs, Midland Air Ambulance and Real Madrid.
Oracle CX CRM
Oracle bought RightNow, a provider of cloud-based customer service solutions, in 2011. It has since bundled the technology with other CRM solutions, known as CX Applications, which are all available in the cloud.
Oracle’s main CRM system is based on technology from Seibel Systems, a provider of popular sales force automation tools, acquired in 2005.
Daryn Mason, senior director, digital experience, CX Applications at Oracle EMEA says the company’s strength in cloud CRM is in understanding industry specific applications and the data structures with which CRM will have to interact.
“Oracle has got great breadth and depth of applications. If you look at customer experience, it does not start and end with sales and service,” he says.
Finance, enterprise resource planning (ERP) and e-commerce all interact with customers in some way or other, and Oracle’s presence in these markets and its understanding of their data models is its strength, Mason adds.
“If you’re a corporate organisation betting the business on customer experience, do you want your source of support to be a tapestry of small boutique software houses tying the data together, or one organisation with a history of building enterprise applications?”
Mason says Oracle also offers expertise in analytics and data mining which can make CRM more predictive, helping businesses understand how to sell to their existing customer base as well as acquire new prospects.
Despite its strong presence in other enterprise application market, Oracle has struggled to set the pace as a pure cloud CRM provider, says 451’s Kingstone. “Its heritage is strong in CRM from the Siebel acquisition, but it did not invest in pure cloud CRM for some time.”
Oracle’s cloud CRM customers include Madza, Dell and Avaya. It does not release pricing.
Conclusion
The cloud offers businesses the capability deploy applications aimed at enhancing customer experience, improving prospect conversion and upselling at low capital costs.
Speed of deployment can also help businesses become more agile.
While Saleforce supports a community of third-party vendors from which customers can select and integrate applications suited to their needs, Microsoft and Oracle claim tight integration with between their cloud offerings and existing software will be important to businesses wanting to enhance CRM.
