Should All Companies Head to the Cloud?

The research company Forrester recently published a report that compares the offerings of leading Salesforce.com implementation service providers against 46 levels of capability across three categories: current offering, strategy, and market presence. The research company recognized Accenture as the leader in global Salesforce.com implementation services. The recognition was based on Accenture's "practice maturity, depth and breadth of resources, and suitability for larger more complex deployments." 

My first reaction is to congratulate my friends and ex-colleagues at Accenture.

However, what is even more interesting about this report that it underlines the fact that important deployments of cloud-based point solutions still need heavy-lifting assistance from large system integrators. 

Forrester cites some reasons for this: Detailed customization requires access to specialized talent, integration to other SaaS and on-premise solutions creates unexpected complexities, and deployments are often connected to business process redesign initiatives. It struck me that overcoming these hurdles for cloud-based point solutions requires obtaining the very same skill sets and capabilities that are also needed to deploy on-premise CRM solutions. The long list of requirements includes following a proven deployment methodology, access to highly specialized skill sets, such as data architects and technical architects, having access to offshore development centers, and the ability to implement change management and design new processes across the organization, among others.

For both on-premise CRM solutions and cloud-based point solutions, one of the key objectives is to ensure that the CRM system and processes become a seamless part of the overall enterprise and improve customer centricity. In a recent survey by Bloomberg Businessweek Research Services, close to 70 percent of the respondents cited disconnected processes and technologies as the single most important hurdle to delivering a better customer experience. I would argue that the importance of this challenge is amplified at larger companies that have more complex and mature business models and operate globally.

In general, what we can learn from this report is a CRM point solution is a CRM point solution. It does not matter whether the point solution is in the public cloud, in the private cloud, or on premises. The business requirements remain the same. What is clear is that all CRM point solutions have the same fundamental limitations and characteristics. These solutions are designed to perform a discrete set of functions, which they perform well. However, point solutions are not designed to support end-to-end processes.

This begs the question: Why do large companies with complex and specialized needs opt to use a cloud-based CRM point solution? There are a few possible reasons that come to my mind: the promise of fast and easy deployment, lower costs, and the promise of little to no impact to the business users from supporting the implementation.

Of course all of these promises could be met, if companies use the "plain vanilla version" of these point solutions. However, this also requires companies to accept certain limitations. The most important one it that they cannot easily connect their CRM point solution with other systems. This means that these point solutions are isolated islands within the organization. But this is a far cry from the business realities and imperatives of today's competitive markets.

According to survey results of the fourth edition of the IBM CEO study "Capitalizing on Complexity," business complexity is expected to rise. Seventy-nine percent of the 1,500 CEOs who were interviewed anticipate even greater complexity in the years ahead. The most successful organizations co-create products and services together with customers, and integrate their customers into core processes. Organizations are adopting new channels to engage and stay in tune with customers. According to study results, successful CEOs make customer intimacy their number-one priority by drawing more insight from the available data.

Drawing insights from data requires tight integration across the organization, its supply chain, and beyond. 

In fact, to become a truly customer-centric company that delivers an excellent customer experience, organizations need to act as a single entity. According to the survey by Bloomberg Businessweek Research Services, companies with tightly integrated applications reported a 20 percent improvement in customer experience.  

The result of this Forrester report give companies considering large-scale deployments of CRM point solutions some points to reflect on. Business executives should ask themselves the following question: Can we live with plain vanilla? To answer this question, executives need to look at their specific requirements, IT infrastructure, and business objectives.

A quick way to solve this challenge might be to answer two additional key questions: Are the process boundaries of the solution enough to support business objectives? Can the company live with a platform that is disconnected from its core systems?

If the answer to any of these questions above is no, then you should expect to deal with traditional challenges of systems integration even if you choose a "simple" point solution in the cloud. A CRM point solution still remains a CRM point solution.

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Reza Soudagar is senior director of SAP's CRM Solution Marketing.