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Executive Summary
Based on a Yankee Group survey of sales management, We call this trend the consumerization of the enterprise. This
salespeople and IT practitioners at large organizations Report uncovers the voice of enterprise users so that companies
conducted late fall 2007, this Yankee Group Report studies can buck the CRM failure rate with a clear understanding of how
the current business environment and use of technology to new on-demand services and technologies can overcome user
improve sales effectiveness. Although many traditional reluctance and ensure sales success.
premises-based CRM applications implemented during the
last two decades promised a significant improvement and
Exhibit 1
increase in sales effectiveness, in reality their strength was in Major Factors for Business Applications
empowering management with a holistic view of the sales Source: Yankee Group, 2008
process rather than actually helping end users and sales Which of the following factors are most important when
teams succeed. This led many companies to reevaluate their selecting a business application?
current salesforce automation (SFA) and customer relationship Flexible pricing models
such as both on-demand
management (CRM) implementations by replacing or and on-premises
augmenting them with newer on-demand/software-as-a-service Industry/vertical-specific
functionality and relevance
(SaaS) applications. Although many companies are still Single integrated package
to lower integration
considering premises-based applications, the on-demand and number of vendors
applications have moved from niche to mainstream capturing User-interface design
10% of the overall software market with phenomenal 20% Interoperability with other
growth. Considering 37% of the SaaS user respondents in applications
the survey said they dramatically improved sales effectiveness Integration with MS Office and
Exchange, and Lotus Notes
and customer satisfaction, it clearly demonstrates a Software is able to meet our
noticeable improvement over traditional CRM users. needs with minimal customization
Quality customer-
service and support
As shown in Exhibit 1, while features and functionality always
Vendor’s long-term viability
rise to the top, the most important feature when evaluating a Application is easily customized
business application is and should be ease-of-use. Considering by line of business and/or
IT to meet business needs
82% of CRM user respondents still can’t get salespeople to
Feature and functionality
understand the value and use the application, it is absolutely
critical to improve its overall usability. The million dollar Ease-of-use
Table of Contents
I. Competitive Market Hinders Service and Sales Effectiveness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
II. Future CRM Applications Demand Collaboration, Process Improvements and Anywhere Information . . . . 4
Consumerization of the Enterprise Drives Future CRM Demands . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
What Do Users Specifically Demand to Ensure High Rate of CRM Adoption? . . . . . . . . . . . . . . . . . . . . 6
III. Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
ucceeding in a highly competitive environment where customer Delving further into the respondents profiles, sales management’s
S service is a key differentiator in many industries is one of the
most significant challenges facing businesses today. Companies
response to competitive pressure was even more significant with a
high of 97% of this segment of respondents listing it as their top
realize that product and price differentiation only lead to a short-term challenge. As compared with the frontline sales representatives’
gain as compared with focusing on longer-term customer service responses, they were more concerned with growing revenue
differentiation. Companies also understand that salespeople have a through increasing sales effectiveness, specifically win rates and
direct effect on providing a differentiated customer experience. With contract values.
88% of respondents stating it as their top challenge over revenue
growth, it is not surprising that businesses are looking for new ways The good news from Exhibit 2 (on next page) is the respondents’
to use technology to create a unique differentiated position. Sixty willingness to use technology as a strategic competitive advantage.
percent of the respondents also stated their current business The concept of using applications to facilitate the selling process is
applications do not enable them to react to fast-changing and not a new one, but many implementations have not empowered line
unpredictable market conditions. of business with applications that have added value to the actual
selling process. Sales teams have moved beyond the days when
they were provided with nothing more than briefcases filled with
outdated pamphlets and samples.
Despite investments in CRM and SFA solutions, 55% of companies’ All these challenges only add to the already complex selling
current SFA applications do very little to increase sales effectiveness. environment. A company must address these challenges or it will fail
Sixty percent have somewhat improved sales efficiency, but the to meet sales management and sales representatives’ top objectives for
sales process is unstructured and these organizations do not have the 2008 of improving win rates through targeted leads and better
applications, data and process to improve effectiveness. Thirty-three messaging for products and services. However, priorities shift
percent of professional services organizations have downright failed significantly for second and third objectives.
to improve sales effectiveness or efficiency because CRM/SFA has • Sales representatives’ objectives focus more around the ability to
been just another application that is difficult to use and does not more effectively target accounts, provide guidance on pricing
provide the necessary functionality to enable productive selling. and improve forecast accuracy.
• Sales management expressed significant interest in improving
Other CRM challenges continue to flourish among CRM users today: customer loyalty.
• 89.5 % still do not use a technology that offers a suite of
applications for sales, service and marketing Process improvements rank high overall in business objectives, but
• 89.5% still do not have a single view of the customer/ companies were essentially split between two groups: One that
360-degree view prioritized an end-to-end business process as a major initiative for
• 78.9% can’t leverage their social network to build quality their current CRM (86.7%as a major factor), as compared with
collateral, presentations and proposals 87.3% of companies that prefer to empower their employees with
• 58% state their current investment in IT and business more collaborative-driven applications that are user-focused.
applications are outdated and don’t provide the visibility and Essentially, the goal is to choose the right approach for the goals
data necessary for business decisions and objectives of the company.
The large manufacturer in contrast has a very different customer • Provide more in-context content and information within business
experience. The company has potentially a few hundred customers and applications
a complex, collaborative selling environment. Essentially, the CRM • Replacing legacy with newer service-oriented applications that
system must make the people more productive as they move the empower line of business
sales cycle forward. In other words, if you have a high volume, high • Enabling mobile access to corporate applications through Wi-Fi,
transactional process business like the online retailer, you go with a wireless cards or smart phones
CRM implementation that empowers the end-to-end process. If the • Reducing application silos to make the organization more
company’s differentiation is centered on the people, empower the process-centric
strategic asset (people) with a collaboration-driven CRM solution.
The good news here is that IT and CRM initiatives are finally
Either way, new services and technology can improve both aligned with process improvements, collaboration and mobility. By
solutions. Salespeople and management must have the capability to providing newer applications that are more process-oriented and
leverage their inherent collaborative nature to help them influence empower lines of business, companies will improve the overall
the sale and close more deals. usability of the CRM applications. By incorporating in-context content
and information, businesses can not only improve the overall customer
experience, but also increase sales effectiveness. Lastly, IT
II. Future CRM Applications Demand understands the priority for mobile access. Salespeople rank mobile
Collaboration, Process Improvements and access much higher on the IT priority list, second only to
Anywhere Information implementing collaborative technologies.
• Use of application without worrying about upgrades, updates delivered in context is critical to increase user adoption. It also
and security patches. The dirty little secret is that premises- enables sales representatives to share content such as PowerPoint
based applications have a significant hidden cost. Although most presentations and proposals help proliferate best practices.
companies only conduct significant upgrades every 3 years, it is a • Collaborative applications: Collaborative applications
very painful and expensive process. consistently ranked high with respondents while Web 2.0 usage
ranked lower. This is an interesting dichotomy to point out
Another consumerization of the enterprise lesson includes the use of considering Web 2.0 functionality is generally regarded as the next
users’ content, collaboration and anywhere information. When wave of technology that will better meet the enterprises
respondents were asked to rate whether they agree or disagree with collaboration needs. Vendors must do a better job explaining to
statements in Exhibit 5, the issues with which they agreed strongly customers and prospects the inherent benefits of Web 2.0 and
were all focused on empowering line of business with more how it helps organizations improve collaboration.
consumer-like functionality such as mobility, collaborative • Pricing tools: Salespeople need more pricing guidance. These
applications, content and pricing tools. Here are the reasons behind tools are designed to help salespeople by evaluating win/loss ratios,
why they agreed with our statements: product differences and customer difference to present optimal
• Sharing content: Salespeople refuse to use SFA because it has price recommendations based on corporate governance rules.
never given them an incentive to log in besides to heed the • Mobility: Companies are striving to become Anywhere
warning, “Do it or you won’t get your commission check.” Enterprises. Ubiquitous connectivity has enabled the mobile
Technology needs to start giving back. Instead of static content computing revolution. However, connectivity alone is not
that adds little value to daily efforts of a sales representative, enough to make users more productive. They also require access
solutions need to proactively share changes in information that to applications and information.
are relevant to their current accounts. Again, taking a lesson
from the Web 2.0 world, interactivity meshed with fresh insight
Exhibit 4 Exhibit 5
Top Reasons for Using SaaS Agreement or Disagreement of Key Industry Trends
Source: Yankee Group, 2008 Source: Yankee Group, 2008
Which of the following factors prompted your
organization to adopt software as a service? Do you agree or disagree with the following statements?
Preferred the ease-of-use We would like to incorporate
of the application more Web 2.0-type features
Allow distributed employees in our enterprise software
to stay connected and We would like a more closed-looped
be productive business process to gain insight
Use of applications without and feedback on sales situations
worrying about upgrades, Our customer management
updates and security patches
applications such as CRM and SFA are
Application depth best suited for managing transactions
and functionality
We are looking for new ways to
Less risk—can switch vendor empower mobile workers with
if service not adequate anywhere, anytime access
IT staff are generalists and
cannot support complex Better pricing tools to help
business applications salespeople with optimal prices
Lower TCO because no need We would like to empower our
for IT infrastructure or IT employees with more collaborative
resources for SaaS applications applications that are user-focused
Having private instance of the
SaaS for control and privacy We need a better way
Being able to move to a to share content
premises-based deployment,
if necessary 0 10 20 30 40 50 60 70 80 90 100
Percent of Respondents
Percent of Respondents
because of application complexity, high TCO and lack of user adoption.
Major Factor
Minor Factor
Not a Factor
The CRM industry, especially sales automation, has been revitalized to have.” As businesses continue to transform into Anywhere
with newer services that buck the failure rate. With a clear understanding Enterprises, anywhere applications become strategic priorities.
of how new on-demand services and technologies are used effectively,
businesses can overcome end-user disillusionment and ensure sales
success. Interestingly, Web 2.0 technologies ranked lowest on users’ Recommendations
priority list: Only 18% ranked Web 2.0 as a major priority for
improved collaboration. Undervaluing the benefits of Web 2.0 is a • SasS might reduce TCO, but not budgets. Instead, reallocate
big mistake for any company embarking on evaluating the latest dollars for improved creativity and strategic development. New
CRM and sales automation solutions. tools can empower both IT and line of business. IT ensures the
foundation provides enough depth, security and scalability. Line
Web 2.0 directly impacts the overall success of the application by of business adds the context to the business process through easy
providing: to use application development wizards. It’s truly a collaborative
• Dynamic assembly of relevant processes and services: Users win-win approach.
can easily customize services to meet unique process requirements • Use technology as the enabler. The differentiation is in how it is
or mash up components into unique composite applications. A applied to increase sales effectiveness. To cover the last mile in
small piece of functionality such as maps, data services and tools sales effectiveness, companies must enable anytime, anywhere
that is loosely coupled and joined as components is essential. interactivity for sales and prospect information through a
This ensures that end users can get access to the easy-to-use combination of voice and data transactions. Sales representatives
services freely available on the web, which can be integrated often make and receive calls from mobile phones. At the close of a
into their SFA. call, representatives could trigger an event to automatically log that
• Creative empowerment of business user: Gone are the days of call into the CRM or sales system of record. With a combination of
“over the wall” IT application development. Business users must alerting and preprocessing done on the platform, the end user
be active participants and co-developers of the service. A spends less time reentering data. This is a simple step, but the
collaborative, iterative approach to releasing functionality cross-channel benefits could improve the quality of information
becomes a core competency and the end to release cycles. Sales available for all users.
management and IT consistently ranked higher collaborative IT • Upgrade or replace existing sales automation applications to
processes. New SaaS and Web 2.0 empower success by improve pipeline visibility and forecasting. Gain visibility into
decentralizing the IT process and empowering business users the health of your business before it is too late. Management must
with a platform to control their business desires. be apprised of the top opportunities the salesforce is pursuing and
• Data-driven decisions: Quality data drives business insight. A be able to manage those opportunities from inception to closure.
platform is nothing but an empty shell without data powering the Because many companies make key decisions based on their
end-user interactivity. Disparate data sources need to be forecasts such as resource allocations, manufacturing schedules.
harnessed and then transformed into a visual representation for • Companies with IT resource constraints should use an SaaS
improved decision-making. solution to speed time-to-market and minimize ongoing
• A shared ecosystem of intelligence: The web taught users a maintenance requirements. Many companies have already
valuable lesson: The network effect is a vital element for success. spent a large amount of money on an on premises-based SFA
Users add value in multiple dimensions from knowledge on content solution that sales representatives don’t use. Companies looking
through RSS feeds to participation in processes and collective to replace such a system quickly—without the worry of IT
networks. While overall rankings of Web 2.0 were lower than involvement—should choose an SaaS solution.
expected, 53% of respondents still agreed that they would like to • Despite user adoption issues, don’t potentially throw out on-
incorporate more Web 2.0-type features in their enterprise premises CRM. Instead, evaluate augmenting the existing solution
software such as ratings, subscriptions and social networks. with an on-demand/SaaS application for end users that can work
seamlessly with the existing premises solution. Especially if that
Also clearly consistent in the survey was the overwhelming sales on-premises solution can meet the needs of an end-to-end process
users’ interest in mobile applications that can be used by employees focused around management needs of process control, business
anywhere, anytime. Ninety percent of the sales respondents agreed insight and intelligent forecasting.
with this statement, thrusting it to the number one position. Today,
mobile CRM projects have evolved from a “nice to have” to a “need
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