Why should my company invest in Salesforce or any other CRM?

If you are a business still weighing in on whether or not to invest on a CRM, this post is for you. CRM systems are no longer the tools merely meant for sales and marketing leaders, but are capable of serving business functions organization wide. However, this particular post is particularly of interest to Sales leadership, Marketing leadership and IT leadership.

Why does my company need a CRM?

The best CRM systems change a company and its relationships for the better. Implemented well, CRM systems can take a business into entirely new markets while solidifying leadership in existing ones. It has been established that a successful CRM system will return about $5.6 on every $1 invested.

Traditional Benefits:

There are various benefits to using a CRM system and these benefits could range from being low to transformational depending on the functional areas of the enterprise where they are adopted and also just over how mature the usage is.

Functional areas a CRM system will address are not limited to Sales Reporting, Sales Content Management, Territory Management, Lead Management and Salesforce Automation – although it’s traditionally assumed to be so, but will also support advanced Sales functions such as Sales Appraisal and Evaluation Management, Sales Incentive Compensation Management, Mobile Sales Force Automation for activities like – Call reporting. A well implemented CRM system will provide for these sales functions and will also support Account Management Activities such as – Opportunity Management, Partner relationship Management, Proposal Generation, Mobile Sale Force Automation for Orders and Inventory, E-Commerce, Sales Performance Management, Customer Engagement, Social CRM, Speech driven sales automation, Sales Objective and Quota Management. Sales Coaching Solutions (learn more on this page), Sales Analytics etc.

So, are enterprises investing in CRMs?

Yes. In fact, based on the Gartner study in 2013, CRM Systems are ubiquitous in the Enterprises, constituting their 2nd largest IT spend collectively and by 2017 CRM will be the largest IT spend of the Enterprises.

What CRMs are companies buying? The Market place

Salesforce.com is leading the CRM market with 14% market share this year, ahead of the other leaders with over a $1B in sales, SAP(12.9%), Oracle(11.1%), Microsoft(6.3%) and IBM (3.6%). IBM is a recent addition to the Billion dollar club. Other large CRM systems are by Adobe, Nice Systems, Verient Systems, Amdocs, SAS.

Outside of these big players in the market here are the top 10 fastest growing CRM softwares, measured in revenue Annual Growth Rate (AGR) in 2012 include Zoho (81.2%), Hybris (78.6%), Teradata (70.4%), Bazaarvoice (56.2%), Marketo (54.3%), Kana (44.2%), Demandware (43.9%), IBM (39.4%), Technology One (37.1%) and Neolane (36%).

How successful have these companies been with their CRM implementation?

This now is the most important question of all and in fact is the key to spend your dollars right on CRM. But how many companies are really realizing this ROI? The answer is less than 45%. This is because, as ubiquitous as the CRM Systems are in the Enterprises, so is the poor adoption of these systems. Considering CRM is among the largest spends in an enterprise – it’s significant amount of investment under realized. Why are more than half of the CRM implementations suffering from poor adoption problem and have ended up in failed investments?

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We’ll answer that in the next post and subsequent posts. Please stay tuned.