On-demand CRM and SaaS takes hold in midmarket

Experts say adopters of on-demand CRM can profit from integrating with back-end systems. They have plenty of approaches from which to choose.

Users at midmarket companies will get more out of a customer relationship management (CRM) system delivered through Software as a Service (SaaS) if it's integrated with back-end systems like financial applications.

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"CRM is kind of a standalone listing of who your customers are, but in an ideal situation it should be linked to sales activity and that sales activity should be tied to those financial systems," said Jeff Kaplan, managing director of Wellesley, Mass.-based consultancy THINKstrategies Inc.

Peter Marston, an analyst at Cambridge, Mass.-based Forrester Research Inc., said CRM users can have a better understanding of what their customers want and need when their CRM system can access live financial and sales data from the back-end systems.

"A lot of times there's transactional data you've had with customers in the past," Marston said. "There's a need to reach out to existing customers or to try to get trend of information. A lot of sales guys will want to have that data. They might use it as an opportunity to upsell."

Marston said many companies, particularly smaller ones, will try to go without integration, but midmarket companies can't afford to go without it.

"For larger organizations the tendency is to have a greater fluidity of information exchanged and to have it more accessible to more individuals," Marston said. "On the lower end of the scale, smaller businesses don't have as much of a need because their business processes are much simpler in nature."

Different approaches

There are many directions a midmarket firm can take when integrating a SaaS-based CRM system. Kaplan said the options are all over the map because there are so many different deployments of CRM.

"Many people, whether it's a traditional CRM system or an on-demand variety like Salesforce.com, don't realize until they begin to do that deployment the additional work it takes to integrate it with a financial management system," Kaplan said.

For Doug Menefee, CIO of The Schumacher Group, there was never any question that he would need to integrate his deployment of Salesforce.com with his back-end financial applications from PeopleSoft Inc. and the other applications he uses to run the business. The Schumacher Group is a $250 million staffing service company based in Lafayette, La. It specializes in providing hospital emergency rooms with doctors on a temporary basis.

"We are heavily invested in Salesforce.com," Menefee said. "We use the CRM application. We've pushed it pretty much to the limit of being an ERP application without the financial side."

Menefee said his company uses Salesforce.com to track opportunities, recruit doctors, manage credentials and run background checks on doctors who work as independent contractors for the company. But he needed to integrate it with his financial systems and with Tangier Web, a hosted doctor scheduling application from Peak Software Labs in Hunt Valley, Md. For about three years, the company went without any integration.

What we're trying to do is put something in place that could be implemented quickly and grow with us
as we grow.

Doug Harr
CIOIngres Corp.
Without that integration, information was transferred manually, which put data quality at risk and inhibited the company's ability to scale for growth.

Menefee narrowed his integration approach to two choices. He considered an extract, transform and load approach to integrate everything using SQL Server Integration Services (SSIS), a Microsoft integration platform. He also considered an integration appliance approach, inviting Mountain View, Calif.-based Cast Iron Systems Inc.

Menefee decided to have a bake-off between the two approaches, giving Cast Iron and a professional services company using SSIS both a use case to solve. Each approach was to take information on a new doctor from Salesforce.com and transfer it to the Tangier Web application. The system was supposed to check that the new doctor wasn't already in Tangier. If he was, the integrator was supposed to notify the end user of the discrepancy.

"Cast Iron was able to walk in the door and do it in four hours," Menefee said. "We brought in another group to do it with SSIS. After two days they said the use case we put out there couldn't be done."

Menefee has been using Cast Iron since March 2006. He was able to get up and running fast, but there have been some typical headaches along the way.

"Getting up and running was the least amount of my worries. We were ready in a matter of days. The issue was that which most corporations deal with when doing integration: The data between the systems does not exactly match up with each other. We were writing integrations points in place. And end users continue to go in and clean up the data from legacy systems."

Still, Menefee said Cast Iron's approach is simple, with a drag-and-drop user interface that his Web application developers love. More traditional developers in the company, who prefer complex, line-item approaches to development, don't like the appliance as much.

Growing together

Doug Harr, CIO at Ingres Corp. in Redwood City Calif., also uses Salesforce.com as his CRM application.

Ingres, a vendor of open source database technology and services, was spun out of CA Inc. two years ago. Essentially, the company was a startup with 120 employees (Today it has 285). So there were no legacy back-end systems to integrate Salesforce.com.

At first the company tried to run its financials on QuickBooks from Intuit Inc., but that didn't scale very well for a rapidly growing company.

"The CFO and I agreed that it only made sense to implement on-demand solutions," Harr said. "We started down that road with Salesforce.com. We share the view that running out and buying products like Oracle or SAP at the upper end of the market is something a smaller or growing company should avoid."

Harr said he adopted a SaaS-based product from Intacct Corp. in San Jose, Calif., to run Ingres' financial systems. He said this was a natural choice, since Intacct is a partner of Salesforce.com on the company's AppExchange directory of applications.

"What we're trying to do is put something in place that could be implemented quickly and grow with us as we grow," Harr said. "We wanted to ensure it could handle our transaction volumes out into the three- to five-year range."

Kaplan said it's never really that easy to integrate on-demand CRM with your back-end systems, but it's not as challenging as you might think.

"There's a whole set of third-party solutions aimed at integration issues," Kaplan said. "There are some appliances, there are a set of independent tools or connectors that vendors like Pervasive and Informatica have crated. And there are even the hands-on skills of professional services companies like SaaSpoint and even old-line companies like Accenture. Some companies like Intacct have crated APIs that make it relatively easy, but even they will deploy professional services at times to help clients with processes because there might still be some manual mapping of processes to make the configuration work properly."

Let us know what you think about the story; email: Shamus McGillicuddy, News Writer

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