Sometimes, Software as a Service (SaaS) is the only choice for a CIO looking to automate processes across a disparate customer base. At least, that was the case at National Retirement Partners Inc. (NRP), which turned a well-known SaaS application for customer relationship management (CRM) into a single sign-on front end to nearly a dozen applications for its network of 400 financial advisers.
The result? Not just time saved -- make that a lot of time saved -- for advisers, but also new business for the advisers due to the CRM features and a huge return on investment for NRP.
"Since we started using the system this past September, we brought on 16 new clients," said John Prichard, an advisor at Heffernan Financial Services, a unit of Heffernan Insurance Brokers.
The need for integration
NRP is a broker/dealer with 130 offices that manages $40 billion in assets focused mostly on retirement plans such as 401(k)s and 403(b)s. Previously, advisers in its network had to access four or five websites and three or more systems to track and manage their clients' funds. Producing 15 to 30 funds reports for 100 to 300 clients on a quarterly basis from disparate systems was a laborious process.
Enter Adam Sokolic, project lead and vice president of product management at NRP, which is based in San Juan Capistrano, Calif. He led the team that chose Salesforce.com Inc.'s SaaS CRM application and integrated it with all the back-end systems using Pervasive Software Inc.'s Integration Manager.
A quarter-million-dollar investment later, NRP has a SaaS CRM application in place that ties together its compliance due diligence fund management system, commission tracking application, mutual fund scoring system, prospect database, wealth management system and five other fund companies' back-end systems, behind a single user interface.
Financial advisors now put in their fund lineups once, click a button and the information is ...
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sent to NRP's fund monitoring system to create a report from Salesforce.com that can be printed out or emailed to a client.
"The savings in the number of hours it saves advisors is astronomical on a quarterly basis," Sokolic said.
Sokolic estimated that the initial investment would pay for itself within a year if NRP could lure just one advisor from a competitor. So far the tool has convinced 15 financial advisors to drop their existing brokers or dealers in favor of NRP, he said.
San Francisco-based Heffernan Financial Services was already working with NRP before the new system was installed last year, but it has fattened its client prospect pipeline since it began using the SaaS CRM application. "I'm not attributing all of that new business to Salesforce, but it certainly helped, and because of the built-in prospecting system we have a person dedicated just to handling that," Prichard said.
Previously, Prichard's five-person team handled contacts and calendaring through Microsoft Outlook and monitored fund rankings and benchmarks with a series of disconnected NRP tools. "This gives us one place to store customer information and one Web page to go to to manage clients' funds," he said.
NRP saved money on its end by having advisors in its network sign their own licensing agreements with Salesforce.com. It cost Heffernan Financial Services $1,400 per user, which the company easily recouped within the first year, Prichard said.
NRP's up-front costs included outlays for data transfers and custom coding. For example, Pervasive Software took NRP's specs for its fund management and advisor management systems and created a workflow between the back-end systems and Salesforce.com. This initial investment was around $30,000 for the workflow and data transfer.
For Salesforce.com customization, NRP used Echo Lane Inc., a San Francisco-based integrator that specializes in SaaS CRM. Echo Lane's custom coding cost about $10,000 and NRP still calls on the integrator to handle the heavy code lifting, such as integrating its Larkspur Data Resources Inc. prospecting database with Salesforce.com.
But NRP says the customization costs and ongoing integrations are well worth it. On the commission tracking side alone, NRP is now able to navigate the confusing sea of 6,000 retirement plan commission models from a single system.
"Paying commissions in our industry is painful because every fund company and platform does it a little differently. … Some [fund companies] charge you one lump sum for a plan; others pay by participant or by fund," Sokolic said. "Now we can easily aggregate and track what we owe our advisors and what they owe us."
Much of the configuration work, as far as designing fields and page layouts in Salesforce, can be done by Sokolic or another IT staffer, and advisors are able to customize Salesforce to their liking on their own, he said.
As far as the SaaS vs. on-premise systems battle, Sokolic said neither NRP nor its advisors would have been able to modify the CRM application had the company gone with other vendors it looked at, such as Microsoft or Sage Software Inc.'s ACT. "The biggest thing is that it needed to be simple enough for our advisors to customize and it had to be Web-based," Sokolic said. "A solution like ACT that is server-based wouldn't work for our business model, and I don't know for sure, but I don't think we could customize an ACT or Microsoft CRM like we've been able to with SaaS."
Off-the-shelf products would not have met NRP's release cycle needs, either. Since launching the SaaS CRM application last May, NRP has had eight release cycles to accommodate new functionality. By the time the company is a year into using the system, Sokolic expects that release number to be around 13.
"SaaS is a justifiable cost even if you have to continually pay for it, because in most cases SaaS vendors continue to move the product forward and you don't pay for those additions," he said. "If we had gone with Microsoft CRM, it would have been for a number of years with maybe one upgrade coming in a two-year free upgrade period. On top of that, we would be paying for the server and the body needed to support it."
Indeed, SaaS total cost of ownership remains the No. 1 concern among application decision makers, according to a Forrester Research Inc. survey.
Let us know what you think about the story; email: Christina Torode, Senior News Writer
