On-demand Demands Attention
Thursday, August 17th 2006

The one-time reserve of corporates, on-demand software is now accessible to businesses of all sizes.

"We're financial people, not technology experts," comments Liam Church, CEO of Acumen & Trust. His firm provides wealth management advice to high net worth individuals and employee benefits consultancy to corporate clients. It employs 24 people, up from a staff of eight less than two years ago. However, with the rapid growth came the need to invest in IT systems that could maintain high levels of customer service. The company had amassed more than 2,000 clients, making a customer relationship management (CRM) system a necessity.

"We had been paper based," Church relates. "Our sales process had been unstructured. In the absence of a central reservoir of customer data, managers found it difficult to delegate. As a result, we had overworked managers and staff, leading to long hours and frustration."

The choice for Acumen & Trust was a simple one: on the one hand was the traditional approach of client server software that the company would run from a large computer in its offices, with staff able to access it on their desktops. The alternative was the on-demand option, which is essentially software provided as a service over the internet, without the need to buy and install hardware or worry about software licences.

Acumen & Trust had heard about Salesforce.com which provides enterprise-class CRM. Unlike the client server option which requires a capital outlay up front, Salesforce.com is available for a monthly subscription, priced per user. The software is hosted offsite and is accessed through a web browser. One advantage to this approach is that when Salesforce.com makes quarterly upgrades to the software, they are made available to the customer immediately free of charge, removing the need to install new versions of the application on every user's machine.

"We implemented Salesforce.com because of its predictable cost, speed of implementation and low maintenance," says Church. "As it is a hosted service we don't need to worry about software, hardware or back up."

The handover from paper to online took just over a month and Church is in no doubt that it was the right move. "Implementing client server is a nightmare by comparison. You need to design, encode, test, run, roll it out and invariably you end up with something that isn't quite right, so you go through the process all over again," he relates.

By contrast, Salesforce.com was easy to set up and Church notes that Acumen & Trust has the flexibility to adjust the software in-house to suit its needs. "Salesforce.com is rich in functionality so we are constantly customising it to our specific business needs," he says. "The beauty of a hosted service is that our people can access it anywhere they have a web browser. This can be on the road, with a client in any country."

There have been other advantages: communications with clients are more streamlined through the use of web-based forms. Workflow has improved and client contact and service no longer depends on whether a particular executive is available. "We also have a much better view of our sales pipeline," adds Church. "Before this it was guesswork. We can now identify how many leads we have generated through individuals or marketing. We can see in chart form how many of these opportunities are being created into new business and how quickly. I get a full view on screen of how our business is doing at any point in time."

Before long we're likely to see many more firms take the same approach as Acumen & Trust, if forecasts by the IT analyst firm AMR Research are any gauge. It has predicted 20pc year-on-year growth in revenues for software as a service. Current revenues are US$2bn, less than one tenth of the total software market but showing faster growth than the traditional model.

Salesforce.com's efforts in this field have made the company almost synonymous with on-demand computing, but it doesn't have the field all to itself. Many of the technology industry's heavyweights are rowing in with similar or competing offerings, among them SAP and Siebel, which is now part of Oracle.

Even Microsoft, the biggest software company of them all, has begun talking about a very different future for software. Speaking mere weeks ago at a financial analyst meeting, Microsoft CEO Steve Ballmer acknowledged the change taking place in the market. "Software is becoming a service," he said. "Embracing advertising- and subscription-based models and internet-based delivery across Microsoft's product line is an important part of what we will do."

The trend has made its way into the indigenous market too: at the Irish Software Association's annual conference in Dublin earlier this year, software as a service was the term on everyone's lips. Melinda Ballou, a programme director with IDC, drew the analogy between the old and new distribution models with buying CDs versus downloading music from iTunes. She called it a dynamic area of the market and said it was equally suited to serving the needs of small or large businesses.

Not everyone agrees with this assessment: John Simpson, vice-president, EMEA (Europe, Middle East and Africa) for CRM at Oracle, recently claimed that the two approaches fit different business models and sizes, suggesting that the on-demand model is more appropriate for smaller companies with less in-house technical expertise.

Larger enterprises still favour the traditional model, he said. "When you get to large organisations, you get some very sophisticated requirements for CRM. The hosted model doesn't fit the bill," he argued.

Whatever the merits of either point of view, the bottom line for businesses is that they now have a viable alternative for how they buy and use many of their software applications.

Original Article: Irish Independent