Managers of IGH Solutions struggled to integrate and share customer data among their ERP and Salesforce.com systems. This resulted in the double-entry of customer and prospect information and drove down the company’s user adoption rate. After implementing Microsoft Dynamics® CRM, data is entered once and user adoption increased by 246 percent. Overall, managers expect the solution to yield a projected return on investment (ROI) of 595 percent over the next three years.
Table 1 – Key financial benefits of the Microsoft Dynamics CRM implementation
|Net present value:||$1,086,441|
|Internal rate of return: ||252%|
|Payback period:||5.2 months|
IGH Solutions used systems that managed information and workflows in a way that did not match the company’s business processes. This led to unacceptable inefficiencies in the management of pre-sales activities, the quoting of bids and booking of new business as well as the delivery of customer and job information into manufacturing systems.
Managers traced the problem to poor data integration between the company’s systems. IGH has multiple instances of its enterprise resource planning (ERP) application, which operated independently to support various business lines. Moreover, the firm’s Salesforce.com application didn’t integrate with the ERP system.
This inability to share data effectively resulted in the redundant entry of data, low user acceptance of the customer relationship management (CRM) solution, limited or inaccurate visibility into future workloads, and disputes over the ownership of sales leads.
In practice, customer and prospect print jobs and billing information had to be manually double-entered into the ERP and Salesforce.com systems. And given the inflexibility of these solutions, managers were unable to implement workflows between the applications. As a result, salespeople spent more time on low-value administrative activities and less time on high-value sales functions.
Worse still, the effort to double-enter data discouraged the use of Salesforce.com. Over time, user adoption fell by 50 percent. Consequently, salespeople “did their own thing,” and efforts by sales managers to enforce and automate a consistent sales process were stalled.
After repeated meetings with Salesforce.com, managers concluded that the solution could not support complex integrations with their Hagan systems. Nor could the Salesforce.com technicians recommend a technology to facilitate the integration. That led IGH executives to search for an alternative CRM solution.Solution
The IT department worked with front-line managers to create the criteria for a CRM solution. The ability to integrate with the Hagan ERP applications topped the list so that the double-entry of data could be eliminated. Ease of use was also important managers reasoned, because it would allow them to drive up adoption rates and establish a company-wide sales-force automation solution.
Because salespeople spent their days using the Microsoft® Office Outlook® messaging and collaboration client, any solution would need to integrate seamlessly with this application. Limited IT support resources also mandated that any solution be very easy to maintain.
In the end, decision makers chose Microsoft Dynamics® CRM 4.0. To increase operational efficiencies, the firm’s parent company, Taylor Corporation, implemented the on-premise platform. Taylor Corporation then created a multi-tenancy environment to offer CRM services to all its divisions.
Working with Microsoft Gold Certified partner Inetium, the IT team integrated Microsoft Dynamics CRM with the firm’s Hagen ERP system. They used Microsoft BizTalk® server to establish pathways to move data between the systems. Today, customer and prospect data in Microsoft Dynamics CRM acts as the “master copy.” Then it is synchronized with the ERP systems so that other employees have access to current and accurate customer data.
In total, 80 IGH employees are using Microsoft Dynamics CRM. These users are primarily sales reps but also include sales managers and executives, sales-support staff, and customer service representatives. Salespeople use the sales module to track their activities and utilize workflows to follow up on new leads.Benefits
The deployment and integration of Microsoft Dynamics CRM with the company’s systems markedly increased the efficiency and productivity of the firm’s sales staff. Moreover, the CRM platform serves as a highly cost-effective means to deliver CRM services across the enterprise (see Figure 1).Directly Measurable Benefits
[see “Benefits” in Figure 2: The Definitive Economic Model]
Enhanced sales-team productivity valued at $1.2 million over the next three years. Managers estimate that the efficiency gains made possible by Microsoft Dynamics CRM granted each salesperson one additional hour of sales productivity per day. Multiplied by the number of salespeople, that represents well over a million dollars in value to the company during the next three years.
On-premise solution avoids $370,500 in Salesforce.com license fees. The on-premise deployment of Microsoft Dynamics CRM for use across the company’s divisions allowed managers to offer CRM services at a cost 96 percent lower than Salesforce.com. Over three years, projected Salesforce.com costs of U.S.$125 per user would have resulted in license fees approaching $400,000.
Improved administration productivity to save $20,500 over next three years. Previously, the finance and order processing staffers had to manually double-enter data into various systems. Not only was this low-value task time consuming, it also resulted in errors—which consumed more labor hours to identify and fix. By eliminating the double-entry of data and all but eliminating the errors, Microsoft Dynamics CRM will save the equivalent of $20,500 in labor costs over the next three years.
Additional Value to the Business
|Figure 1: Projected three-year costs and benefits of Microsoft Dynamics |
User adoption increased by 246 percent and continues to grow. For Microsoft Office Outlook users at IGH, the Microsoft Dynamics CRM interface was very easy to learn and use. The integration with the company’s ERP systems eliminated the double entry of client and prospect data. A single, easy to access repository of data provides granular visibility into customer data. Collectively, these benefits led to a dramatic increase in the number of employees who adopted, and use, the CRM solution on a daily basis.
Consequently, managers met their goal of establishing a single, standardized sales-force automation system.
Standardized solution for use across the enterprise. Taylor Corporation uses a cost-effective IT operations model where applications are hosted and maintained centrally. The parent company is responsible for the administration of the Microsoft Dynamics CRM environment and the backup of its data.
By taking advantage of the Microsoft Dynamics CRM multi-tenancy capability, managers can easily and economically offer CRM services to IGH and other divisions. IGH managers in turn configure fields and workflows to adapt the solution to their specific business needs.The Investment
[see “System” and “IT Costs” in Figure 2: The Definitive Economic Model]
IGH’s investment in Microsoft Dynamics CRM included implementation costs and IT expenditures in software, hardware, ongoing maintenance, and staffing.
- Costs associated with the firm’s implementation included the selection of a CRM solution along with the scoping of the project, the project design, hiring an outside implementation resource (partner), and developing the solution to fit IGH’s business needs. These expenses totaled $103,000.
- Expenses for infrastructure (hardware and software) and staffing over three years are estimated to reach $178,983. Adding these two costs together yields a total projected CRM system cost of $281,983.
Ultimately, IGH’s parent company, Taylor Corporation, utilized the CRM platform’s multi-tenancy capability to implement an economical CRM service model. Whereas Salesforce.com charged a monthly fee of $125 per user, IT managers charge back a monthly fee of $6.50 for Microsoft Dynamics CRM services. That represents a 95 percent savings over Salesforce.com.
Another advantage of “hosting” the on-premise CRM solution centrally is that the cost per user will diminish over time as more users are added. While some incremental costs will be incurred, the consolidation of hardware, software, and administrator resources to support the solution centrally delivers the most economical approach. Hence, managers will be able to shift needed funds elsewhere in their IT budgets while meeting the CRM needs of its employees.
|Figure 2: The Definitive Economic Model™|
About The Optera Group, LLC1
The Optera Group, LLC (Optera) is a professional services firm specializing in understanding the business value of technology and the strategic use of technology to generate sustained economic value. Opera advises clients on their market strategies and the way their solutions create value in real world implementations. Optera has extensive experience in IT best practices, business IT alignment issues and defining the Definitive Economic Value TM of technology investments.
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About the Method and General Disclaimers
This report provides an illustration of the potential total cost of ownership (“TCO”) and other financial results a customer or interested party may achieve by implementing various technology solutions. The results shown are based on The Optera Group, LLC’s (Optera) independent analysis of the expected costs and benefits associated with the implementation described above and is based upon the application of assumptions provided by the organization described in this study. Actual results may vary depending on factors associated with a specific implementation. Optera does not guarantee the timeliness or completeness of the information provided by this report or warrant any results from your use or reliance upon the information.
For More Information
Microsoft Dynamics is a line of integrated, adaptable business management solutions that enables you and your people to make business decisions with greater confidence. Microsoft Dynamics works like familiar Microsoft software such as Microsoft Office, which means less of a learning curve for your people, so they can get up and running quickly and focus on what’s most important. And because it is from Microsoft, it easily works with the systems that your company already has implemented. By automating and streamlining financial, customer relationship, and supply chain processes, Microsoft Dynamics brings together people, processes, and technologies, increasing the productivity and effectiveness of your business, and helping you drive business success.
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