Lower TCO and Higher ROI


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Lower TCO and Higher ROI

  1. 1. Lower TCO and Higher ROI Al Falcione, salesforce.com Wanda Dembeck, R. L. Polk & Co. Tom Ford, Polycom Track: IT Executive Track
  2. 2. Safe Harbor Statement <ul><li>“ Safe harbor” statement under the Private Securities Litigation Reform Act of 1995: This presentation may contain forward-looking statements the achievement of which involves risks, uncertainties and assumptions. If any such risks or uncertainties materialize or if any of the assumptions proves incorrect, our results could differ materially from the results expressed or implied by the forward-looking statements we make.  All statements other than statements of historical fact could be deemed forward-looking, including any projections of subscriber growth, earnings, revenues, or other financial items and any statements regarding strategies or plans of management for future operations, statements of belief, any statements concerning new, planned, or upgraded services or technology developments and customer contracts or use of our services. </li></ul><ul><li>The risks and uncertainties referred to above include - but are not limited to - risks associated with the integration of Sendia Corporation’s technology, operations, infrastructure and personnel with ours; unexpected costs or delays incurred in integrating Sendia with salesforce.com, which could adversely affect our operating results and rate of growth; any unknown errors or limitations in the Sendia technology; any third party intellectual property claims arising from the Sendia technology; customer and partner acceptance and deployment of the AppExchange and AppExchange Mobile platforms; interruptions or delays in our service or our Web hosting; our new business model; breach of our security measures; possible fluctuations in our operating results and rate of growth; the emerging market in which we operate; our relatively limited operating history; our ability to hire, retain and motivate our employees and manage our growth; competition; our ability to continue to release and gain customer acceptance of new and improved versions of our CRM service; unanticipated changes in our effective tax rate; fluctuations in the number of shares outstanding; the price of such shares; foreign currency exchange rates and interest rates. </li></ul><ul><li>Further information on these and other factors that could affect our financial results is included in the reports on Forms 10-K, 10-Q and 8-K and in other filings we make with the Securities and Exchange Commission from time to time, including our Form 10-K for the fiscal year ended January 31, 2006. These documents are available on the SEC Filings section of the Investor Information section of our website at www.salesforce.com/investor . </li></ul><ul><li>Any unreleased services or features referenced in this or other press releases or public statements are not currently available and may not be delivered on time or at all.  Customers who purchase our services should make purchase decisions based upon features that are currently available.  Salesforce.com, inc. assumes no obligation and does not intend to update these forward-looking statements, except as required by law. </li></ul>
  3. 3. Agenda <ul><li>ROI/TCO Overview </li></ul><ul><li>R.L. Polk Case Study </li></ul><ul><li>Polycom Case Study </li></ul><ul><li>Q&A </li></ul>Al Falcione Salesforce.com Wanda Dembeck R. L. Polk & Co. Tom Ford Polycom All
  4. 4. Al Falcione Director, Product Marketing [email_address]
  5. 5. What is ROI and TCO? Return on Investment (ROI) Benefit - Cost = Revenue or Net Profit Total Cost of Ownership Payback Period (months) Total Cost Benefit (per month) Internal Rate Return (5 year) Benefit - Cost Cost (over 5 years) NPV (months) Benefit - Cost (discounted)
  6. 6. ROI for CRM Includes Revenue and Cost Analysis Sales Marketing Service & Support Close Rates Deal Size Productivity/Time Visibility & Forecasting Revenue per Rep Benefit Customer Satisfaction Customer Retention Upsell/Cross-sell Leads Conversion Rates Campaign ROI Revenue Contribution Revenue Contribution Total Revenue (return) Sales Metrics Marketing Metrics Service & Support Metrics Software Hardware Deployment and Testing Total Cost Ownership (investment) Configuration and Rollout Integration Maintenance/ Upgrades Revenue and cost metrics include those typically effected by salesforce.com IT Costs Costs Subscription/ License Support Services Resolution Time Case Efficiency Poor Quality Ongoing Management Administration Personnel Campaign Costs Non-Customer Time Operations & Administration Business Costs
  7. 7. Use ROI and TCO for Everything! <ul><li>Initial Purchase </li></ul><ul><ul><li>ROI for budgeting </li></ul></ul><ul><ul><li>TCO for software comparison </li></ul></ul><ul><li>Renewal </li></ul><ul><ul><li>Ongoing ROI </li></ul></ul><ul><li>Org Consolidation </li></ul><ul><li>ROI of single customer view, integrated forecasting </li></ul><ul><li>Mobile </li></ul><ul><li>ROI for productivity </li></ul><ul><li>AppExchange Applications </li></ul><ul><li>Lower TCO with fewer platforms </li></ul><ul><li>Higher ROI with improved data sharing, productivity, better decisions </li></ul><ul><li>Upgrade </li></ul><ul><ul><li>ROI for workflow, APIs, campaigns, etc </li></ul></ul><ul><li>Sandbox </li></ul><ul><ul><li>Sarbanes-Oxley Compliance </li></ul></ul><ul><ul><li>TCO vs. Development Environment </li></ul></ul>Buy
  8. 8. ROI Beyond CRM Recruiting Professional Services Finance/ Accounting Human Resources Project Management Key Metrics Key Metrics Productivity/ Time Savings Faster Proposal Time Expense Tracking Productivity/ Time Savings Accuracy Improved Recruiting Success Productivity/Time Savings Bug Tracking Case Management IT Management Key Metrics Faster Resolution Productivity/Time Savings Custom Applications Discounting Approval Key Business Metrics SOX Compliance Reduced approval costs by 75% Site Survey Google Mash-up 25% Reduction in Site Survey Cost Change Mgmt Reduce Manual Process Automated Approvals + 38,000 Other Custom Objects and Applications Reduced Cost of Managing Desktop Apps IT Costs Key Metrics
  9. 9. Wanda Dembeck VP, Global Initiatives [email_address]
  10. 10. R. L. Polk & Co. Overview <ul><li>Automotive Market Intelligence </li></ul><ul><li>Markets include automotive manufacturers, truck, aftermarket, dealers, government, insurance, market research, marketers </li></ul><ul><li>Salesforce.com users since 2000 </li></ul><ul><li>Systematically implemented SFDC to achieve a 360 o view of customer including marketing, leads, opportunities, service. </li></ul><ul><li>Today’s presentation focused on ROI of customer service and quality components </li></ul>INDUSTRY: Premier provider of automotive intelligence EMPLOYEES: 1,300 GEOGRAPHY: Offices in USA (MI, CA, NJ), Canada, UK, Germany, Spain, France, Australia, China, Japan PRODUCT(S) USED: Sales, Marketing, Service & Support, 13 custom objects, 6 custom tabs, AppExchange downloads # USERS: 400
  11. 11. Key Challenges Before Salesforce Service & Support Implementation – North America <ul><li>Visibility into Customer Issues: 10% </li></ul><ul><ul><li>Management found out about them when the customer became frustrated enough to call upper management </li></ul></ul><ul><li>Understanding of Source of Issues: 10% </li></ul><ul><ul><li>Ad hoc only; no metrics or analysis on source of quality issues; went by intuition </li></ul></ul><ul><li>Customer Satisfaction </li></ul><ul><ul><li>“ Polk provides excellent customer service” – 81% positive </li></ul></ul><ul><ul><li>“ I would recommend Polk to a colleague” – 85% positive </li></ul></ul><ul><ul><li>Percent of open ended question on Polk weaknesses that mentioned problem resolution and speed: 2.5% </li></ul></ul><ul><li>Repeating Quality Issues </li></ul><ul><ul><li>Estimated percent of quality issues that repeated themselves: 50% </li></ul></ul><ul><ul><li>Preventative Actions put in place annually: 100 </li></ul></ul><ul><li>Costs Generated by Quality Issues </li></ul><ul><ul><li>Estimated over $1.5 million spent on addressing quality issues reactively </li></ul></ul>
  12. 12. Integrated CRM Solution for Driving Positive Return <ul><li>Salesforce Service & Support was a critical component in the implementation of our best-in-class issue resolution process which included: </li></ul><ul><ul><li>Case and CAR (Corrective Action Report) process </li></ul></ul><ul><ul><li>Case Escalation </li></ul></ul><ul><ul><li>CAR SLA Definition and Commitment </li></ul></ul><ul><ul><li>CAR Metrics Tracking and Reporting </li></ul></ul><ul><ul><li>Post-CAR Customer Satisfaction Survey </li></ul></ul><ul><li>Service & Support Cases, CAR Custom Tab, Survey </li></ul><ul><li>400 Users </li></ul><ul><li>Trained all users on process and tool </li></ul><ul><li>Sales, Operations, Quality </li></ul><ul><li>Currently launching in Europe </li></ul>DEPLOYMENT DETAILS
  13. 13. Positive ROI for R. L. Polk <ul><li>Visibility into Customer Issues: 10% 100% </li></ul><ul><ul><li>Management found out about them when the customer became frustrated enough to call upper management </li></ul></ul><ul><li>Understanding of Source of Issues: 10% 100% </li></ul><ul><ul><li>Ad hoc only; no metrics or analysis on source of quality issues; went by intuition </li></ul></ul><ul><li>Customer Satisfaction </li></ul><ul><ul><li>“ Polk provides excellent customer service ” – 81% positive 87% </li></ul></ul><ul><ul><li>“ I would recommend Polk to a colleague” – 85% positive 90% </li></ul></ul><ul><ul><li>Percent of open ended question on Polk weaknesses that mentioned problem resolution and speed: 2.5% .75% </li></ul></ul><ul><li>Repeating Quality Issues </li></ul><ul><ul><li>Estimated percent of quality issues that repeated themselves: 50% 1.6% </li></ul></ul><ul><ul><li>Preventative Actions put in place annually: 100 1440 or 1340% increase </li></ul></ul><ul><li>Costs Generated by Quality Issues </li></ul><ul><ul><li>Estimated over $1.5 million spent on addressing quality issues reactively Estimated cost avoidance annually $1,190,354 </li></ul></ul>
  14. 14. Key Metrics Tracked on Ongoing Basis <ul><li>CAR Metrics are reviewed monthly by North American Leadership Team, including: </li></ul><ul><ul><li>Case volumes by Owner, by Customer, by Product </li></ul></ul><ul><ul><li>Re-occurring CARs </li></ul></ul><ul><ul><li>COPQ – Cost of Poor Quality </li></ul></ul><ul><ul><li>SLA performance </li></ul></ul><ul><ul><li>CAR Customer Surveys </li></ul></ul>
  15. 15. Key Metrics Improvements <ul><li>More immediate insight and metrics allow us to adjust faster to get improvement faster – detailed, daily insight versus annual, high level insight </li></ul><ul><li>In the last four months, we’ve used the CAR data and survey responses to jump on hot areas: </li></ul><ul><ul><li>“ Gave firm commitment date for follow up” from 44% to 62% </li></ul></ul><ul><ul><li>“ Issue resolved to customer’s satisfaction” from 88% to 93% </li></ul></ul><ul><ul><li>Externally identified issues from 117 to 53 </li></ul></ul>ROI Highlights Customer Satisfaction: Increase from 88% to 93%
  16. 16. Ongoing Success <ul><li>Future: Moving from reactive to proactive – CAR to PAR (Preventative Action Reports) </li></ul><ul><ul><li>Creating customized PAR tab capture, assign and track continuous improvement opportunities BEFORE they are a customer issue </li></ul></ul><ul><ul><li>Tracking validation / metrics of proactive continuous improvement efforts (Six Sigma) </li></ul></ul><ul><li>Future: Europe and Asia/Pacific to achieve the same results!! </li></ul>
  17. 17. Tom Ford Sales Operations Manager [email_address]
  18. 18. Polycom Overview <ul><li>World leader in Unified Collaborative Communications (UCC) solutions…voice, video, data and web collaboration </li></ul><ul><li>On-demand solutions enable companies and organizations to achieve maximum productivity and efficiency </li></ul><ul><li>HQ: Pleasanton, CA NASDAQ: PLCM </li></ul><ul><li>Salesforce implemented 2003 </li></ul>INDUSTRY: Telecommunications EMPLOYEES: 1,600+ GEOGRAPHY: Global PRODUCT(S) USED: Everything except cases, Custom Tabs, 2 Custom Objects, DemandTools # USERS: 400
  19. 19. Polycom UCC Delivers Real Results Improved Day-to-day Efficiency, Effectiveness “ Enables the company to respond very quickly to changing customer preferences and buying trends” Virtual Teams Get Product to Market Faster “ Several months savings on a new drug development cycle which can mean potential sales of $1M per day” Increased Individual Productivity “ Connect 130 sites for a single meeting, savings of $2.5 million to date in enhanced productivity” “ While you can’t always replace an initial handshake with a video call, many a deal has been closed over video at Bear Stearns” Virtual Sales Calls Increase Revenue “ Travel savings amount to over $130,000 per month” Improved communications reduce expenses
  20. 20. Key Challenges Before Salesforce.com <ul><li>Polycom helps organizations maximize efficiency/productivity through better COMMUNICATION . . . but we needed someone to help us improve how we dealt with INFORMATION! </li></ul><ul><li>Sales team’s general inefficiency and lack of productivity </li></ul><ul><li>No central repository for sales information (spreadsheets) </li></ul><ul><li>Too much time spent “chasing & analyzing” outdated information </li></ul><ul><li>Hard to predict or drive linearity </li></ul><ul><li>Not enough time spent with customers and channels to grow business </li></ul><ul><li>Too many highly manual and/or “paper based” processes </li></ul>
  21. 21. Integrated CRM Solution for Driving Positive Return <ul><li>Chose salesforce.com over Siebel and PeopleSoft </li></ul><ul><li>Eight week implementation (2003) </li></ul><ul><li>Immediately benefited from forecast accuracy (now within 2% of revenue) </li></ul><ul><li>Dramatic improvements in efficiency and productivity </li></ul><ul><li>Saved minimum of 1 day per week in lost productivity for sales reps and mgmt </li></ul><ul><li>Salesforce – single admin with no IT support required (low cost to operate) </li></ul><ul><li>Incredibly easy to customize/modify – add new fields, custom objects, etc. </li></ul>ROI Highlights Sales Forecast Visibility: accuracy within 2% of projected
  22. 22. Challenges with Non-Standard Terms (NST) Requests & Authorization <ul><li>Spreadsheet request process </li></ul><ul><li>Spreadsheet emailed manually for approvals </li></ul><ul><li>No real-time visibility to status </li></ul><ul><li>Typical approval averaged 5 to 7 days </li></ul><ul><li>Incredibly inefficient – countless hours wasted </li></ul><ul><li>Manual tracking and reporting </li></ul><ul><ul><li>Limited capability </li></ul></ul><ul><ul><li>SOX concerns: auditing approvals and request details </li></ul></ul><ul><li>Very difficult to reference requests for order processing </li></ul>Before Salesforce and AppExchange: Manual Non-Standard Terms Request Process
  23. 23. NST with AppExchange <ul><li>Implemented custom object < 60 days </li></ul><ul><li>Links to required forms from Opportunity – easy to complete and update </li></ul><ul><li>Click single link to submit for approvals </li></ul><ul><li>Workflow rules automate email notifications (and Tasks) to approver </li></ul><ul><li>Real time tracking in Salesforce </li></ul><ul><li>Many requests fully processed in a few hours </li></ul><ul><li>Estimate 75% decrease in time and costs related to old process </li></ul><ul><li>Reporting is simple, fast, and available real-time </li></ul><ul><li>Approved NSTs are “locked” from edits and approvals are recorded with a “snapshot” </li></ul>After Salesforce and AppExchange: ROI Highlights NST process with AppExchange: 75% decrease in time & costs
  24. 24. NST Tracking – Opportunity Record
  25. 25. NST Form - Partial
  26. 26. Positive ROI or Reduced TCO for Polycom <ul><li>Dramatic improvements in efficiency and productivity </li></ul><ul><li>Sales reps/mgrs save average of 1 full day per week on reporting/forecasting alone and 75% reduction in time/cost for NSTs </li></ul><ul><li>Single admin (no IT background was required) </li></ul><ul><li>Improvements: Dashboards, win/loss reporting </li></ul><ul><li>Campaign and Lead management </li></ul><ul><li>Accuracy: forecast within 2% of revenue </li></ul><ul><li>Higher customer satisfaction –more time to spend with customers and channels to grow the business </li></ul><ul><li>Everyone wants to use Salesforce.com! </li></ul>ROI Summary Sales Reporting: Save 1 day per week per rep NST: 75% reduction in time & costs, fast & easy reports Admin: 1 admin Visibility: 98% forecast accuracy
  27. 27. Al Falcione Director, Product Marketing Wanda Dembeck VP, Global Initiatives QUESTION & ANSWER SESSION Sales Operations Manager Tom Ford