Dears,
Mirror Mirror, On the wall. Here are some reflections of new realities.
With the days of never-ending on-premises engagements and limitless budgets long gone, CRM can no longer sustain the consultancies of yesteryear. But what kinds of professional services are still needed in today's CRM industry—and what kind of CRM are consultants selling?
When Mark Benioff cofounded Salesforce.com, in 1999, he loudly declared that the software-as-a-service (SaaS) model would drive into obsolescence the exorbitant installation-and-maintenance fees once commanded by consultancies. On-demand software could be up and running in a matter of days without putting a huge dent in budgets. SaaS vendors have stuck to the promise in many respects, providing low-cost, viable options for even the largest of enterprises. But pity the poor consultants! (Well, OK—maybe not.) Seriously, though: How are consultants faring in the changing software landscape? In the Age of SaaS, has the need for consultants evaporated alongside expensive license fees?
It’s clear that the professional services field hasn’t just packed up and faded away. Part of that is due to the continued existence of on-premises CRM implementations, which many analysts say will always have a place in the industry. However, as organizations ease away from on-premises software and look more favorably upon SaaS solutions, large-scale consulting and implementation lightens up, too. The consensus seems to be that the demand for professional services is still high—it’s just coming in a different form nowadays. With the emergence of Web services, consultancies are reshaping their offerings to meet the changing frontier. As services-oriented architecture (SOA) continues to blossom, organizations are emphasizing integration and flexibility.
So, was Benioff’s boast one of foresight or fantasy? Is there a need for CRM consultants in the cloud-computing world of Web 2.0?
So, was Benioff’s boast one of foresight or fantasy? Is there a need for CRM consultants in the cloud-computing world of Web 2.0?
Paradigm Shift
I think there is a revolution taking place in how consultancy services are delivered, both in the U.S. and globally.What’s pushing these trends is the ability to focus on value-added services—[that] has really differentiated consultancies that are providing high-end services [over] those services that are getting commoditized.
Take for example Accenture positions itself as a company that specializes in global management consulting, technology services, and outsourcing—and it’s the largest consulting firm in the world. Accenture’s clients include 80+ of the Fortune Global 100 and more than two-thirds of the Fortune Global 500. Mr.Driggs, the CRM Head of Accenture sees his role in the true sense of the word “consult”: He advises companies about creating and maintaining profitable customer relationships and building superior brand value to foster greater customer satisfaction and loyalty. For Driggs and his fellow consultants at Accenture, the professional services industry is not a matter of on-demand or on-premises segmentation—it’s about keeping customers. The main distinction, according to Driggs, is between companies pursuing emerging markets and those dealing with existing customers. He says the ultimate underlying message for consultants to impart, no matter the company type, is to be more customer-centric.
The competition for customers is huge .The need to be more customer-centric is there. At the same time, customer-satisfaction ratings are not improving and companies are struggling to keep pace. As satisfaction wanes, the economy weakens, and customers jump ship, a company’s needs change. A CRM consultant’s focus has to shift from technology to more of a top-down operational evaluation.
Whether it’s SaaS or a niche application or a large [enterprise resource planning] module, you have to figure out how that fits into your current technology environment—into current data, into the overall process and operating model environment.“The key message is that when you’re implementing these technologies, you’ve got to think about all three of those pieces.”
Take for example Accenture positions itself as a company that specializes in global management consulting, technology services, and outsourcing—and it’s the largest consulting firm in the world. Accenture’s clients include 80+ of the Fortune Global 100 and more than two-thirds of the Fortune Global 500. Mr.Driggs, the CRM Head of Accenture sees his role in the true sense of the word “consult”: He advises companies about creating and maintaining profitable customer relationships and building superior brand value to foster greater customer satisfaction and loyalty. For Driggs and his fellow consultants at Accenture, the professional services industry is not a matter of on-demand or on-premises segmentation—it’s about keeping customers. The main distinction, according to Driggs, is between companies pursuing emerging markets and those dealing with existing customers. He says the ultimate underlying message for consultants to impart, no matter the company type, is to be more customer-centric.
The competition for customers is huge .The need to be more customer-centric is there. At the same time, customer-satisfaction ratings are not improving and companies are struggling to keep pace. As satisfaction wanes, the economy weakens, and customers jump ship, a company’s needs change. A CRM consultant’s focus has to shift from technology to more of a top-down operational evaluation.
Whether it’s SaaS or a niche application or a large [enterprise resource planning] module, you have to figure out how that fits into your current technology environment—into current data, into the overall process and operating model environment.“The key message is that when you’re implementing these technologies, you’ve got to think about all three of those pieces.”
When Mark Benioff cofounded Salesforce.com, in 1999, he loudly declared that the software-as-a-service (SaaS) model would drive into obsolescence the exorbitant installation-and-maintenance fees once commanded by consultancies. On-demand software could be up and running in a matter of days without putting a huge dent in budgets. SaaS vendors have stuck to the promise in many respects, providing low-cost, viable options for even the largest of enterprises. But pity the poor consultants! (Well, OK—maybe not.) Seriously, though: How are consultants faring in the changing software landscape? In the Age of SaaS, has the need for consultants evaporated alongside expensive license fees?
It’s clear that the professional services field hasn’t just packed up and faded away. Part of that is due to the continued existence of on-premises CRM implementations, which many analysts say will always have a place in the industry. However, as organizations ease away from on-premises software and look more favorably upon SaaS solutions, large-scale consulting and implementation lightens up, too. The consensus seems to be that the demand for professional services is still high—it’s just coming in a different form nowadays. With the emergence of Web services, consultancies are reshaping their offerings to meet the changing frontier. As services-oriented architecture (SOA) continues to blossom, organizations are emphasizing integration and flexibility.
So, was Benioff’s boast one of foresight or fantasy? Is there a need for CRM consultants in the cloud-computing world of Web 2.0?
Paradigm Shift
I think there is a revolution taking place in how consultancy services are delivered, both in the U.S. and globally.What’s pushing these trends is the ability to focus on value-added services—[that] has really differentiated consultancies that are providing high-end services [over] those services that are getting commoditized.
Take for example Accenture positions itself as a company that specializes in global management consulting, technology services, and outsourcing—and it’s the largest consulting firm in the world. Accenture’s clients include 80+ of the Fortune Global 100 and more than two-thirds of the Fortune Global 500. Mr.Driggs, the CRM Head of Accenture sees his role in the true sense of the word “consult”: He advises companies about creating and maintaining profitable customer relationships and building superior brand value to foster greater customer satisfaction and loyalty. For Driggs and his fellow consultants at Accenture, the professional services industry is not a matter of on-demand or on-premises segmentation—it’s about keeping customers. The main distinction, according to Driggs, is between companies pursuing emerging markets and those dealing with existing customers. He says the ultimate underlying message for consultants to impart, no matter the company type, is to be more customer-centric.
The competition for customers is huge .The need to be more customer-centric is there. At the same time, customer-satisfaction ratings are not improving and companies are struggling to keep pace. As satisfaction wanes, the economy weakens, and customers jump ship, a company’s needs change. A CRM consultant’s focus has to shift from technology to more of a top-down operational evaluation.
Whether it’s SaaS or a niche application or a large [enterprise resource planning] module, you have to figure out how that fits into your current technology environment—into current data, into the overall process and operating model environment.“The key message is that when you’re implementing these technologies, you’ve got to think about all three of those pieces.”
PROCESS FIRST
“Business process” seems to be a popular catchphrase among vendors and analysts these days.. Although CRM Consultants are skilled at implementation and development, a different need is visible in the marketplace. I saw a lot of people wanting to get business consulting on the best way to use [a given] tool in [a given] business model. Many users didn’t know how to use the offerings to the extent. I always look at the customer system, and say, ‘Is it configured the way you need it to be configured?’ [Then I] come back with a recommendation list of what [the company] should be doing, and say, ‘This is the type of training you should give your employees.’ ”
With SaaS solutions on the rise, the need for systems integrators has significantly declined. Consultants now spend less time technically configuring an actual implementation and more time on consulting. I think where a buyer used to look at consulting to understand the technology and make it fit, now [consulting provides the] buyer an understanding of how it fits.
SHORT AND SWEET
Aside from helping to spawn a rise in business consulting, SaaS has shortened each implementation job, a factor that has forced many consultancies to adjust their operations. On-premises [implementations] could take one to three years. Today, the bulk of those multiyear gigs are history. Consultants can finish an installation job within a matter of weeks, which frees them to focus more on integrating solutions throughout the enterprise, rather than having to spend months (or years) making one bulky technology work. Organizations are not static—they change in two to three years. By the time we fully implement, their business has changed. One reason companies now tend to seek operational advice is because of this shorter time frame, but also because of the newfound flexibility within their consulting budgets—another benefit the speed of SaaS provides over the old on-premises consulting scene. When the project was going for two years [and companies] didn’t have any more hours left—they didn’t have the budget—[they’d] cut the training hours. Today, companies aren’t spending all the time on up-front costs. They have a nice bucket to focus on training and adoption. The cuts in integration and configuration have meant less revenue for consultancies. For an integrator, the time spent configuring is notably less. So it does erode earnings—and for [similar] implementations, you have less configuration and customization. With that in mind, some consultancies are upping the ante with overall business consulting, helping organizations to see the bigger picture by promoting the kinds of training programs that help drive user adoption and ensure the technology doesn’t go to waste. Analysts also note that, with SOA, there is more emphasis than ever on seeing the entire ecosystem. In addition, Web services and on-demand technology often involve an operational shift that consultants can help identify and administer.
The business model for consultancies can get out of whack as the drive toward shorter, briefer implementations perpetuates. Those accustomed to dedicating months—or sometimes years—to one project may find the bar being raised, and the need to develop an entirely new approach. Many of the core skills remain the same. If they try hard enough, consultants can find the connective tissue linking the old and new projects. So all the more the drive for customer centricity is something that has not changed—and it’s not likely to change anytime soon.
The adoption is too-often overlooked—training is glossed over, with users simply expected to adopt new software and tools. At the end of the day, if you don’t have people using [an] application, it’s failed. Even with SaaS’s easier implementation, there’s still a learning curve—employees need to understand the value of anything new.
PARTNERSHIPS, SEGMENTATION, AND COMMODITIZATION
The one segmentation trend is starting to appear: Consultancies are popping up to offer specific expertise with a particular vendor or solution. While this wisely targets a very niche audience, these consultancies might struggle down the road. Some also worry that off shoring services pose a threat to consultancies for one, remains convinced that there will continue to be a place for face-to-face consultation. Even though [there’s a] tremendous amount of off shoring, salaries [of consultants] are still relatively high. If you are willing to travel and you are able to perform reasonable consulting...you can pick your job right now. The demand is overwhelming
SHOWING CLIENTS THE MONEY
So with some consultancies offering solutions for every need, others specializing with one kind of software, and even some vendors offering professional services of their own, how are you supposed to know what to choose?
Any enterprise that wants to get it right will take time to sort through project objectives and work backward to think of skills and criteria: Who has the best skills to help us achieve that? “It’s a best-for-the-need world.”
Today’s CRM consultants can help companies fix problem areas such as sales processes. (20 points in revenue can be lost by companies that can’t police sales processes on their own.) . The modern CRM consultant best serves the client by aiming for customer centricity: “If I fix [a broken process] at the point of the customer, [the] business would be healthier.
And sometimes ROI is hard to gauge, even with SaaS. “When the [SaaS] consultant leaves, the end client has the SaaS product with features turned on—[but] with no real process or adoption practices,” adding that the client may “fumble initially out of the gate.The key is to ask basic questions before deploying: What’s your business model? What are you trying to manage? Where are the tools?Opting for plain-vanilla SaaS likely means less-than-full customer support, which means it’s critical that the tool adhere to your practices. You have to introduce it to your staff and understand why you’re implementing the tool.
Te switch from on-premises to on-demand can save anywhere from 40 percent to 60 percent of implementation costs, but he says it’s difficult to gauge whether the consultancy industry has picked up or dropped off dramatically. Consultants and analysts say the best of the firms pitching in on a CRM implementation—SaaS or not—are those trying to develop a positive customer experience. So, in the hunt for a CRM consultancy, look for one that engenders loyalty—and one that’s not too hard on the user. Any consultancy effort needs to work with other parts of the enterprise, not create a silo of its own.
But does any of that answer Benioff’s decade-old boast? Perhaps not, but Salesforce.com itself may provide an insight: In its most recent quarterly financial report, the original “no software” vendor’s line item for “professional services and other revenues” came to $23.4 million, an increase of 41 percent on a year-over-year basis.
Perhaps “the end of software” isn’t the end of professional services after all—just a shift in cost from implementation expense to business process consulting.
Any enterprise that wants to get it right will take time to sort through project objectives and work backward to think of skills and criteria: Who has the best skills to help us achieve that? “It’s a best-for-the-need world.”
Today’s CRM consultants can help companies fix problem areas such as sales processes. (20 points in revenue can be lost by companies that can’t police sales processes on their own.) . The modern CRM consultant best serves the client by aiming for customer centricity: “If I fix [a broken process] at the point of the customer, [the] business would be healthier.
And sometimes ROI is hard to gauge, even with SaaS. “When the [SaaS] consultant leaves, the end client has the SaaS product with features turned on—[but] with no real process or adoption practices,” adding that the client may “fumble initially out of the gate.The key is to ask basic questions before deploying: What’s your business model? What are you trying to manage? Where are the tools?Opting for plain-vanilla SaaS likely means less-than-full customer support, which means it’s critical that the tool adhere to your practices. You have to introduce it to your staff and understand why you’re implementing the tool.
Te switch from on-premises to on-demand can save anywhere from 40 percent to 60 percent of implementation costs, but he says it’s difficult to gauge whether the consultancy industry has picked up or dropped off dramatically. Consultants and analysts say the best of the firms pitching in on a CRM implementation—SaaS or not—are those trying to develop a positive customer experience. So, in the hunt for a CRM consultancy, look for one that engenders loyalty—and one that’s not too hard on the user. Any consultancy effort needs to work with other parts of the enterprise, not create a silo of its own.
But does any of that answer Benioff’s decade-old boast? Perhaps not, but Salesforce.com itself may provide an insight: In its most recent quarterly financial report, the original “no software” vendor’s line item for “professional services and other revenues” came to $23.4 million, an increase of 41 percent on a year-over-year basis.
Perhaps “the end of software” isn’t the end of professional services after all—just a shift in cost from implementation expense to business process consulting.
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