No industry segment seems to be in greater flux than that of the package software giants, merging and evolving and captivating the attention of businesses small and large. And arguably, there is no greater change taking place across the software world than what we are seeing in the areas of solutions designed for sales force automation and especially solutions linked to business intelligence.
With so much turnover in the software marketplace, a rather amazing thing is happening—or rather, happening again. Many companies are going back to the days of hiring developers to build custom products; only this time the products they seek are not designed to balance accounts receivable and payable. Their mission is to provide accurate, timely information to decision-makers across all strata of organizations. Organizations that live and die by the thing called Sales.
In the mid ’90s, ERP systems were becoming more integrated and focused on supply chain optimization and ecommerce but still lacked sales force automation or business intelligence capabilities. Siebel products led the way by linking mobile sales forces in ways that had not been done or imagined before. Then along came cell phones, PDAs, wireless modems and laptops, and suddenly you’re entering a sales order as your MD-80 seat mate is jostling you while stowing her carry-on and apologizing all the while.
Time passed and companies began to measure the costs associated with this new functionality around SFA, and based on recent experiences with approximately 50 Fortune 1000 companies across the United States, we believe roughly 10 percent of them are now considering alternatives to their current systems. But, you might ask, for what other reasons besides licensing and integration costs would a company with 10-plus years using pre-packaged software suddenly be motivated to internalize the project with custom development?
Competitive advantage
Some companies believe that in today’s business climate, competitive advantage is important enough to mandate the development of proprietary SFA software. In addition, we believe the shift is also motivated by the desire to have more control of revisions, changes and quick fixes needed without delay.
There are other factors at play, as well. Hardware costs have come down across the marketplace, and the overall expense associated with deploying a web-based program has also fallen dramatically.
The promise of lower costs and more control associated with custom development, however, does bring new risk. For instance, now that you are back into software development, you are totally reliant on your own resources to ensure reliability. And what about best practices? Who’s making sure you are keeping up with innovation across other industries, supply chain advancements and hardware changes?
Ultimately, if you haven’t thought of it, you’re not gonna’ have it.
So how difficult is developing your own sales force application? If you look at the models presented by salesforce.com and other relative newcomers to the CRM space, it’s not difficult to put a program in place and have it up and running in a matter of months. New developments are also coming with the rise of open source software, like SugarCRM and the Business Process Management Initiative (BPMI). Companies like Savvion are making custom development cheaper, faster and more easily integrated into a heterogeneous software environment.
So where is your company in this discussion? Wondering what’s in store for your sales automation system? Will you have to change vendors, or have you thought twice about custom-dev? Heard about a peer who’s outsourcing a test this summer? You still have choices, and at this stage there seems to be no clear direction. In a May 16, 2005, article titled, The Critical Questions To Ask Before Embarking on BI Standardization, AMR Research authors Jacqueline Coolidge and Marc A. Meunier wrote, “Companies will continue to both build their own analytic applications and buy applications from vendors that instantiate deep domain expertise in a specific business process or vertical industry.”
Unfortunately, these choices are probably becoming more difficult than ever, but luckily, many of them are being driven by cost. It’s hard to ignore the savings of custom development, but don’t get caught spending less and getting less. Your company can develop its own systems and do it well if you remain true to your sales strategy.
