Business Benefits of CRM in the Cloud for Midsize Companies

AMI-Partners Whitepaper Sponsored by

Business Benefits of CRM in the Cloud for Midsize Companies

December 2011

AMI-Partners 546 Fifth Avenue

Suite 22 New York, NY 10036

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Copyright AMI-Partners, 2011

Business Benefits of CRM in the Cloud

Table of Contents

Introduction ................................................................................................................................... 3 Core Benefits of Cloud Applications ......................................................................................................... 3 CRM in the Cloud for Midsize Businesses .............................................................................................. 4

Global Midsize Business Climate ................................................................................................. 5

Midsize Business CRM Drivers ..................................................................................................... 6 Midsize Business Requirements for CRM................................................................................................ 6

Driving Value across the Organization: Oracle CRM On Demand............................................ 7 Integrate Sales and Marketing .................................................................................................................... 8 Consistent, Continuous Experience ........................................................................................................... 9 Mobile Support ................................................................................................................................................. 9 Actionable and Insightful Business Analytics ......................................................................................10

Conclusion.................................................................................................................................... 11

About AMI-Partners.................................................................................................................... 12

? AMI-Partners, 2011

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Business Benefits of CRM in the Cloud

Introduction

Today, midsize companies face two fundamental challenges; they must nurture and expand business opportunities under dynamic market conditions, and achieve sustainable growth in an increasingly competitive environment. Like large enterprises, midsize companies need enterprise-class solutions to support day-to-day operations and maintain business efficiencies. Enterprise applications in particular, align strategically with midsize companies looking to fuel growth using automated business processes or company-wide intelligence. An AMI-Partners' study shows that nearly 80 percent of midsize companies worldwide regard enterprise applications (e.g., ERP, CRM, etc.) as essential to their organization's continued success.

Compared to large enterprises, however, many midsize companies do not have a wellestablished IT infrastructure to benefit from economies of scale. Limited financial capital often restricts their capabilities, while IT demands may steadily outgrow immediate IT resources -- including staff, budgets, and systems. Managing the core technologies necessary to run the business (e.g., IT security, data storage, IT networks) thinly stretches resources, leaving little time for more strategic IT initiatives--like customer relationship management (CRM) implementations--which are critical for business expansion.

Core Benefits of Cloud Applications

Midsize companies across the globe, nonetheless, are increasingly recognizing the benefits of cloud computing, including software-as-a-service (SaaS) or, cloud applications. Nearly 2-in-5 already deploys one or more cloud applications, and interest level across various business management applications is just as significant. Cloud applications represent a cost-effective and highly adaptable solution for midsize companies ?particularly with limited budgets, small IT staff and varying business requirements to consider. The overall cost, flexible commitment, and simpler deployment and maintenance are some of the main advantages of a cloud-based model.

Specifically, deploying cloud applications is chiefly an operating expense, as opposed to the typical capital outlay associated with enterprise-scale software deployments. The "pay-as-yougo" structure allows companies to procure (or terminate) additional capacity, seats, components or features, as business requires. Having a flexible service delivery model impacts midsize companies' ability to react to changes in the market, enabling them to remain competitive and sustain profitability.

? AMI-Partners, 2011

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Business Benefits of CRM in the Cloud

In addition, modern cloud applications are optimized for a browser-based environment, which improves manageability, upgrades and troubleshooting, and ultimately frees up IT staff to focus on the organization's strategic needs of growing top line revenue while positively impacting the bottom line profitability. IT departments significantly benefit from this type of architecture, which depending on the vendor, is typically housed in a world-class data center and provides superior performance and high availability.

With all of these factors combined, an increasing proportion of midsize companies worldwide are deploying various business management applications in the cloud. One of the most valuable is CRM. By 2015, AMI-Partners expects that 45 percent of all SaaS users within this segment will deploy a CRM cloud application.

CRM in the Cloud for Midsize Businesses With the mindset of midsize companies shifting to growth, businesses are taking steps to implement solutions to enhance organizational intelligence in an effort to drive greater performance in the market. Along with gains in productivity, attracting and retaining customers have become strategic priorities to improve competitive positioning and bottom-line results. As these strategic goals must be achieved in a cost-effective manner, cloud services are garnering increased acceptance among midsize companies. In particular, CRM has been a prime driver in the cloud market as basic CRM functions apply to many types of businesses and rapid deployment is attractive to companies seeking an immediate sales impact. For midsize companies, there are four key business requirements for successful implementation of CRM cloud applications:

Integration of sales and marketing for increased ROI Consistent, continuous experience from a customer perspective Mobile support for an increasingly flexible workforce Actionable and insightful business analytics

In this paper, we examine in particular, how Oracle's CRM cloud solution, Oracle CRM On Demand, meets these requirements and enables midsize companies to realize their growth aspirations. But first, we gain a perspective of the global business climate for midsize companies worldwide and drivers for CRM adoption.

? AMI-Partners, 2011

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Business Benefits of CRM in the Cloud

Global Midsize Business Climate

AMI-Partners' global research confirms the expansionist mindset of midsize companies. Average 2010 revenue for this market has increased considerably compared to that of the prior year. Over 60 percent of midsize companies worldwide expect a further rise in revenue this year, which falls in line with their more optimistic perceptions toward future business conditions (see Figure 1 below). Moreover, over 80 percent of midsize companies generated sales from large enterprises, which is a major motive for adopting advanced technology. In many instances, smaller companies need to extend their IT infrastructures to large customers and/or suppliers, in order to effectively respond to and manage these business dealings. Top-tier business applications help midsize companies implement efficient business processes and meet the higher demands of their large enterprise customer base. Cloud solutions have become a key means in building an enterprise-level IT network, more quickly and economically.

Worldwide Midsize Companies Expectations About Upcoming Business Conditions

Not sure 6%Get worse 9%

Get better 39%

Stay the same 45%

Figure 1: Worldwide midsize firm outlook on upcoming business conditions, AMI-Partners, 2011

Another strong indicator of growth plans is that more than a quarter of these companies are planning to expand their footprint by adding new business locations and nearly half plan to enlarge their staff in the next 12 months. Midsize companies tend to have employees that work outside of the office, with 4-in-5 managing a mobile workforce (or, employees travelling for business at least 20 percent of the time) and 3-in-5 supporting telecommuters. With this, enabling out-of-office or remote workers to seamlessly and securely connect to the company's IT network and resources is essential to supporting their productivity levels.

? AMI-Partners, 2011

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