The pitch for sales software

If there was technology that could help your sales force better manage contacts, generate higher sales, and close more deals, would you invest in it? Well, such a solution does exist in the form of sales force automation (SFA) software. The concept has been a little slow to catch fire, however: According to Boston-based research firm Aberdeen Group, some companies — and salespeople — remain skeptical of the effectiveness of SFA tools. But with growth back on the corporate agenda, it could be time for another look at SFA.

How to proceed with SFA may be the most important question. In a recent sales effectiveness survey of more than 200 sales, marketing, and IT management executives, Aberdeen Group asked how effective they believed their sales efforts were — and to back up their perceptions with some specific metrics. The results revealed that although quantity and quality of leads were of paramount importance to sales and corporate management, productivity was the most important factor for sales reps. In other words, salespeople think that they need more time to sell to the prospects they already have. With that in mind, Aberdeen Group recommends that any SFA investments be targeted at the needs of the sales representatives and in support of the selling process.

The survey also uncovered a strong — and for the most part overlooked — correlation between the degree of collaboration within a company and the effectiveness of that company’s sales force. This supports the idea that selling is increasingly becoming a team, rather than individual, activity. So SFA investments should aid productivity and collaboration.

What kind of solution is best for you as part of your multichannel efforts to sell to other businesss? Not surprisingly, that depends on the size of your company — and of your budget. “It always makes sense to have, at a minimum, some kind of centralized contact management solution,” says Liz Herbert, an analyst with Cambridge, MA-based Forrester Research. At the most basic level are software packages such as ACT!, GoldMine from FrontRange Solutions, and Prophet from Avidian Technologies. “These are first-step contact managers that allow you to see what’s going on, where you’re winning and losing deals, and keep track of activities,” Herbert says. “They help the salesperson, and especially help if you’re transitioning to a new salesperson.”

ACT!, the granddaddy of contact managers, has been through a number of owners, the most recent being The Sage Group, represented in the U.S. by Best Software (along with its sister product, SalesLogix). It allows users to store contact information and to import that data from Microsoft Outlook, Palm Desktop, and other sources. And it’s been bulked up with bells and whistles such as the ability to attach presentations and proposals to Activities, Notes, and History items, plus improved, built-in sales and forecasting tools. Of particular interest to b-to-b salespeople are new company records capabilities, to get a more complete picture of the entire relationship with any company; it’s still a top-notch appointment calendar as well. ACT! is also pushing its tighter Outlook integration, no doubt reacting to competition from Prophet 2004, which claims to be the only sales management app in its market that integrates fully with Outlook and is sales specific. Avidian boasts that unlike ACT! or GoldMine, Prophet users may continue to use all the Outlook e-mail, calendar, appointments and tasks features they love while also being able to create and manage sales opportunities associated with their Outlook contacts without constantly moving between two applications or synching databases.

The most important factor in the midmarket range of SFA software is the strong emergence of hosted solutions, which are housed and maintained by an application service provider (ASP) via the Web. Herbert notes that at Forrester, “more than 50% of the people we’re talking to are now looking at hosted solutions.” The main advantage to a hosted solution, of course, is that the user company has far fewer costs; “because you’re simply accessing the hardware over the Web, you don’t have to worry about IT people or anything; it’s a much lower investment and quicker ROI,” says Herbert. In a September 2004 Forrester report Herbert noted, “For firms with limited (or zero) IT resources, the hosted-vs.-licensed decision is a no-brainer. Even at larger firms with well-staffed IT departments, hosted is the best option if the internal team lacks the skills, time, or interest in taking on the project.” Hosted solutions also allow customers to grow and shrink their implementation — both number of users and modules of functionality — as needs change.

But while hosted solutions have been around since 1999, they had failed to gain more dominance in the marketplace due to some drawbacks. The hosted vs. licensed argument cuts in a variety of ways; Forrester’s report noted, “With customization tools geared toward business administrators instead of IT types, hosted solutions are easier to customize — but have limited flexibility. As one ASP customer put it, ‘My hosted CRM app is a vanilla solution that I can customize to an extent.’ On-premise systems like Siebel have more capabilities for customization and integration but are more difficult to customize — and much easier to overcustomize.”

As part of its September report, Forrester did a price comparison for a typical hosted solution vs. software installation and found that the initial ASP software ran around $168,000, while licensed software cost $200,000. But the hosted solution had none of the $40,000 hardware/OS costs associated with the licensed software, saving about $16,000 each on customization and integration costs. Thus the total initial ASP implementation costs were $336,000, while those for licensed software were $440,000. But while hosted solutions are cheaper up front, licensed solutions have lower ongoing software costs and become the cheaper option in year three or after.

What’s more, the Forrester report noted that “for firms with field sales reps that need either offline or strong PDA support, licensed solutions provide better options, usually providing full functionality in the offline client.” Hosted applications often “lag in the offline arena with products that lack full functionality, such as analytics and the content library — usually a symptom of offline products developed as afterthoughts.”

Don’t write off hosted solutions as an option, however. Improvements in software capability and advances in wireless technology are now overcoming most of these shortcomings. Last fall Forrester reported that to bridge the gap, “New entrants like NextSale developed a full functionality product version in parallel with its hosted offering, and ASPs such as and Salesnet are improving wireless access with tailored screens and navigation shortcuts for PDAs.”

And, Herbert now says, “while a salesperson who wants to work without Internet access is limited to what can be done offline, what we’re starting to see are people buying these new BlackBerry add-ons, so a salesperson who uses one of those wireless devices can access the full SFA functionality.” The hosted solutions are becoming much more flexible, says Herbert, with providers now creating more and more tools businesspeople can use.

The highest demand for hosted solutions, says Herbert, comes from the midmarket segment, although she’s starting to see some demand from larger companies that would normally stick with licensed enterprise software providers such as Siebel, Oracle, and SAP. In response to this growing demand, licensed CRM vendors including Siebel and Epicor are beginning to offer hosted versions of their on-premises software or to provide a completely different product for the ASP space.

Whether hosted or licensed, the value of an SFA system depends on the quality of the data it contains. Forrester advises companies to look for strong tools for detecting duplicates, merging records, and tracking many-to-many relationships to gain a complete picture of their customers. Firms also need a flexible forecasting tool that accurately represents the sales pipeline without forcing reps to learn a new forecasting process.

Finally, too many sales managers are stuck in the old-school style of reporting: exporting everything to Excel long after an SFA system is in place. So in addition to sophisticated analytics capabilities such as dashboards with color-coded gauges and dials to alert managers to problems as they arise, look for a strong set of tools for customizing reports without creating a whole new set of analyses in Excel.

South Salem, NY-based freelance writer Jeff Morris writes frequently on technology and retail topics.

SFA software: The hosted top eight

Here are eight vendors of hosted SFA solutions singled out by Cambridge, MA-based Forrester Research in its April 2005 “The Forrester Wave” evaluation.

LEADERS Said to provide the strongest SFA functionality overall; also includes some customer service and marketing features. “Provides eight light vertical templates and an impressive set of customization and integration tools to enable firms to create a solution that fits their business needs.”

Siebel CRM OnDemand Offers strong SFA, some e-mail marketing, and some additional-cost integrated contact center functionality. With a hosted data warehouse for more-advanced historical analytics, Siebel has strong customization and integration tools but is said to still lack some advanced capabilities; this can mean firms are limited to using custom fields to manage entities such as suppliers to manufacturing companies.


RightNow Has made impressive progress during its first year in the sales component market, building on its strength and experience in hosted customer service/CRM.

NetSuite A strong all-in-one front- and back-office solution spanning enterprise resource planning (ERP), accounting, and e-commerce, best fit to wholesale, distribution, online retail, and high-tech industries requiring tight integration between front and back offices.

Entellium Offers strong sales automation and basic service, with a strong focus on usability, customer support, and cost-effectiveness. Thanks to an innovative modular pricing model and bundled features, it offers one of the lowest prices on the market.

Salesnet A deeply focused sales solution that embeds sales best practices, Salesnet is a strong fit for independent sales organizations within larger enterprises. It is also a good fit for resellers looking to add sales automation to their portfolio.


NextSale entered the market in 2004 with an easy-to-use product focused on discrete sales. Offers basic sales automation with support for quotes, samples, and inventory management, and includes a full-functionality offline client. Most appropriate for basic sales automation in larger firms or for smaller firms looking to move off ACT!. NextSale is following a strategy similar to that of Salesnet, focusing on quotes, inventory, and order management rather than being a flexible, customizable, something-for-everybody solution.

SalesCenter provides basic opportunity-centric sales management through an easy-to-navigate user interface. “2005 will be a key year for SalesCenter, as it plans to improve its relationship tracking, integration, and customization capabilities,” says Forrester analyst Liz Herbert.

Among leading SFA solutions that are not hosted, Herbert points to Microsoft CRM, SalesLogix (Sage), Onyx, Pivotal, Siebel Professional Edition, and SAP.

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