Why Social Media will drive adoption of SaaS CRM

Posted by Harish Kotadia, Ph.D. on June 6, 2010

5 comments | 5829 reads

SaaS CRM (Software as a Service) has been around for a while. Salesforce.com, one of the largest service providers in SaaS CRM space has been around for more than ten years and has been listed on NYSE for almost six years now. I can still recall the day Salesforce.com was listed on NYSE, having seen a giant banner with the letters “CRM” (ticker symbol of Salesforce.com) on NYSE building on that day on my way to work in lower Manhattan, where I was working as a CRM Program Manager for a Fortune Top 10 client (on how many occasions you get to see “CRM” banner on NYSE building!)

But inspite of the fact that SaaS CRM has been around for a decade, it is not as popular or widespread as what some might have expected it to be by now. I think this is about to change. As I noted in my previous post, four independent trends, namely Social Media, Smart Phones, Predictive Analytics and SaaS are now converging to bring about a Paradigm Shift in CRM.

In particular, Social Media will drive adoption of cloud computing/SaaS CRM going forward. Some of the key reasons why I think this is likely to happen are as follows:

Social Media channels (like Twitter and Facebook) generate tremendous volume of user generated content created by millions of users. Not possible for CRM system to import/store the data “locally”. This is unlike “traditional” CRM, where data was generated by few users and stored in “local” database. SaaS Model makes it possible to store information in the “cloud” (shared space) and access it from (Social) CRM application “on-demand”

Social Media space is changing and evolving rapidly. New Social Media channels and tools are being added almost every day. Very difficult, if not impossible, for any CRM vendor to incorporate all new channels and feeds “locally” for every installation of CRM system. Under the SaaS model, it is not difficult to add new Social Media channels/feeds to the “hosted” (Social) CRM application and make it available to users “on-demand”

Service Oriented Architecture and Cloud Computing not only make it easy to integrate applications, but also facilitate “plug and play” modules and add-ons that can dramatically reduce time and cost involved in extending functionality of the application. This can be of great help in Social CRM as Social Media space is changing and evolving rapidly.

CRM and Analytics application vendors such as Oracle, SAP and SAS should take note of this trend towards SaaS and should extend their service offerings to include CRM SaaS.

What do you think? Please do share your thoughts and comments on impact of Social Media on SaaS CRM.

Republished with author's permission from original post by Harish Kotadia, Ph.D..

Harish Kotadia, Ph.D.

Dr. Harish Kotadia has more than twelve years’ work experience as a hands-on CRM Program/Project Manager implementing CRM and Analytics solutions for Fortune 500 clients in the US. He also has about five years’ work experience as a Research Executive in Marketing Research and Consulting industry working for leading MR organizations. Dr. Harish currently lives in Dallas, Texas, USA and works as Social CRM/CRM and Analytics Consulting Lead for Infosys Technologies.

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Walter Adamson

June 9, 2010

I'd like to think so, but I don't find the argument compelling

I'd only like to think so because more momentum in SaaS is good for our business (not because I am keen to see more "CRM). I read through your post carefully just to check that I was fair to say that I'm not really convinced by your arguments.

Starting from the end, you're not suggesting that those companies are not either already there or taking SaaS seriously, are you?

As to the 3 reasons, isn't it the case that an on-premise CRM can still interface easily to any cloud services, by virtue for example of your 3rd point SOA plus other industry standard APIs and interfaces?

I don't know if social media will drive more "CRM" or not, and in terms of social media driving SaaS CRM ahead of the general SaaS adoption rates unfortunately I am not convinced by the post. Tell me more.

Walter Adamson @g2m
Certified Social Media Consultant
http://NewLeaseG2M.com
Melbourne, Australia
My social spaces and places: http://xeesm.com/walter

Harish Kotadia, Ph.D.

June 17, 2010

I'd like to think so, but I don't find the argument compelling

Thanks Walter for your comment, much appreciated!

Regarding CRM and Analytics application vendors, I am not suggesting that those companies are not either already there or taking SaaS seriously, what I am saying is that they need to offer more robust functionality and better SaaS CRM offering that meets requirements of their clients. One of the major issues faced by Enterprise CRM clients, especially with reference to Social CRM, is that they do not have many good choices. And major vendors in this space such as Oracle, SAP and SAS should take note of this trend towards SaaS and should extend their service offerings to include CRM SaaS.

I agree that "hybrid" solution of "on-premise" CRM/Analytics can be integrated to cloud social media monitoring and reporting. But this is not a seamless solution. Focus here is on engagement with customer and collaboration with co-workers to deliver great customer service. For that to happen effectively, CRM solution has to be seamless so that real-time conversations can happen. Remember, Social is not just another channel - it is a whole new way of managing customer relationship (through customer engagement).

If we try to store data from Social streams "on-premise" or "local" database, DB size and performance are issues to be resolved. If we want to effectively engage in real-time with customer and collaborate with colleagues, best option is SaaS/cloud, not only from cost perspective but also from tech/DB performance point of view. Any one who has integrated "billing" with traditional CRM system can vouch for the negative impact DB performance can have. Here the volume is much greater (text, images, video etc..) and add the need for Knowledge Management tools to extract insights from data.

Hope I have answered your questions, please feel free to add your comment and take this discussion further.

Harish Kotadia, Ph.D.

http://hkotadia.com/

Walter Adamson

June 17, 2010

CRM/SaaS and social networks

You've answered my questions very well, a full explanation, and perhaps those ARE the reasons that your article headline makes sense, and it may happen that way.

Walter Adamson @g2m
Certified Social Media Consultant
http://NewLeaseG2M.com
Melbourne, Australia
My social spaces and places: http://xeesm.com/walter

Bob Thompson

June 18, 2010

SaaS vendors more responsive to market needs

For some, social apps could be one reason to move apps to cloud computing. But cloud computing is evolving, and there are lots of hybrid approaches. And why can't installed apps integrate with social apps? Like SAP's CRM integrating with Twitter and SimplyBox?

But my guess is that SaaS-focused vendors are going to get on board with Social Web integration faster. In fact, they already are. Salesforce.com, Parature and RightNow, just to name a few of the early adopters.

So it isn't so much that social is driving SaaS, but that SaaS vendors are doing a better job of meeting customer needs for social apps.

If on-premise vendors easily connect with social media, then they could benefit too! But will they?

Shofia

December 21, 2010

I think may social network media drive SaaS adoption.

Though software as a service has been in existence for several years, allowing users to subscribe to services from an external supplier and pay only for what they use, many businesses and individuals still remain unaware of the technology.

One of the reason is the continuously changing environment of social media, citing almost daily changes and additions to tools and features across the major social networking sites.

http://www.ademero.com

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