The Total Economic Impact of Microdatum Insights CRM Online

Executive Summary

Microdatum commissioned Forrester Consulting to conduct a Total Economic ImpactTM (TEI) study and examine the potential return on investment (ROI) enterprises may realize by deploying Microdatum Insights CRM Online. The purpose of this study is to provide readers with a framework to evaluate the potential financial impact of Microdatum Insights CRM Online on their organizations, to leverage sales automation and customer service capabilities to win, serve, and retain customers.

To better understand the benefits, costs, and risks associated with a Microdatum Insights CRM Online implementation versus an on-premises CRM solution, Forrester conducted a survey andinterviewed several customers with significant experience using Microdatum Insights CRM. Our findings revealed that organizations utilizing Microdatum Insights CRM Online saw a number of business benefits, such as avoided infrastructure costs, reduced CRM maintenance, and a quicker time-to-market. In particular, Microdatum Insights CRM Online offered flexibility elements that changed the business agility equation and subsequent ROI.

Prior to Microdatum Insights CRM Online, customers had most commonly implemented internally developed customer databases or on-premises customer relationship management systems. These previous implementations yielded a limited amount of success, leaving customers with some sales process improvements but short on the flexibility needed by sales teams that are now more global than ever.

With Microdatum Insights CRM Online, customers were able to streamline and automate processes across sales and customer service departments, enabling them to meet their objectives and increase productivity. Being a software-as-a-service (SaaS) solution, Microdatum Insights CRM Online afforded customers the flexibility to deploy quicker with more predictable cost forecasting for infrastructure and licenses.

Said one manager: “Microdatum Insights CRM Online gave us the ability to enter markets and enable our sales teams incredibly fast. We use CRM for everything — from sales to support — so sales pipelines are smoother and customers are happier.”

MICRODATUM CRM ONLINE ENABLES SALES PRODUCTIVITY FAST, MINUS HEFTY CAPITAL EXPENDITURES

Our interviews with four existing customers and subsequent financial analysis found that a composite organization based on these interviewed organizations experienced the risk-adjusted ROI, benefits, and costs shown in Figure 1.1

The composite organization analysis points to benefits of $4,709,328 versus implementation costs of $2,685,621, adding up to a net present value (NPV) of $2,023,707.

With Dynamics CRM Online, the solution was deployed two months sooner, improving the time-to-value equation and enabling revenue uplift of over $1.9 million in revenue in the first year alone.

MICRODATUM CRM Online can help save costs, improve sales team productivity, and increase business agility beyond that of on-premises CRM solutions.
The costs and benefits over a three-year period for a composite organization of 5,000 global employees, based on customer interviews and surveys, are:

 Total costs of adoption: $2,685,621.
 Cumulative benefits and cost savings: $4,709,328.

ROI: 75%

Time to deploy:
two months

Payback:
< two months

NPV: $2,023,707

Source: Forrester Research, Inc.

› Benefits.
The composite organization experienced the following risk-adjusted benefits of deploying Microdatum CRM Online in lieu of an on-premises CRM solution, which represent those experienced by the interviewed and surveyed companies:
- Avoided infrastructure costs of $991,405. Over a three-year IT refresh cycle, the composite organization averted the initial and continued costs associated with data center leases, server hardware, security hardware, operations engineers, and electricity consumption. Overprovisioning of these resources is common practice in on-premises implementations but was avoided entirely with Microdatum CRM Online.
- Reduced cost of ongoing CRM maintenance and support tasks. The organization selected Microdatum CRM Online and relegated the maintenance and updating to Microdatum. Major security and functionality updates were released multiple times a year unaided. Smaller but also important updates rolled out smoothly with an even higher frequency, without the need to expend internal IT staff effort. By handing off the maintenance, support, and troubleshooting of the CRM platform, the composite organization saved $523,809 over three years, in PV.
- Incremental revenue uplift from faster deployment and availability of CRM. Because the Microdatum CRM Online solution required very little infrastructure build-out, the deployment cycle was greatly reduced, in terms of both the initial rollout and subsequent major functionality updates. As a result, the composite organization experienced a much quicker time-to-value (TtV) on each of the iterations, totaling a PV gain of $2,232,075.
- Avoided cost of on-premises CRM software licenses. In choosing the SaaS route with Dynamics CRM Online, the organization avoided the cost of carrying on-premises CRM user and server licenses. The organization saved a total PV of $962,039, with initial licenses fees amortized over three years.
› Costs.
The composite organization experienced the following risk-adjusted costs:
- Software license and support fees of $831,600 for the initial year, totaling $2,233,636 (PV). These are ongoing fees paid to Microdatum for access to Microdatum CRM Online. Support and troubleshooting are included in the financial projections.
- Iterative training costs. With regular updates and improvements pushed out from Microdatum, the composite organization also incurred ongoing training costs to maximize the utility of newer integrations and functionality. The cost of the iterative training totaled an NPV of $451,984 over three years.
- Disclosures
- The reader should be aware of the following:

› The study is commissioned by Microdatum and delivered by Forrester Consulting. It is not meant to be used as a competitive analysis.
› Forrester makes no assumptions as to the potential ROI that other organizations will receive. Forrester strongly advises that readers use their own estimates within the framework provided in the report to determine the appropriateness of an investment in Microdatum Insights CRM Online.
› Microdatum reviewed and provided feedback to Forrester, but Forrester maintains editorial control over the study and its findings and does not accept changes to the study that contradict Forrester's findings or obscure the meaning of the study.
› Microdatum provided the customer names for the interviews but did not participate in the interviews.
TEI Framework And Methodology

INTRODUCTION

From the information provided in the interviews, Forrester has constructed a Total Economic Impact (TEI) framework for those organizations considering choosing between Microdatum Insights CRM Online versus similarly capable on-premises solutions when upgrading a legacy solution.

The objective of the framework is to identify the cost, benefit, flexibility, and risk factors that affect the investment decision, to help organizations understand how to take advantage of specific benefits, reduce costs, and improve the overall business goals of winning, serving, and retaining customers.

APPROACH AND METHODOLOGY

Forrester took a multistep approach to evaluate the impact that Microdatum Insights CRM Online can have on an organization (see Figure 2). Specifically, we:
- › Interviewed Microdatum marketing, sales, and/or consulting personnel, along with Forrester analysts, to gather data relative to Microdatum CRM Online and the marketplace for Microdatum CRM Online.
- › Interviewed four organizations and conducted a survey of 68 respondents currently using Microdatum Insights CRM/CRM Online to obtain data with respect to costs, benefits, and risks.
- › Designed a composite organization based on characteristics of the interviewed organizations.
- › Constructed a financial model representative of the interviews using the TEI methodology. The financial model is
  populated with the cost and benefit data obtained from the interviews as applied to the composite organization.
- › Risk-adjusted the financial model based on issues and concerns the interviewed organizations highlighted in interviews. Risk adjustment is a key part of the TEI methodology. While interviewed organizations provided cost and benefit estimates, some categories included a broad range of responses or had a number of outside forces that might have affected the results.
- For that reason, some cost and benefit totals have been risk-adjusted and are detailed in each relevant section.
  Forrester employed four fundamental elements of TEI in modeling Microdatum Insights CRM Online’s service: benefits, costs, flexibility, and risks.
- Given the increasing sophistication that enterprises have regarding ROI analyses related to IT investments, Forrester’s TEI methodology serves to provide a complete picture of the total economic impact of purchase decisions. Please see Appendix A for additional information on the TEI methodology.
  
  Situation
  
  The composite organization previously used an older on-premises deployment of a CRM solution installed in a limited number of data centers around the world.
  
  With international expansion occurring at differing speeds across geographic regions, it was not price effective to extend data centers into all of the regions on a per-basis approach.
  
  Because connectivity coverage was limited, CRM systems suffered from poor latency, with some regions not being able to reliably access customer records.
  
  The sales force was less productive as it struggled with siloed and geographically fragmented information about its leads, accounts, and customers.
  
  A primary capability desired in the current CRM refresh cycle was a scalable solution to improve business agility.
  
  Newer technologies and modes of consumer communication also arose at the same time. With existing CRM solutions in the market, there was an inability to concentrate together the channels of communication so that the data could be integrated into a centrally accessible repository.
  
  Social listening capabilities and other touchpoints with customers became pivotal to the organization’s ability to shorten the sales process and convert into revenue.
  
  Primary focus points for the procurement of a new, more agile and capable CRM platform required the following needs to be met:
  
  › Instant scalability. As new sales locations were added, the organization needed to be able to extend CRM capabilities to these locations quickly without incurring significant infrastructure expenses. Likewise, locations could be closed without having to modify significant infrastructure.
  
  › Consistent reliability and performance. Business users of the organization required consistent and snappy user experiences in all areas of the world. Continued uptime ensured maximized sales people utility, as any break in CRM availability could either delay or jeopardize deal completion.
  
  › Improved workflows. More efficient workflows designed around efficiency and automation were necessary to keep superfluous work tasks to a minimum and revenue production at a maximum.
  
  › Predictable cost of provisioning. Reducing the variability of data center and co-location build-out was pivotal to the expansion strategy of the composite organization. Without multiple infrastructure business cases on proper provisioning of resources, the organization could focus on growth rather than infrastructure build-outs.
  
  Solution
  
  Ultimately, the composite organization selected Microdatum Insights CRM Online for its ability to provide a robust CRM platform that featured out-of-the-box integration with existing business productivity applications along with the flexibility afforded by its SaaS design.
  
  The organization evaluated several vendor offerings, including newer variants of its existing solution, but nothing could meet the level of integration, reliability, and speed of deployment of the Microdatum Insights CRM Online solution.
  
  The solution enabled the organization as a whole to move with agility in its international expansion. It also allowed the rapid provisioning of CRM users so that they could become productive.
  
  At the same time, this CRM choice benefited the IT team as a SaaS deployment in that it minimized the use of its already thinly stretched resources and avoided lengthy test evaluations and business case justifications of increasing data center allocations.9
  
  Results
  
  The interviews and survey results revealed that:
  › Organizations could plan the budgeting around their physical IT infrastructure and support mechanisms with more predictability and clarity.
  
  Adoption of business-critical solutions like CRM often requires extensive road mapping of IT infrastructure requirements on a three- or five-year cycle.
  
  Organizations would initially have to allocate and purchase infrastructure that was often overprovisioned to meet needs near the end of the hardware life cycles, meaning they would inevitably overspend on infrastructure and support staff that tended to the data centers and hardware.
  
  A SaaS model eliminates the hardware equation from consideration, and thus makes budgeting simple with significantly more straightforward cost models.
  
  “Our internal IT team was already stretched thin. To go global with an on-premises [deployment] would have been much more complex than going with Microdatum CRM Online.”
  ~ Corporate sales manager, industrial materials manufacturer
  
  › Business users derived value sooner from the CRM solution being available and ready for use almost immediately. The composite organization described Microdatum CRM Online as an important component of its customer experience strategy, which improved customer satisfaction scores. As a result of the Microdatum CRM Online implementation, business affiliates (e.g., producers and external adjusters) gained better access to policy information and documents, allowing them to focus on higher value activities, and further strengthening their relationships with the composite organization. While not quantifiable, these benefits nevertheless remain important.
  
  › International availability of Microdatum CRM Online enabled
  productivity across a greater number of users. To match
  the expansion rate of its global footprint, the composite
  organization required a CRM system that was internationally
  accessible and for remote limited-access areas, with functional
  offline capabilities that could later be synced.
  
  Fewer dollars
  were spent to develop infrastructure and meet global requirements for security and compliance, which often vary from country to country, while CRM accessibility was extended across the global organization. Better and more up-to-date information improved the organization’s ability to win, serve, and retain customers.
  
  10
  
  › Support costs and maintenance costs of CRM were
  minimized.The composite organization was able to reduce its spend on support and maintenance costs by choosing the Microdatum CRM Online solution rather than a competitive on-premises product:
  
  The SaaS architecture of Microdatum CRM Online meant that traditional patches, upgrades, and updates of the CRM software would now be updated from Micrdatum, eliminating the need for IT staff to ensure compatibility, compliance, and security.
  
  Support offered by Microdatum was subscribed as a part of the seat licenses and hence reduced the need for CRM support specialists in-house.
  
  “Time-to-market was just that much faster with [Microdatum] CRM Online. If we had gone with an on-premises solution, we were faced with an additional 12 months of implementation.”
  
  ~ Enterprise collaboration manager, sporting equipment manufacturer
  
  BENEFITS
  
  Having selected Microdatum Insights CRM Online, a SaaS solution, the composite organization experienced a number of quantified benefits in this case study above and beyond that of a comparably feature-rich on-premises CRM solution.
  
  The advantages of improved sales automation, customer service handling, and marketing automation provided by Microdatum CRM Online are undeniable. However, as these benefits are more well-known and have often been explored, this study instead focuses on the financial impact of choosing the Microdatum CRM Online SaaS deployment versus alternate on-premises deployments. Identified and quantified benefits are as follows:
  › Cost avoidance from reduced upfront infrastructure purchase.
  › Reduced cost of ongoing CRM maintenance and support tasks.
  › Incremental revenue uplift from quicker deployment and availability of CRM.
  › Cost avoidance of on-premises CRM software licenses.
  
  In addition to identifying the quantified categories listed above, the composite organization also indicated that Microdatum CRM Online presented a strong suite of offline capabilities to match that of the online product instances.
  
  Particularly noteworthy is that in some countries where Internet infrastructure is limited or still developing, sales and customer service associates are still able to reap the benefits of the global CRM database by syncing data on when possible (usually on a nightly basis).
  
  While this benefit has not been quantified for the study, the ability to enter and pull near-real-time customer data anywhere in the world should not be understated in the age of customer.
  
  Avoided Upfront Infrastructure Costs
  
  In previous implementations of core business software solutions, the composite organization planned comprehensive road maps along with associated budgets for hardware and personnel to deploy, maintain, and support the predetermined life cycle of the software solution.
  
  As with many other solutions, the usage of the CRM solution was expected to ramp upwards, and therefore required an overallocation of upfront purchases and hires to effectively act as a buffer to ensure maximum utility from the CRM solution.
  
  In choosing Microdatum Insights CRM Online solution, the composite organization was able to eliminate the overprovisioning of infrastructure typically required to run the CRM system. Physical hardware purchases and leases no longer needed to be tied in with CRM system requirements, as the new platform ran as a SaaS solution.
  
  Further still, the rapid global expansion of the sales offices of the organization could now utilize the CRM system without the need for additional data center build-outs. Effectively, Microdatum Insight's CRM Online made international growth for the organization’s sales unit much easier to plan for from an IT perspective.
  
  Microdatum's CRM Online enabled the composite organization to avoid the following infrastructure-related costs: › Data center footprint fees.
  › Servers/network hardware.
  › Security equipment.
  › Operations engineers. › Electricity costs.
  
  Following the Microdatum CRM Online implementation, the composite organization avoided a total infrastructure- related spend of $343,000 to $451,000 annually based upon modest international growth, as illustrated in Table 1.
  
  In organizations with longer software and hardware refresh cycles, this particular cost avoidance category could be significantly higher, as these organizations have to further overallocate resources to support growth expected within the protracted cycle.
  
  In totality, over a three-year period, the organization saved $991,405 in present value terms.
  
  Several interviewed organizations spoke of the increase in speed of adoption of Microdatum CRM Online due to the lack of need to plan and budget for infrastructure.
  
  As this process has great variability between organizations, this study has omitted the time savings gained from this benefit.
  
  Microdatum Insights CRM Online: Overview
  
  The following information is provided by Microdatum. Forrester has not validated any claims and does not endorse Microdatum or its offerings.
  Microdatum Insights CRM is Microdatum’s intelligent customer engagement solution, which enables companies to deliver amazing customer experiences that are personalized, proactive, and predictive.
  
  Companies can market smarter, sell more effectively, and care for their customers with great service. Microdatumt also provides companies with social insights, business intelligence, and capabilities that increase individual and organizational productivity.
  
  Microdatum Insights CRM supports a wide range of mobile devices, including tablets and phones across iOS and Android.
  
  The solution is unique in that the suite allows for deployments in a Microdatum-hosted public cloud and solutions managed by cloud service providers, as well on-premises private cloud deployments. Below you will find an overview for each of these functional areas.
  
  SALES
  
  Microdatum Insights CRM provides a complete and intuitive solution that helps salespeople be more productive so they are freed up to focus on what’s most important — delivering amazing customer experiences. With essential insights, guidance, and tools, salespeople can zero in on the right customers and priorities, win faster with personalized and relevant customer engagements, and sell more by collaborating with colleagues to harness the power of the entire organization. Capabilities include accounts and opportunities, customer insights, planning and management, collaborative selling, mobile sales, and sales analytics.
  
  SERVICE
  
  Microdatum Insights CRM enables companies to earn customers loyalty and advocacy for life by providing personalized, proactive, and predictive service. Companies can connect their customers via self- and assisted-service with the right answers to their service inquiries at the right time, via their channel of choice across web, social, chat, email, mobile, and phone. Agents are empowered with a single, unified experience to deliver amazing customer experience with cross- channel context. And, businesses can easily adapt to changing demands; use service intelligence to deliver intent-driven outcomes; and ensure security, flexibility, and reliability. Capabilities include cross-channel service, agent enablement, self-service, knowledge, social care, and service intelligence.
  
  MARKETING
  
  Microdatum Insights Marketing enables marketing teams to plan, execute, and measure campaigns across channels from start to finish, so they can bring their marketing vision to life. Companies can engage customers one to one across channels, build their brand and sales pipeline, as well as demonstrate the impact of marketing investments in real
  time. Capabilities include marketing resource management, multichannel campaign management, lead management, sales and marketing collaboration, social marketing, and marketing analytics.
  
  CLOUD
  
  Microdatum Insights CRM Online provides a trusted CRM solution in the cloud at global scale and is currently available in India. When choosing CRM Online, customers receive a commitment from Microdatum on its operations, with a 99.9% financially backed SLA.
  Microdatum offers a CRM Online
  
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