Like paying huge amounts for Salesforce? Don't read this

Endless possibilities – and endless traps


Visit Salesforce.com’s website and you’ll find a rather helpful list of 10 benefits of the cloud, which includes – in no particular order – flexibility, disaster recovery, and increased collaboration.

The fact that there’s no need for capital expenditure makes it in at number 4: “And because cloud computing is much faster to deploy,” the software giant tells us, “Businesses have minimal project start-up costs and predictable ongoing operating expenses.”

It's a message you can expect to be preached at the firm's annual Dreamforce conference in San Francisco, California, this week.

Moving the cost of your software on the balance sheet from Capital Expenditure (Capex) to Operating Expenditure (Opex) offers obvious benefits, particularly in terms of consistency and transparency of your licence fees.

Remember too that the cost of access to the software is only the tip of the iceberg.

However, depending on the complexity of your implementation, the non-licence fee overheads will cost you at least the same as your licence fee outlay, or as much as twenty times your software subscription fees. What can you do to make sure that the total cost of ownership of a Salesforce implementation doesn’t spiral out of control?

While a large capital expenditure will force companies to think long and hard about the cost implications of going live, the shift to Opex, combined with the ease with which you can sign up, means it is far easier to stumble into incurring costs you might not have factored in.

“It doesn’t necessitate the same rigour in terms of upfront business case,” warns Colin Robinson, senior vice president at Salesforce Cloud Alliance partner Cloud Sherpas. “Always make sure you’re doing this to serve a business objective. A little strategy goes a long way.”

Many of those who thought that investing in cloud would work out cheaper than existing on-premise alternatives have been sorely disappointed. 451 Research last year found while lowering costs emerged as a major driver for cloud adoption, 36 per cent ended up paying more for on premise cloud compared with the equivalent services delivered by a provider, and 26 per cent were paying about the same.

Alex Hilton, chief executive of industry body the Cloud Industry Forum warns that overall costs are something that people need to closely manage.

“Cloud adoption rates continue to accelerate and more people are using multiple services, which brings challenges with it, particularly in terms of migration. People may think cloud is an easy option in terms of migration but it’s not a quick fix,” Hilton warns.

So where are these costs and what steps can you take?

Consulting, implementation and integration are the biggest cost elements that customers should factor in. Most newbies to Salesforce are drawn to the bells and whistles of the software. However, focusing firmly on what you want to achieve as a business makes good business and means you’re also more likely to control your costs.

It’s like the days of Oracle and SAP, where it’s the customisation of the basic package that leads to growing costs and pain.

Vera Loftis, UK managing director of Salesforce consultancy Bluewolf, advises steering clear of unleashing the grand project. “It can be little and quick wins that will make the biggest difference. Don’t think about it as an implementation. Have a roadmap and think of it as being a series of incremental steps and focus on pieces that add the most value,” Loftis says.

Loftis agrees the focus should, where possible, be on configuration rather than customisation, unless it is absolutely critical to the business. “There is always a reason to code things,” she says, “but then you need to remember there’s the cost of building it and also the cost of maintaining additional code.”

And, if you do develop some kind of Salesforce rollout and development roadmap, ensure it’s built on real feedback from actual users on the coalface not on some vision from the Ivory Tower of corporate central. This breeds a mismatch between what management thinks and what users and customers use, producing a system nobody wants.

“People sit in a boardroom and say: ‘This is how our business works’ and ‘This is where we see ourselves in five years’ time’ and they map their technology to it. Make sure you have some validation of the vision,” Loftis said.

Another contributing factor can be over-ambition on the shop floor or from those not normally versed in the difficulties and complexities of planning and delivering IT projects. We’re talking marketing types.

Marketing is fast becoming one of the most technology dependent functions in business. In 2012 Gartner predicted that by 2017 a company’s chief marketing officer would be spending more on technology than its chief information officer. Therefore, having visibility across both marketing and IT is critical, prompting some companies to employ chief marketing technologist in recognition of this shift.

The highly configurable nature of Salesforce is bound to get marketers salivating but it’s a trap worth avoiding.

Simon Denny is an independent Salesforce consultant and former customer engagement and ecommerce director at media giant Time, where he spearheaded the rollout of Salesforce.com. In the UK, Time has 200 licences for Salesforce Sales Cloud and two years ago started a pilot among 150 users of Salesforce.com’s Service Cloud and Marketing Cloud.

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