Software as a Service: Handling Customers, Hands-Free - ' The Need for Speed '

The Need for Speed

Salesforce.com founder Marc Benioff touts the SaaS model as the "end of software." Well, at least software as we know it. In the dominant client/server model, the user company maintains the program as well as the databases and application servers needed to run it effectively.

But the on-demand model is gaining speed. With 2006 worldwide sales pegged at $8.35 billion, the hosted customer relationship management space is expected to grow at an average of 7% annually, reaching almost $11 billion in 2010, according to Forrester Research.

On-premise software leader SAP got into the mix in early 2006, rolling out its first on-demand customer relationship management offering. Microsoft is expected to follow suit this year.

And vendor consolidation is changing the competitive landscape. Last year, Oracle bought Siebel Systems, in part for its on-demand offering, which debuted in October 2003. Also in 2006, RightNow Technologies bought SalesNet to boost its marketing and service software.

Besides cutting costs, an oft-mentioned benefit of the software is speed of deployment. For Pleasanton, Calif., health food and personal-care product maker Shaklee, a fast deployment was key.

Shaklee came under new ownership in 2004. At the time, the company had no customer relationship management tools. Most important, it had no apparatus for tracking what questions its customers were posing to call-center representatives, and no online self-service tools like a FAQ page, according to chief information officer Ken Harris.

Tabulating questions and complaints was done with pen and paper; follow-ups were also manual, and records were kept by representatives in separate files. "The business had been slowly declining through the years, so [there was no] investment in technology to stay abreast of what's possible," Harris says.

Harris and his team wanted a solution that could be deployed quickly. They opted for an on-demand solution, expecting the deployment to take three to six months, as opposed to an on-premise system, which could take up to 18 months to implement, says CRM project manager Melanie Peters. After speaking with a number of vendors, Shaklee got a commitment from RightNow Technologies to meet a three-month time frame.

RightNow met that goal, deploying the software in 90 days, says Peter Neels, Shaklee's director of field support. "They wanted to work with us, to help us be successful," he says. "And we were."