Bandwidth.com, a provider of business communications, started investigating on-demand software because the company was having trouble keeping up with demand.
Not a bad problem to have, right? Not necessarily.
“This was a time when we were experiencing exponential year-over-year growth,” said Scott Barstow, CTO of Bandwidth.com. “We were unable to keep pace with internal development efforts. We needed more features and quicker deployment.”
To do this internally would take time, putting the company further behind and it would cost a good deal of money.
Rather than investing in internal IT, Bandwidth.com realized the majority of its IT problems where in a specific area: customer relations. “One of our main problems was that we didn’t have a good way to show customers what was going on with the installation of their communications products,” Barstow noted.
Typically, the company handed trouble tickets off to its telecommunications partners but, once the hand-off was made, they had no way of tracking those trouble tickets.
This is basic CRM stuff, so what’s the big deal, right? Actually, it’s more complicated than that. Since Bandwidth.com resells many telecommunications offerings, often bundling them with other products and services, a web of business relationships must be negotiated.
Rather than building an application and maintaining it in-house, they turned to on-demand software vendor Salesforce.com, subscribing to its CRM platform. By going this route, deployment time was cut dramatically, and they didn’t have to hire and train new IT staff.
“With this application in place, our customers can now interact directly with the service provider handling the trouble ticket without us having to broker the exchange,” Barstow said.
Once they started handling customer service in this manner, they realized that the Salesforce.com platform could also serve as a portal for communicating with partners.
“Let me give you two concrete examples,” Barstow said. “CDW and CompUSA are both partners of ours, and both use Saleforce.com as a CRM tool. Prior to Salesforce.com, we would have had to build a specific application interface for each partner. Now, we just wall them off within Salesforce.com. It’s an instant partner portal.”
Early on, Salesforce.com picked up on the fact that its customers were using its CRM platform for more than traditional CRM. To capitalize on this they rolled out AppExchange, a venue for the sharing of business applications. AppExchange features more than 200 plug-and-play applications, which are easily downloaded and integrated into the basic platform.
If one customer builds a related application, they can offer it to the entire user base, and they typically earn a fee for doing so. Often, internal development efforts can pay for themselves, since these applications can now be resold. Customers can plug in applications for anything from electronic document signing to payment processing.
Good for the Goose …
The creation of an application eco-sphere benefited Salesforce.com as well. With so many partners building applications around the basic CRM offering and customizing certain components within the CRM platform, it made sense for Salesforce.com itself to participate in and encourage this give and take.
“An example of this is when we updated our user interface,” said George Hu, SVP of applications for Salesforce.com. “In the old world of shrink-wrapped software, existing customers have what they have, and the vendor focuses on new customers.”
However, in the on-demand software world, any changes made to entice new customers might inadvertently irritate existing customers who were comfortable with the way things were.
“What we did was post the prototype of the new interface to our user community,” Hu said. “We got back hundreds of responses, which helped us build a much better product.”
Salesforce.com vetted and improved its product, without dumping huge piles of cash into those processes, and at the same time customers felt like they were in the loop.
Besides the traditional benefits of on-demand software—lower costs and fewer management burdens—SaaS (software as a service) ends up changing the vendor-customer relationship, offering more benefits to each.
SaaS vendor OpenAir believes there are even more side benefits emerging from the SaaS model. OpenAir, a professional services automation company, believes SaaS can be extended beyond the applications themselves, serving not only as an IT management and communications platform, but as an overall business management tool as well.
Morris Panner, OpenAir’s CEO, believes a good on-demand business software platform can serve as a method for managing service professionals in a way that leverages the efficiencies learned through IT management.
“Service professionals are often the most talented and highly trained employees in an organization,” Panner said. “However, the work they do is often a mystery to management.”
The U.S. economy is now service-based, and, therefore, more and more of the workforce is service-oriented. Today, people work on projects, rather than toiling on assembly lines, but according to Panner that doesn’t mean they can’t work more efficiently.
Since those jobs were relationship-oriented, they were considered too nebulous to automate, but then salesforce automation (SFA) and CRM applications came along and people realized certain workflows could be streamlined and leveraged across an organization.
To optimize anything, you need to find a way to measure it, “[h]owever,” said Panner “understanding exactly what knowledge workers are doing is difficult to measure.”
The way someone works varies from person to person, with each completing tasks through different means, relying on different skill sets. “Therefore, the natural tendency is to do nothing. You just let them go on doing what they’ve always done.”
The goal of professional services automation (PSA) is not to change how employees work, but rather to give them a better understanding of the scope of each project along with associated tasks and ultimate business goals.
“Visibility into project metrics minimizes that risk,” Panner said. “If you break projects down into their constituent parts, your employees are aware of the value they’re adding to a project, so they can be careful to not give their work away for free.”
In essence, a good SaaS operation functions like a network, in that with a network the value of it rises exponentially with the number of nodes. While any given end user may not have encountered a specific business problem, chances are someone in the user base has, and that knowledge finds its way into the application. Each time a new customer adds knowledge, every customer benefits.