Kaveh Vessali

1
How to Build an ROI Model for Salesforce CRM
Kaveh Vessali Vice President Solution Marketing
2
In Times Like TheseROI is More Important Than
Ever
3

Smart Companies Invest In Times Like TheseCisco
Spending More on IT to Grow Business
Why the increased spend? Better employee
collaboration Accelerate business
strategies Improve market competitiveness
4
To Get the OK, Projects MustFocus on the
Customer and Improve the Top Line
Keep Every Customer
Win Every Deal
Increased customer satisfaction decreased churn
by 20
Increased corporate sales 30 year over year
5
Deliver Measurable Business Success
43
34
30
29
25
Profit Margin
Win Rate
Revenues
Productivity
Customer Retention
Source Salesforce.com Customer Relationship
Survey conducted Feb. 2008, by an independent
third-party CustomerSat Inc.
6
To Get the OK, Projects MustReduce Risk, Costs
and Improve the Bottom Line
Cut, Defer and Stabilize Costs
Improve Visibility and Control
Increase Project Success Rates
95
Improved Revenue Visibility to less than 1
variance
Reduced Total Cost of Ownership by 46
95 Success Rate for SFDC projects
7
Deliver Measurable Business Success.Fast!
Client/Server Software
6 month Breakeven
27 month Breakeven
ROI
ROI
Value to Customer
Risk
Risk
Source Gartner, Customer Surveys
Time
Time
Go Live 6 Weeks
Go Live 12 Months
8
Salesforce.com Offers Three Approachesto the ROI
conversation
1
3
2
1
2
Low Calorie
Light Lunch
5-Course Meal
When to use
Commitment Required
Engagement Approach
Business Value Discussion
ROI Self Service
Detailed ROI Analysis
9
Five Common Value DriversKey metrics to look for
when assessing ROI

• Channel Management
• Forecasting Accuracy
• Revenue Per Partner
• Channel Mgmt Productivity
• Channel Effectiveness
• Partner Loyalty

• Sales Effectiveness
• Opportunity Pipeline
• Win Rate
• Average Deal Size
• Leads Generated
• Lead Conversion Rates

• Customer Profitability
• Opportunity Management
• Customer Acquisition Cost
• Cross-Sell and Up-Sell
• Customer Service Costs
• Customer Retention

• Customer Satisfaction
• Customer churn rate
• Case resolution rate
• Customer case deflection
• Customer referrals

• Sales Productivity
• Administrative Tasks
• Account Planning
• Approvals
• Forecast Pipeline Reporting
• Search Document Creation

10
Salesforce.com ROI Analysis ToolExecutive Summary
11
Salesforce.com ROI Analysis ToolRead Me
12
Salesforce.com ROI Analysis ToolBusiness Inputs
13
Salesforce.com ROI Analysis ToolExecutive Summary
14
Salesforce.com ROI Analysis ToolSummary Output
15
Our Speakers
Greg Anderson Global IT Manager
Mary-Kay Olechny Director, Data Quality
Processes
Source Salesforce.com Customer Relationship
Survey conducted Feb. 2008, by an independent
third-party CustomerSat Inc.
16
Mary-Kay Olechny Director, Data Quality
Processes
17
All About MDS

• MDS Inc. is a global life sciences company that
  provides market-leading products and services
  used for the development of drugs and the
  diagnosis and treatment of disease. Our
  customers are the most prestigious researchers in
  pharmaceutical, biotechnology, government, and
  academic institutions in the world.

• INDUSTRY Life Science
• EMPLOYEES 5,500
• GEOGRAPHY Global
• USERS 350
• PRODUCT(S) USED

18
Three MDS Global Business Units Using Salesforce
CRM

• Leading edge life science tools for discovering
  and developing new drug compounds
• 100 users selling scientific equipment ranging
  from 5k to 500k

• Radioactive isotopes used in medical imaging,
  targeted cancer treatments and sterilization of
  medical products
• 50 users selling TheraSphere

• Research services at each stage of the drug
  discovery and development process
• 200 users selling services such as clinical
  trials, regulatory filing, lead ID and screening

19
How to Build an ROI Model for Salesforce CRM

• You need to convince your organization to spend
  money
• Purchasing new licenses
• Additional licenses
• Adding on a new platform
• How do you prepare a financial justification for
  CRM?
• Very little published data on how to create a
  Return on Investment model for a CRM project

20
What are the Benefits?Reduce Costs

• 1 Basic assumption
• A global CRM will reduce operating expenses
• Less manual work
• Less time manipulating consolidating
  spreadsheets
• Fewer errors, more accurate forecasts
• Less time waiting for data and compiling reports
• Dive into the current business process to find
  these opportunities.
• Measure the time of inefficient work, rework due
  to errors, and time waiting. What is it costing
  your business?
• Estimate how much this could improve with your
  CRM solution.

21
BEFOREMDS Analytical Technologies Previous
Method of Forecasting
North America Europe Only
Monthly consolidation of many, many spreadsheets!
22
AFTERMDS Analytical Technologies - Current
Method of Forecasting
North America Europe Only
Saved 15,000 hours a year.
Real-time sales forecast rollups.
23
Real-Time Forecasting Was Our FocusBut There are
Many Benefits of a Global CRM
Find your business opportunities.
24
What are the Benefits?Increase Revenues

• 2 Basic assumption
• A global CRM will increase revenue
• Less time spent on administrative duties means
  more time selling
• Less time searching for data
• More data and better quality of data about our
  customers
• More time and better tools for strategic targeted
  marketing
• Estimate the increase in revenue dollars
• __ Revenue increase X Estimated gross sales
  X Margin
• When sales forecasts fluctuate or margins
  change, re-adjust your calculation keeping the
  increase constant

Market conditions fluctuate, so can your model.
25
Better Data Quality - Account Hierarchy based on
Industry Data
CRM adds value to the business.
26
Link it Back to the Financial Balance Sheet
Direct Indirect Cost Benefits
Work with your finance team!
27
Manage. Share. Build. Apply what youve learned

• Identify opportunities where a CRM will reduce or
  eliminate inefficient processes.
• Measure the time cost to the business of these
  inefficiencies
• Assess the benefits of the CRM and how it will
  increase revenue.
• Estimate the impact on sales revenue
• Quantify the impact to the bottom line!
• After you implement, validate your projected
  improvements. This builds confidence in the
  business to spend money for future enhancements.

28
Results

• In one year, rolled out 100 SFDC licenses to
  Sales Marketing throughout North America
  Europe
• In a tough financial year, with company budget
  cuts
• Canceled projects, travel restrictions,
  restructuring layoffs
• Due to strong ROI model, the project was not
  impacted by budget cuts
• Delivered on time, and on budget

29
Customer Hero Mary-Kay Olechny
Luis Costa, CRM Project Manager says
Mary-Kay has transformed the way we do Sales
Marketing at MDS Analytical Technologies with
more efficient and cost-effective processes that
drive increased revenue. Her determination, resour
cefulness, collaborative approach and
attitude have made the implementation of
Salesforce.com within our organization a positive
experience with management and users alike. She
is a true hero to our organization."
CRM Project Claim to Fame Rolled out to 100
users Across Sales, Marketing, Field
Application Scientists Throughout North America
Europe Within the first year
Mary-Kay Olechny MDS Analytical
Technologies Director, Data Quality Processes
Session How to Build an ROI Model for Salesforce
CRM
30
Greg Anderson Global IT Manager
31
About PIAB
PIAB, headquartered in Taby Sweden, has been
providing solutions used to automate industrial
manufacturing applications since 1972. PIAB
products are used to handle everything from
semiconductor chips to automotive windshields.

• INDUSTRY Industrial Manufacturing
• EMPLOYEES 300
• GEOGRAPHY Global 18 locations worldwide
• USERS 25 first rollout (130 planned)
• PRODUCT(S) USED

32
Overview

• 3 Main Topics for todays presentation
• Getting Started with your ROI
• Providing accurate and believable numbers
• Presenting your project

33
Getting Started with your ROI

• The first step in building an ROI is to identify
  the areas where the project will show a return to
  the company. 
• Working with the requirement spec will help to
  identify key areas and opportunities for the
  value side of the equation. Reviewing this spec
  and drilling down into the details will provide
  concrete examples and key metrics to build an ROI
  model.

34
Getting Started with your ROI

• The requirement spec
• The value side of the equation
• What benefits will we get from this project
• Work with the project team and sponsor
• Identify the business needs
• Turn the business needs into metrics
• By meeting this business needs what value will we
  gain
• Turn the metrics into monetary value
• Note the soft metrics as well

35
Providing accurate and believable numbers

• Too many ROIs reflect inaccurate/inflated
  information which casts doubt in the validity of
  the project in the eyes of management.  It is
  important to review key business requirements for
  the project and use conservative numbers for
  projected savings.

36
Providing accurate and believable numbers

• When given a range of values choose the lowest
• Get numbers from a few people and use the average
• Review your numbers
• Make sure there isnt any duplication
• Make sure they are logical
• Using Parameters
• Allows dynamic changing of numbers
• Use an efficiency factor
• No ROI will be 100 accurate
• Adds a cushion to the project
• Increases the believability in the eyes of
  management

37
Providing accurate and believable numbers
38
Providing accurate and believable numbers
39
Providing accurate and believable numbers
40
Presenting your project

• Now that all the hard work is done it should be
  easy to sell your project to management. The
  previous steps have prepared you to get to this
  point so now you will need to

41
Presenting your project

• Explain your ROI process
• Help them understand that your numbers are real
• Shows that you have done your homework
• Make the ROI dynamic
• Use a spreadsheet and change the numbers as
  necessary
• Review the formulas if needed
• Be ready to support your data with real world
  examples
• This goes back to working with the requirements
• Looking at the costs from another perspective

42
Presenting your project
43
Finally!

• Importance of being conservative
• Less pressure on you and the project
• Gains trust with management
• Follow up after !!!!!!!!
• Report to management on where it all ended up
• Learn from your mistakes and successes
• Focus on the business not the technology

44
Session FeedbackLet us know how were doing and
enter to win an iPod nano!

• Please score the session from 5 to 1
  (5excellent,1needs improvement) in the
  following categories
• Overall rating of the session
• Quality of content
• Strength of presentation delivery
• Relevance of the session to your organization

Additionally, please fill in the name of each
speaker score them on overall delivery.
We strive to improve, thank you for filling out
our survey.