Technology continues to innovate, and business is evolving with it. Because companies and individuals can interact globally to conduct business, client databases have grown too expansive and complex to be easily managed with a paper Rolodex. However, with the development of Customer Relationship Management (CRM) systems, companies can effectively manage interactions with large numbers of current and future customers.
Sophisticated CRM systems not only manage account and contact information but track and forecast sales in one central location. In particular, sales and marketing departments have benefited most from integrated CRM systems. Many companies offer CRM services, including Microsoft (MSFT), Oracle (ORCL), and SAP (SAP). However, Salesforce (CRM) remains the industry leader in CRM systems and solutions. Primarily utilized in the cloud, Salesforce offers customers the ability to integrate reporting, process controls, and visibility of ongoing projects.
Customer Relationship Management
Prior to widespread access to CRM systems, companies recorded and received information through numerous channels. Widespread access to CRM systems has allowed companies to organize information, including sales, accounts, and contact information in one central location. In particular, these systems facilitate sharing information across various teams in an organization.
- Customer Relationship Management (CRM) systems allow companies to manage interactions with customers.
- Microsoft, SAP, and Oracle are leading companies in the CRM space.
- Salesforce has emerged as the leader in CRM systems and solutions.
- Using Salesforce throughout an organization can allow for accessible circulation of information across all departments.
- A disadvantage of CRM systems is that they can become complex and difficult for inexperienced users to navigate.
In 2018, worldwide customer relationship management software amounted to $193.60 billion, up from $20.4 billion five years earlier. As competition continues to intensify, the increasing sophistication of CRM software differentiates platforms from one another.
The market contains various types of CRM systems, including Business to Business (B2B), Business to Customer (B2C), Software as a Service (SaaS), and social media platforms. In particular, SaaS platforms represent the largest share of CRM systems, accounting for more than 70% of all CRM revenue. Software as a Service is a means of delivering applications over the Internet. Commonly referred to as cloud computing, SaaS bypasses the installation and updating of software. In particular, Salesforce provides both SaaS and Platform as a Service (PaaS) CRM systems to companies.
The focus of the CRM industry is to provide seamless processes within a company. Prior to CRM systems such as Salesforce, centralizing information required extensive data entry. However, the utilization of Salesforce within departments in a company allows accessible circulation of information. Besides process control, Salesforce is a valuable tool providing visibility, tracking, reporting, and several quantifiable metrics that enable companies to more effectively hit strategic goals.
As the industry leader, Salesforce is widely recognized for CRM systems, with over 150,000 companies using its services. As a proven innovator, Salesforce provides new features and capabilities with continual updates. For instance, Salesforce’s combination of Force.com and AppExchange lead the SaaS CRM industry in cloud integration and software customization.
Some of Salesforce's most popular features include sales forecasting, collaboration, contact management, and reporting. Salesforce claims that the application of its CRM systems can increase revenue by 30%. In addition, Salesforce says its software increases sales productivity, pipeline, win rate, and forecasting accuracy.
The utilization of a CRM system can also track all sales activity including past and future customers. This information provides insights for companies to act on higher potential customers. In these customer-focused industries, CRM systems offer unique insights into customer information and decisions. For example, information such as social media, emails, and client data can help companies understand customer needs and leverage potential sales.
Like all software and applications, Salesforce has disadvantages. Contrary to the mission of increasing efficiency, a convoluted platform causes a disconnect with users. For instance, high-level executives tend to be highly separated from data within the CRM platform. Salesforce also involves a great deal of training and the reporting process can be difficult for the novice and experienced user. The customization tool kits for reporting can be too technical for use by even seasoned administrators.
The number of Salesforce employees at the end of 2019—the company ranked first in Fortune's 100 Best Companies To Work for in 2018 and second in 2019.
However, as a tool, Salesforce is only as powerful as the individuals who use it. When components of the process do not operate smoothly, the potential value associated with Salesforce cannot be realized. As a result, the largest limitation of Salesforce is not necessarily the complexity of the platform itself, but the willingness of an organization to learn and fully integrate it into their operations.
The Bottom Line
The development of a CRM system can assist in the implementation of executable processes for all departments of a company, including sales, marketing, and finance. It can help predict increased sales and revenue growth as a result of more efficient tracking, reporting, and visibility of processes. Increased visibility supports companies monitoring of end-to-end processes from a project's inception to completion. As a result, companies can further track and report completed and future sales. Salesforce continues to supply the largest share of such systems.