Posted: 12/2000
Service Providers Window-shop for SFA
Hosting
By Aldo Morri
Hosted sales automation is is attracting attention like a fleet of shiny 2001 model cars, but service providers aren't exactly driving them off the lot, preferring a "kick the tires" approach.
Further, many are hesitant to discuss their plans because, in some cases, they haven't found that perfect vehicle, and they certainly don't want to tip off the competition.
"What we are doing about improving SFA is not something we are yet willing to discuss," says Amy Kweder, a spokesperson with carrier Adelphia Business Solutions (www.adelphia-abs.com) based in Pittsburgh, Pa.
Still some carriers are taking some test drives with hosted SFA, as well as a lot of other ASP services.
Bernie Roemmele, CEO for CitX Corp. (www.citx.net)--a Quakertown, Pa.-based ASP--says his company is working on a hosted SFA implementation project with Sprint Communications, and that most other carriers are evaluating the use of hosted SFA.
Like Sprint, many carriers already have tried to solve the SFA problem internally, but with limited success.
"It is not their core competency," Roemmele says. "They would rather have SFA hosted in an environment that they know is redundant and reliable and maintained externally."
Assuming that critical data and information can be seamlessly transferred between carriers' current legacy systems, most carriers have very good reasons to embrace hosted SFA along with other applications.
"ASP services, along with SFA, will be critical to the future of carriers," says Kneko Burney, director of e-business infrastructure and services at Cahners In-Stat Group (www.instat.com). "Reducing customer churn is everything. Carriers will do anything to reduce customer churn."
No More Shrink Wrapping?
As the needs of a typical sales force change, so does the functionality of a particular application. And, as the actual sales force, dynamics or information change, the application must be modified to keep the sales force competitive.
"You can't do that in a shrink-wrapped application," says Roemmele, unless the company allocates the necessary IT resources to develop an in-house technical staff trained to complete modifications on the application.
This is how most carriers currently handle SFA. But it isn't quite good enough in the increasingly competitive marketplace.
As we all know, a shortage of competent technical personnel exists throughout the industry. Like other businesses, carriers are finding that when they need to modify an application or install software, they need to hire and train IT people.
This ultimately presents companies with a dilemma. Eventually the new hires cease to serve a day-to-day function. Companies must then decide whether to keep these specialized people on their payrolls--with the chance they will be needed in the future--or let them go.
The problem is, if these IT professionals move on, the companies must go through the hire-apply-fire cycle again when they need to make a change to the application.
So, it is not unusual to learn carriers are looking at hosted SFA and other applications as a cost-effective and quicker way to transition and modify applications.
Size Makes a Difference
Certain SFA applications fit the ASP model, but there are others that don't. Typically, businesses with large, geographically distributed sales forces that need persistent connectivity to a particular application are prime candidates for SFA on a hosted basis.
Telecom carriers should fit this model because sales forces--that can number in the tens of thousands for some carriers--are in constant need of scheduling, pricing and implementation information.
Group and individual scheduling is probably at the top of the list of sales force requirements, particularly when that force is set up in such a way that one person may be scheduling meetings for others.
There is a big need for this among those negotiating deals when on the road.
But hosted SFA is not just for enterprise businesses. It seems smaller telecom players are more interested in ASP offerings--for the same reasons that hosted applications are inviting to other small and medium-sized companies. Why own when you can rent?
"ASPs tend to support companies that don't have a lot of capital and need to start out fast," says Don Ryan, vice president of consulting for Sterling, Va.-based research firm, Current Analysis (www.currentanalysis.com). "It makes a lot of sense that smaller carriers would use hosted SFAs."
In fact, while they are not talking openly about it, smaller and medium-sized carriers are probably more interested than large carriers in transferring quickly to hosted SFA. Smaller carriers are more anxious to implement this kind of solution because it becomes a cost issue, allowing them to stay lean and compete with their larger peers, according to Ryan.
Typically, the major selling point to adopt hosting SFA for a small carrier comes in its pocketbook. While hosted SFA systems for enterprises start scaling from 2,000 up to 10,000 simultaneous users, some ASPs have developed similar systems for companies that have from 100 to 500 salespeople, with scalable modules that can be added.
"Small carrier salespeople are much more in need of having all of the latest cost information available immediately at their fingertips, which is why SFA makes more sense in this context," says Cahners' Burney.
Larger carriers are more apprehensive. Although they are looking at hosted SFA closely, the consensus is that it will take longer for them to actually make the transition for their day-to-day operations.
"Large carrier salespeople focus mostly on large enterprise accounts," Burney says. "This is more of a relationship game that doesn't take a lot of real-time, immediate information."
Keep It Simple, Reliable
The ASP industry is finding that the adoption rate for a new system is more important than how many people can use it. Perhaps that is why it is an industry that is bursting.
During the past two years, few industries have received as much hype as ASPs. A recent Phillips Group-InfoTech (www.phillips-infotech.com) survey showed the demand in the United States for network hosted applications will increase twelvefold by 2004, and ASPs will generate as much as $13 billion in revenue by then.
Dataquest Inc. (www.dataquest.com) is even more optimistic. The research firm predicts the ASP market, which was only worth $1 billion in 1999, will increase to more than $25 billion in 2004.
Of course, how quickly a company can integrate a new system into its business, and then how quickly it can train its employees, has to be a factor in choosing which way to go.
A lot of the success of SFA is based on the simple elegance of the web-based front end.
A lot of the "bells and whistles" that are jammed into shrink-wrapped packages are typically not imbedded on the hosted SFA packages. This is done purposefully to allow the user to make the transition quickly and not become confused by unneeded functions and features.
This is the beauty of an ASP--and perhaps a reason for the industry's huge success. You can get it up quickly to make your sales force productive. Later, you can add more functions as needed.
Virtual Sales
The newest iteration of ASP is the virtual ASP (VASP), which is finding ways to bring new features and services to the SFA marketplace.
An innovative feature handles customer calls when the agent is in the field. Rather than the traditional way of mapping a customer through an internal message system or voice mail, VASPs actually work to bring the call directly into the SFA system and that client's sales contact. A touch-tone telephone interfaces with the application on the ASP platform.
In other words, a kind of touch-tone browser enables anyone to pick up a touch-tone telephone and parse it to either a website or a web-based application to send or receive data. Customers automatically can schedule a meeting or describe their needs to the salesperson by e-mail, directly on a website or via the telephone.
It is likely that SFA clients are concerned with fault tolerance. Carriers that host SFA applications internally find that important functions, such as scheduling, cannot be done when the network goes down. However, with a VASP model, even if servers go down, it doesn't take the sales force out of the loop.
Along with better reliability, the sales force wants to be in physical control of its data. Solutions must deploy equipment on the customer's facility, yet offer services such as connectivity, data backup facilities, application backup facilities, upgrades and remote support. The idea, as in the traditional ASP model, is that the customer doesn't have to hire the IT resources to maintain the server.
ASPs are solving this problem by deploying applications in a distributed model that gives clients significantly more reliable 24-hour uptime to their applications. With a VASP solution, not only does the ASP install the hardware locally for the customer, but backup and servers are distributed across the ASP's own architecture in different physical locations.
"Under this architecture, users are virtually guaranteed that they can still get to applications in the case of a hacker attack or other disruption by going through an alternative network connection," says CitX's Roemmele.
Aldo Morri is a free-lance writer based in New York. He can be reached at amorri@aol.com.
