Salesforce seems to be on a roll this quarter making new clouds available left and right. We’ve seen two already in Healthcare and Education and today they announced general availability of the Financial Services Cloud. As I have written before, back in the day Siebel had over 20 industry versions of its flagship CRM product so I would imagine this will not be Salesforce’s last industry offering.
There’s apparently a hierarchy or naming convention that needs to be observed when discussing industry versions. Just under the industry is the vertical. So for instance, if I understand it right, Financial Services would be home to verticals like banking and insurance. It appears the announced product focuses on wealth management and that makes sense.
Agents who want to show some love to wealthy clients will appreciate the CRM functionality that makes it easy to keep all the important customer information at hand as well as customer asset information available for easy retrieval. But the interesting thing about this announcement is how many partners work together to deliver the whole solution. By my read, specialist software companies’ products are involved in mediating most major transactions. The announcement cites some processes and partners including:
“Account aggregation: Athene Group and Envestnet | Yodlee aggregate account data from multiple sources, such as bank accounts and 401(k)s, to provide advisors using Financial Services Cloud with holistic views of their books of business.
Document management: DocuSign and eSignLive plan to add integrations that could allow advisors to send, sign and manage financial documents within Financial Services Cloud.
Data aggregation: Informatica and MuleSoft bring information from multiple sources including on-premise systems, SaaS applications, enterprise databases and more into the Financial Services Cloud allowing advisors to access data from siloed systems in one place.
Implementation services: Accenture, Capgemini, Deloitte, Fortimize, INVISR, LiquidHub, NexGen Consultants, PwC, Silverline and Unlimited Technology Solutions deliver professional services for implementation of Financial Services Cloud, ensuring the product is customized for each firm’s individual needs.
See the company for the whole list.
I imagine that launching a new financial services solution set could be a tough slog for most software companies. It’s hard to see how people in such a conservative industry would just come flocking to a new or relatively untested vendor. But by surrounding itself with experienced partners Salesforce can focus on its core strengths of platform and CRM while letting more expert software partners handle the arcane parts. It’s a good idea and I can see it giving the new cloud a big push.
Salesforce has been partnering like this for a long time and I think they’ve got the mix right. But with the advent of the Lightning platform I’d expect the pace to pick up in this industry as well as others. Platform is the key to industry solutions because each company that uses a solution depends on the ability to uniquely define its business processes for its clients. It seems Salesforce has all the pieces are in place.
Nearly every generation sees the birth of what for it will define modern life as going forward. As uncertain as the twenty-teens have been so far, some day in retrospect economists may pinpoint this decade as important as the tipping points of 1870’s and the 1920’s. If that turns out to be the case there may be no better event to symbolize the beginning of the era than the Salesforce fiscal year kick-off in San Francisco this week.
It has been an eventful year so far for the company, its city (with the Super Bowl festivities taking over much of downtown), and even the nation. On the day after polling began in the presidential primaries (which were eventful in their own right) Salesforce CEO Marc Benioff laid out an annual plan and announced a reshaped product line that will contribute much to the story of what will be the new modern in enterprise software.
Just back from the annual confab of the rich and the forward looking at Davos, Switzerland, Benioff gave revenue guidance to the financial analysts pegging his company’s work product at $8.1 billion for the fiscal year that was only a few hours old. As a subscription company Salesforce can be reasonably sure of its guidance because most of those revenues are already under contract as unbilled deferred revenues thus making climbing the $8.1 billion mountain much easier.
Benioff mentioned the Fourth Industrial Revolution as a topic of discussion in Davos, which might correspond to the launch of a new long economic wave (aka a K-wave). Long waves are often associated with the late Russian economist Nicolai Kondratiev and I correlate K-wave formation with what I see as the inflection points around us today.
The product line received the lion’s share of visibility, but in one way, it seemed to me under reported. While the technology was impressive, its impact on business is the real story and that will take years to write.
The Salesforce product line has been renamed using a Lightning moniker attached to nearly every cloud, so for instance Sales Cloud Lightning is now how we reference what was once simple SFA.
Lightning-izing the product line brings a great deal of complexity to the technology but this is largely hidden from the user so that we can more truthfully refer to the product line as sophisticated rather than complex. This is important because it directly affects the perception of new modernity.
For a very long time, CRM product sets have been on a ramp up to complexity as vendors, including Salesforce, layered subsystems on top of subsystems. These included collaboration, community, analytics, journey mapping, wireless and mobile accessibility, and more.
The evolution of the multi-tenant, metadata driven cloud platform was a key piece of the puzzle. Under this umbrella, all complexity can be consolidated and managed so that users can construct business processes on the platform without necessarily getting hip deep in code. But that’s not sophistication. Sophistication happens when one can achieve Arthur C. Clark’s vision that new technology should be indistinguishable from magic. I think that’s where we’re going.
Salesforce didn’t get all the way to magic with its Lightning announcement but it certainly put down a marker, which I believe will serve as a reference point for the birth of the modern.
Fundamentally, the technology is easily accessible by those who need it but it has been abstracted. A new layer that supports the user as if it was an assistant in a business process hides the complexity with a sophistication that begins to border on magic. So users are reminded, they are presented with data and information to enlighten their activities, and data that surfaces within a business process directly or through inference, is captured and teed up for future analysis that will again inform users in their processes. This is cool stuff.
Let’s have a look at the announcement’s big parts.
Everything starts with the platform now known as Salesforce Lightning. Co-founder Parker Harris has, over several years, guided his developers to build a platform and stack that makes the magic possible. The Lightning-ization of Salesforce is largely the story of building the new platform full of services and of enabling all the apps to access these services and deliver them to the customer and employee facing applications.
Sales Cloud Lightning
SFA has been reimagined and added to so that it is a very different species than the one we started writing about in the 1990’s. Then SFA was a system of record, a tool for tracking basic contact information and the size of an order or a deal. The latest incarnation includes:
CPQ from recently acquired SteelBrick, which will accelerate, and for many companies standardize, the configuration, pricing, and quoting process.
Lightning Voice, an embedded telephony service that will see use in sales as well as service. Lightning Voice will enable reps to connect with prospects within the Salesforce application with all of its suggestions and prompts. Its functions include click-to-call, auto-logging of calls, and call forwarding.
SalesforceIQ Inbox, which brings the email inbox into the CRM suite through a suite of iOS, Android and Chrome apps that weave together Sales Cloud data with email and calendar apps of one’s choice.
Sales Wave App is just what you’d expect, analytics for the sales process. It is one of the sources of the information and suggestions that will change selling. New dashboards for things like pipeline trending were things that early SFA users could only imagine.
Salesforce1 Mobile. The big news here is full offline capabilities for iOS and Android devices. There are also 20 new Lightning Sales Components but I am getting tired and I recommend looking over the press release for even more detail. Check out Sales Path and Kanban.
Service Cloud Lightning
The Service Cloud got the same treatment in that service processes have been re-imagined but I’d say that this process of enhancement has been more evolutionary than revolutionary over several years. Nonetheless there were some big announcements including Field Service Lightning, which provisions CRM tools to dispatchers who will receive suggestions for service assignments based on location, technician training and skills, and availability. An Omni-Channel Supervisor gives call center managers more insights to better manage agents’ workloads.
Salesforce is also noting its 49th and 50th product releases in the coming year. These milestones will also bring to market further enhancements in virtually every part of the product line. For instance, the company will release Heroku for the Enterprise aimed primarily at developers of highly scalable customer-facing apps. There will also be Marketing Cloud announcements later in line with enhanced uses for Journey Builder, which in my estimate may be the most important part of any CRM going forward.
Briefly, journey mapping enables vendors to bring scientific management to what have always been chaotic customer-facing processes. When used appropriately journey mapping will significantly enhance the customer experience and drive better engagement. It’s going to be a big deal.
Pricing and packaging
Salesforce continues to use a gold, silver, bronze approach to product packaging and pricing and it has taken this opportunity to reset the packaging to reflect the bulging product line. It would be a sales nightmare to sell this product line a la carte and it would also be counter-productive to the user who needs all the pieces and parts to fulfill the vision of modern sophistication. So Benioff told me that the company will continue with three levels of pricing, albeit at somewhat higher rates, and it will pack more technology into each level. See the company for details.
The Lightning-ization of Salesforce completes the solution set transition from a system of record to a system of intelligent engagement. Using all of the capabilities together makes it difficult to do business as we have always done it, which is a good thing. I don’t think it’s possible to sandbag deals any more or generally hide things from the boss. CRM is no longer a chore to be performed on Friday afternoons. It is an assistant that will enable many people to work better, smarter, and maybe more productively.
But long as customers are still involved, nothing I have seen will truly accelerate business processes beyond the acceleration on the vendor side. Customers will still think and deliberate about offers thus presenting us with a kind of speed limit much as the speed of light is the ultimate speed limitation in the universe. But these re-imagined tools do something as important as speeding up customer-facing processes, which I have discussed here before. They open the door to managing many more customer situations per employee. This will of course raise productivity but even more important from a sales process standpoint, they make it possible to expand skinny pipelines, to make them fat and thus enable revenue acceleration if not exactly shortening individual deal times.
As a former sales and marketing guy I am more than familiar with spreadsheets as a not-so-good tool for managing the avalanche of data generated by the front office even before the big data craze. Name a department or function in business and you can easily find someone using a spreadsheet to manage it—often poorly but through no fault of their own. Consider this list: financial reporting, revenue management, professional services automation, human capital management, compensation management, contract management, order fulfillment, CPQ, inventory management, supplier management, and I am sure there are more examples.
Spreadsheets’ shortcomings are well known. They capture a moment in time and when you change the data in a cell, it’s a new deal—there is no database supporting the data so there is no historic record of anything unless you go through an elaborate process of saving repeated versions of each spreadsheet. If you do that, good luck reconciling anything.
CRM fought the spreadsheet wars at the beginning of the century with SFA gradually replacing spreadsheets in about half of all sales organizations. That’s right half, I bet you thought SFA’s penetration rate was higher but there’s still a lot of white space. CRM or SFA were relatively easy things to sell. After all SFA dealt with revenue generation and who doesn’t want to improve revgen?
But there are large numbers of business processes, especially in the back office still under the weight of spreadsheets (see above), despite the fact that there are now quite good applications to support them.
This point was brought home to me last week when I was invited to serve as a judge for FinancialForce.com’s Customer Excellence awards to be given out at Dreamforce. I don’t know who won so don’t ask. But in use study after use study I was both impressed and a bit taken back by the number of business processes these companies had relied on spreadsheets to perform. They replaced spreadsheets with inexpensive cloud apps and all of them came out winners.
What was most revealing to me though were the impressive results that came from freeing a business from the overhead of recording data in spreadsheets, managing the sheer number of them, extracting information and compiling reports all through brute force methods. Companies routinely reported enormous reductions of time and costs resulting in better information flow to managers, more timely responses to customers, and ultimately greater profitability in part because things didn’t go missing.
In the old days you could look at all of this and say, yes, but a spreadsheet is virtually free and software to run in my data center is a million bucks. It was a persuasive argument.
Curiously, I think spreadsheets have filled their niche for so long precisely because they filled it well. It’s the niche that’s changing and that’s causing big problems. Spreadsheets with their snapshot view of reality turn out to be just right when you operate in a transaction environment. They record the data of the moment in time when the transaction took place before everyone moved on.
But today we’re transitioning aggressively into process orientation and data needs to be collected throughout a process so that analytics can assess the next best offer or action. These are all things that require more data and that spreadsheets are bad for.
The introduction of cloud computing and software platform technologies has made having access to competent applications cheap and easy. Moreover if you still want to build rather than buy, development on a platform has never been easier. This isn’t a column about Salesforce per se, but go to Dreamforce and look at all of the components available in the Lightning product set for rapid codeless application development.
Now with a solid knowledge of a business any businessperson can define an application as easily as that same person might have developed a spreadsheet just yesterday. The payback that businesses are likely to reap from adopting a platform strategy and using development tools and point solutions built for the platform is potentially huge. I think of it as the next big iteration of IT, the next automation revolution that will boost profits and drive productivity. A release from the tyranny of spreadsheets is a revolution indeed.
The idea of an omnipotent software platform and the evolution of Customer Science go hand in hand. Customer Science is the upshot of my idea that we’re in the process of converting from random acts of CRM in the front office to a more structured, efficient, and predictable approach to conducting front office business. Platforms make Customer Science possible.
The emphasis on collecting and analyzing customer big data has taken up most of the brain space in the discussion about the front office but it is only half of the Customer Science story. The other part is what vendors do with the information they distill from customer data. They might simply use a fragment of analysis to tell customers that other people almost like them bought product B when they bought product A but that’s like carpet bombing when a laser guided approach would work so much better.
A better approach to the new vendor customer relationship implied by Customer Science is to use the information to first construct journey maps and metrics and to then put in place business processes mediated by powerful software that leverages all of the new kit that’s come to market over the last few years, in short the platform. That includes workflow, social, transaction oriented analytics, and mobility solutions for starters. All of these specialized components have to be part of the underlying platform on which the solutions rest. Thus platform has become a big deal.
Platform is arguably much more important than the messaging surrounding it might suggest. The vibe I get from the messaging is that platforms are cool and, well, don’t you want to be cool? That’s early market messaging, the kind of thing that vendors spout when the use case is still being fleshed out, but platform is already much more than this.
In reality, if the Customer Science light bulb shines brightly above your head, platform is essential for the simple reason that the modern, Customer Science driven front office can’t possibly write by hand all of the software you’d need to support a single business process across desktop, laptop, iOS, and Android let alone integrating apps from Salesforce, Oracle, Microsoft, and SAP. Thus platform has become the new application table stakes for our industry and making apps on platforms that are open to the rest of the universe is a business necessity.
The big attraction of a platform, at least one constructed properly in my humble judgment, is that for the most part it exists a level above raw code and that it can generate the code for the business process on all of the platforms that a business wishes to deploy — one specification for all user interfaces the business is likely to need from the handheld device to the desktop.
Additionally, a platform, rather than the application, should be the point of integration with third party apps so the platform must be able to support apps working together whether they are all written natively or they come from widely different sources. The capability to do all of this was once science fiction but today’s leading platform vendors make it look easy.
From a business perspective, it’s a game changer. Software companies (and most other companies) have always sought out ways to lock in customers. Prior generations relied on compilers and database standards to carry that load with the result that getting applications to simply exchange data was viewed as reason to celebrate. No wonder it has always been so difficult to string together multi-vendor support for common business practices.
Platform is bigger than all that and one example of its impact is the Force United Consortium a group of vendors with applications built on top of the Salesforce1 Platform. They include Apttus, FinancialForce, and ServiceMax among others. Their extra value add is that their disparate applications not only integrate well with Salesforce products but that their solutions are almost indistinguishable from Salesforce and each other at the foundation level because they are platform native meaning they use the same objects from the Salesforce toolkit. Of course, they do vastly different things too and that’s the point.
The consortium elevates the members as well as Salesforce to the status of an uber application, sharing data but even more importantly sharing metadata that supports the business processes on a common platform that make Customer Science possible.
We’ve come a long way from the times when computer automation was mainly about making data more accessible to better support manual business processes. Big Data gave us the insights to understand customers in ways we never could before and platforms are enabling process automation not simply data storage and retrieval.
There are still things that only people can do in this highly automated environment but the new science and platforms make the people involved in the processes much more productive and importantly they provide better and more intimate association with customers. Ironically, process automation is still not widely accepted, it is only gradually becoming part of the landscape though of course, leading practitioners have already gotten and digested the email. Perhaps next year it will see greater emphasis for the rest of us.