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Salesforce is a global software-as-a-service (SaaS) company to be reckoned with. The swarming crowds at its Dreamforce event last week were estimated to exceed 90,000. The company is rapidly growing an ecosystem that includes Sales, Service and Marketing Clouds; Force.com for building applications; and Data.com for storing data in the cloud centrally for use across Salesforce products. It is also focusing on social computing, as I outlined at the beginning of the event. Hundreds of Salesforce partners complement and in some cases compete with the company with a large range of applications and tools available on the Salesforce AppExchange.

In the last couple of years Ventana Research has been closely examining support for data within and across cloud computing environments like Salesforce.com’s and dozens of others, and we have seen the need to provide an interchange with data in on-premises enterprise applications and systems. Unfortunately Salesforce, like other companies that deliver applications and platforms in the cloud, has failed to advance such interchanges. It is clear that managing data in the cloud, as our research has found, can have significant process benefits, such as improving data quality and reducing resources to establish and maintain the cloud effort.

I was looking to find more direction from Salesforce.com at Dreamforce, as were thousands of other organizations who are now connecting their applications and data together. I found few improvements outlined for Database.com in the Winter ’13 release, and found no real substance to support organizations’ broader data needs beyond just processing data within its own environment – but organizations cannot just put all of their data in this offering for their broader business and IT needs.

Organizations create and store larger volumes of data that needs to be utilized across business processes, within an enterprise or shared across cloud computing environments. Our research shows that a significant number of organizations (more than 40%) need or plan to add data integration for cloud computing and software as a service (SaaS). Such integration to support the needs of people and processes across applications requires many levels of plumbing. First, when organizations start using a new application that operates in the cloud, it must migrate data to the new application. Most organizations then require some level of replication and synchronization of data until their legacy application is no longer needed. Second, as new data is created within the cloud application, it inevitably must be replicated to other applications, perhaps on a daily or weekly batch basis, or maybe via real-time feed as transactions occur. This data might need to be piped to other cloud computing areas or on-premises applications and data environments, and that requires more than just some administrative tools within an application or database.

Distributed applications that create data must also have some level of consistency in their definition and use of customer, product and service information. In addition, our research has found concerns about areas such as data security, which was the top concern in 63 percent of organizations. Having dedicated software to help manage the data plumbing in the clouds and enterprise can provide better safety nets and auditing of data usage. As organizations continue to demand analytics across line-of-business areas, a third-party approach will best fit most organizations’ needs, as I point out in “Salesforce struggles to deliver on the dream of analytics.” This basically means that integrating data for analytics at any level of information management requires integration of data across the cloud.

Salesforce has not been progressive in helping organizations manage data effectively. It still uses methods such as exportation (56%) and custom coding through APIs (39%), which are part of the problem when it comes to providing consistency, quality, security and overall efficiency to adapt to enterprise needs. Our research finds organizations are rapidly adopting dedicated tools that do a better job.

Salesforce does have a portfolio of partners that help with application and data integration needs across a range of business processes, which is important; our recently released Ventana Research Data Integration Value Index included in our assessment the ability to support cloud computing environments. But other vendors do more to help business and IT with their data needs. Several such vendors deserve special mention.

Informatica provides an on-premises and on-demand environment for data integration and has continued to advance its cloud computing offering as a platform for supporting a range of applications and data needs. Informatica also this month announced a new software offering to help with data integrity by ensuring that consistent data is placed in the cloud computing environment. It leverages a master data management approach, which our research finds is growing rapidly, as 29 percent of organizations have initiated new projects and 26 percent have them in planning. The software also helps consolidate instances of Salesforce and provides the ability to augment existing data with offerings from Salesforce’s Data.com and other sources, such as IMS, Moody’s and Thomson Reuters.

As another example, SnapLogic provides a dedicated cloud computing environment for componentized integration of data across applications and systems. It has been able to provide a data integration environment that analysts find easy to use to dissect their data deluge and support management’s need for analytics, and that developers can use to tailor the flow of data to the range of business processes that customers and partners might need. SnapLogic’s dedicated focus on the cloud and its leverage of partners’ and customers’ work makes it a vendor to watch.

Information Builders provides direct connectivity to Salesforce and supports a range of real-time and batch-related tools for unifying the cloud and on-premise environments. Zyme Solutions offers tools to provide consistent data across channels and partners and supports associated business processes across accounting, order management, customer service and supply chain applications.

Many organizations are not able to just consolidate applications but instead have existing applications whose data must be integrated across a range of business processes. Kapow Software provides a method for capturing data in any browser-based environment. It can also help organizations make existing applications operate on other platforms, such as mobile technology, then enable the data from the screen to be integrated into the cloud or on-premises enterprise environment. This approach simplifies the integration of applications and processes through a self-service approach that helps leverage existing investments.

As your organization looks to integrate cloud computing environments like Salesforce with the enterprise, you will not find much help from Salesforce itself. Chances are you will need help from third-party providers to build an automated and sustainable approach. Automating data activities related to the cloud is a very important task to 38 percent of organizations and growing in importance rapidly.

The challenges your organization faces with data are getting larger, and the financial benefits of data in the cloud, such as reduced TCO and reduced implementation fees, are substantive. Too much time and too many resources are wasted in manual approaches where data is transitioned inconsistently and incorrectly. Automation helps organizations rationalize their overall information management efforts.

The largest barrier to efficient information management that we found in our research is data spread across to many applications and systems, according to 67 percent of organizations, followed by multiple versions of the truth (64%). If your organization lacks an information and data strategy for cloud computing across line-of-business areas where applications are being rented frequently, you’re at risk of wasting time and money and having incorrect or out-of-date data.

I hope that Salesforce will present a better blueprint for integration technologies in the future to guide customers toward the options it has and is available from its partners. The company inevitably will need to buy a company that provides this technology to meet the needs its customers have today and will continue to have in the future.

Regards,

Mark Smith

CEO & Chief Research Officer

Salesforce.com’s 2011 Dreamforce conference is under way. If you’re in sales and you use the company’s application, here’s how to gain the most value from your time at the conference. 

Today, For background, we need to note that Salesforce.com is not as focused on the sales force as it once was years ago, now concentrating more on application development, collaboration, mobility, database and cloud computing advancements to address the needs of IT who is readily engaging into this method of software usage. All of these are useful underlying capabilities that a sales force might use, but they are not aligned with the critical sales activities and processes. If you use Salesforce.com for sales force automation (SFA) in managing accounts, contacts and opportunities, we advise you to link it to a larger management and operational process that we call sales performance management and now are doing some new research. Our ongoing research into this topic shows that sales organizations require a portfolio of applications to support this process, but that two-thirds of organizations are not satisfied that SFA is meeting their needs. 

Salesforce.com does have a framework for sales called the Sales Cloud that addresses sales representatives’ basic needs in managing accounts and contacts, entering opportunities and quotes, working through approvals and workflow along with analytics. The company will be introducing some new capabilities, including basic sales forecasting, but that will not match the current class of sales forecasting available from its partners such as Cloud9 that I just assessed. Salesforce does deliver auxiliary collaboration with Chatter, email and calendaring and the ability to augment its contacts in an account with its purchase of Jigsaw. It has been steadily advancing its capabilities for mobile technologies including smartphones and tablets. It also recently released its Account Viewer, an iPad app that lets managers and account sales teams access account and related information as part of a review or visit. 

It’s a good thing Salesforce isn’t standing still, because Oracle and SAP are entering this market with cloud and mobile-based SFA offerings. My analyses of Oracle and SAP found they have covered the basics of SFA and provide more functionality for sales managers and management, which should provide new competition for Salesforce.com. Microsoft is rapidly becoming competitive with its new offerings and move into cloud computing. 

Dreamforce has grown so big that picking out what matters for sales professionals is not easy. There is much focus on cloud computing, collaboration, mobility, analytics and social media at the conference, and these are important topics that we have outlined as the business technology innovations of the decade. The secret behind Salesforce.com’s strategy is its enterprise software in the cloud, and the diatribes on technology-related advancements in cloud computing will be overwhelming.  

Still you need to determine what applications fit best for your sales organization. At Dreamforce you will find a number of sessions that are valuable for sales operations and management staffs. I am looking forward to “LinkedIn for Salesforce: Close Deals Faster with Insights for Your Pipeline” and “Mobile Crash-Course for Busy Sales Executives.” “iPad Revolution: How Going Mobile Will Transform and Boost Sales Efficiency” will get you thinking about the use of mobile technology for your sales organization. I also suggest “Social Selling: Rising Above the Noise to Drive Sales Performance” and “The Future of Comp (Hint: It is not Excel).” If you are trying to see whether Salesforce will go beyond the basic projections of opportunity records and align to the forecasting process, stop into “Forecasting Best Practices and a Sneak Peak at the NEW Forecasting Application.” I would also not miss “Sales Cloud Roadmap: A Sneak Peak into the Future” to see if Salesforce will advance further into sales performance management, and “Roadmap Sneak Peak: The Future of Analytics in Salesforce” to see what the company plans to do about sales analytics, which our benchmark research shows needs serious improvement from the wide use of spreadsheets and generic reporting and dashboards.  

At the Dreamforce expo you can find a wide range of dedicated sales applications, some of which are more likely than others to be worth your time, but the show floor will be chaotic and there is no “sales cloud” area on the show floor. The quick guide below starts with sales-related vendors who have the smallest booths, and works up to those with higher sponsorship levels and investments. 

At the Bronze level, see what Merced Systems is offering in Sales Performance Management 4.0, which I recently assessed. Stop by Qvidian, which has been advancing the art of sales playbooks and proposals in applications, as I just assessed; it could be one of the gems of the show for sales. If you are trying to improve the science of territory and quota optimization, stop by TerrAlign to see how the largest and most complex sales forces optimize their sales organizations. Zyme, which my colleague Robert Kugel recently assessed, helps you gain control of your channel through data integrity. If you care about pricing and profitability, see Vendavo and Zilliant, both of which have been helping B2B organizations for years. 

At the Silver level, ChannelInsight provides applications to help manage channels sales, a critical area of focus for many who depend on distribution and reseller channels. Also Varicent, from our analysis is one of the fastest-growing providers of sales performance management specializing in sales compensation and incentives, along with quotas and territories and sales analytics. 

At the Gold level, Callidus Software is a long-time provider of applications for sales management and operations, and was rated a Hot Vendor in our Value Index for Sales Performance Management. It has been integrating talent management into its sales portfolio through acquisitions that started with that of ForceLogix in 2010. If you care about configuration, pricing and quoting in your sales organization to maximize margins and pricing more immediately, stop by Camelon Software. Cloud9 has just expanded to provide intelligent sales forecasting to complement its pipeline management, as I just assessed. Xactly is showing its rapidly growing suite of sales performance management; we rated the company a Hot Vendor, and it provides a range of applications for the sales organization. My latest analysis of Xactly shows significant growth of capabilities in its 7.1 release. 

At the Titanium level, if you are looking to arm your inside sales and accounts teams with maturing leads that might be ripe enough to sell to, you will find Marketo has expanded its footprint to provide a sales application called Marketo Sales Insight that is worth checking out. 

There will be a lot to cover for sales professionals. I will be busy assessing the latest from Salesforce.com and dozens of its partners as part of my preparation for the 2011 Value Index for Sales Performance Management. Our 2010 version indicated that Salesforce still has a way to go to reach Hot Vendor status. We are also busy with our latest benchmark research in sales to determine your priorities for more efficient sales processes from management to operations to sales teams, all aimed at gaining the best possible outcomes.  

Dreamforce should be a good event for those in sales teams. Make sure to network with your peers in the sessions, as the rest of the event will be chaotic, with attendance well beyond even Salesforce.com’s expectations. I too will be looking to see how I can get the best return on my Salesforce.com investment that we use for SFA, and whether our firm should continue using it. If you are in sales and want to track me down and catch up, find me on Twitter at @marksmithvr, and we can talk about providing you with ways to get inexpensive access to our research and consultations.  

Regards, 

Mark Smith – CEO & Chief Research Officer

Mark Smith – Twitter

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