cloud: session 7: cloud computing, software as a service, and sales forecasting

Cloud

Cloud Computing, Software-as-a-Service, and Sales Forecasting

Douglas Lucy

Cloud Computing, Software-as-a-Service, and Sales Forecasting

04/08/2023 ©2012 SugarCRM Inc. All rights reserved. 2

©2012 Adaptive Planning, Inc. All rights reserved.

Marketing

Autom

ationC

RM

, SFA

Signature

Automation

Human

Cap

ital

Man

agem

ent

Communication

& Meetings

Searc

h Eng

ine

Mar

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g

Sales & Use

Tax

Call C

enter

Pro

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M

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Website Monitoring,

Testing

Fixed Asset, Equity Management

ERP, Payroll,

Banking

Cloud Computing is Mainstream for Business


On-demand servicesDelivered from remote locations by third party

Service delivery via the internetMulti-tenant – multiple, diverse customers share computing resources, allowing economies of scale

Partitioned tenants don’t impact each otherSecurity tightly integrated into service

Scalable and elasticIncrease or decrease number of users that have access to services

Automatic and frequent enhancementsAutomatic backups integrated into services

Essential Cloud Attributes


Cost Savings

Time Savings

Scalability

The Cloud

Cloud Market Drivers


We have a general IT strategy of preferring SaaS over on-premise deployments

It was the only deployment option available from software providers

Lack of in-house IT staff to maintain a traditional software solution

Ability to substitute upfront costs with regular monthly payments

Gaining a feature or functionality that is not available in a traditional, licensed software package

To support a large number of mobile and remote users

We chose the best application for our needs and were neutral on whether it was SaaS or not

Improved business agility

Allows us to focus resources on more important projects

Lower overall costs

Speed of implementation and deployment

15%

11%

22%

24%

26%

23%

24%

28%

31%

26%

35%

6%

10%

19%

18%

18%

22%

26%

30%

28%

35%

33%

4 - Important 5 - Very important

Sample: 534 software decision-makers Source: Forrsights Software Survey, Q4 2010

Why the Cloud?


Source: Hurwitz & Associates, 2010.SaaS solution analyzed: Adaptive Planning. On-premise solutions analyzed: Clarity Systems, Longview, and Prophix.

4-Year Total Cost of Ownership for Cloud-Based vs. On-Premise CPM Applications (10 Full Users & 15 Review Users)

SaaS On-Premise $-

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

$350,000

IT Infrastructure Application Software Implement & Support Training

77% Lower Total Cost of Ownership for

Cloud-Based vs. On-Premise CPM Solutions


Cloud Lowers Total Cost of Ownership

Software Licenses 9%

Hardware

IT Personnel

Maintenance

Training

Customization & Implementation

68% Subscription Fee

Customization Implementation& Training

On-Premise Software Cloud Computing

43%

26%

14%

7%

1%

32%TCO

TCO

Source: Yankee Group DecisionNote Technology Analysis

“Customers can spend up to four times the cost of their software license per year to own and manage their applications.”

– Gartner “The End of Software”

“Cloud computing yields substantial economies of scale and skill, and lowers total cost of ownership (TCO).”

– The Hurwitz Group “The Compelling TCO Case for Cloud Computing”

77% less than On-Premise


Source: CSC Cloud Usage Index

82 %

65 %

Majority of business save money with the cloud

of companies choose cloud subscriptions lasting one year or more

Percentage of savings

48 % of U.S. government IT workers have moved to the cloud

Businesses are into the cloud for the long term

U.S. federal agencies are required to adopt a “cloud first” policy

Business Cloud Usage


Agencies must default to cloud-based solutions whenever a secure, reliable, cost-effective cloud option existsEach agency CIO must identify three “must move” services, and plan to migrate them to cloud solutionsWhy?

Build capabilities and momentum in the Federal GovernmentEncourage industry to develop cloud solutions for governmentReduce operating costs

U.S. Federal Government Cloud First Policy

Cloud First



Cloud computing is a commercially viable alternative for companies in search of a cost-effective storage and server solution.

Data Center & IT Resources

Complex, overgrown computing platformsDepreciates quicklyConsumes large amounts of space, power, and cooling resourcesIT resources silo around particular applicationsDifficult to adapt to changing business demands

Storage and server needs in hands of outsourcerShifts burden from in-house IT to 3rd-party providerFrees up internal resourcesReliable serviceHuge datacenters with endless storage and computing capacityAdd or subtract capacity as business needs changePay only for what you use



Well-managed cloud computing can be more reliable, secure, and private.

Security

Personal computers easily corruptedIn-house data centers not immune to hackersSecurity cost burdenIn-house IT staff not necessarily most skilled at securing your dataInfrequent audit of all processes and policies

Superior security technology and expertise than a company trying to protect its own dataCost of security spread over a number of customersSSAE 16 Audit and SOC 1 Type II ReportAvailability 99.9%Continuous performance auditsBackup/restore/disaster recovery


SaaS: Software as a Service Enables on-demand use of software

over the Internet

IaaS: Infrastructure as a Service Computing resources (processing

power, storage, etc.) as services over the Internet

PaaS: Platform as a Service Programming platform and tools as

a service over the Internet

BPaaS: Business Process as a Service Business process offerings that

integrate process, technology, and people, e.g., call centers, human resources

Cloud Service Categories


Why SaaS DominatesSaaS Forecast

Forecast: Total Public Cloud Markets

20082009

20102011

20122013

20142015

20162017

20182019

2020$0

$20

$40

$60

$80

$100

$120

$140

$160

$180

IaaS ($) PaaS ($) BPaaS ($) SaaS ($)

Sizing the Cloud April, 2011

SaaS is Well Established and Will Continue to Dominate the Cloud

Ready to run with next-to-no set-up expenditureMost SaaS applications are vitally important but peripheral to core enterprise operationsLow-risk on-ramp to wider cloud adoptionSaaS applications deliver value because their applications encompass complete functionality, which vendors continue to evolve and enhanceBusiness applications delivered far more cost-effectively than other implementations


On-Premise Model

On-Premise Model Cloud-Based Model

Requires new HW, SW, & IT support No new HW , SW or IT involvement

Implement in months/years Implement in weeks

Time consuming, costly upgrades Automatic, disruption-free upgrades

No innovation velocity Constant improvement, enhancement

Designed for techie users Designed for business users

Time-consuming to rollout Automatically accessible worldwide

High upfront cost and TCO Low annual subscriptions and TCO

High risk: big upfront purchase Low risk: try first, cancel at any time

SaaS Delivers Significant Advantages


SOHO

SMB Enterprise

NONPROFIT

Pay only for what you use ENTERPRISESMB

SaaS Levels the Playing Field

World class performancescalability for any

size business

Same featuresSame performanceSame scalabilitySame reliabilitySame global solution


CRM solutions are excellent sales operations toolsDetailed insight into opportunities over next few months/quarters

But significant limitations exist when used for sales forecasting & analysis

Poor visibility into sales further in the future

Insufficient ways to incorporate management judgments Limited snapshots of data at different points in time, for pipeline change analysis

Inability to integrate external data

Sales Forecasting


Optimizes your investment in CRM and other sales tracking systems by enhancing their capabilities:

Top-down forecastingManagement adjustmentsSnapshots of dataDriver-based planningWhat-if analysesIntegrate External Data (Run Rate, Quota, compensation planning, etc.)

Optional automatic integration of sales and financial plans

Sales Forecasting & Analysis Solution

Dramatically improve sales forecasting, enhance productivity, and improve alignment and collaboration

among the sales management team


Sales Forecasting & Analysis Solution:Integration

Detailed Forecast by Opportunity

CRM & Other Sales Applications

On-Premise Applications

Sales Instances

Detailed Forecast by Opportunity+

Management Adjustments+

Additional Data(Run Rate, Quota, etc.)

+Pipeline Snapshot History

Sales Forecasting Instances

Corporate Financial Model• Income Statement

• Personnel• Expenses• Capital• Revenue

• Balance Sheet• Cash Flow

Financial Planning Corporate Instance

Optional

+ Many More


Automatic import of key CRM or other source data (leads, opportunities, wins), plus other data (run-rate business, backlog, compensation detail)Multiple ways to forecast past time horizon of CRM data

Drive current data into future time periods, then adjust with multiple toolsOr use driver-based and assumption-driven planning to model future time periods

Drivers can incorporate financial and non-financial data, such as call volume, man hours, billing rates, units, pricing, etc.

Sales Forecasting & Analysis Solution:Improved Visibility into Sales Further Out

Leverage CRM data and easy-to-use but sophisticated modeling tools to forecast past CRM time horizon


Manipulate data in Adaptive Planning, regardless of the sourceOr supplement it with additional data, at the detailed or higher level

E.g., adjust total sales by region, or for specific product lines

Multiple modeling tools make either method easy, e.g.,

Automatic copy forward, adjust up or down by values or percentages over timeAssumptions and lookup tables facilitate calculations and what-if scenario analysis

Sales Forecasting & Analysis Solution:

Easily Integrated Management Adjustments

Top-down meets bottom-up forecasting, while maintaining pipeline detail


Create snapshots of CRM data at any chosen interval (e.g., monthly, weekly, daily)Use reports, dashboards, KPIs, scorecards with real-time pipeline snapshot data for trend and change analysis

Also perform other analysis, e.g., benchmarking sales’ reps conversion rates

Use drag-and-drop report builder for easy slicing and dicing of pipeline data across unlimited dimensions

E.g., product, customer, channel, region, sales rep

Drill down to identify root cause of variances

Improve analysis of sales performance and understand key changes in forecast over time

Sales Forecasting & Analysis Solution: Snapshots of Pipeline Data for Analysis


Build quota and compensation plans in same system as sales forecast

Integrated planning facilitates what-if scenario analysis

Take advantage of tools to calculate compensation by sales rep, territory, region, etc.

Revenue targets can be set by product line, key customers, etc.Allocate targets down to individual rep level, with uplifts where appropriate

Integration of sales and compensation planning decreases planning time, improves productivity, and makes what-if analysis fast and easy.

Sales Forecasting & Analysis Solution: Integrated Quota & Compensation Planning


Unlimited custom dimensions, e.g., product, customer, channel, region, rep

View data on multi-dimensional cube sheets, whose axes can be changed by dragging and dropping

Multiple currencies and automatic currency conversionAutomated consolidation, across worldwide entities and currenciesIntuitive and easy to use, even for non-finance peopleCan be owned and managed by Sales, with no IT or Finance support requiredImproves collaboration among sales managers

Sales Forecasting & Analysis Solution: Additional Features & Capabilities

Decrease forecasting times by up to 90%, free up more time for value-added analysis, and improve overall sales execution


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