Building the Social EnterpriseBusiness Case

July 2012

Agenda

• Salesforce.com Approach to Business Case• Identification/selection of key value drivers• Definition of corresponding metrics• Data Request• Recap and Next Steps

Salesforce.com Approach to Business CaseSalesforce.com Approach to Business Case

Six Steps to Build the Social Enterprise Business Case

Identify/select key value drivers

Identify/select key value drivers

Define corresponding

metrics

Define corresponding

metrics

Benchmark vs.peer group

Benchmark vs.peer group

Validate assumptions with

LoB and IT

Validate assumptions with

LoB and IT

Build and iterate the underlying

model

Build and iterate the underlying

model

Prepare an exec presentation

Prepare an exec presentation

11

22

33

44

55

66

The Sales Transformation at CUSTOMER XBrings in a Set of Value Drivers

11

• Delivering a 360 View of Customer across all Business Units

• Enabling Visibility tools and processes to focus on high-margin and high-growth opportunities

• Evolving CUSTOMER into a Collaborative and Connected enterprise

• Rationalizing IT portfolio to increase margins

• Selecting a CRM tool that guarantees User Adoption

• Delivering a 360 View of Customer across all Business Units

• Enabling Visibility tools and processes to focus on high-margin and high-growth opportunities

• Evolving CUSTOMER into a Collaborative and Connected enterprise

• Rationalizing IT portfolio to increase margins

• Selecting a CRM tool that guarantees User Adoption

360 View of Customers

Operational and Financial Visibility

Connected Sales Processes and Staff

Simplified IT Systems

Increase Tool Adoption

CUSTOMER’s Requirements

Sales Transformation Value Drivers

Illustrative

Salesforce response to CUSTOMER X Value Drivers will Translate into Significant Business Value (I)

22

Salesforcebenefits for CUSTOMER

Revenue generation

Businesscost

savings

360 View

Visibility

Collaboration

Rationalize IT

User Adoption

360 View

Visibility

Collaboration

Rationalize IT

User Adoption

• Win rate improvement• Opportunity size increase• Opportunity volume increase• Time-to-market (sales cycle time decrease)

• Churn rate decrease• Cross/up sell

• Sales productivity increase• Reduced attrition• Sales admin/ops productivity increase

• Information search time decrease• Meeting volume decrease

CUSTOMER X Value Drivers

Key Metrics

Illustrative

Salesforce response to CUSTOMER’s Value Drivers will Translate into Significant Business Value (II)

Salesforcebenefits for CUSTOMER

IT cost savings/av

oidance

• Software License Cost• Software Support/Maintenance Costs• IT Integration Costs• Upgrade Costs• HW• IT Infrastructure & Support Costs• Application Support/Administrative Costs

• User Training Costs

CUSTOMER Value

Drivers

Key Metrics

22

360 View

Visibility

Collaboration

Rationalize IT

User Adoption

360 View

Visibility

Collaboration

Rationalize IT

User Adoption

Illustrative

On the Other Hand, Bringing CUSTOMER Sales Transformation to Life Has Some Inherent Costs

22

• Salesforce.com Contract Value• Initial implementation and integration costs,

including Change Management• Centre of Excellence, to ensure ongoing support

and value provided

All of these values need to be further detailed during the Business Case process

All of these values need to be further detailed during the Business Case process

Benchmarks from Specific Players in the Professional Services Sector to Validate the Key Metrics

33

Metric improvements

Case resolution time

Agent productivity

Case deflection

First call resolution

Customer renewal

Customer satisfaction

Sales productivity

Sales cycle time

Number of leads

Lead conversion rate

Opportunity win rate

Deal size

Auto Insurance US

company1

International general

insurance group2

US life insurance company2

US bank1

15%

15%

25%

5%

-

-

12%

-

1%

2%

-

-

-

-

-

-

20%

-

-

5%

3%

10%

-

-

-

-

-

-

20%

20%

-

10%

10%

5%

-

30%

30%

-

30%

30%

10%

80%

10%

-

10%

-

1. Implemented multiple products: Sales Cloud, Service Cloud, …2. Implemented Sales Cloud only

Illustrative for an

Insurance Company

%improv.

CUSTOMER’s Peer Group Benchmarks Show Significant Improvements in the Key Metrics Defined

33

%improv.

%improv.

%improv.

Source: Salesforce.com Customer Relationship Survey conducted from June 09 – March 12 by an independent third-party. Survey respondents filtered for Insurance and FS customers (+1,000 business executives/project sponsors and system administrators worldwide)

Illustrative for an

Insurance Company

Additionally, Salesforce.com Delivers Significant IT Cost Reduction

33

Source: Salesforce.com Customer Relationship Survey conducted from June 09 – March 12 by an independent third-party. Survey respondents filtered for Insurance and FS customers (+1,000 business executives/project sponsors and system administrators worldwide)

Software Upgrade Costs

IT Infrastructure Management

Costs

Overall IT Costs

37% 41%IT Integration

Costs

Application Support /

Administrative Costs

User Training Costs

34%

36%36%

42%41%

“Force.com delivered 4x as many apps and resultant business value at less than half the cost” - IDC white paper

“Force.com delivered 4x as many apps and resultant business value at less than half the cost” - IDC white paper

Average Percentage Improvements Reported by Customers

CUSTOMER Needs to Validate the Improvement Hypothesis

44

Lines of BusinessLines of Business

ITIT

• Confirm Key Metrics affected by the Value Drivers • Validate improvement values based on benchmarks• Provide values for business parameters to calculate €

amounts• If applicable, identify other metrics affected and agree on

improvement values

• Confirm Key Metrics affected by the strategic initiatives• Validate improvement values based on benchmarks• If applicable, identify other metrics affected and agree on

improvement values

ROI Framework

Salesforcebenefits for CUSTOMER

Revenue generation

Businesscost savings

IT cost savings/avoida

nce

55

++

++

--CUSTOMER’s investment

Net benefits for CUSTOMER

ROI

++

Model Output Shows Details On Benefits Evolution, ROI and Payback Period

55

• Benefit realization driving overall implementation roadmap (illustrative)

- Phase 1: 0-6 months

- Phase 2: 6-12 months

- Phase 3: 12+ months

• Calculations take into account both recurrent and one-time costs

The Exec Presentation is the Formal Deliverable to Justify CUSTOMER’s Investment

66

Data RequestData Request

To Calculate the Business Impact of the Improvements we need CUSTOMER to Collect some Data

MetricMetric CurrentValue

CurrentValue

Improvement benchmarks

Improvement benchmarks

Projected improvement

Projected improvement

Business impact

Business impact PhasingPhasing

Cross-selling 4% 17% - 32%

10%

Increase in cross buy rate x # of cases

per yearx average size of cross buy

oppty

50% 6 months, 100% year 1

Illustrative

Customer X

We Will Support our Data Request with a Set of Templates Tailored to CUSTOMER X Key Metrics

Back-up

Appendix: Customer SurveyAppendix: Customer Survey

Key Success Metrics for Salesforce.com Customers (I)

Key Success Metrics for Salesforce.com Customers (II)

Recap and Next StepsRecap and Next Steps

Recap and Next Steps

• Today we have

- Shared our Approach in Building a Business Case

- Validated Drivers and Metrics to consider

- Identified Data to collect

• Next Steps are

- Set up a conference call to understand your business priorities

- CUSTOMER X and SFDC to agree on Projected Improvements

- SFDC to propose a Financial Model if needed

- CUSTOMER S or SFDC to iterate the Model with Data Collected and Projected Improvements

- SFDC to propose Bus Case Presentation if needed