Property services firm implements CRM tool, generates return on investment in less than three months
Who is ISS Belgium?
ISS Holding A/S is an €8.9 billion [approx. U.S.$12.5 billion] a year worldwide facilities management and maintenance firm. One of its subsidiaries is ISS Belgium, which provides cleaning, catering, property services, and office support to 12,425 customers. The firm's 12 operating divisions post earnings of €415 million.
ISS Belgium's service offerings come in three tiers. The Single Service offering provides stand-alone services such as office cleaning. The Multi-Services offering bundles two or more services, while the Integrated Facilities Services offering delivers most all of a facility's management needs.
Low usability of the firm's existing SAP customer relationship management (CRM) application undermined user adoption. IT managers found the inflexible system prohibitively expensive to customize to individual business units. As a result, the solution was not used and salespeople lacked visibility into the activities of other business units. This led to "friendly-fire" incidents, whereby multiple salespeople from different groups contacted customers and prospects—much to the irritation of everyone.
Managers implemented Microsoft Dynamics® CRM business software as the firm's sales force automation solution. User adoption increased nine-fold while friendly-fire incidents diminished. Customer satisfaction increased, client churn decreased, and salespeople increased cross-sales revenues along with their sales closure rate.
Table 1 – Key financial benefits of the
Microsoft Dynamics CRM implementation
Net present value: / €5,886,843
ROI: / 1,936%
Payback period: / 0.2 years
[ Figures developed using the Optera Definitive Economic Model™]
Situation
The business relationships of ISS Belgium can be summed up in one word: complex. That reality stems from an employee base of 12,000 working across 12 operating groups to serve 12,425 clients. In practice, keeping track of which operating group approached which prospect to sell which service fell short of manager expectations.
This can be traced to a lackluster SAP customer relationship management (CRM) implementation. Users found it so cumbersome to use that the adoption rate hovered at an insignificant level.
IT managers were similarly unhappy. Adapting SAP CRM to the needs of individual business groups was very difficult. Managers determined that to do so would be cost prohibitive, not to mention that it would saddle the IT department with costly ongoing support for a customized SAP environment. Consequently, the older CRM system languished.
Employees lacked the visibility into each other’s actions and as sales and marketing activities progressed, employees stepped on each other's toes. It happened so frequently that managers coined a new metric called "friendly-fire" incident.
The price of friendly fire was high. Not only did the company's brand image suffer but current customers and prospects were put off by it. Some customers chose not to renew their contracts and revenues were lost.
The inability for business units to collaborate on cross-sales efforts kept sales and closure rates below the level managers knew salespeople were capable of achieving. Moreover, many processes relied upon inefficient manual processes that lowered the productivity and effectiveness of the sales teams.
Executives were determined to eliminate friendly fire, promote cross-sales collaboration, and increase efficiency. They decreed that a user-friendly, adaptable, automated sales force system be implemented to achieve this end.
Solution
Managers used a scorecard to evaluate alternative CRM solutions against the following criteria:
· Ease of use
· Integration with the Microsoft® Office Outlook® messaging and collaboration client
· Easily adaptable to the processes of business units and newly acquired companies
· Easily configurable roles-based security
· Strong reporting capabilities
· Easily configurable workflows and integrations that utilize automation
Tallying the results, Microsoft Dynamics® CRM business software won over Siebel CRM and SAP CRM.
Managers established the Microsoft Dynamics CRM solution as the sales force automation foundation across the enterprise. They use the marketing and sales modules to support operations from the initial contact with a prospect through the purchase and renewal of services. Customer data was imported into a single repository to provide 100 users with a 360-degree customer view. The configurability of Microsoft Dynamics CRM empowers managers to tailor fields, terminology, and workflows to the business requirements of each operating division.
To eliminate friendly-fire incidents, salespeople research a prospect to see if an ISS Belgium peer has been working the lead. When a salesperson identifies an opportunity outside their service offering, they easily pass it on to someone in the appropriate business unit.
Business and IT managers have heavily utilized workflows to improve productivity and business outcomes. Workflows guide the service contract renewal process; the "win-the-customer-back" process; and the new customer credit check process, among others.
Benefits
ISS Belgium managers project that the Microsoft Dynamics CRM solution will deliver a business value of €7.6 million [approx. U.S.$10.8 million] over three years. [See Figure 1.] This includes €1.9 million due to increased receivables management efficiency and €6.448 million attributable to increases in sales productivity and performance.
Directly Measurable Benefits
[see “Benefits” in Figure 2: The Definitive Economic Model]
Increased contract renewal rate by 15 percent to capture a projected €4.5 million in three years. Managers configured a proactive Microsoft Dynamics CRM contract renewal workflow to reach out to 90 percent of clients. That compares to 60 percent previously. Subsequently, managers documented a 15 percent increase in the contract renewal rate to significantly increase revenues.
Slashed net receivables float time by 53 percent to provide €1.92 million in projected savings over three years. Using Microsoft Dynamics CRM workflows, credit checks are run on 95 percent of new customers. That compares to 10 percent using the previous system. As a result, financial analysts have noted a significant drop in receivables days outstanding from an average of 75 days down to 34. (Benefit calculation assumes a cost of money rate of Libor +300 basis points.)
Figure 1: Projected three-year costs and benefits of Microsoft Dynamics CRM deployment
Boosted customer re-win rate by 17 percent to earn a projected €1.2 million over three years. By utilizing automation and workflow management capabilities, ISS Belgium salespeople have increased their re-win rate by 17 percent since the implementation of Microsoft Dynamics CRM.
Enhanced sales productivity to save €748,000 over three years. Managers used Microsoft Dynamics CRM to automate key tasks and provide efficient workflows. Based on time and motion studies, the CRM solution liberated about 15 percent of sales professionals' time, which translated directly to an increase in selling time.
Key performance metrics steadily improving. Since Microsoft Dynamics CRM has been implemented:
· ISS Belgium's market share has increased by 5 percent (from 41 percent overall to 46 percent).
· ISS Belgium's brand awareness has increased by 45 percent (from 22 percent to 67 percent).
· Sales conversions increased by 6 percent (from 13 percent to 19 percent).
· Customer satisfaction has increased by 18 percent.
· Customer wallet share has increased by 4 percent (from 4 percent to 8 percent).
· Customer churn has been reduced by 3 percent (from 8 percent to 5 percent).
Additional Value to the Business
Nine-fold increase in CRM system user adoption. ISS Belgium employees found Microsoft Dynamics CRM easy to use because it draws upon the look and feel of Microsoft Office Outlook. Integration with Outlook further eased the use of the CRM solution to promote a dramatic rise in user adoption.
Friendly-fire incidents all but eliminated. The creation of a single customer data repository gives salespeople a full view of prospects and customers. Thus, friendly-fire incidents have nose-dived.
Fast turn-up of new corporate acquisitions on standardized platform. As ISS Belgium acquires new companies, IT managers can quickly import customer data into Microsoft Dynamics CRM and add new users to shorten the time to value of their investment.
The Investment
[see “System Costs” and “IT Costs” in Figure 2: The Definitive Economic Model]
ISS Belgium’s investment in Microsoft Dynamics CRM included implementation costs and IT expenditures in software, hardware, ongoing maintenance, and staffing.
· Costs associated with the firm’s implementation included the selection of a CRM solution along with the scoping of the project, the project design, hiring an outside implementation resource (partner) and developing the solution to fit the firm's business needs. These start-up costs included €165,069 in pre-launch development along with €124,008 in initial hardware and software expenditures—for a total of €289,077.
· Expenses for infrastructure (hardware and software) and staffing over three years are estimated to reach €487,063.
· The total three-year projected implementation, infrastructure, and ongoing maintenance costs are €727,132.
About The Optera Group, LLC1
The Optera Group, LLC (Optera) is a professional services firm specializing in understanding the business value of technology and the strategic use of technology to generate sustained economic value. Opera advises clients on their market strategies and the way their solutions create value in real-world implementations. Optera has extensive experience in IT best practices, business IT alignment issues, and defining the Definitive Economic Value ™ of technology investments. To learn more, please visit us at:
www.opteragroup.com
About the Method and General Disclaimers
This report provides an illustration of the potential total cost of ownership (“TCO”) and other financial results a customer or interested party may achieve by implementing various technology solutions. The results shown are based on The Optera Group, LLC’s (Optera) independent analysis of the expected costs and benefits associated with the implementation described above and is based upon the application of assumptions provided by the organization described in this study. Actual results may vary depending on factors associated with a specific implementation. Optera does not guarantee the timeliness or completeness of the information provided by this report or warrant any results from your use or reliance upon the information.
For More Information
For more information about Microsoft products and services, call the Microsoft Sales Information Center at (800) 426-9400. In Canada, call the Microsoft Canada Information Centre at (877) 568-2495. Customers who are deaf or hard-of-hearing can reach Microsoft text telephone (TTY/TDD) services at (800) 892-5234 in the United States or (905) 568-9641 in Canada. Outside the 50 United States and Canada, please contact your local Microsoft subsidiary. To access information using the World Wide Web, go to:
www.microsoft.com
For more information about ISS Belgium's products and services, call 00 352/42 46 20 1 or visit the Web site at:
www.be.issworld.com/Pages/Frontpage.aspx
1 Information contained in this publication has been obtained from sources considered reliable, but is not warranted by Optera Group, LLC.