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What's the Appeal of Microsoft Dynamics CRM 4.0?

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Linda Leung talks with Marc Wolenik and Rajya Vardhan Bhaiya, authors of >Microsoft Dynamics CRM 4 Integration Unleashed, about Microsoft Dynamics CRM, its appeal to customers, and how it stacks up against the competition.
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It's probably difficult to find a business, large or small, that doesn't use Microsoft software. Whether it's Microsoft's Office productivity suite or the Exchange mail platform, Microsoft's software appears ubiquitous. But Microsoft isn't just about personal productivity products. It also has a suite of enterprise applications for enterprise resource planning (ERP) and customer relationship management (CRM). Dynamics CRM 4 is Microsoft's flagship CRM product that is seeing stiff competition from standalone CRM products from companies such as Salesforce.com. Microsoft in early 2008 moved to further extend the appeal of Dynamics CRM 4 by releasing a hosted version for customers that don't want to manage an on-premises product. In November 2009, Microsoft launched an aggressive initiative aimed at luring Salesforce.com customers away.

Microsoft Dynamics CRM 4 Integration Unleashed written by Marc J. Wolenik and Rajya Vardhan Bhaiya, presents proven techniques, best practices, and example code for going far beyond the out-of-the-box capabilities of Dynamics CRM 4. The authors provide a step-by-step guide to integrating Dynamics CRM with SharePoint, Office Communicator, PerformancePoint, BizTalk, Silverlight, and other tools.

Wolenik, MCP, PMP and MBS CRM certified professional, is the owner of Webfortis, a consulting company based in Northern California. Webfortis specializes in solutions around Dynamics CRM and is a Microsoft Gold Certified Partner. Bhaiya, based in San Francisco, Calif., is an IT Solutions Architect with extensive experience supporting large-scale Fortune 500 applications that use and integrate Microsoft Dynamics CRM, SharePoint, and PerformancePoint.

I spoke with Wolenik and Bhaiya to discuss Dynamics CRM, its appeal to customers, and how it stacks up against the competition.

Linda Leung: Why should customers consider Microsoft for their enterprise software needs?

Marc Wolenik: If you consider Microsoft Servers and virtualization options, Microsoft already serves the enterprise space with their software. Enterprise ERP and CRM is an additional offering that Microsoft has been offering for over five years now. The advantage to using Microsoft for ERP and CRM across the enterprise is that the software is supported by existing infrastructure, technology and skill sets. Built on .NET technology, existing customers can easily extend their software across the enterprise — something that is not always an option with competitors.

Rajya Vardhan Bhaiya: Microsoft software provides a scalable and integrated system platform. The platform has capabilities to integrate with applications across various platforms and services.

LL: Why should customers choose Dynamics CRM 4 compared to Salesforce.com or other established CRM platforms?

MW: First of all, Microsoft Dynamics CRM 4.0 IS an established CRM platform. Designed from the ground-up on .NET technology, it has been existence for over five years, and has over a million people using it. Secondly, Microsoft Dynamics CRM is a much more than just "Customer" relationship management. The xRM initiatives that are available (whereby the "x" is anything management), allow organizations to use Microsoft Dynamics CRM for more than just customer management and we have seen organizations consolidate many LOB (line of business) applications onto the one platform.

Additional reasons to choose Microsoft Dynamics CRM 4.0 include:

  • The "Power of Choice" whereby customers can start in the cloud on a hosted solution and then move that solution to their in-house servers if they desire.
  • Easily extended platform and technology built on .NET.
  • Single pricing for ALL functionality.

RB: Microsoft Dynamics provides a customizable and agile foundation that can be configured to the business process for a variety of organizations across all industries. The higher-end services from Salesforce.com or other vendors provide configuration. But Microsoft Dynamics allows that on every version.

Here is a small list of features that are superior in Dynamics:

  • Dynamics CRM has native integration with Outlook and other office client products.
  • All the data is stored in a dedicated database, which makes backup and recovery easier.
  • Depending on the version of the competing products, the organization is entitled to different features (Activity, Campaign, Marketing Lists, Leads, Products, Workflow, ad-hoc reporting, and more). In Dynamics CRM, all the CRM features are part of the standard installation.

LL: Microsoft rolled out an on-demand version of CRM 4.0 in early 2008. Did this help to increase awareness and interest in the market for Microsoft CRM?

MW: Absolutely. Customers are increasingly interested in cloud or on-demand software. The fact that Microsoft offered this, followed by SharePoint, Exchange and now Office as a hosted service shows that the product is mature enough to be available on-demand.

RB: Yes, this increased awareness and people were more comfortable to trust this application as "enterprise ready." People have a perception that if something can run in a hosted/cloud environment, it is able to scale to the highest degree. Smaller organizations are considering this as the primary CRM system. This change is sprouting interests in medium size companies to switch to MS Dynamics CRM.

LL: What's the process that customers should go through to decide whether to opt for on-premises or on-demand CRM?

MW: Typically this decision process is made based on a technology decision — i.e. whether or not the infrastructure is in place to support an implementation. Additional considerations include "rent or buy" decisions (there is usually a break-even point at just under three years), and desire (or lack) to integrate the system.

RB: The organization will need to balance the cost of maintaining the servers vs. the cost of the network connectivity required for a hosted solution. It is recommended to have redundant network connections, so that there is a backup connection for the clients to use the hosted solution.

If an organization has offices across the globe they will need to have sufficient network connections between the clients and the servers.

Network connectivity is the key determining factor between a hosted vs. non hosted solution.

Other things to consider are the integration required with other systems. For example does the data need to synchronize with the backend system constantly?

LL: Integrating CRM with key Microsoft collaboration software such as Outlook and SharePoint is a key requirement of many customers. But established CRM providers, such as Salesforce.com, have been providing as deep an integration to Microsoft for a while. How does Microsoft compete here?

MW: I would question the point about "deep" integration for several reasons. It is true that competitors have integration points however it is unlikely that anybody can do it as well or as deep as Microsoft. When you look at the native Outlook integration offerings for example, you will not find anything equal to that level of integration.

RB: Microsoft Dynamics CRM provides native integration to Outlook and to other analytical tools like Excel and Access. Other CRM providers usually require either a developer-level access, or usually have an additional fee associated with the process.

Also, since all products are from Microsoft, they have an upgrade roadmap which will ensure upgrades and long term stability.

LL: On the other hand, one of the traditional limitations of hosted software is that customers have to work hard to integrate the software with other enterprise systems, such as ERP, because the on-demand apps often don't easily support the APIs of those applications. How can customers overcome this?

MW: Hosted software has an inherent limitation with integration due to the nature of ERP system — i.e. they tend to be on-premise. Because of this, most organizations are looking at performing a multi-platform integration whereby the ERP is hosted locally and the CRM is hosted and therefore there can be challenges with the availability, speed and reliability of the systems. Microsoft Dynamics CRM overcomes this limitation by allowing you to perform an integration in a hosted environment, and if required bring the data in-house/on-premise.

RB: In a hosted CRM, you can run a synchronization utility on the same network as the ERP system, which will communicate with Microsoft Dynamics CRM's Web Services. All Web services are on the same network port as the Web site, which makes the integration seamless.

LL: Even if you use APIs to integrate hosted apps with existing enterprise software, how robust is that integration?

MW: Depending on the integration technology you implement, the integration can be very robust. We have three chapters on Scribe integration in our book and this software has full redundancy built in. This is essential not just for a hosted application, but for an on-premise integration.

RB: APIs are the preferred approach for integration; this interface allows an abstraction layer between the data structure and the business processes. When using the APIs, the system can/will invoke any workflows associated with that object. This will allow all business processes to be executed properly, thus providing a stable and consistent CRM system.

LL: Some observers say that a limitation of CRM software is that it doesn't offer the entire spectrum of relationship management, such as transaction management. How should customers ensure their CRM systems provide everything they need to run their business?

MW: This is completely untrue with regard to Microsoft Dynamics CRM. Leveraging xRM, organizations can take advantage of any kind of management, including transactions. We have seen implementations consisting of Financial, Grant, Student, Vendor and Investment management just to name a few.

RB: Typically, all transactions are managed through the ERP system, so it is recommended to put the transaction management entities into read-only mode, and create a one-way sync between the ERP system and the CRM system. This architecture will provide higher visibility to the data.

LL: Microsoft is getting pretty aggressive in its marketing of on-demand CRM 4.0. In November 2009, the company offered customers six months' access to CRM 4.0 at no charge if they signed a 12-month contract. Is this kind of initiative attractive to customers? How should customers take advantage of these and any retaliatory moves by competitors?

MW: Well, this offering is only available if you are an existing customer of competing software — such as Salesforce.com. New customers were offered the software at a reduced price — $44 per user per month, with the previously separated advanced functionality (offline access, increased storage, etc.). If you look closely at the offering by competitors (where each module/feature has an additional price) and you compare the single cost of $44 per user per month, and the 30 day free trial, there is a strong and compelling reason to go with Microsoft Dynamics CRM 4.0.

RB: These kinds of initiatives are definitely helping the customers to adopt Microsoft Dynamics CRM; after all in today's market, everyone is focused on saving cost and getting the most for the investment.

Customers should compare the ROI between various CRM systems with promotions like this one. The other thing to consider is that once a decision is made to invest in a specific CRM system, typically the lifespan of that system is three years. Usually by then the business process needs alterations, or maybe a significant change has been made to the CRM system that the organization needs to optimize business processes.

LL: Microsoft last year eliminated restrictions that prevented customers from moving virtualized applications, which included CRM 4.0, to a different server more than once every 90 days. What other licensing restriction changes or other initiatives should Microsoft implement to make CRM 4.0 more attractive and flexible for customers?

MW: Microsoft Dynamics CRM licensing is very flexible and allows organizations to re-use licenses if a user is no longer necessary (the system will automatically move all records associated with that user when they are deactivated). Additionally, with the Enterprise version, organizations can have unlimited "tenants" or organizations within the system — allowing for a vast and robust xRM build-out if desired.

RB: Microsoft provides a flexible licensing structure, and the license is associated to each active user. When a user leaves, the organization can reallocate that license to a different user. This is one of the more liberal license agreements for CRM system in the market.

LL: Final question: What has been your most memorable CRM 4.0 installation and why?

MW: My most memorable CRM 4.0 installation was for a customer located in San Francisco. They had complex business requirements and expected the installation to take several weeks. Instead we completed the installation in half a day, made the configurations with the other half and they were up and running the next day. The customer was amazed at how easy everything was and eager to start using the system — not to mention show the surplus budget.

RB: The most memorable installation was with a customer who wanted to use Microsoft Dynamics CRM as the front end to an SAP ERP system. The part that made this implementation interesting was the conversations regarding the business processes and the requirement of specific attributes. We were not only defining the system, but also defining the business process for the company.

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