CRM - March 2008 - (Page 19)

Insight “The most important thing to state, because outsourcing is starting to get a bad rap because of language barrier, is that you get what you pay for,” he says. “You do have to make it a top priority to ask for references on customer satisfaction statistics to make sure [outsourcing] won’t be as much of a problem as we do hear about.” Despite all the negative talk and uncertainty, the outsourcing industry continues to grow—but with an emphasis on nearshoring and work-at-home agents (WAHAs). According to statistics released by Frost & Sullivan, the outsourcing market earned $20.7 billion in revenues in 2006, and will reach an estimated $27.5 billion in revenue by 2013, by which time the offshore segment is projected to represent only 25 percent to 35 percent of total North American outsourcing revenues. Companies are moving toward creating a multifaceted outsourcing strategy, in order to have a flexible, expandable workforce that can also accommodate different seasons, promotions, and call values. “They may decide to keep their own inhouse contact centers and expand with nearshore facilities like Canada and Latin America,” DeSalles explains. “It mitigates [the risk of] having too many agents in a single geographic area, which is extremely risky in case of a natural disaster or pandemic. It also gives organizations an opportunity to benchmark performance.” For those undecided on whether or not to outsource using offThe service issues shoring, nearshoring, or come from cultural WAHAs, Teodoru says to use extreme caution before differences between committing to any strategy. domestic and “The savings to the bottom line are immediate, and overseas locations. [any potential] loss of the customer is something that erodes over time,” she warns. “While the net present value or ROI calculation clearly might suggest that a company is better off in the short or medium term, it is simply a short-term view of the business as opposed to a longer-term view of the customer asset.” —Christopher Musico www.destinationCRM.com NetSuite’s Sweet Ride Takes Another Turn After what one analyst called a “painfully long” anticipation, the on-demand CRM vendor finally goes public T he wait was finally over, but the moves kept coming: Years after its first steps to become a public company, on-demand CRM vendor NetSuite raised its offer price twice during an initial public offering (IPO) built around a Dutch auction. Then the price tag still moved nearly $10 per share higher on December 20, its first day of trading on the New York Stock Exchange, where it had landed a prestigious single-letter trading symbol (N). By its second day, the stock had nearly reached $46. And while some of the early headiness has dissipated—at press time, the stock had tumbled back to the neighborhood of its debut price, in the mid$20s—the marketplace’s response continues to fortify NetSuite’s position as a key player in the software-as-a-service (SaaS) industry and, in turn, gives credibility to the still-emerging market of SaaS solutions. According to Scott Sweet, senior managing partner at stock research firm IPO Boutique, the delay was partly attributable to concerns regarding a conflict of interest for NetSuite’s majority shareholder, Oracle Chief Executive Officer Larry Ellison. “It’s very rare that a person is the majority shareholder in more than one company,” Sweet says; only after Ellison agreed to put his shares in a “lockbox” for several years could NetSuite finally proceed with its IPO. As the last IPO of 2007, NetSuite’s success was even more “[NetSuite] will give impressive because the market “has been very challenging Salesforce.com and very difficult,” Sweet says, adding that several other firms due to go public the same week had postponed their IPOs. a big challenge.” Some analysts were quick to note that, despite exponential growth in revenue, NetSuite has yet to claim a profit. As SaaS continues to gain momentum (see “SaaS X.0?” page 20), and as NetSuite caters to the “very fertile market” of small and midsize companies once left out of the game, Sweet and others anticipate a tremendous opportunity for growth. “It’s my expectation that they will be profitable in mid-to-late 2008,” Sweet says. “NetSuite also has the enormous benefit of having Larry Ellison, who can—and has—worked very well with debt and can make the acquisitions that will enhance NetSuite’s niche.” NetSuite’s not the only SaaS vendor to hit Wall Street lately. Within the past six months, Constant Contact and SuccessFactors also went public, in October and November, respectively. Sweet says he wasn’t impressed with SuccessFactors—which was selling below its offering price as of press time—and, though he’s more positive about Constant Contact, he still sees NetSuite leading the pack of newly public SaaS vendors. For the time being, the company most often viewed as NetSuite’s main competitor is Salesforce.com, another on-demand CRM vendor that counts Ellison as an early investor and Oracle veterans among its founders.“NetSuite, along with its likely acquisitions, will give Salesforce.com a big challenge,” Sweet says. “A very big challenge.” —Jessica Tsai CUSTOMER RELATIONSHIP MANAGEMENT | MARCH 2008 19 http://Salesforce.com http://Salesforce.com http://www.destinationCRM.com

Table of Contents Feed for the Digital Edition of CRM - March 2008

CRM - March 2008 Contents Front Office Feedback Reality Check Customer Centricity The Tipping Point Re-shoring Contact Centers NetSuite’s Sweet Ride Takes Another Turn SaaS X.0? destinationCRM Dashboard Retailers Dream Big Detroit: Driven to Distraction Required Reading The Markets Within the Masses In Search of... Selling CRM to Your Sales Force Quixtar’s Quick Fix Travelocity’s New Traveling Companion Chasing Down First-Call Resolution Governing Better Marketing Secret of My Success Re: Tooling Connect Pint of View

CRM - March 2008

For optimal viewing of this digital publication, please enable JavaScript and then refresh the page. If you would like to try to load the digital publication without using Flash Player detection, please click here.