Managment Information Systems. W2 EXC. CH5.
Read the following Case Study and then, answer the fourquestions at the end in an essay:
Case Study:
salesforce.com: taking CRM to the cloud.
As the leading CRM software vendor, Salesforce.com is alsothe pioneering company that launched cloud-based software as a service (SaaS)for enterprise-level applications. Founded in 1999, the company boastsdouble-digit annual growth, with sales topping $6 billion by 2016. In the earlyyears, however, Salesforce had a difficult time convincing other companiesthat a cloud-based solution for CRM would work or that their sensitive datawould be secure.
Larger enterprises, in particular, were reluctant to movesuch data off their privately managed servers housed in their own data centers.But Salesforce persisted, offering a pay-as-you-go subscription pricing modelthat allowed companies to identify a small number of users to try out theservice. The advanced CRM features that Salesforce offered were often wellbeyond what the companys own CRM software could do, particularly on mobiledevices. Salespeople are on the road quite a bit, and having the ability tomanage their leads, tasks, customer communications, and other data importantfor CRM from anywhere at any time quickly became a must-have. The companysapproach essentially propelled the era of enterprise-level cloud computing.Analysts project that 50% of organizations will select SaaS for complexbusiness process support by 2018 as they wind down their private data centersand move applications to the cloud.
Salesforce.com has a growing number of competitors, however,and focuses heavily on continuous innovation for its products. For example, thecompany added the Wave Analytics app to its services so that business userscan analyze data in real time and take action from within the app. To encourageinnovative thinking, Salesforce.com draws on the ideas of its millions ofcustomers who contribute their thoughts to the Idea Exchange. Other customerscan vote on the ideas by clicking thumbs up or down, and those with high votetotals are reviewed by Salesforce staff who decide whether to include thefeature in an upcoming release. The Idea Exchange shows the fate of each ideaso contributors can see the outcome.
The relentless drive to innovate led company executives torecon-sider office space design. Salesforce.com CEO Mark Benioff brought inBuddhist monks to give their thoughts on how to configure the companysskyscraper headquarters in San Francisco. The monks observed that the employeeswere talking all the time and working constantly and suggested that spaceshould be provided for more contemplation. Benioff added mindfulness areas oneach floor so that employees would have a quiet place to think and reflect.
Despite very rapid growth, Salesforce.com faces a number ofchallenges. One involves the need to constantly upgrade its services andtechnology. For example, it relies on Oracle databases, but the company isconsidering moving to an open-source database solution to reduce costs. It alsomust ensure that its own platform is constantly available for customers. Amajor outage in 2016 left customers very frustrated, and 5 hours worth of dataupdates were lost.
Perhaps the most important challenge for Salesforce.com ismaintaining security, especially because the datas sensitivity is quite high.Concerns about security have always been uppermost in customers minds, andSalesforce.com continually bolsters the systems used to monitor traffic andaccess. Its Salesforce Shield, for instance, allows IT administrators to seeuser activity in real time.
To grow, Salesforce.com spends a large chunk of its revenueon sales and marketing and also technology to improve and expand productofferings. While revenue is growing, the company often posts losses withexpenses exceeding income. But with growing adoption of SaaS and cloudcomputing in general, Salesforce.com should have a promising future.
Questions to answer:
-Identify one way that in the early years Salesforce.com addressed marketconfidence in its cloud-based systems. Was this way successful? Why or why not?
-How does Salesforce.com use the Idea Exchange forcompetitive advantage? What benefits does it provide to the company and itscustomers?
-Explain how office space design in the San Franciscoheadquarters was changed and why this change is expected to return value toSalesforce.com.
-Identify at least two challenges that Salesforce.com facesand explain why these are important challenges to Salesforce.com.
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