Tien Tzuo, chief strategy officer, and Renny Monaghan, senior director of product management at salesforce.com, dropped in this morning to update us on their hosted solution for customer relationship management (CRM) and related applications. "We're seeing a lot of interest on Wall Street," Tzuo said. "Commissions have dropped, to zero in some cases, so many firms are shifting from a transaction focus to a relationship focus." Tzuo says the first wave of CRM implementations on Wall Street failed because the software was either too expensive and complex, like Siebel, or took the form of simple applications like ACT that were popular with individual relationship managers but offered too little in terms of security, backup and corporate control and support. Having salesforce.com run the application, including security and support, and deliver it to users' desktops (for $500 per person per month), provides a middle ground that he says Wall Street firms are gravitating toward.According to a recent survey of CIOs by management consultants McKinsey & Company, 61% of North American companies with sales over $1 billion plan to adopt one or more software-as-a-service (aka hosted) applications over the next year, a dramatic increase from the 38% who were planning to install such applications in 2005. Over the years, hosted software has been favored by small and mid-sized businesses that like the low up-front costs and quick deployment that the software delivery model provides. The downside for large enterprises has typically been the lack of ability to customize, upgrade and control the application that's inherent in having someone else host your software on their servers.
A month ago, salesesforce.com introduced a Wealth Management edition of its CRM application that it co-developed with Merrill Lynch (by spending time with the firm's financial advisor teams, watching them work and interviewing them about their needs). E-trade, Ameritrade, and Morgan Stanley have already begun using the hosted Wealth Management solution, although it won't become generally available until Q3. A quick demo of the software showed that it provides basic information about customer holdings, past transactions, and portfolio metrics. It lets wealth and asset managers create "action plans" (e.g. contact a customer 20 times a year) and generates alerts when the time has come to execute an action point in the plan (e.g. take the client out to play golf). Merrill Lynch uses the program in a "mashup" with Thompson Financial whereby users can drill down into specific customer holdings and see the latest financial information on companies, prices and markets. Also available is an integration with Cisco's voice over IP, whereby the user can click on a client's phone number to automatically dial it. Another "mashup" salesforce.com offers with the Wealth Management edition is with a Dow Jones news service whereby news from 50 newspapers is filtered according to customers' holdings and preferences, and asset/wealth managers receive recommendations of specific articles that they should forward to a client because they might be of interest - providing a timely, relevant reason to contact the client.
Tomorrow, Finetix, a financial services IT consulting firm, will announce the launch of Finetix Investor Relationship Management for asset managers and wealth managers on salesforce.com's AppExchange. (AppExchange is basically a web-based directory of applications that other software vendors and developers have written that work with salesforce.com's software. There are currently 500 downloadable applications available at the site; two dozen of them are specific to the financial services industry.) The Finetix application provides analytics that ensure that financial advisors are spending the right amount of time with the right clients and prospects, it provides relationship manager key performance indicators and offers customer segmentation tools across financial products.