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Adapt CEO: Sales may be taking back seat to service

Adapt Software Applications, Inc. has lived up to its name. In five years, the Irvine, Calif.-based software firm has developed from a vendor offering a customer management application for mid-range accounting/ERP systems

What would you say that Adapt offers mid-market companies that others in the CRM space don't?

The thing that makes us unique in the industry is that we have multiple real-time interfaces to large numbers of popular accounting and ERP programs. And the other thing that we add is the ability to change the software very quickly. In the CRM industry the ability to customize the software is much more important than it normally is for other business software. CRM software is often criticized for taking too long to implement. How long does it usually take to implement Adapt?

The average implementation is two weeks. . .That includes data conversion, configuration, user training, and it typically includes all the components -- the sales, the service and the marketing, and the linkage to the accounting system. Adapt was first released as a customer management app for users of accounting/ERP systems. How has its scope expanded beyond this area?

When we provided the software for the accounting users, we were focused mainly on adding the features that accounting users were missing, such as sales force automation. Since then, we've added service tracking, marketing automation and a fairly sophisticated system for automating business processes, which is not just within the realm of CRM but has applications outside of CRM. We've also created Web-based versions of the software -- and enhanced the calendaring and the task management systems. What mistakes do you see companies make in implementing CRM?

The first mistake that they make is that they fail to get the buy-in of the employees. The decisions are typically made by the management of the company who wants the CRM system because it wants certain reports. . .So it ends up with a system that is intended to provide the information the management needs, but without the buy-in of the employees, the data that's needed to feed into that system doesn't get put in and the managers end up not getting what they want out of it. Another common mistake is they fail to integrate the system with the other systems in the office. . .And maybe a final one that occurs with the smaller companies -- a lack of commitment to doing a proper requirements analysis of their needs. How long does it take your customers usually to achieve return on investment, and how do they measure that?

That's a tough question to answer because it's so qualitative. You're trying to measure the difference between what the company is doing compared to what it would have done if it wasn't using your software. The problem is, without the use of the software, it wasn't able to accurately measure what it was doing in the first place, so it's hard to say, [is it] 20% better than what? Generally, people see a return on investment, or let's just say some benefit on the product, typically after about a month of use. My personal opinion is that Adapt does have an impact on company's sales, probably on the order of between a 5% and 10% increase in sales during the first year. There's been a lot of consolidation in the CRM space in the past year. Do you think there's going to be more?

I think there's going to be a continuing trend for CRM companies acquiring others, but I think what we're going to see more of is business software companies, ERP companies, or companies that own a fleet of products, acquiring CRM products and embedding the CRM product into their own line of software. I think that the area where you won't see that as much is in the vertical markets, where the CRM companies that are focusing on a vertical will be able to continue to be independent. I think that the level of CRM sales in industry is going to be fairly stagnant also for the next couple years, but I do think it's going to grow in the small and medium-sized markets. Have you noticed an effect from the economy on your customer's goals and concerns?

There's been a shift from focusing on sales to focusing on customer service, which probably reflects a concern that companies have on keeping the customers they have, more than generating new customers. Another thing that we've noticed is an increasing price sensitivity. . .but for us, that's been a benefit. It's opened up a lot of deals for us with companies that normally would not have considered our product; they might have only considered Siebel or Pivotal.

Probably the main focus, though, is the time to implement. They tend to say, 'Well, we're not really sure where we're going, we're not sure what our economy is, let's wait until the recession ends, let's wait until we see where the economy's headed before we take on this project.' But it's exactly during this recession that a company needs to become more competitive. Does Adapt have any merger or acquisition plans?

No, we don't at this point. We've been approached by other companies over a number of years, particularly because we link with so many companies' products that it would make us a natural appeal for companies that want to acquire us a module of their software. At this point though, we like the independence, the ability to support multiple vendors' products and not be tied to one specific company's plans. So we don't have any short-term plans to do that. . .There is a desire to have a public offering in the future when we think the time's right. At this point we're just focusing on the growth of our company.

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