How ERP Can Use CRM: Mass Payment Notifications

Often the worlds of CRM and ERP are quite distant. It is a rare individual who has traversed both of these lands (I am quite lucky to have a few such folk in my team, but it is unusual).

One idea I recently had was a way a CRM system could be used to help with the processes traditionally associated with the ERP system. This post is probably more aimed at ERP users who are CRM-curious than everyday CRM folk but, hopefully, it might generate some ideas to help bridge communication between the two nations.

How Not to Use CRM

There is a rich tradition of people trying to bring ERP functions into a CRM system and it failing horribly. The fact of the matter is a general ledger has no place in a CRM system. If it involves debits and credits or account reconciliation, keep it out. However tempting it my be or however insistent the client is that it is exactly what they need, it is wrong and unnatural and will fail. Even things like inventory management are limited in their scope if managed through a CRM system. This being said, there are some things CRM systems do well which an ERP system can make use of.

What CRM Systems Do Well

CRM systems do two things really well:

• Managing business processes that involve the passing of information between people
• Managing interactions with external stakeholders

ERP systems also handle the first one of these well in regards to financial transactions. However, sometimes the second one is lacking. Sure, most ERP systems have a concept of ‘vendor’ and ‘customer’ but tracking external communication is not always as strong; pulling up a history of client emails, meetings and phone calls is not always simple.

This is where CRM systems can help.

Mass Payment Notifications The CRM Way

I am not an expert on ERP systems so I am sure there are some ERP systems that do this really well; I just have never seen it. Let us say we have made a series of payments in our ERP system. Cheques are in the mail, bank transfers are done and money cabled to distant lands, as required. All of this is recorded in the ERP system and we now want to let the recipients know the money is on its way.

To do this via CRM, we first extract the list of payments from the ERP system into a CSV file. Pretty much every ERP system has the ability to generate lists of transactions and export them to Excel so this should not be a problem.

Next, we use the CRM Import Wizard to bring in the transactions. We will need to create a transaction entity in CRM first, but this is a straightforward, codeless process.

Once we import, we can then use a CRM workflow to do the rest. The workflow will automatically kick in the moment the record is imported and can send an email, using a template of our creation to inform our customer that their money is on its way. The sent email will be held in the activity history of the account record in CRM, along with any meetings and phone calls made by other parts of the business.

While money could be thrown at integrating the CRM and ERP systems to pass the various bits and pieces of information between them, in the case of the activity history, it is probably simpler for the ERP users to simply use the Outlook client for CRM so they can reference the various interactions at their leisure. Similarly, such a setup means the other areas of the business can see when payments are made. For example, if an enquiry comes in via phone to the call centre about a missing payment, they can reference the CRM system to see if and when it went out. If the payment record is not there, they can escalate it, as required.

Conclusions

Sometimes it is hard for the CRM and ERP camps to understand how they fit in with each other. However, it is possible to use the strengths of both for the benefit of the entire business. In the case above, I have described a simple way CRM can help the ERP process and also provide clear visibility of transactions across the entire business. I am sure there are other ways, such as for debt collecting, where a similar process could be employed. If this is of interest, enquire with your internal CRM power users or ask your Microsoft partner how things can be streamlined (as outlined above, it does not have to be an expense process).

Setting Long-Term Workflows in Dynamics CRM

I originally wrote this article for MS Dynamics World who gave me permission to recreate it on my blog.

Setting Long-Term Workflows

Workflows are remarkably useful because they are so powerful as well as being easy to configure. A feature of them which takes a little getting used to are the ‘waiting’ steps. I recently had a problem where a client needed to use the waiting steps well beyond the time limits available in Dynamics CRM.

The Problem

The client in question was a financial management client who classified clients into three categories (let us call them gold, silver and bronze). Based on their category, a major review of their financial situation happens every one, three or five years respectively. The idea was that when the record was created, a review date would be set. A month before this review date the client was contacted and an appointment set up (handled by a different workflow). When the review date passed, the review date was again reset.

The problem is timeouts can only happen up to 24 months out, not three or five years out.

My initial reaction was to tell the client it was not possible. My main contact smiled and she suggested I think it over. Sure enough I found a solution.

The Solution

The solution in the end turned out to be quite simple.

To start at the top, the workflow begins on the creation of the record (Account Category is a mandatory field so we can guarantee it will have a value). It can also be called by another workflow as a child process (I am planning to loop this workflow).

The first step the workflow has is to set the review date to one year in the future.

In this case I have set the Review Date to 12 months after the ‘Execution Time’. The Execution Time is a commonly misunderstood expression and leads to no end of confusion when setting up workflows. The Execution Time is the time the expression is evaluated. In other words it is the time at which this update step updates the Review Date. Given this is the first step in the workflow it is almost exactly the same time as the Accounts Created On value and almost exactly the same time as when the workflow started but if the update step was further down in the workflow with timeouts and the like before it, the execution time would be very different to the start time of the workflow and the Created On time of the Account.

It then checks if the Account is Silver or Bronze and, if so, increases the Review Date by another two years.

This use of the Review Date to set itself is completely valid.

For Bronze Accounts, this is then repeated. The net result is Gold clients will have a 12 months Review date, Silver clients will have a 36 month review date and Bronze clients will have a 60 month review date, as required.

The final step is to wait until the Review Date and then reset it by calling the workflow again.

We now see the reason we used the Execution Time in our first expression rather than the more commonly used, and less confusing, Created On value. The Created On value will still be the same whereas the Execution Time will now be approximately the same as the Review Date, as required.

As a word of warning, generally speaking CRM will fail a looping workflow. However, for longer cycles it will let them happen. I cannot remember the exact time limit for loop detection but it is of the order of minutes and hours, rather than months and years.

Conclusions

This is a nice example which combines a few of the trickier aspects of workflow creation such as timeouts, looping and the Execution Time. One other thing to take note of is often people will shy away from creating long-running workflows fearing they consume resources. My understanding is this is not the case. When a timeout is encountered, the workflow unloads from memory and is only reloaded when the timeout condition is met.

Salesforce Turns the Corner, Kinda

Great news this quarter for Salesforce; they reported a quarterly profit . Is this the ‘opposites’ segment of “You Can’t Do That On Television”? Is Marc seeing the value of selling $10 bills for $11 in his old age? Let us delve into the numbers and find out.

Salesforce Quarterly Results

As usual all numbers come from the Salesforce web site.

	2013 Q2	2013 Q3	2013 Q4	2014 Q1	2014 Q2
Revenue	731,649	788,398	834,681	892,633	957,094
Subscription Revenue	687,493	740,600	785,495	842,221	902,844
Revenue Cost	162,418	186,248	183,362	208,994	217,717
Operating Cost	582,697	656,338	672,126	728,179	779,234
Salesforce Income	-9,829	-71,150	-20,844	-67,721	76,603
Revenue Growth # yoy	185,647	204,138	202,768	197,166	225,445
Revenue Growth % yoy	34%	35%	32%	28%	31%
Revenue Growth % mom	5%	8%	6%	7%	7%
Total Cost % yoy	33%	42%	34%	31%	34%
Staff	8,765	9,319	9,801	10,283	12,571
Staff Growth (yoy)	38%	34%	26%	23%	43%
Margin	-1.34%	-9.02%	-2.50%	-7.59%	8.00%

NB: A miscalculation in the revenue growth at the time of original writing has now been adjusted in the table above. Related commentary below has been lined through.

Sure enough, the ‘Salesforce Income’ aka ‘GAAP Earnings’ is positive for the first time in two years with a healthy margin of 8%. Even with this profit, revenues have grown around 28% year on year. So what is the secret sauce in the Salesforce recipe?

Revenue and Cost Growth

Revenues have consistently grown, year on year, at around 30% for the past three years. How about costs? Costs this quarter grew at 34% year on year. Cost growth for the past three years (apart from one quarter where sales growth inched ahead by 1%) have consistently out-paced sales growth. Sales keep growing but costs are growing faster. So if this is the case this quarter, where is the extra money coming from?

Digging Deeper

The fact is the GAAP numbers above do not reveal how Salesforce made a profit this quarter. To do that we need to look at the line items not summarised above, specifically the ‘Benefit from income taxes’. Because of Salesforce’s lack of profits, they got a tax rebate to the tune of around $130m and it is this that changed a $60m loss into a $70m profit.

What About the Future?

So will the IRS bail out Salesforce in the future? Fortunately, we do not have to speculate because Salesforce has done it for us. In their earnings press release they tell us in their guidance section how they will fare next quarter and in the year overall. Salesforce tell us that they expect a GAAP Earnings Per Share (EPS) of between –$0.19 and -$0.18 per share using a basis of 601 million shares for the next quarter. For the full year they expect a GAAP EPS of between -$0.44 and -$0.42 per share using a basis of 598 million shares.

EPS = GAAP Earnings / Number of Shares. So all we need to do is multiply the EPS by the number of shares to get the expected GAAP earnings (Salesforce income).

For the next quarter, Salesforce expect to make –$0.185*601,000,000 = -$111m. For the full year, they expect to make -$0.43 * 598,000,000 = -$257m.

Finally, we know that in the first two quarters, Salesforce made -$68m + $77m = $9m. So, we can also work out what Salesforce expect to make in their last quarter which is -$257 -$9m + $111 = -$155m. So, this financial year, Salesforce expects in earnings:

• Quarter 1: -$68m (last quarter)
• Quarter 2: $77m (this quarter)
• Quarter 3: -$111m (next quarter)
• Quarter 4: -$155m (final quarter)

Total loss: $257m

Let me be very clear on this point, I am not doing some clever extrapolation of historical numbers here; I am simply presenting the numbers Salesforce have put out in their press release. This is their expectation of the next six months, not mine. Salesforce expect to lose a quarter of a billion dollars this year and they expect to lose over $100m in both of the next two quarters.

It seems, unfortunately, this quarter’s profit is an anomaly and not a paradigm shift in thinking that making a buck is a good thing.

Staff Numbers

The slowing growth of staff has been truly bucked this quarter, leaping up to 43% and back to the kind of growth Salesforce was seeing a year ago.

Earnings Call Buzzword Bingo

As with other quarter’s, here are the buzzword bingo figures.

	2013 Q1	2013 Q2	2013 Q3	2013 Q4	2014 Q1	2014 Q2
Number of words	3200	3200	3000	3800	2800	3500
Revenue	38	39	38	45	32	37
Social	32	21	13	9	10	9
Cloud	23	20	20	22	16	23
Enterprise	21	10	7	15	0	6
Customers/Customer	28	9	21	40	32	40
Sales	14	8	9	8	9	14
Cash	13	17	9	13	10	10
Service	11	15	9	16	12	14
Growth	11	19	17	17	13	12
Operating	10	17	0	0	9	9
EPS	8	0	0	0	7	10
Marketing	0	8	10	9	0	12
Mobile	0	0	7	0	16	11
Margins	0	0	0	7	0	1
ExactTarget	0	0	0	0	0	24

The key words are still consistent. ExactTarget got a good showing but it is their new acquisition so this is not too surprising.

Phrases of two or more words:

• Deferred revenue (15 times)
• Non GAAP (12 times)

which are the same as last quarter.

Insider and Institutional Sales

According to Yahoo, in the past six months, insiders did a net sale of 0.5% of their shares. This was made up of one purchase and 109 sales.

Institutions sold 16 million shares this quarter, reducing their overall ownership by 3%.

There are many reasons why people sell shares. Whether this is a dropping confidence or simply the desire to pay a few bills or diversify investments is difficult to say.

Google Trends

It has been a while since I have done the Google Trends analysis and I noticed a week or two ago that there are a bunch of new features so here is the Google Trend analysis for ‘salesforce.com’ and ‘dynamics crm’.

The dotted lines are Google’s predictions (no more Excel straight line extrapolations)

The regional comparison is also interesting.

We see a more global interest in Dynamics CRM and a more focussed interest in Salesforce. In Central and South America and in Europe it seems Dynamics CRM has the edge whereas Salesforce has a strong concentration in the USA.

I am not sure what is behind this trend but it will be interesting to monitor it over time.

Conclusions

While Salesforce has broken the drought and made a profit this quarter, there is no indication that the ship is changing direction. Marc’s appetite for revenue over profit continues. Similarly Marc’s messaging is also unwavering, focussing on the key words and phrases this quarter as the last.

Insiders continue to sell and it seems institutional owners of Salesforce shares are also reducing their holdings. Whether this is connected to Marc’s strategy is unknown.

Google trends suggests interest in both salesforce and Dynamics CRM is at similar levels but the global focus is different. While the Salesforce buzz is generated primarily out of the USA (San Francisco to be precise), Dynamics CRM buzz is much more global with USA not even appearing in the top ten countries and the highest ranking USA city being New York at the eighth position.

Which CRM is the Most ‘Enterprise’?

I came across this infographic from Capterra a little while ago and tweeted it. To be honest, the idea of using social with equal weighting to customers and users does not sit too well with me but what occurred to me was, using the ratio of users to customers, we could use this to estimate which product the big end of town use i.e. which is the most ‘enterprise’ CRM.

Clicking through to the Capterra website gives us their raw data. I have filtered the list here to those CRMs which appear on the latest Gartner Magic Quadrant.

Obviously there are other CRM systems on the Magic Quadrant but they do not appear in the Capterra infographic (SAP, for example). If you have numbers for those that are missing, feel free to add them to the comments. Here is the quadrant for reference.

Checking the Numbers

Regular readers will know I keep track on subscription numbers for Microsoft and Salesforce, although Salesforce have not released user numbers for about two years. The last accurate numbers were in January 2011 when there were 3,000,000 users and 92,300 customers, giving us a ratio of around 33. For Microsoft, the ratio around the same time was 63 (1,700,000 users and 27,000 customers). Microsoft has edged this up to 77 in their latest numbers which came out in March this year (3,000,000 users and 39,000 customers).

For Oracle, the PDF source used by Capterra quotes 4,600,000 users and 4,000 enterprises, giving a huge ratio of 1,150. Given Siebel is the traditional enterprise CRM, this is probably right.

For Zoho, I struggle to believe the numbers are accurate. Zoho is a great little SFA solution, but it is limited, as highlighted in the Gartner Magic Quadrant. I assume they are counting the people who have signed up for the ‘free for the first three users’ version, and then counting the number of organisations who have signed up for a paid subscription. I signed up for the free subscription a few years ago but I do not consider myself a user of Zoho, even though the subscription is probably in the count.

The SugarCRM source checks out. While Capterra offer no source for their Sage numbers, this one claims 3,100,000 users for ‘Sage CRM solutions’ and 10,000 organisations for ‘Sage CRM’, giving us a ratio of 310, which is much larger than the one using the Capterra numbers. I assume it is accurate but I wonder whether this also includes the user numbers for Sage SalesLogix and Sage ACT!, explaining the disparity.

Therefore in modified numbers, we have:

• Oracle: about 1,000
• Sage CRM: 310 (or possibly 51, depending if Sage are spinning their numbers or not)
• Zoho: 220 (although I do not believe it)
• SugarCRM: 143
• Dynamics CRM: 77
• Salesforce: 33

Therefore, the big end of town appear to be using Siebel and, surprisingly, SugarCRM (possibly boosted by IBM switching to it from Siebel). If you believe the numbers, Sage CRM and Zoho are also up there but my spidey sense tingles on these ones. Next we have Dynamics CRM with Salesforce in last place.

Conclusions

Large organisations appear to be on Siebel over competitive offerings and so it maintains the title of the most enterprise CRM. Given the strong growth of Dynamics CRM and Salesforce I am wondering if they are taking market share from Oracle, which will boost their numbers in the long term. At the other end of the spectrum is Salesforce whose average customer has 33 users but may be increasing if they are taking market share from the larger players. In the middle are the others (Dynamics CRM, SugarCRM, Zoho and Sage CRM) whose customer size ranges from 50-300 users in size.

Dynamics CRM Licensing for DEV, UAT and PROD

There is much confusion about what licenses are required for which environments when it comes to Dynamics CRM. Common wisdom suggests a production setup should have three environments: a place to develop new additions (DEV), a place for users to test the additional (UAT) and the ‘real’ environment where business happens (PROD). There is also an argument for a fourth training environment and a support environment but these are not seen as often in my experience.

So do we need a full production license for each environment? Is the situation different between online and on-premise? Are there non-production licenses I can use?

Licensing for CRM Online

Online is, arguably, the simplest licensing model. Basically, under the same Office 365 account, you can spin up additional CRM instances and all users can use these environments without hindrance. The downside is the cost as it is upwards of $500/month per new instance. Therefore, as well as your primary production CRM Online environment, you can have a development (DEV) and user acceptance testing (UAT) environment for $1,000/month.

This is probably quite expensive for the smaller end of town which is why many opt for trial instances when the need arises. However, my understanding is that this is not a valid use of a 30-day trial in that it violates the end-user license agreement (EULA) so be careful, especially if asking for extensions to the 30 days; there is no guarantee you will get an extension and your Microsoft contact may give you a finger-wave and encourage you to use the additional Office 365 instances instead.

Licensing for On-Premise

Licensing for On-Premise is slightly more complicated but, thankfully, less expensive in the long term. Our friend in this case is the Microsoft Developer Network (MSDN) subscription. The MSDN license is made so you can create an environment to develop and test solutions without paying for a full PROD environment. For the full terms and conditions, here is the link.

Essentially, an MSDN license is to “design, develop, test or demonstrate” as well as allowing “end users to access the software to perform acceptance tests”. For Dynamics CRM licenses, you need the premium subscription, which costs around $6,000 in the USA and just shy of $10,000 in Australia. Strange, given the US$ and the A$ exchange rate is about one to one but there it is. For the details of what you get, go here.

You need an MSDN license for each developer but, after that, you are set. This covers DEV and UAT. All you need are the servers to run it on. If you do not have servers, there is Azure, Microsoft’s IaaS offering. You can spin up a server for a few dollars a month and then you only spend for when it is turned on. With a premium subscription you also get $100 monthly credit for Azure (the same in the USA and Australia so they got the exchange rate right on this one).

It used to be the case that it was not permitted to run MSDN licenses on Azure but this was relaxed in June this year, along with a string of other improvements. In fact, you could also run your CRM PROD environment on Azure although, Microsoft have not come out saying they support this (but I cannot see why it would not be valid).

So what about licensing for PROD? Well, for this you still need full licenses; MSDN cannot help you here.

What About Support and Training?

There is nothing in the MSDN terms and conditions about the licenses being used for support or training environments. If we can make an argument that training is a part of ‘acceptance testing’ then they could be used. However, my thinking is to use the production licenses, backup a clean version of production, conduct training and then restore back to the clean version. Using production licenses means no rule jockeying needed.

Support is more problematic. While the MSDN licenses are for testing, the intention in the short description is that this is for testing before releasing to production, not after. Even in the full PDF terms and conditions for MSDN, there is no mention of support that I could find. If this is internal support, then this is not a big deal as an organisation can spin up as many instances as they like on premise with the same Dynamics CRM licenses (you will need additional Server licenses etc. of course). However, for companies providing support to others, the rules are not clear. MSDN does not state is can be used for this which only leaves a full production license. The way I see it, the safest course is for the owner of the production system to spin up a clone of production for support and license the support provider to access it and diagnose the issue. This is probably not an ideal solution but it seems the safest from a licensing perspective.

Conclusions

If you are using CRM Online, your license options for additional instances beyond production are limited and, arguably, quite expensive. For on-premise implementations of Dynamics CRM, you have MSDN for DEV and UAT environments and full licenses for production. For training, you could run a pre-production version of production but for external support, licensing is not clear.

Ultimately, if you are not sure how you can use your software and what licensing you need, read the license agreements, ask for VAR partner or ask Microsoft directly. You may not get the answer you want but you will be on the right side of the law.

Using Dialogs When a Contact Moves Employers

A common scenario when maintaining Contacts in a CRM system is moving them between employers when they change jobs. For Dynamics CRM, and many other CRM systems, this poses a problem: what happens with their Activity history?

If we simply click on the Parent Customer lookup and change the Account, all the Activity history moves with them to the new Account. This may be appropriate for B2C companies, where the history needs to stay with the individual but for B2B this means if I look at the Related ‘Regarding’ Activity summary on the former employer, all the Activities of my Contact has disappeared (now appearing on the rollup of their new employer).

The Solution

The solution often employed is to create a copy of the Contact under the new Account and deactivate the old Contact. This way, while the old Contact will be hidden on the old Account, all their Activity history will still be visible on the Account’s ‘Associated’ Activity. New Activity will be logged against the new version of the Contact and will appear under the Related ‘Regarding’ view of the new Account.

The Problem

The problem is the process for moving the Contact becomes a bit of a chore because we must:

• Create a ‘clone’ of the old Contact copying across the values of the key fields on the old Contact form
• (optional) Link the clone Contact with the old Account to state it was a former employer
• Deactivate the old Contact

It is easy for a user to mistype information when creating a copy of the Contact or to forget to deactivate the old Contact.

The Solution to the Problem: Dialogs

Dialogs provide a way to automate the steps which a user could forget or get wrong and only get from them the information needed.

Here it is:

Step One: Ask for the new Account

The only piece of information we need from the user is the new Account the Contact is moving to. Everything else we can determine from the Contact we start the dialog from.

Here is the Prompt and Response:

The trick here is in setting up the Reference Entity and Reference Field correctly. Thanks to Richard Knudson for his excellent article walking through this. Richard also has a book devoted to CRM Processes so if Processes are a big part of your administration of CRM, it may be worth picking up.

Essentially, the way to set up the Reference Entity and Reference Field is to use a lookup which already exists somewhere in CRM. In this case I have told it to use the Parent Customer lookup on the Contact form. This means, when the dialog runs, I will be able to use this lookup to select an Account as if I was selecting an Account for a Contact on the Contact form.

Step Two: Clone the Contact

This is another handy use of workflows or dialogs: to make a copy of a record. Using the Create Record step, we simply populate the desired fields in a new Contact record.

The only real trick here is using the value we got from our Page and Response to populate the Parent Customer field.

Step Three: Create a Connection back to the old Account (optional)

In this case we link the new clone to the old Account and use the out of the box Former Employer/Employee roles.

In the above picture you can see that to populate the Name field with the right Contact reference, you drop down the Look For in the Form Assistant and find the Page and Response description reference.

Step Four: Deactivate the old Contact

The final step is to deactivate the old Contact which we do with a Change Status step (if you try to use an Update Record step, it will fail).

The End Result

The end result is a dialog we can trigger from any Contact which prompts us for an Account and then takes care of the rest.

Conclusions

Again, Dialogs prove to be more than just a call scripting engine.In this case we take a process which a user could easily make a mistake with and automate it, taking from them only the information required and automating the rest.

If you have processes in your CRM system which have multiple steps and are prone to errors, a Dialog to guide the user through the steps and automating it as much as possible is worth the consideration.

Freebie Product Plug: Bulk Workflow Extension Tool

There are a few tools Dynamics CRM consultants have in their toolbox. Things like Tanguy’s Iconator, Metadata Document Generator and the SiteMap Editor are great examples. This is another tool which I am sure is going to become a standard in my collection, Zero2Ten’s Bulk Workflow Extension Tool.

The Problem: Running Lots of Workflows At Once

Literally last week I came across this problem. I had tried to run the bulk reassign tool off of a user and my browser crashed on me midway through. The result was I had about 20,000 records reassigned and the rest (about 80,000) sitting on the original user. I wanted to reverse what had been done but that meant, somehow, assigning 20,000 records back to the original owner.

The best you can do with CRM, without coding a fix or doing unsupported SQL updates (which I never recommend for ownership reassignment) is highlighting 250 records at a time via a view and hitting the Assign button (or creating an on-demand workflow to do the same).

So this is exactly what I did. I spent a few hours highlighting 250 records at a time and clicking the Assign button (I actually got two running at the same time, so I managed to make it 500 at a time but it was still a tedious process).

The Solution: Zero2Ten’s Bulk Workflow Extension Tool

Then, a couple of days later, Gus Gonzalez (CRM MVP, Jujitsu master and all-round top bloke) announced Zero2Ten had released the ‘Bulk Workflow Extension Tool’. Here is the video of what it does:

In short, you run the program, connect to CRM, find a list of records you want to run a workflow on and then select the On Demand Workflow of choice. You then set it running and it takes care of the rest. If this is of interest, you can download it here. It is free and they do not even ask for names and email addresses (nice work Zero2Ten). Thank you Andy Popkin for making this happen. If we ever meet, I owe you a Mac and Jack’s or two (I am sure Gus will collect them on your behalf at Summit).

Conclusions

CRM workflows are a key element in the new version of CRM (previously Orion, now Dynamics CRM 2013) and will replace many functions typically performed by plugins (I will likely write a blog on these changes in the near future). Therefore a tool like this (with the extensions suggested by Andy such as a workflow scheduler) will become increasingly important. A free tool which helps manage workflows can only be a good thing and, in my case, will literally save me hours of work.