Salesforce is a powerful, cloud-based Constituent Relationship Management (CRM) system. Beyond that, there can be some common misconceptions about what Salesforce can and should be used for, starting with the obvious assumption that it is software strictly intended for use by salespeople. This was relatively true in 1999 and 2000, the first few years that the company was established. But by the mid-2000’s, Salesforce CEO Mark Benioff was demonstrating inventory management applications and Salesforce users were creating custom applications that went far beyond supporting sales processes. Today, Salesforce serves as a platform for HR systems, project management, marketing, and finance, in addition to the powerful contact and sales automation platform that was originally introduced.
So what is Salesforce? Why would one use it instead of a competing product that is strictly designed to provide the functionality that you need? When would you be better off with an alternative application? Let’s look at what Salesforce is and is not in order to answer these questions.
At its core, Salesforce is a relational database, similar to Oracle or Microsoft SQL Server. Unlike those products, Salesforce was developed from scratch as a cloud-based, multi-tenant[1] application. You cannot buy a copy of Salesforce and install it on your own server, but you can do everything on it that you could do on a locally-hosted system short of restart it, and the performance, availability, and security range from perfectly acceptable to excellent.
If creating applications is not something that you want to do, Salesforce has a real edge on the competition, with a vast number of add-on applications available (some free, many at additional monthly cost) and a large network of third-party integrators. If you cannot find an app on the Salesforce AppExchange to do what you need, there is a Salesforce developer available to design it for you. If you have a need to integrate Salesforce with an existing application, there are powerful options to connect Salesforce with external data sources. The combination of a highly customizable system, with a large ecosystem of developers and consultants to support it, and an open architecture that allows for deep integration with external applications makes Salesforce a very compelling option.
Salesforce comes with a basic user interface designed to allow users to interact with the data. Out of the box, you can enter contact information, segment and report on those contacts, develop a pipeline, and automate email campaigns. Customizing the data entry forms and reports takes some technical skill, but not at as high a level as is needed to develop reports in most commercial database applications. Salesforce’s user interface allows you to do a number of highly complex things without having to know a programming language like SQL, JavaScript, or C. Depending on the simplicity or complexity of your data management needs, you can quickly create a custom application to manage and report on other information.
Database products like Microsoft SQL Server, Oracle, and MySQL can be used to develop custom user applications. In addition to designing the database, creating an application requires programming/designing the user interface as well. In a traditional database environment, adding the field to the table is one step; adding the interactive component to the user interface is a separate step, writing the code that connects the two is a third step, and, often, compiling those changes into a new version of the application is an additional step.
Adding a field to a user input form in Salesforce is as simple as editing the object that the form is based on and telling it the name, type, and length (or similar criteria) for the field. Once the field is in the object, it can immediately be dragged into its proper place on the input form and it is available for reporting purposes.
As a general rule of thumb, Salesforce is best at managing relationships. The roots in sales automation make it suitable for similar processes that involve strengthening the bonds with constituents, communicating and connecting with them, and maximizing their interactions with you, be they customers, donors, clients, volunteers, members, employees, or politicians. Accordingly, sales processes, fundraising, case management, volunteer management, HRIS[2], congressional outreach, and marketing are just some of the business activities that Salesforce can support. Salesforce has been used as a grants management system, a legal case management system, the platform for a Sage HRIS product, and a full-featured Enterprise Resource Planning (ERP) system.
While Salesforce can work well as a tool for managing financial information, it has some limits that make it less suitable for financial reporting. An offset of the CRM roots is that the system does not natively recognize monthly periods and “snapshot” data at regularly intervals. It can be programmed to do that, but any significant amount of financial data, regularly saved for subsequent reporting, will soon run up against Salesforce’s data storage limits. If you consider purchasing one of the many financial applications available for Salesforce, make sure that you understand how they do the reporting and what limitations exist.
Commercial applications are designed to support standard business processes. If your business is a restaurant, you can buy an ERP product that includes point of sale transaction handling, inventory management,
and employee scheduling, among other things, and it will usually include a CRM module that, while not as powerful as Salesforce, is suitable for your needs. When selecting major data management systems to support your operations, it is critical to determine which processes are very specific to your business, as opposed to standard processes in your industry, and then see whether the products you are evaluating
can support your less generic business needs. It is usually preferable to buy the product that already does it for you than it is to buy a platform like Salesforce and build the functionality on it. However, if what you do is different enough that you would either be heavily customizing the product or creating complicated workarounds for functionality that the product cannot provide, then you might be better off building the product. If you are going to build it, then Salesforce offers a much more mature base to start from than many competing platforms.
Salesforce has a fairly complex pricing model and for most companies it is fairly expensive. As of this report, the enterprise version, which is where many companies would land if they are looking for the customizable platform, costs $150 per month per user for the full license. You can mix and match that with limited “platform”, “community”, and “Chatter” licenses to keep the costs down where feasible. 501(c)(3) nonprofit organizations get ten free enterprise licenses and pay about a third of the cost for additional licenses, so a very small nonprofit can get the licensing for free (but will still likely have to pay for some add-ons and consulting/development work). What every organization should consider is how much Salesforce can do for them. The more individually licensed applications that it can replace, the more relative the pricing is. This is where the versatility of the platform, again, becomes compelling.
There are many products that compete with Salesforce and are worthy of consideration. In terms of Customer/Constituent Relationship Management, Microsoft Dynamics CRM is a fairly direct competitor, and might be a more suitable choice for companies that already have sufficient in-house Microsoft developers on staff. Oracle, SAP, and other major vendors all have powerful CRMs. If budget is an issue, there are many more affordable products, some of which are also fairly flexible, but none with an ecosystem as deep as that of Salesforce. They include HubSpot, Zoho CRM, Apptivo CRM, and many more. If your business is in need of ERP along with CRM, products like Acumatica and NetSuite might be a better fit, although Salesforce is moving more in that direction. As mentioned above, financial reporting is still an issue, and most ERPs do not suffer from the same limitations (although some have complex reporting interfaces).
Salesforce is a compelling choice for businesses that revolve around relationships (as most businesses do). Its strengths are its customizability; its healthy ecosystem of add-ons and support vendors; the integration capabilities, and the rapid application development. What makes it stand out from most products is that it is less of an application and more of a platform for software applications and functions. It might be a poor way to go if there is a commercial product that specifically supports your key business processes, but it is a strong alternative for companies that do not fit the industry mold. It is expensive (although more affordable for nonprofits), but if you can leverage it for a lot of uses, the pricing gets very competitive.
[1] Multi-tenant is a term for a hosting environment where many parties use the same software base, but each company’s data and customizations are isolated to their use. More information
[2] Human Resources Information System
