Open-source CRM and ERP: New kids on the cloud

Users report significant ROI

When Nikon decided to merge and consolidate customer data from more than 25 disparate sources into one system, officials didn't want the burden of maintaining it in-house, yet whatever they went with had to meet all their requirements and work picture-perfect.

Flash forward to the early 2000s: The camera and imaging company decided to host its entire CRM needs with RightNow, a cloud computing CRM provider based in Bozeman, Mont. The vendor builds its wares with open-source technologies including MySQL database software, the Linux operating system, Apache for its Web servers and PHP for a lot of the coding.

In moving the application maintenance and support off-site, Nikon has achieved significant ROI, says David Dentry, general manager of Nikon's technical support and based in Melville, N.Y. Nikon had been using at least three systems for CRM-like functions, which included e-mail, product registration and customer call tracking.

Nikon's David Dentry
David Dentry, general manager of Nikon's technical support, says his firm has seen 3,200% ROI since moving to open-source cloud CRM software.

When the company was looking for a new Web-based FAQ system -- a way of answering questions via published support articles -- company officials came across RightNow, which also had other CRM features they were interested in. They decided they could consolidate outbound e-mail, contact management and customer records into one system.

Most functions were moved to the RightNow cloud some five years ago.

A study Nikon did two years ago revealed a "ridiculous, 3,200% return on investment figure,'' says Dentry. That figure considered the amount of money Nikon had invested in RightNow -- specifically in end-user support -- and calculated how many calls Nikon staffers were able to deflect because customers had found information for themselves on the Nikon Web site, he explains. The number also took into account how many e-mails Nikon's customer service people could answer without having to generate a phone call.

That translated into a cost savings of over $14 million after the first three years of the RightNow implementation; a 50% reduction in call response times; and a 70% reduction in e-mail response times.

"The percentage seems so high that it almost feels like it couldn't be true," Dentry acknowledges, "but I implemented the system and generated the numbers, and I know they're correct."

Although Nikon still hosts its SAP ERP system internally because of the "complexities of the system," says Dentry, he feels strongly that Nikon was right to move its CRM applications out of the data center and into the cloud. Nikon uses RightNow for its entire CRM system globally, including modules for service, outbound marketing, sales, customer database, analytics and customer surveys.

RightNow wouldn't disclose what Nikon is paying, but a company spokesperson said the Enterprise Package starts at $140 per user, per month and the Enterprise Contact Center Suite Package starts at $250 per user, per month.

"If I was starting a new system I wouldn't consider doing it in-house," says Dentry. "There would have to be very specific requirements to make me consider doing that."

ERP, CRM on the cloud: A 'significant' trend

Moving CRM and ERP applications to the cloud is a pretty significant trend, says Rebecca Wetteman, vice president of research at Nucleus Research, Boston. "We talk to lot of folks and see broad adoption of cloud computing and open-source tools out there," she says.

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