How to Keep Costs in Check

By Gregg Spivack

Director of Client Services, NPI

July 06, 2015

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It’s been an exciting first half of 2015 for Salesforce. Acquisition rumors have been swirling (despite some views that the asking price is far too high) and the company’s financials remain strong. The vendor’s solutions have expanded far beyond the sales department and into other areas such as marketing and development.

All of this has created a sourcing environment that is well primed for overspending. More users, licenses and data – spread further across the customer organization – mean higher and more decentralized spend.

If you’re a Salesforce customer, there are several cost risks to keep in mind as you renew and expand your Salesforce estate:

Make sure you’re buying the correct license type. Companies often buy full use licenses for users who only need a lower license profile. Do your application architects and developers really need full use? Consider your unique usage requirements and align license types accordingly.

Don’t overbuy support. Not every customer needs premier support. Many get by with a lower tier of support for far less spend. Even better, customers can work with a third-party support provider to provide comparable levels of service at a much lower price. Know your support requirements and be sure to explore alternatives to premium options.

Know how and when to maximize discounts. Pricing flexibility is rare with Salesforce, but strong discounts in specific circumstances are not. The vendor is known to give large discounts (70 percent or more) to companies that know how and when to demand them – especially volume purchasers, strategic customers and those companies engaging in a competitive sourcing process.

Don’t forget “hidden” monitored costs. One way that Salesforce extracts more of your spend is through the management and measurement of data, number of objects used, number of tabs, number of fields, etc. Given the sprawl and depth of the Salesforce estate, this can easily be a five or six-figure expense for some customers.

To keep Salesforce costs in check:

  • Consolidate your spending across the enterprise for greater leverage (this also helps to deter underutilization).
  • Have a precise understanding of your usage requirements so you can select the best-fit (and lowest-cost) license types.
  • Benchmark the vendor’s pricing and discounts to ensure you’re paying fair market value. (NPI can help here!)
  • Finally, eliminate surprises – know where spend “creep” can happen, manage those metrics closely and prepare for and/or mitigate that spend.