There are many benefits to subscribing to a CRM provider versus a company writing their own, but according to Gallaugher this can be too time-consuming and costly (2016). As an upside, there are many established CRM providers that can pretty much manipulate their software to fit your company’s needs. It also makes more sense to buy this software than to write your own, so that it has the capability to integrate all your company’s departments into one system while still having specific departmentalized functions incorporated into it.
The healthcare has become very challenging at this time, especially with the rising cost of healthcare and the heavy increase of patients, which is creating such difficulties in getting people the care they need (Onibalusi, 2017). Dave Willis, Chief Strategy Officer for Clarius Mobile Health, believes that entrepreneurs and healthcare startups can solve this problem (Onibalusi, 2017). Willis goes on to later to say “Innovation in healthcare technology, particularly on the mobile front, are helping medical professionals reduce the cost of care, both for the patient and the hospital. As the industry continues to adopt these technologies, it will be able to fulfill previously unmet patient needs (Onibalusi, 2017)”.
Therefore, as a pilot, we will focus this project on integrating Salesforce within the insurance sales divisions of UPMC to achieve increased sales. To pilot Salesforce integration into the insurance sales division, therefore, we estimate rolling out to 200 employees. Salesforce has four different fixed- cost pricing options, which are highlighted below:
The healthcare has become very challenging at this time, especially with the rising cost of healthcare and the heavy increase of patients, which is creating such difficulties in getting people the care they need (Onibalusi, 2017). Dave Willis, Chief Strategy Officer for Clarius Mobile Health, believes that entrepreneurs and healthcare startups can solve this problem (Onibalusi, 2017). Willis goes on to later to say “Innovation in healthcare technology, particularly on the mobile front, are helping medical professionals reduce the cost of care, both for the patient and the hospital. As the industry continues to adopt these technologies, it will be able to fulfill previously unmet patient needs (Onibalusi, 2017)”.
Therefore, as a pilot, we will focus this project on integrating Salesforce within the insurance sales divisions of UPMC to achieve increased sales. To pilot Salesforce integration into the insurance sales division, therefore, we estimate rolling out to 200 employees. Salesforce has four different fixed- cost pricing options, which are highlighted below:
 |
| (“Editions & Pricing - Sales Cloud - Salesforce.com,” n.d.) |
For detailed information on fixed cost and different options available, visit Salesforce's Pricing Page.
For the purpose of this project, we will focus on the option for $150 per user which happens to be Salesforce’s best seller. The fixed cost, therefore, will be $30,000 (200 people X $150 per user).
For the purpose of this project, we will focus on the option for $150 per user which happens to be Salesforce’s best seller. The fixed cost, therefore, will be $30,000 (200 people X $150 per user).
Initial Investment
|
||||
Fixed Cost
|
||||
Total License Cost
|
$30,000
|
|||
Application
License Cost
|
$150 per User
|
|||
Number
of Licenses
|
200
|
|||
Total Installation Cost
|
$0
|
|||
Hardware
Installation Cost
|
0 per User
|
|||
Software
Installation Cost
|
0 per User
|
|||
Oracle Integration Cost
|
$12,000
|
|||
Mobile Access
|
$1,000
|
|||
($50 per resource for 20 Leads)
|
||||
Total Fixed Cost
|
$43,000
|
|||
Hidden Cost
|
||||
Training Cost
|
$360,000
|
|||
(40 hours training per User with average salary of $45 per hour)
|
||||
Database Integration
Cost
|
$15,800
|
|||
Total Hidden Cost
|
$375,800
|
|||
Total Initial Cost of implementation
|
$418,800
|
|||
Recurring
Charges
|
|||
Total License Cost
|
$30,000
|
||
Oracle Integration Cost
|
$12,000
|
||
Mobile Access
|
$1,000
|
||
Database Integration
Support
|
$1,000
|
||
Total
Recurring Charges
|
$44,000
|
||
As you can see from the breakdown mentioned above, the fixed cost of $30,000 does not include all of the hidden costs associated with Salesforce or any extras that UPMC’s insurance sales division may want to buy in addition to what comes with the $150/per user package (Salesforce, n.d.). An additional cost of $50 per user per month is added for the mobile access to the system, and $1200 per year cost for integration capability to Oracle is additional as well (Salesforce.com, n.d.).
Salesforce is offered as part of SaaS, so there are no infrastructure fees and additional maintenance fees. There are simply the fixed costs, which in this case will be $30,000 annually (Salesforce, n.d.), plus any variable costs, which are hard to determine at this juncture, but will include any add-ons UPMC may choose for its insurance sales division, such as mobile access (an additional $50 per user per month) or integration capabilities at an additional $12,000, mentioned above.
As per UPMC's fiscal year 2016 financial results, UPMC is observing growth in insurance services (UPMC, n.d.). There was 10% growth in insurance services resulting in UPMC's operating revenue to increase to $13 billion (UPMC, n.d.). With increase in sales and customers, UPMC is required to upscale its CRM system, and Salesforce is the best option to do so.
(“UPMC Fiscal Year 2016 Report, UPMC” n.d.)
As per UPMC's fiscal year 2016 financial results, UPMC is observing growth in insurance services (UPMC, n.d.). There was 10% growth in insurance services resulting in UPMC's operating revenue to increase to $13 billion (UPMC, n.d.). With increase in sales and customers, UPMC is required to upscale its CRM system, and Salesforce is the best option to do so.
References:
Gallaugher, J. (2016, July). Information Systems: A Manager's Guide to Harnessing Technology. version 5. Retrieved from https://scholar.flatworldknowledge.com
Salesforce. (n.d.). Editions & Pricing - Sales Cloud - Salesforce.com. Retrieved October 10, 2017, from https://www.salesforce.com/editions-pricing/sales-cloud/
CRM_Total_Cost_of_Ownership_Analysis1.pdf. (n.d.). Retrieved from http://www.fayebsg.com/wp-content/uploads/2010/06/CRM_Total_Cost_of_Ownership_Analysis1.pdf
Onibalusi, A. (2017, April 03). 3 Mobile Solutions to Healthcare Industry Problems. Retrieved October 15, 2017, from https://www.entrepreneur.com/article/285036
UPMC.
(n.d.). UPMC Ends Fiscal Year 2016 with Strong Financial Results that
Support Clinical Excellence Mission and Commitment to Our Community. Retrieved October 15, 2017, from http://www.upmc.com/media/NewsReleases/2016/Pages/upmc-ends-fiscal-year-2016-strong-financial-results-support-clinical-excellence-mission-commitment-community.aspx
UPMC. (n.d.). UPMC Facts & Stats. Retrieved October 15, 2017, from http://www.upmc.com/about/facts/pages/default.aspx
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