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As the demand for consulting services to boost customer relationship management continues to rise, BearingPoint is scaling its Salesforce practice. Having already doubled its team to over 200 specialists during the last three years, the firm now aims to deliver the same level of growth by 2025.

Salesforce is a cloud-based software company, providing customer relationship management (CRM) software and applications focused on sales, customer service, marketing automation, e-commerce, analytics, and application development. As the digitisation of the global economy continues, this is a line of work which is becoming crucial to firms – particularly as they look to ride out the current economic uncertainty. CRM solutions can help keep track of contacts within a business, to allow both sales and marketing teams to personalise communication to maintain customer loyalty, or win new clients.

Getting the most from a CRM often requires external expertise, though – and that is driving demand for consulting firms specialising in services relating to top CRM providers. As it looks to take advantage of this, BearingPoint has been rapidly ramping up its Salesforce footprint.

An independent management and technology consultancy, BearingPoint deepened its Salesforce expertise in the UK in April 2023, with the purchase of Smplicity. The London-based consultancy with around 20 consultants boosted BearingPoint’s Salesforce platform to more than 200 dedicated staff.

BearingPoint had already achieved Platinum Consulting Partner status with Salesforce, with over 140 Salesforce-related services projects under its belt in support of more than 50 clients. These include one of Europe’s largest logistics organisations. In the weeks since the Smplicity deal, however, the firm added clients including BDO, Adecco and Citi, and has subsequently become emboldened to grow its Salesforce presence even further.

Markus Franke, the head of the firm’s practice, recently said in an interview with Pierre Audoin Consultants, that BearingPoint had doubled its volume of Salesforce-related project bookings during the last three years. Between now and 2025 – a shorter period of time – it intends to double its project bookings again. To do this, Franke confirmed that the company is looking to build on its core European hubs of the DACH region, France and Benelux, while ramping up its presence in its growth markets, such as the Netherlands, UK, Ireland and the Nordic region.

The firm will also continue to expand its Salesforce offering beyond implementation. While BearingPoint helps clients with applying Salesforce cloud solutions, based on client-need and the latest research, the firm also designs its own Salesforce projects in line with anticipated market and technology trends, helping future-proof the investments of its customers. This has produced a number of demo accelerators to bring excellence to client Salesforce processes, including 360-degree insights from internal and external sources to help automate core processes; real-time customer service and campaign controls; and a Service2Sales offering to use enhanced customer service as starting point for cross and upselling initiatives.

BearingPoint has previously published several case-studies highlighting how this service is supporting clients. One example saw BMW France gain a 360-degree view of ever-changing customer preferences, enhancing sales efficiency by leveraging Salesforce CRM solutions through BearingPoint. BearingPoint’s work helped BMW France to gain full visibility of all customer interactions regardless of their type, with information such as test drives, configurations, and GDPR consent centralised in one place linked directly to that customer. This solution is now being used by almost 120 dealerships and more than 2,500 BMW employees, with benefits for BMW France, dealerships, and the end customer.

Another case saw a leading luxury cosmetic brand take the next step to establish a strong foundation in client insights and personalised interactions via its CRM application. BearingPoint supported the company in turning the CRM vision into reality, by implementing a global CRM database to lay the basis for advanced omnichannel capabilities. The changes helped the client engage in even more individualised one-to-one communication on digital channels and connect the digital with the physical contact in the stores.

Pointing to this kind of work, Franke suggested to Pierre Audioin Consultants that while Salesforce has built a major platform of business in most industry sectors in Europe – including a growing presence in the public sector – there is still plenty of headroom for growth. As Salesforce continues to extend its reach deeper into its clients’ core business activities, partners such as BearingPoint have an important role to play in helping them get a 360-degree picture of operations, synchronise changes, and realise the true potential of the technology.

Adobe (ADBE -0.50%) and Salesforce (CRM -1.49%) are both bellwethers of the cloud software market. Adobe's Photoshop, Illustrator, and Premiere Pro -- all housed in its Creative Cloud -- are industry-standard tools for media professionals. Its Acrobat PDF and e-signature apps are also widely used by its enterprise customers alongside its other cloud-based e-commerce, marketing, and analytics services.

Salesforce owns the world's largest cloud-based customer relationship management (CRM) platform. Like Adobe, it also expanded that ecosystem with additional cloud-based marketing, data analytics, and collaboration services.

I compared these two cloud stocks back in Sept. 2021 and concluded that Salesforce's more balanced growth and lower valuation made it the better buy. But since I made that call, Salesforce's stock declined 25% as Adobe's stock slumped 33%. Both stocks lost their luster as the macro headwinds curbed their near-term growth and interest rates deflated their frothy valuations. But could either of these out-of-favor cloud kings be worth buying again before a new bull market starts?

Adobe continues to face tough macro headwinds

Adobe expects its revenue to rise only 9% in fiscal 2023 (which will end in early December) compared to its 12% growth in fiscal 2022 and 23% in fiscal 2021.

It blames that slowdown on the macro headwinds that forced many companies to rein in their software spending. However, it expects its adjusted earnings per share (EPS) to grow 12%-14% in fiscal 2023, which would represent an acceleration from its 10% growth in fiscal 2022, as it streamlines its spending to cope with its slower sales growth.

However, Adobe's revenue and earnings outlook for fiscal 2023 doesn't include any gains from its planned $20 billion takeover of the design software start-up Figma, which competes against Adobe's own XD platform in the user interface (UI) and user experience (UX) design markets. Adobe insists it can close that massive half-cash, half-stock deal by the end of fiscal 2023 but hasn't cleared all the regulatory hurdles yet. Adobe's critics claim that acquiring Figma would further solidify the company's control of the digital media and design markets.

Meanwhile, Adobe is still spending a large portion of its free cash flow (FCF) on big buybacks. It reduced its outstanding share count by more than 4% over the past three years, and it still has $5.2 billion remaining in its current $15 billion buyback authorization -- which will last through the end of fiscal 2024. Adobe's stock still looks reasonably valued at 24 times forward earnings, and its growth will likely accelerate again once the macroeconomic environment improves.

Salesforce is cutting costs to cope with the downturn

Salesforce expects its revenue to rise 10% in fiscal 2024 (which ends next January), which would also mark a slowdown from its 18% growth in fiscal 2023 and 25% in fiscal 2022. That deceleration was mainly caused by macroeconomic and currency-related headwinds.

But unlike Adobe -- which only let 100 employees go last December and doesn't plan to execute any mass layoffs -- Salesforce abruptly laid off about 8,000 employees, or 10% of its workforce, at the beginning of this year. It also hinted at additional layoffs throughout the rest of the year as it focuses on boosting its operating margins. It even launched its first buyback plan last year, then doubled that authorization from $10 billion to $20 billion earlier this year.

As a result, Salesforce expects its adjusted EPS to rise 36% in fiscal 2024 compared to its 10% growth in fiscal 2023 and 3% decline in fiscal 2022. That accelerating earnings growth could appease the activist investors who ramped up their pressure on Salesforce over the past year. Still, there's a risk that it could toss out its babies with the bathwater and weaken its own defenses against Microsoft, Oracle, and SAP in the CRM market.

Moreover, investors should recall it already lost a long list of top leaders -- including co-CEO Bret Taylor, Chief Strategy Officer Gavin Patterson, Chief Marketing Officer Stephanie Buscemi, Slack CEO Stewart Butterfield, and Tableau CEO Mark Nelson -- as it streamlined its sprawling business.

Salesforce's stock looks a bit pricier than Adobe's at 27 times forward earnings, but it's also growing faster and has no unresolved acquisitions hanging over its stock.

The better buy: Salesforce

Salesforce's aggressive cost-cutting measures seem risky, but they were long overdue after years of big acquisitions and hiring sprees. If it successfully streamlines its business this year, it could emerge as a leaner, more profitable tech giant that generates more predictable returns. Adobe is still a good long-term investment, but its slower growth and massive commitment to Figma could make it a less appealing investment than Salesforce for the rest of the year.

Leo Sun has positions in Adobe and Salesforce. The Motley Fool has positions in and recommends Adobe, Microsoft, and Salesforce. The Motley Fool recommends the following options: long January 2024 $420 calls on Adobe and short January 2024 $430 calls on Adobe. The Motley Fool has a disclosure policy.