Ask The CRM Expert: Questions & Answers

Is a Siebel upgrade worth the money?

Is a Siebel upgrade worth the money?

By  William Band, Vice President and Principal Analyst, Forrester Research 

SearchCRM.com

We were acquired by a major firm a few months back. We are currently using Siebel CRM version 7.0.4, and since the new company that bought us has invested a lot of money in its own customized CRM suite, they were looking at synergizing all the companies' software to operate on one CRM suite.

I am trying to make a pitch to my boss and team members that we will need to upgrade to the latest version of Siebel CRM. The application is extremely slow and customers are not happy. Can you give me a rough estimate of how much it would cost to upgrade? I want to have all my data ready before I make the pitch to my teammates.

I am also wondering if it is worth upgrading just to keep the system going on until we move out of Siebel CRM completely. (It should be around January of 2008 that we move out of Siebel.) Can you please suggest how I should go about doing this?

Upgrading Siebel to a new version is costly. Most Siebel installations are highly customized and upgrading means a total reimplementation of the software. You should go through this process only if you plan on staying with the vendor's software for three to five years. Most business cases for CRM software that I see approved by top management require an acceptable ROI within a three-year timeframe. This threshold generally applies to any investment in business technology.

For budgeting purposes for Siebel, use the following guidelines:

  • Vendor on-premise perpetual license:
    $2000/user – paid in advance in year 1

  • Annual vendor maintenance fee:
    22% of initial license cost per annum

  • Professional services, implementation, servers, infrastructure cost:
    4x the license cost in year 1