I'm advising a client on a Siebel application upgrade. What are some questions I should ask before advising him about a Siebel CRM upgrade?
The key question to pin down: What is the primary driver for the upgrade?
I typically see two scenarios:
Scenario 1: Achieving IT management benefits and cost reductions. This breaks down thusly:
- Driving down ongoing application customization costs. Enterprise-class firms invest heavily in IT resources to support line-of-business applications. Sometimes, business requirements arise for functionality or integration that exceeds packaged CRM application capabilities. In these instances, buyer firms develop custom functionality to support the business through in-house or external resources. As demand for customizations increases, costs to perform customizations can increase, because firms need to procure resources to perform coding efforts and sometimes need to retain resources indefinitely to support the customizations.
- Extending vendor maintenance. For some firms, supporting CRM applications and periodic patch fixes can grow expensive. Enterprises can incur costs to support maintenance themselves, or through a third party, which can be more than the cost from the CRM application vendor. In such cases, the extension of vendor maintenance support can decrease internal support costs for the application.
- Avoiding increased maintenance fees and being out of vendor compliance. Firms that fall out of vendor maintenance windows often have to pay premium fees to their CRM vendor to support an aged application. What's tricky is that CRM vendors don't support all versions of their applications in perpetuity. It's costly for them to do so. They may or may not offer support for certain older application versions. In the cases where CRM vendors will not support out-of-compliance apps, firms must either invest in internal resources to support the application going forward, or seek third-party services to support the application. For highly complex and significantly large technical environments, costs (and risks) can escalate dramatically.
- Building flexibility for the future. Staying on older CRM app versions can limit a firm's ability to scale its CRM app for increased capacity needs in the future, as well as confining its technical agility to support ongoing customizations and changing configuration needs. Additionally, staying on older versions can limit integration and interoperability capabilities with other third-party apps -- like enterprise resource planning (ERP), financials, and inventory management -- that may be needed to support workflows efficiently. An upgrade can ease customization and integration tasks for developers, can be an opportunity to provision and build more capacity for future needs and can reduce the costs that future upgrades may require.
Scenario 2: The organization performs an application upgrade primarily to capture key business benefits. In addition to IT benefits that come from the upgrade, the business benefits include:
- Revenue growth. An app upgrade can contribute to the top-line growth through functionality enhancements. For example, improvements in customer data analytics can enable customer-facing personnel to have better information and intelligence about customers and prospects to better engage and sell products and services. As a result, an upgrade can have an impact on the ability of customer-facing sales and service staff to promote and merchandise offers, cross-sell better and close more deals.
- Improved efficiencies. A CRM app upgrade can have a positive impact on key CRM business processes like lead management, campaign and cross-sell management and customer service. For lead management, upgrade functionality may have improved scoring support so that sales reps work on higher qualified leads than they had before. For campaign and cross-sell management, an upgrade may have improved business-rule logic to identify buyer patterns better so that firms promote the right products to the right targets. And for customer service, the upgrade could provide reps with access to richer customer service data sources so they can handle requests quicker and more effectively.
Apart from the return on investment (ROI) that CRM app upgrades can deliver, they can also offer enhanced organizational flexibility. In the case of a CRM app upgrade, flexibility refers to the ability to adapt to and handle changing business states and evolving and uncertain environments in the future. The impact (or value) that flexibility provides can be significant. For example:
- Technical flexibility. CRM app upgrades are packaged applications. And packaged applications can provide much easier and better-defined integrations with other market-based, industry-standard systems compared with an internally and custom developed system. System extensibility, integration with other systems, and the availability to adapt processes provide technical flexibility.
- Scalability. A CRM app upgrade can provide higher amounts of user capacity than prior versions. This scalability improves the enterprise's ability to accommodate future growth. Scalability in deployment, the addition of new sites and users, enables the enterprise to easily purchase additional site licenses and installations as needed. In some cases, this relates to the ability to apply a large number of users to a single instance, or deploy many users across multiple instances and stay in sync.
- Configuration. CRM app upgrades can provide flexibility of configuration rather than having to do customization. In other words, newer version of applications support numerous rich configuration options that can be flexibly deployed on installation, modified during production, and supported on future upgrades.
- Interoperability and integration. Newer versions of CRM apps contain more standardized tools and architectural flexibility to ease integration to third-party applications, like marketing tools and lists, ERP systems and Web services for legacy systems. The ease of integration and ability to interoperate with other tools can reduce the amount of custom code and development needed for future app integrations.
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