Don't skimp: CRM integration is integral

Integration can eat up more than half of your CRM budget. In this installment of CRM Steps to Success, users and experts offer advice on how to get the biggest bang for your buck.

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Once you've forged a relationship with a CRM vendor and picked out your new software, you reach a sticky point in the implementation process: integration. After all, your new applications must work with the legacy systems that form the information backbone of your company.

"The biggest issue in CRM these days is integration," says Paul Greenberg, president of The 56 Group, a CRM consultancy in Manassas, Va. Part of the problem is that companies are forced to integrate from multiple standpoints, Greenberg says, combining mainframe legacy systems and/or client-server legacy systems with newer Web-based systems. They also have to cope with the variety of standards that exist for Web-based CRM -- everything from .NET to J2EE and XML.

Because every company is different -- in terms of focus and process -- and because no two legacy environments are alike, each integration project will be unique. There are, however, a few tips to keep in mind as you prepare to integrate.

User profile: Countrywide Financial
Countrywide Financial Corp., a 25,000-employee financial services company based in Los Angeles, is in the midst of a five-year integration project. It includes using Microsoft BizTalk server as an information exchange interface between a customer data mart and a Siebel B2C data store. In addition, one of Countrywide's business units, Balboa Life & Casualty, is using WRQ Verastream to integrate legacy IBM mainframe applications.

"Each project is like a piece of the overall jigsaw puzzle," says CTO Richard Jones. "The pieces will come together and we'll realize our long-term B2B, B2C and B2E [business-to-employee] strategic objectives."

Budget: When it came to preparing a budget, Countrywide looked at each integration problem separately. "In some cases, such as sales force automation, there was very little integration required," Jones says. "In other cases, such as the e-claims system, there were several integration points, consuming as much as 50% of the cost of the project." As a general rule of thumb, Countrywide assumed that software licensing would make up roughly a quarter of the cost; customization, integration and hardware accounted for the remainder.

Hiring a systems integrator: The company elected to go with Siebel Professional Services for its systems integration and is also working with IBM Corp. and Cap Gemini Ernst & Young. The main reason for hiring outside integration experts, Jones says, was to complete the integration projects more quickly. The ultimate goal is to make each business division's CRM team autonomous.

Advice on integration: "Don't underestimate this aspect of the initiative," Jones says. "It will make or break you. You will need to make hard decisions about existing legacy systems. In some cases they may need to be retired [or] replaced by the new CRM system. In other cases, you will need to determine how to coexist with them."

Everyone will have to integrate

"If there's an enterprise-level strategy in place, then there is going to be integration," Greenberg says. The only alternative is throwing out everything, which is highly unlikely given the money companies have invested in legacy systems.

Integration is necessary whenever a newer system is fed data from these older systems -- in other words, almost all the time. It may come as a surprise to some, but even sales force automation requires integration because its success can be dependent on data from financials, inventory management, billing and procurement applications.

Of course, some systems will need more integration than others. Erin Kinikin, vice president and research leader at Cambridge, Mass.-based Giga Information Group, offers the contact center as an example of a system with multiple integration points, especially those centers that focus on answering questions about order and billing status. The bulk of the information required to provide those answers exists in legacy systems, Kinikin says.

The savings are huge, Kinikin adds, if you can resolve an inquiry without having to pull together information offline and then get back in touch with the customer. You'll probably also make your customers a lot happier.

Three things to look for in an integrator

A good systems integrator can help companies get the project focused and off on the right foot. A systems integrator can also bring knowledge of the CRM package and its capabilities that the internal IT team probably lacks.

When hiring a systems integrator, companies should keep three things in mind, Kinikin says: vertical industry expertise, flexible project management and results orientation.

"CRM is not a one-size-fits-all problem," Kinikin says. "Companies need to work with an integrator that understands the processes and integration points for a specific industry." She also stresses that integrators be willing to work on smaller projects in collaboration with internal IT staff rather than focusing on large-scale "big-bang" implementations. Integrators should also bring a measurement methodology that will enable the company to measure results as they go.

If you're going to keep any of your old systems that are enterprise-related in any way, then you do have to budget for integration, says Greenberg. Beyond that, however, it's hard to say how much to budget because every company's legacy environment is different.

A good rule of thumb, however, is that for every dollar you spend on CRM, you should plan to spend two to five dollars on consulting and implementation services, says Kinikin. Integration accounts for one-third to one-half of those fees.

Web services are not a magic bullet

Many view Web services -- those services and protocols that help Internet-enabled systems communicate and share data -- as a panacea to integration problems. But Kinikin says that it's really a "small part of the integration problem." She likens Web services to a "universal phone line" that makes it possible for two systems to communicate but doesn't give them the vocabulary to communicate in a meaningful way.

"The real nuts and bolts of integration is managing formats, managing these processes, not just connecting the systems together," Kinikin says. Ultimately, says Greenberg, Web services solve technical problems and will be a "great leap forward ... but nothing will be the final answer" because processes vary from company to company. Integration will always be a concern.

The CRM vendors realize this and are trying to make things easier. For example, SAP is issuing xApps, which the company says will snap on top of existing applications regardless of platform or vendor and open up data so users can pull it together on demand. Siebel's strategy involves its Universal Application Network (UAN), which creates standards-based, prebuilt business processes to link CRM software with back-office systems; UAN uses common object models and data transformation maps.

Kinikin says that UAN may keep businesses from thinking about dozens of customer processes that are going to cross with these systems because half of the processes may come from Siebel. If a Siebel-defined process doesn't fit your business, you can ignore it, she says.

A phased approach is a smart approach

Like everything else in CRM, the most successful integration projects take a phased approach, Kinikin says. For example, companies may want to begin by integrating new contact center software with one or two primary legacy systems rather than the half dozen applications that eventually need to be tied in. Eventually, organizations can build in integration to satisfy the most frequently performed actions.

"Somehow, when it comes to integration, people lose all that wisdom that they knew about CRM, and try to do everything at once," Kinikin says.

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