Optimizing CRM Application Performance and Lowering the Total Cost of Ownership

CRM is a strategic business initiative that comes at a significant cost to the organization. The annual cost of implementing a CRM solution is an issue many businesses consider when initially implementing a Siebel application or migrating to the latest Siebel 7.5 version.

Many companies are currently evaluating the benefits of upgrading to Siebel 7 and 7.5 to take advantage of enhanced capabilities, including a new Web architecture, improved global deployment support, deeper vertical functionality, and the integration of analytic and employee relationship management (ERM) capabilities. Implementing any CRM system requires substantial time and resource commitments. Even the use of a packaged application such as Siebel does not change the dramatic ripple effect throughout the entire IT organization-from business process strategy to multiple application integration points to network and infrastructure decisions.

Further complicating the situation are unmet ROI expectations due to a higher total cost of ownership (TCO) and unanticipated lower user adoption. Some common characteristics in businesses today are

• Poor performance of the application can result in low customer satisfaction and a decrease in user adoption.
• Desire for a true 360-degree view of the customer forces many companies to integrate with financial, ERP, and SCM applications, which further complicates implementation and maintenance.
• Many new initiatives are attracting new users of the application, such as customers and partners.
• New technologies such as three-tier architectures, Web services, and inter-enterprise initiatives are impeding the upgrade process and increasing the complexity and cost of running IT.

CIOs are striving to align business goals with IT initiatives, but are drowning in the cost and complexity to meet the demand. Because CRM systems contain mission-critical customer information that affects the entire IT infrastructure (along with many users, internally and externally), it is a challenge to ensure the application is optimized for performance and reliability. Managing these costs to deliver competitive advantage and drive improved results that affect the bottom line is also difficult.

Despite the downturn in the economy and lowered IT budgets, businesses are still willing to invest in business-critical applications such as CRM because they can not only shave costs through efficiency gains, but also help retain and grow customer revenue. Companies are realizing that CRM technology is critical to their success. However, technology is only a differentiator when used effectively. Because 80 percent of IT budgets are used to maintain the current environment instead of moving to the future, companies need to reduce the ongoing dollars spent and reallocate money for more strategic technology development. It is with this understanding that the Yankee Group makes the following recommendations:

• Use BTO. BTO is an important tool for current and future CRM implementations with at least 200 seats. Value can be achieved not only by optimizing the design and development phase, but also by assisting ongoing management efforts to improve end-user satisfaction.
• Lower costs and accelerate ROI. Use BTO for improved regression testing and assisting in end-user adoption through functional testing that verifies business requirements and response times.
• Gain a faster ROI on a CRM investment. Focus on improved user adoption, reduced implementation costs, and reduced application ecosystem maintenance costs.
• Design for production. Follow the best practices used by product manufacturing departments that design products in ways to reduce defects, eliminate waste, and create production scalability.
• Remember that testing, tuning, and application management are vital. These steps have become a critical component of delivering high-quality and high-performing applications. Without it, organizations risk high costs or failure-losses in revenue, an unproductive workforce, increased maintenance costs, and customer dissatisfaction.