White Paper. The Case for CRM on IBM System i

Transcription

1 White Paper The Case for CRM on IBM System i Companies Choose System i for its Reliability, Manageability, Scalability and Low Total Cost of Ownership. Those are a just few of the many reasons for also choosing it as your CRM platform. Version: May, 2008 TOUCHTONE CORPORATION, OF 8 THE CASE FOR CRM ON IBM I

2 Note: This white paper assumes that the reader s company uses IBM System i as its primary business system platform. If that is not the case there are still good reasons for running CRM on System i, but some of the rationales explored below particularly the integration issues apply only if System i is also your primary business system platform. (Note: Throughout this paper, for System i you can generally also read IBM i, Power Systems i edition, iseries, AS/400, OS/400 or i5/os. ) Here s the scenario: You ve determined that implementing a Customer Relationship Management (CRM) application will deliver a significant return on investment. Now you have to make a decision. Where should the CRM run? Should you opt for a Software as a Service (SaaS) offering because you won t need to incur up-front capital costs to buy a CRM software license? Or should you run the application in-house and choose a Windows-based CRM because the required hardware is relatively inexpensive and widely used? The answer to both of these questions is probably no, particularly if IBM System i is your company s primary business application operating system. The major reasons why customers choose System i for other applications reliability, manageability, scalability and low total cost of ownership (TCO) also make it a good choice for your CRM platform. But the very fact that your IT department is already an IBM i shop makes the rationale even stronger. Running all systems on the same platform will leverage your existing skills and enable easier and tighter integration between your CRM and your other business applications. This white paper expands on these issues to provide the business case for CRM on System i. Integration Integration of your CRM with your ERP, supply chain management and other applications isn t just a nice to have. It is a fundamental driver of CRM value. The truth is that the greatest source of return on your CRM investment will come not from the data that originates in the CRM, but rather from the amalgamation of CRM data and functionality with data from back-end applications. For example, when salespeople get ready to make sales calls, a click of a button in the CRM should show them the dollar value of their customers past purchases, the status of all invoices issued to and orders received from the customer, whether or not the accounting department has placed a credit hold on the customer s account, and more. All of that information originates in back-end systems, not in the CRM. In short, the only way to gain the 360-degree view of customers and customer interactions that is one of the primary profit-enhancing benefits of a CRM is by integrating it with the back-end systems. In fact, without that integration, the CRM becomes one more island of isolated information. To maximize the return on your CRM investment, integration should be bi-directional. If a salesperson enters or changes some data in the CRM and those data elements also exist in one or more back-end databases, the updates should be applied automatically in all locations, without the need for re-keying. At the same time, you should retain complete, granular control of data security, allowing you to restrict who can add, delete or change data and which applications the CRM or the back-end systems can accept those entries. Implementing tight integration is easier if the CRM runs on a server that uses the same operating system as the servers running your back-end applications. And it is even easier if they also run on the same server. In fact, although integration is possible when the CRM runs on a different server and/or operating system, it will never be truly tight because it typically involves batch rather than real-time updates. What s more, in the long-term, the stability of the integration will also be a problem as the structures TOUCHTONE CORPORATION, OF 8 THE CASE FOR CRM ON IBM I

3 supporting the integration tend to break down over time as the underlying applications and infrastructure change. By running your CRM on the same platform as your back-end systems, you avoid these problems. The middleware required to share data among applications is then, at worst, much simpler and possibly not even required at all. When libraries reside on the same database, DB/2 in the case of System i, RPG programs are all that is needed to link the two libraries and provide you with strict control over how information is updated across applications. And if you operate in a homogeneous computing environment, it is more likely that your CRM provider will offer pre-built data integration tools for popular business applications. These tools can make data sharing virtually transparent to both users and the IT department. In contrast, consider the use of SaaS. In that case, data is usually transferred between your systems and the SaaS databases using XML and Web Services. Before you can start using the CRM you must buy or build tools that extract data from your back-end databases, convert it to XML and interface with the SaaS vendor s Web services to load the data into its databases. Then, you need tools that capture ongoing data changes on the back-end systems and send them to the vendor s databases, probably, but not necessarily using the same transport mechanism as the initial data set-up process. In System i shops, where XML and Web services skills are, for the most part, still relatively scarce, this can be a severe handicap. Even after overcoming this challenge, this does not allow you to implement two-way integration. The contrast couldn t be clearer. If your CRM is running on the same platform, System i, as your other business applications, it will be much easier and less expensive to integrate the two and reap the following rewards. Benefits of Integration Reduce Costs. Integrating CRM and back-end data can eliminate costly duplicate data entry. Instead of entering, for example, customer contact information in both your CRM and your ERP applications, you enter it once and it is automatically shared with or propagated to the other application(s), subject to security restrictions under your control that limit where data can be updated and by whom. Figure 1: Redundant data entry adds costs and reduces data quality. Beyond integrating at the data level, also integrating at the application level can further reduce human resource costs. You can then improve productivity by providing one-click switching between applications rather than burdening employees with cumbersome log-out/log-in processes to switch from one application to another. Easy application switching should extend beyond the back-end systems. Users should also have one-click access from the CRM to desktop applications such as Microsoft Word and Excel and to Web sites that are visited frequently. Furthermore, this one-click switching capability should be customizable company-wide, by department or by individual user, so you can accommodate each unique need. By running all core business applications on the same platform, it s also easier to provide a common look-and-feel for all user interfaces, thereby reducing learning curves and preventing the need for employees to switch gears when switching applications. TOUCHTONE CORPORATION, OF 8 THE CASE FOR CRM ON IBM I

4 Improve Data Quality. In addition to lowering data entry costs, entering data once and only once and then sharing it among applications reduces the incidence of data errors and inconsistencies creeping into one or more of the databases. What s more, automating creation, where possible, through the CRM eliminates the human error that can result when people try to assemble critical messages by cutting-and-pasting data from various sources or by writing them from scratch. Improve Customer Satisfaction. Industry pundits argue over the precise number, but there is general agreement that it costs somewhere between four and ten times more to win a new customer than to keep an existing one. An investment in improving customer satisfaction will, therefore, likely pay large dividends. Integrating your CRM with your back-end systems can achieve that objective. For instance, despite the best of intentions and efforts, things occasionally go wrong. When they do, customer satisfaction is usually threatened, but it doesn t have to be. If your CRM is integrated with your customer support systems, when a customer calls the support center to report a serious problem, the CRM can automatically alert the appropriate sales representative and trigger a series of activities that are managed through the CRM. The sales rep can then act as the customer s advocate and hold the customer s hand through the problem resolution process. When that happens, a threat to customer satisfaction turns into a valuable opportunity to clearly demonstrate how highly the company values its customers. The truth is that, it might seem irrational, but customers often value companies that go above and beyond the call of duty to resolve problems even more highly than they value companies that never had any problems in the first place. The reason is that when things go exactly according to plan, nothing attracts customers attention. That s a situation that all companies customers and their suppliers desire, but by responding quickly, comprehensively and decisively to resolve any problem that does arise despite the best of efforts and intents, a company can clearly and powerfully demonstrate its policy of providing superior customer service and delighting customers. Increase Sales. When you don t integrate CRM and back-end systems, sales data exists in the sales database, financial data exists in the financial database, customer support data exists in the customer support database, customer contact data exists in the CRM database, and never the four (and any others) shall meet. That s a hindrance to sales maximization. Consider just a few of the many examples of how integration can help to boost sales. A CRM that has access to sales data can show salespeople who their top customers are, allowing salespeople to allocate their time more profitably. When the customer support system has links to the CRM, the CRM can immediately alert the appropriate salesperson when the support team identifies that the reason why a product that a customer bought is running slowly is that the connected Gizmonater is reaching the end of its normal useful life. The salesperson can then proactively sell the customer a new Gizmonater rather than waiting for the customer s call, a call that may go to a competitor instead. Integration of sales data with the CRM makes it possible to analyze customers replenishment cycles for consumable goods. Sales offers can then automatically be sent to customers shortly before the expected replenishment date in an attempt to keep customers loyal. TOUCHTONE CORPORATION, OF 8 THE CASE FOR CRM ON IBM I

5 Improve Cash Flow. Sales are a necessary, but not sufficient, component of profitability. For a company to be profitable, customers have to not just buy from the company; they must also pay their bills. When salespeople don t have real-time access to back-end data, they may misallocate their time, devoting precious hours to closing deals with customers who have proved to be very poor credit risks in the past. In addition, if the CRM and back-end systems are integrated, if, subject to any security restrictions, a salesperson changes a billing address in the CRM, that change can be propagated to the database supporting the billing system. Without this capability, the invoice and the ensuing payment might otherwise be delayed when the post office returns the invoice and it has to be resent. Deliver Value to Salespeople While Ensuring that the Company Retains its Valuable Information Assets. An integrated CRM benefits salespeople by merging their customer and contact information with data from enterprise applications, which helps them to do their jobs more effectively. This, in turn, gives salespeople a strong incentive to store customer and contact information in the CRM. Contrast this with alternatives such as Goldmine, ACT or an Excel spreadsheet. Those applications don t store data in a database that is shared company-wide. The result is that when salespeople leave the company, their customer and contact information often leaves as well. Storing the data in an enterprise database eliminates this problem. Increase the Return on Your Information Assets. All of the above integration benefits can be summarized as one overarching advantage: integration allows you to make more and better use of your existing and new information assets, thereby increasing the return you receive from your investment in them. Figure 2: Not integrating CRM and accounting data can be detrimental to cash flow. TOUCHTONE CORPORATION, OF 8 THE CASE FOR CRM ON IBM I

6 Reliability and Availability After your organization gains experience with a CRM you ll find that you will quickly reach the point where almost every customer-related activity will be driven, supported or, in some cases, fully automated by the CRM. If the CRM is down, many of those activities will be either severely hampered or possibly halted until it comes back on-line. It is, therefore, critical that you run your CRM on a highly reliable and available system. System i running on a Power System is one of the most reliable computing platforms you can buy. As a result of a number of Power Systems and System i features, such as robust logical partitioning that usually prevents failures in one partition from affecting other partitions, redundant strategic components, redundant I/O paths, an inherent ability to predict potentially catastrophic hardware errors before they occur and autonomics to provide self-healing capabilities, downtime due to either operating system or hardware failure is exceptionally rare when using System i. That assertion is borne out by industry studies. IDC compared workloads running on x86 platforms to the same workloads running on System i and found that availability was 16% higher in the System i environment. Another IDC study comparing service levels on System i versus x86 platforms showed that the surveyed System i environments experienced an average of 0.58 hours of downtime per year. The equivalent number in x86 environments was hours almost 27 times the downtime in the System i environment. The same study showed that 0.21 hours per user were incurred annually to respond to virus attacks in x86 environments. The equivalent number in System i environments was only 0.05 hours, or less than one quarter of the time spent in x86 shops. Beyond the reliability of the platform itself, Capacity Backup Editions of System i Power Systems improve the affordability of using high availability software to maintain redundant hot-backup systems. This allows you to eliminate downtime that would otherwise result from causes that even the most reliable hardware and operating system can t prevent, such as natural disasters, server and application upgrades and database maintenance and backups. Furthermore, because effective use of the CRM requires that it be integrated tightly with back-end systems, running the CRM on a different platform than those other applications introduces additional points of failure that could hobble your CRM. Beyond the fact that most other platforms are less stable than System i, running your CRM on a different platform means that communication links and complex middleware, including any translators required to move data between incompatible platforms, must be operational to ensure data synchronicity. Running a CRM on an SaaS vendor s systems adds yet more points of failure. If the SaaS provider s servers, disks, applications or one of the Web services protocol stacks fails, you may not be able to use your CRM until the problem is resolved. Total Cost of Ownership Regardless of the application, cost is always a factor. No matter how great the benefits of a CRM, if those benefits are overwhelmed by the associated costs then the application cannot be justified. That s another reason to choose System i as your CRM platform. Because of, among other factors, its high availability and the ease of management afforded by the tight integration of its software stack, the total cost of ownership (TCO) of System i is among the lowest of all business computing systems. This assertion is verified by a number of industry studies. For example, a report titled The Business Value of IBM System i in Midsize Business Deployments, published by IDC in July 2007, noted that earlier IDC studies evaluating the benefits of consolidating x86-based workloads onto System i showed that TOUCHTONE CORPORATION, OF 8 THE CASE FOR CRM ON IBM I

7 operating costs declined after a move to System i, in part due to 16% higher availability and 40% lower IT staffing costs in the System i environment. Further supporting the TCO argument for System i, a May 2007 report, Value Proposition for IBM System i: Cost/Benefit Case for JD Edwards EnterpriseOne Deployment in Midsize Businesses, by the International Technology Group stated, three-year IT costs for System i-based scenarios averaged 28.5 percent less than those for Microsoft Windows server equivalents; 38.0 percent less than those for Hewlett-Packard (HP) Integrity server equivalents; and 41.6 percent less than those for Sun Solaris server equivalents. What s more, in many System i environments, when it comes time to buy new hardware, IBM s April 2008 Power Systems announcement of a converged hardware platform for AIX and System i systems should serve to further lower TCO compared to previous System i hardware offerings. Scalability Touchtone s customers report that the integration of Wintouch CRM with their other System i applications does not add a significant burden to their systems processing loads. Nonetheless, no application can avoid all use of processing resources. There will be some added demand on your systems. And, more importantly, one of the primary end-objectives of CRM is to increase sales. Consequently, if your use of CRM is successful, the business activity required to support sales will increase and, in turn, the demands on your systems will grow. Thus, the use of highly scalable systems will help to lower the long-term TCO. System i scores well on scalability. There are Power System models that can support from the smallest to the largest of workloads, meaning that, as your system demands grow, you will not be forced to switch to a new architecture in order to meet your expanding requirements. In addition, the availability of Power System capacity-ondemand options allow you to keep extra capacity sitting on-site just waiting to be put to use, but you don t have to pay for those additional processing resources until you are ready to use them. Leverage Existing Skills If you re IT department is already a predominantly System i shop, it undoubtedly has a substantial investment in System i system management, development, implementation and optimization skills and experience. The IT department has also likely built strong relationships with business partners who provide technical assistance on the System i platform. Keeping your CRM on the same platform, namely System i, as your other core business applications allows you to further leverage those skills and experience. In contrast, switching to a new platform and/or having to implement unfamiliar interfaces, such as Web services and XML, will require a substantial investment to acquire new skills and experience. The Bottom Line AS/400, System i and, now, Power Systems i edition have always been touchstones for system reliability, availability, serviceability and low total cost of ownership. That s probably why you re using it to run your other business applications. It s also one of the reasons why you should use IBM System i as your CRM platform. TOUCHTONE CORPORATION, OF 8 THE CASE FOR CRM ON IBM I

8 In addition, much of the value of a CRM comes from integrating it with your back-end systems. That integration is much easier and less expensive when your CRM and back-end systems share an operating platform. And sharing a platform is also the best way to make the ultimate goal of integration seamless, real-time data sharing practical. About Touchtone Corporation Founded in 1991, privately held Touchtone, an IBM Premier Business Partner, is located in Orange County, California. Touchtone s experience with CRM on IBM midrange computing platforms dates back to 1993, when the company launched Wintouch CRM, an RPG-based CRM solution. In 1995 Touchtone enhanced the flexibility, portability and usability of the Wintouch user interface by giving it a Java-based front-end. Since then, the company has continued to invest significantly in Wintouch research and development. For further information about Wintouch CRM or Touchtone Corporation, call (714) or visit TOUCHTONE CORPORATION, OF 8 THE CASE FOR CRM ON IBM I