Information Technology Services Division. Item 9(d) - Customer Relationship Management (CRM) Solution
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1 [Type text] Date: To: California State Lottery Commission From: Prepared By: Subject: Paula D. LaBrie Acting Director Amy Tong, Deputy Director Information Technology Services Division Item 9(d) - Customer Relationship Management (CRM) Solution ISSUE Should the California State Lottery Commission (Commission) approve the procurement of a new CRM solution which will uniquely adapt to business processes and practices? RECOMMENDATION California State Lottery (Lottery) Regulations section requires the Lottery to use a formal competitive process to procure goods or services involving an expenditure of more than $100,000 to ensure that it obtains the best value for the Lottery. Lottery Regulations section D provides an exception to the formal competitive process where the Director has determined, after a good faith effort to locate potential bidders, that only one viable source exists for the goods and/or services due to proprietary interests, licensing restrictions, or any other reason. The Lottery has determined that only one viable source meets all key criteria for a CRM solution. This memorandum sets forth the justification for the Lottery s determination that only one viable source exists for a CRM solution: Hudson Alley. Staff recommends that the Commission approve the procurement of a new, commercial-off-the-shelf (COTS) solution offered by Hudson Alley, pursuant to Regulation D.
2 Page 2 CONTRACT TERM: December 1, 2013 November 30, 2016 (36 months) CONTRACT AMOUNT: $1,422,000 Total one-time cost: $150,000 Recurring software subscription and support for a 36 -month term for 300 users at $115 a month per user: $1,242,000 Training services 10 one-day classes at $3,000 per class (minimum of 3 classes per week): $30,000 BACKGROUND The CRM system currently in use by the Lottery s Sales and Marketing Division is a version of Microsoft s CRM which is no longer supported by Microsoft. This tool, referred to as Sales Force Automation (SFA), has compatibility issues with current hardware and software used by the Lottery. The current tool was implemented back in 2005, and was designed to be run as a server/client platform, which requires connectivity to the corporate network at all times. Given the Lottery s sales staff is in the field most of the time and without connectivity to the corporate network, the current tool cannot fulfill their needs of real-time data access. The current tool is cumbersome for sales staff to use and is limited in its ability to be modified for easier use. The reporting capability and the ability to enhance the system to meet customer needs is also limited due to outdated technology. Lastly, the current tool cannot be easily upgraded to meet mobile needs since it was designed in the era where mobility was not a criteria. An upgrade would require a complete technology architecture change, which could take years to implement. DISCUSSION The existing limitations of the current tool combined with the Lottery s increasing sales goals create an urgent need to replace the SFA with a CRM solution that requires minimal configuration to implement. In order to equip sales staff with the tools they need as quickly as possible, several key criteria must be met: 1. The selected tool allow for implementation with minimal configuration changes to support Lottery business practices. A COTS product is preferred to minimize initial implementation cost, and by limiting the customization of such COTS, the ongoing maintenance and support cost will be reduced. Also, when it is time to upgrade the product, the product support would still be intact from the original solution provider. This will ensure long term sustainability of the solution by keeping it up-to-date.
3 Page 3 2. The selected tool must also have a native tablet application to ensure the sales staff is able to review and enter data while not connected to the internet, which provides for data access anywhere and at any time. In addition, having a native tablet application is different from accessing an application via a tablet s internet browser. The native application offers easy system navigation based on tablet capability, which enhances user experience and makes for an easier user adoption of the solution. 3. The selected tool must be able to integrate directly with the Lottery s current gaming system provided by GTECH. This integration is necessary to provide sales staff the ability to access accurate, real-time sales data and retailer information. Any additional steps in the middle of data transfer increases the risk of error and delay. Therefore, a proven solution that has a direct gaming system connection is necessary to ensure data integrity. With the above criteria in mind, Lottery s Sales and Marketing and Information Technology Division staff conducted market research through multiple channels in the past several months to find the best solution. The research includes: Industry references from Gartner, Forrester, and other technology research resources to identify market leaders for CRM solutions Vendor solution demonstrations provided by Microsoft, Salesforce.com, SAP, Sales.com, and Hudson Alley Surveys of other Lottery jurisdictions CRM solutions A formal Request for Information (RFI) was released to the industry to allow vendors to respond to the Lottery with solution information. All responses received validated the results from the Lottery s earlier market research. After reviewing the various solutions proposed, Lottery staff confirmed that while some solutions met one or two key criteria, there was only one viable solution that met all of the Lottery s key criteria. OnePlace, the solution proposed by Hudson Alley, satisfies all of the Lottery s requirements: A solution requiring minimal configuration to meet the Lottery s needs. OnePlace does not require redesign or programming changes, and can be used out of the box to meet Lottery s needs. This would allow the CRM project to remain within the project scope, budget and schedule. Subscription to Software as a Service (SaaS) Hudson Alley provides maintenance services which reduces the time and Lottery resources normally required for application programming, modification and maintenance of the software solution. The vendor will manage release of upgrades and fixes to the software, and the releases can be done during off business hours, which would reduce
4 Page 4 the need for internal Information Technology Services Division (ITSD) staff support. The subscription model also minimizes the typical large up-front cost for implementation. The Lottery would only pay annual subscription fees as it consumes the service. This Hudson Alley solution is currently in use by 17 other Lottery jurisdictions, and all of the jurisdictions are subscribed to one code base, hence out of the box. This means the Lottery would benefit from additional software enhancements requested by other Lottery jurisdictions, at no extra cost to the Lottery, as part of the subscription. A proven solution that allows for direct integration with the Lottery s gaming system provided by GTECH. A Mobile (tablet) ready CRM tool that can be accessed and used with or without Internet connection almost anywhere in the field. A native application is available to users. The solution also provides the following: Security o No third party communication/application will be used. Hudson Alley integrates directly with the Lottery s enterprise series gaming system through a proprietary import service. Other solutions utilize third party Scribe software for data importing. o All communication between an OnePlace client and its server is encrypted, HTTPS and SSL. o Data syncs between an OnePlace client and its server are optimized to reduce data transmission and volume. Minimal Configuration o The Lottery can use a majority of OnePlace s functionality based on its business requirements. Other solutions reviewed were not built for Lottery-specific functionality and would require additional time to design. Targeted Lottery CRM o OnePlace is a system designed to be used by lotteries and has powerful industry-specific features which help sales representatives increase sales. o Hudson Alley will work directly with the Lottery on implementation rather than using a third party integration subcontractor. This would ensure the right expertise is in place for successful implementation of the solution, and faster resolution of issues when needed. o The system is maintained solely by Hudson Alley. Other proposed solutions require a large amount of customization as opposed to an out of box implementation. The customization of a solution increases risk of programming errors, requires a greater level of investment of Lottery staff time and Lottery resources for quality control and testing, and could delay implementation of
5 Page 5 the new solution. Some of the solutions characterize their solution as tabletaccessible when in fact the solution is only accessible through an internet connection on the mobile device rather than a native application.
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