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IBM Launches a SaaS Center of Excellence
destinationCRM Exclusive: The consultancy gathers its resources and expertise in software-as-a-service CRM -- and stresses that SaaS may not be right for everyone.
Posted Sep 18, 2008
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As CRM users -- and more than a handful of CRM vendors -- increasingly consider jumping into the software-as-a-service (SaaS) delivery model, at least one CRM consultancy is aiming to help those users look before they leap. As a step toward unifying its efforts in the SaaS CRM space, IBM Global Business Services (GBS) is announcing today the launch of its Center of Excellence for Software as a Service, developed by the consultancy's CRM division.

The Web-based resource is a collection of "decision-support tools and implementation assets" designed to help companies "understand how SaaS differs from traditional software-delivery models, and to manage these differences," according to a statement from IBM GBS. In an exclusive prelaunch interview with destinationCRM, however, two of the IBM GBS executives spearheading the effort describe a much more extensive commitment to deploying best practices and due diligence in CRM initiatives -- and suggest that SaaS may not always be the right response to a company's CRM needs.

The new offering is the culmination of efforts spanning the last three to six months, according to both Daniel Hirschbuehler, IBM GBS's global leader for CRM, and J. David Lashar, an associate partner in the CRM practice. The "CoE" -- which is IBM GBS's shorthand for the offering -- was an opportunity, Hirschbuehler says, to collect "synergies and best practices" that IBM GBS has gleaned from its extensive CRM practice, and a chance "to have a virtual CoE with the assets and tools we’ve developed on those projects." The CoE, as he describes it, successfully brings together a network of professionals with extensive SaaS experience in terms of CRM, and proposes to answer "a lot of questions that our clients have been asking us."

The decision to centralize the consultancy's SaaS assets is underscored by some of the new features being made available. In particular, Lashar (who, in the interest of full disclosure, also writes a column for CRM magazine) says that some of the main highlights include what he calls two of the CoE's "hard assets": a data-translation tool and a territory management utility.

Lashar suggests that not all SaaS initiatives require the traditional (and resource-intensive) extract-transform-and-load (ETL) data procedures. "We developed a utility that eases the [process] and allows data transfer to go more nearly along the schedule you’d see for an on-premise deployment," he says. Small and midsize companies, he notes, are often playing on a different level. "Those businesses don’t have the same kind of complex business models," he says.

The second "hard asset" is one designed to fill a need that Lashar says IBM GBS was seeing in its engagements. "Territory management and sales coverage capabilities had gaps," he says, especially in terms of deliverability. "So we’re doing a territory management utility that leverages Web services." (Unlike the data tool and other features of the CoE, which are immediately available, the territory management module is expected to roll out by the end of this month.) To serve up the collected knowledge of IBM GBS's CRM division, the CoE utilizes "Cattail," the consultancy's internal knowledge repository, developed by "the Lotus team that's up in Cambridge," Lashar says. While it's among the social networking and Web 2.0 applications that IBM has, as Lashar says, "not yet productized to the marketplace," the capability speaks strongly to IBM's internal commitment to virtual collaboration using the Web 2.0 paradigm.

Those offerings are complemented at the CoE by the expected "soft assets." "Yes, we do have white papers," Lashar says, with a chuckle. But the expertise, which in other hands can often be seen as dry and uncompelling, has been made useful, he says. Particularly useful, in fact, is an approach to gauging the costs of SaaS and the economic rationale for pursuing that delivery mechanism over an on-premises option. "We have a simple, graphical economic decision-making model," he says. "For most companies we’re going to engage with, there is an inflection point -- five to eight years out -- where the SaaS model [stops being cheaper] and an on-premise deployment makes more sense." Sometimes, Lashar says, the straightforward approach helps build the most compelling case. "It's a simple-yet-robust model to walk CIOs and VPs of Sales through. That can be illustrative. It can be a useful tool."

Lashar says that the lessons to be learned from the CoE -- and from SaaS efforts in general -- are ones that "might not be obvious out in the marketplace yet – or even suspected.... The SaaS platform is enabling a lot of our clients to embark on their CRM journeys, to demonstrate the benefits of CRM in very material ways." Once those benefits have been made clear, he says, CRM users can then graduate to the kinds of complex and robust capabilities that, as he says, "today, you can only deliver with the on-premise platforms."

A switchover at that point, he adds, is completely feasible -- "no different than the switch from any legacy system to today's new systems." But having made a first effort with SaaS -- or, more to the point, having engaged in a disciplined and well-thought-out SaaS initiative -- makes a company's future CRM efforts potentially that much more powerful. "When you move to SaaS, you’ve upped the baseline, you’ve standardized your data," Lashar says. "You’ve come a long way from what your baseline was -- made it easier, faster, less risky to take the next step on your CRM roadmap."

It's worth noting that IBM GBS's CoE for SaaS is intended for mediated interactions. Clients (and potential clients) are expected to engage with the CoE with IBM GBS partners in tow. "[These offerings] are internal assets for our delivery teams, and assets we can deliver to our clients," Lashar says. "This is part and parcel of our [CRM practice] -- the idea behind the CoE was to inject our skill sets, learnings, and assets into our front-facing persons who engage with our clients, [the] people who help clients answer the question of what SaaS is." He continues, "The way [high-level executives at companies looking to deploy CRM] first encounter [the CoE] is with the partners.... They’re encountering us through our business development or implementation teams."

As the CoE gathers attention over the next several months, he adds, the plan is to progress beyond the virtual confines of the CoE and extend to a real-world dialogue. "We’d like to garner enough interest to bring people into our Innovation Centers," Lashar says. Hirschbuehler agrees, and draws attention to the five Innovation Center locations -- three in the United States (Atlanta, Boston, and Chicago), plus additional sites in Vancouver and London. Hirschbuehler -- whom Lashar characterizes as "leading our initiative on CRM 2.0" -- sees the CoE–to–Innovation-Center progression as critical to what he calls the "digital multichannel transformation" that many CRM users will undergo in the coming months and years, particularly as CRM comes to comprise digital and mobile channels. "There's a lot of interest in the next-generation Web site," he says.

News relevant to the customer relationship management industry is posted several times a day on destinationCRM.com, in addition to the news section Insight that appears every month in the pages of CRM magazine. You may leave a public comment regarding this article by clicking on "Comments" at the top; to contact the editors, please email editor@destinationCRM.com.

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To contact the editors, please email editor@destinationCRM.com
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