Integration Sleight of Hand

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It was 1998, and Ron Hash didn't need a tickler to remind him that the millennium loomed closer each day. His company's non-Y2K-compliant call center system was all the reminder he needed.

As the director of information systems for CCC IS-a $200 million vendor of auto insurance claims software and services-Hash knew that, at the very least, an upgrade lay on the near horizon. What he didn't expect last year, however, was that his company's CRM system vendor would be swallowed up by another software company.

"At the time," recalls Hash, "there wasn't an upgrade path to the other vendor's product. Whether we adopted a new CRM solution altogether or tried to migrate over, it was going to be equally painful."

Under the circumstances, it seemed a good time to consider other solutions, but that brought new challenges. The market had changed dramatically since the company's last call center implementation.

"We were unfamiliar with the vendors and wanted to adopt an eCRM strategy to boot," says Hash. "Given that we were stepping on such unfamiliar turf, we decided to bring in a full-service systems integrator who could help make the project a success."

Hash was no stranger to working with systems integrators-his company was, after all, in the software business-so he knew that hiring just anyone wouldn't do. "In a prior job, I worked with one integrator where their employees' experience level didn't add value to my people," he recalls. "In fact, their lack of experience frequently distracted and frustrated my employees, who felt that they were wasting their time teaching a bunch of college kids. I was afraid of the impact on my staff at CCC if we encountered a situation like that. I wasn't about to let it happen again."

Adding to his concern was that a nearby company was already paying the price for a poorly chosen systems integrator. "I heard about a large firm in our area that hired an integrator to install a software package," he explains. "The integration partner was unfamiliar with the packaged application and performed unnecessary customization. This led to the company's ongoing dependence on the integrator. The project went south, and from what I understand, it remains a real mess."

After a diligent search, CCC turned to The Revere Group, a 500-person systems integrator with offices in five cities across the U.S. "We've had a tremendous experience with Revere," claims Hash. "They helped us navigate through the vendor hype and select a good solution. During implementation and integration, they added value at every step and at all stages in the organization, from the deepest technical issues to helping us chart an eCRM strategy for the near future. They've done a phenomenal job."

Lining Up Your Cards
Selecting an integrator is not as easy as it might sound-a lesson that too many companies have discovered the hard way. "What many people don't realize is that when they select an integrator, they've got to prepare and do their due diligence just as much as when they chose their CRM software vendor. In both cases, the wrong choice can be costly and even disastrous," asserts Peter Perera of The Perera Group, a CRM consulting firm based in Andover, Mass.

Karen Williams of Arterial Solutions in Framingham, Mass., agrees. Prior to starting her own CRM consulting firm, she worked as a principal consultant for a well-known CRM vendor and witnessed several situations in which companies made bad integrator-hiring decisions. "There was one project where the integrators went way off track. What should have taken eight months took over two years, and the customer went way over budget. They finally fired the integrator and brought in the vendor to integrate their solution with their other systems."

Before you begin researching systems integrators, it's advisable to get your own cards in order and understand exactly what you need. Along these lines, you'll want to be clear on the following issues:

Who will be in charge of selecting your integrator? In selecting a CRM solution, companies often appoint a project team that represents each user group accessing the new system. While this approach may work great when choosing a product, Katrina Menzigian of International Data Corporation advises letting your IT group take the lead in choosing an integrator. Hash agrees with this stance. "We're the ones who will be working with the SI every day," he points out. If someone other than your IT group will be responsible for the decision, at least give IT the ability to veto or approve it.

How extensive are your needs? Many businesses falling under the "systems integrator" umbrella today do a lot more than integration. Their services run the gamut from pure integration to moving in with you for a couple of years while they transform your entire business. Knowing what you need up front will largely impact who best matches your requirements. If you're uncertain as to the scope of your project, consider paying someone to do a fixed-time, fixed-price assessment. Steve Lane, a senior analyst in Aberdeen's Professional Services Practice, recommends that if you use this strategy, you also consider soliciting opinions from more than one firm. "It never hurts to get a second opinion," he asserts. "And while it may cost you another $20,000 for a week's consulting work, that could be a drop in the bucket compared to the cost of your actual project."

Services to consider include, but are not limited to: product selection (development of business requirements, assistance in choosing a vendor and even contract negotiation); design and development of the product; integration of the CRM solution to other products or systems within your company; training and support; and if you need it, complete business transformation.

When Hash began the selection process, he knew CCC needed someone who could do more than just integration. "We were looking for someone who could function like a business partner," says Hash. "They needed to assist in product selection, implementation, systems integration and more. We knew eCRM would be part of our strategy going forward, so we also needed a firm with knowledge in that realm."

Do you need a local integrator? How important is it to have your integrator on site or at least down the street? While regular phone conferences and an occasional visit will sometimes work fine, other times that's not enough, as Hash discovered prior to his CRM project. "When we were upgrading our ERP systems," he explains, "we used a group that specialized in writing ERP upgrades. Though they weren't local, we required their specific application upgrade knowledge and programs, and they were able to do the work at significant cost savings. However, the logistics of having every-other-day conference calls, getting their people connected into our network and constantly moving code around made things very difficult. Our CRM project was 10 times the magnitude of the ERP one. We never could have done it with a remote consulting operation."

Do you want an integrator that's affiliated with a CRM vendor? In recent years, countless integrators have married themselves to CRM solution providers, and whether these partnerships are in the clients' best interest remains a topic of debate. The pros of such unions are clear-integrators gain intimate knowledge of vendors' products and can therefore minimize the time, effort and cost involved in integrating them with other systems. They also gain easy access to vendor personnel so when problems arise, they can work with the vendor to resolve them quickly.

But just because a systems integrator has partnered with a vendor doesn't mean the integrator can truly handle everything, as one Fortune 500 company recently learned. Says the project director at that company (who wishes to remain anonymous): "We hired a well-known, full-service integrator to help us install and implement a high-end CRM product. The integrator included training in their proposal, and-given their size and reputation-we assumed they would be the ones handling it. As it turned out, they didn't have a true training organization in-house. They brought in a third party, and during the first class, it became evident that the third party had no idea what they were doing. We demanded our money back and turned to the CRM vendor for help. What really irked me about all this was that the vendor and the SI had a formal partnership. Why didn't the integrator just say, `The CRM vendor is the best on training and we recommend that you use them for this aspect of the project?"

A consultant employed by a large CRM company says he's also seen problems with some of the firm's integrator partners. "While most of our partners are quite knowledgeable, some are not as up on the technology as they should be," he says. "We've had instances in which we've specifically told partners what they needed to do and they didn't do it because they didn't know how. A couple of times we've even had to step in to save them from embarrassment."

If you've selected a CRM solution and are looking for an integrator, this doesn't mean you should shy away from the vendor's partner pool. Indeed, the partner pool remains one of the best sources for finding good integrators. However, you should do your homework. Don't equate the word "partner" with extensive knowledge of the product and its underlying technology.

If you haven't selected a solution, most experts advise that you avoid integrators with a clear bias toward particular products. "If you need an organization to help you develop your business case, define your business requirements, formulate a technology vision and then pick CRM software, don't go with an integrator that has a leaning toward certain vendors," says Perera. "If you do, you're immediately introducing bias into your project. They might be very capable of integrating a solution with other systems, but they might steer you toward applications that aren't the best match for your needs."

In CCC's case, choosing an independent systems integrator was an imperative. "We needed someone to help us choose a CRM solution," says Hash, "and that required that they be objective. Our SI represented the vendors on the merits of their products and not because of any back-office deals. In fact, when it came to decision time, one thing I really liked was that they played devil's advocate. If I leaned one way, they'd bring up the issues with that product. They were very conscious to make sure we were comfortable with our final decision."

Do you need someone with global offices? If you're a multinational firm or if global considerations have any bearing on your project, look to integrators having an international presence. "For many companies," Lane explains, "it's not so much an issue of whether the integrator has an office in a given location but whether or not you will be dealing with issues such as local content requirements. If local content isn't a concern, a U.S.-based firm is perfectly capable of delivering a global solution for you." International firms can implement a product in their solutions center, deploy it around the world and send people to international offices to do integration work if necessary. But if local content is an issue, you'd be wise to look to integrators with international offices. In some cases, not only is it important to select an integrator with global offices, but those offices must communicate effectively. FedEx's system is a classic example of this situation, says Lane. "The entire infrastructure had to be in place globally and simultaneously, so communication between international offices was critical. If your solution is global and must be fully operational all at once-as opposed to being rolled out gradually-then your integrator must have at least regional capabilities on an international scale. This ensures proper timing and coordination during the actual deployment."

"One thing to be especially diligent about is determining to what extent junior personnel will be assigned to your projects."

Do Your Due Diligence, Diligently...
Once you're clear on your company's needs, it's time to start researching potential integrators. For any integrators that make the short list, the following criteria can help you see how they stack up.

Know the history of the systems integrator organization. How long has the integrator been in business, and how much experience does it have with the CRM product and version you've selected? "If you're looking at a fairly new consulting organization that doesn't have a history of successes behind it, you must decide if you can afford that risk," says Williams. Talk to references. Find out how many customers the SI has done implementations for. Also, ask where its clients are in terms of stages of implementation. What are its success rates? Which applications has it integrated the CRM solution with?

"And," adds Perera, "look not to the size of the projects they've done, but to the complexity of them. Don't be overly impressed if the SIs tell you they've done a large implementation or had experience with large-scale systems. A system may be relatively complex because of its size, but the integration requirements might be very simple. On the other hand, a company might do a much smaller implementation, but its integration needs might be extremely complex."

Consider the integrator's degree of industry expertise as well. While CRM is in some ways generic, each industry nonetheless has different issues. "When you get into telephony, for instance, it's all about churn, customer acquisition and retention. With consumer products or retail, the issues focus on how to sell products over the Web. In banking, one of the big concerns is how to segment customers," Lane points out. An integrator who knows your industry is more likely to know the applications most important to you.

One often-overlooked area is the integrator's informal relationship with the CRM vendor. "It's not so much whether they have a formal partnership with the vendor that's important," explains Williams, "but how well the systems integrator and the vendor work together." If the integrator hits on a technical issue that can't be solved internally, for instance, how quickly can it reach the right people at the vendor organization, and how effectively can the two groups work together to solve the problem? Such informal relationships can play a key role in all aspects of the project, as Hash discovered. When his company hit an impasse during contract negotiation, the integrator stepped in and smoothed things over. "When we disagreed on price or other issues," recalls Hash, "our SI partners went through the back door and got our position and message to the right people at the vendor's organization. They really helped grease the wheels during negotiation because of their informal ties to the vendor."

Check the expertise of the people assigned to your project. In addition to researching the SI organization, thoroughly screen all personnel assigned to your project. How much experience do they have with your CRM product and with applications being integrated with it? Do they have effective communication and people skills, and will they be able to work well with your IS group? "When we screened the people assigned to our project," asserts Hash, "we did reference checks on all of them. Frankly, I was less concerned with the firm in general than with the individuals it put on site. I wanted to know how and where they could add value and how extensive their functional and operational knowledge was. I made sure they understood the issues pertaining to our call center, customer data model, order processing, our sales force and so on."

One thing to be especially diligent about is determining to what extent junior personnel will be assigned to your project. "There's a huge shortage of skilled business and technical talent," says Perera, "meaning it's very possible-no matter which integrator you deal with-that you'll be dealing with inexperienced project personnel." Williams agrees. "They all have junior people and they've got to train them somewhere," she notes. "If they're using you to get that training, you should be fully aware up front and should be compensated appropriately. When a junior person is involved, consider negotiating for a price reduction or some other compromise so that everyone achieves a win-win."

Find out the integrator's willingness to share risk. "Companies want integrators that are amenable to sharing some of the risk," asserts Katrina Menzigian of IDC. "That desire has driven integrators to develop more effective processes and to adopt performance-based pricing structures. When they develop repeatable solutions, that's another strong indicator that they've committed to the CRM market and have made investments to back that commitment."

If you're talking to an SI who offers a fixed-time/fixed-price deal, Williams adds, find out to what extent the integrator will commit certain resources if the project goes over. "I recently talked with a company that had hired a relatively new SI," she notes. "The project went way over cost and budget. While the company agreed to pay more, it refused to pay the amount that the SI was asking for. The integrator stayed with the project but began rotating the people assigned to it, and the project didn't go well at all."

Williams also suggests finding an integrator who is willing to include a resource from the CRM vendor on the team. "I don't think many integrators will promote this strategy," says Williams, "but vendors recommend it and it gives you several advantages." No one knows the code like the people who wrote it, she points out. And when issues arise that integrators simply can't work out, having a vendor rep on the team can dramatically reduce the time required to resolve them. Additionally, these reps can review code written by your integrator to ensure that the vendor can support it, and they can step in when issues involve proprietary source code. Finally, having a vendor representative involved helps keep the integrator honest. "From my experience as a consultant and from working for a vendor," notes Williams, "I've found that integrators don't always do what they're told. Vendors sometimes tell integrators not to do things a certain way because they know it can't be done effectively. I've seen situations where integrators went ahead and did those things anyway and then blamed the vendor when the application didn't work. Having a resource from the vendor on the team can help prevent such problems."

Knowledge transfer is another factor to consider here since you don't want to be permanently dependent on a systems integrator. As you interview integrators, ask them how they ensure that knowledge is conveyed to the appropriate people within an organization. "No one wants to be left hanging in the breeze when the integrator goes away," says Perera, "but it's amazing how often companies get themselves into trouble by failing to ensure adequate knowledge transfer."

That Feeling in Your stomach...
You've done your homework and thoroughly screened potential integrators. At this point, Lane suggests doing one last thing. "Follow your gut," he says-advice that worked well for CCC IS. "We've been extremely pleased with the integrator we selected," Hash concludes. "If anything, the whole project has gone much better than expected. I absolutely feel that we made the best possible decision in selecting an integrator and, with its help, in choosing a CRM solution. It panned out well, largely because we took the time to select a strong SI partner to help us."

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