real roi: the business case for upgrading to the latest release of oracle’s siebel crm

Real ROI: The Business Case for Upgrading to the Latest Release of Oracle’s Siebel CRMGeorge JacobGroup Vice President, CRM ApplicationsOracle

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Today’s Agenda

• Justifying an Upgrade to the CFO, CIO, and LOB

• Case Study: High Availability Upgrade

• Case Study: Legacy System Replacement

• Customer and Partner Roundtable

Support Above and Beyond

Industry Standard Apps Unlimited

Previous two releases Unlimited support on key releases

No patches afterwardsSecurity and bug fixes as needed

Browser certifications

Forced upgrades No forced upgrades

Charge for new functionalityNo charge for new functionality: e.g.

Task-Based UI, Business Rules, Application Deployment Manager

* OEM support at Oracle’s discretion

Applications Unlimited for Oracle’s Siebel CRM

ReleasePremier Support

EndsExtended Support

Ends Sustaining

Support Ends

8.0 Jan-12 Jan-15 Indefinite

7.8 May-10 May-13 Indefinite

7.7 Sep-09 Sep-12 Indefinite

7.5.3 Dec-08 Dec-10 Dec-12

7.0 Dec-08 Not Offered Not Offered

6 N/A Dec-07 Indefinite

* OEM support at Oracle’s discretion

Why Would You Upgrade?

I don’t want to disrupt my business…I don’t want to disrupt my business…

I can’t justify an upgrade…I can’t justify an upgrade…

Our current release is working just fine…Our current release is working just fine…

It’s too expensive…It’s too expensive…

There’s no value in upgrading…There’s no value in upgrading…

“Upgrading to the latest version of Siebel CRM will cost you $50 MILLION!”

Justifying to the Key Constituents

CIO

CFO

Lines of Business

? ?

?

‘Like for Like’ Upgrade

Deployment Profile Medium Size (5,000 users)

Medium Customization

Upgrading from Siebel 7.5 to Siebel 8

1993 Toyota Camry 2008 Toyota Camry

Reducing The TCO of Siebel ApplicationsCost Factor 7.0 7.5 7.7/7.8 8.0/8.1

Deployment $0.010 $0.009 $0.007 $0.005

Configuration $0.32 $0.294 $0.234 $0.176

Operations $0.21 $0.189 $0.141 $0.099

Upgrade $0.04 $0.036 $0.029 $0.025

Performance $0.08 $0.060 $0.057 $0.034

Usability $0.11 $0.084 $0.060 $0.042

Test Automation

$0.05 $0.046 $0.028 $0.026

Integration $0.18 $0.144 $0.115 $0.081

TCO Ratio $1.00 $0.86 $0.67 $0.49

Scenario

• Deployment of medium size and complexity (5,000 users)

• Configuration and operations for one year

• TCO cost based on effort (person hour)

* Actual improvements realized will vary by customers, depending on factors such as deployment size, scope, and the amount of customization changes.

TCO Savings

51%

43%

27%

Siebel 7.0 to 8.0

Siebel 7.5 to 8.0

Siebel 7.7/7.8 to 8.0

Download Siebel CRM Upgrade ROI Calculator (ID 738922.1) on OracleMetaLink 3

Decrease Deployment CostsSiebel Application Deployment Manager

Customer Feedback

– “The backup/restore capabilities alone will be the reason for us to use it”

– “…manual tasks will be replaced to a great extent and that should lead to better accuracy.”

Reduce personnel requirements by 60%

Decrease deployment time by 40%

Automate manual processes

Decrease upgrade costs

Make changes more quickly

Reduce downtime

Reduce Configuration CostsSiebel Business Rules Engine

Customer Feedback

“The new business rules engine offered in Siebel 8.0 is helping Verizon Business reduce customization and the complexity of the application. This, in turn, significantly reduces the cost of configuration and improves the performance and maintainability of their Siebel Business Applications deployment.”

–Accenture

Siebel 8.x Improves Hardware ROI

0%

20%

40%

60%

80%

100%

120%

140%

7.8 8.0

30% scalability gains with current HW architecture

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

7.8 8.0

Intel: 3X more users vs. 7.8 on same-price equipment

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

4.00

4.50

7.8 8.0

On Sun: 4.35X more users vs. 7.8 on same-price equipment

0%

50%

100%

150%

200%

250%

300%

7.8 8.0 8.0

8.0 session-pooling scalability >200% vs. standard O.M.

Sta

nd

ard

O.M

.

Se

ss

ion

-Po

ole

d O

.M.

Sta

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ard

O.M

.

‘Like for Like’ Upgrade Scenario

Maintenance Costs Siebel 7.5: $2.5 million/year

Siebel 8.1: $1.3 million/year




Upgrade Costs $550,000*

Savings IT/CFO Savings: $1.2 million/year

Total 3 Year Savings: $3.05 million

Payback in 6 months

* Upgrade costs include software and manpower only. Savings based on hardware and software costs over a 3 yr. period.

Six Things You Can Do with $3.05 Million

Feed 20,333 orphans in a developing country for a year

Conduct 87 marketing webinars

Hire 20 engineers in the San Francisco Bay Area for a year

Purchase and pay the TCO over 3 years for 200 laptop computers

Pay for 65 weddings...in Menlo Park, California

Pay for the foundation of nearly 1,220 U.S. homes built by Habitat for Humanity

Customization Scenarios

Application Changes

Low Medium High

Views 200-400 400-700 700+

Applets 400-1200 1200-1800 1800+

Business Components 20-50 50-80 80+

Scripting 15,000-79,000 80,000-199,000 200,000+

Workflow Processes 10-20 20-40 40+

Assignment Manager Rules 1 2-5 6+

Price Models 1 2-3 4+

Product Configurator Models N/A 0-35 35+

SmartScripts 1-3 3-7 7+

Reports 4-12 12-25 25+

Globalization - Languages 1 1 3+

Globalization - Currencies 1 1 3+

Interfaces - Batch 5-10 10-40 40+

Interfaces - Real Time 0-5 5-10 11+

Upgrade Cost Estimates

* Costs are estimated by Oracle Applications Solution Center for a single-step upgrade and do not include training and hardware. Actual costs vary based on customer-specific scenarios.

Upgrade

TasksLow Medium High

Upgrade Assessment (Envision, Define, Design)

$40,000 - $50,000

$65,000 - $70,000 $80,000 - $85,000

Upgrade Execution (Configure, Validate, Deploy)

$150,000 – $350,000 $350,000 - $650,000

$650,000 - $2 million

Total Cost $190,000 - $400,000 $415,000 - $720,000 $720,000 - $2.085 million

‘Value Add’ UpgradeThe Same Company Upgrades with New Functionality

Deployment Profile Adding Real-time Decisioning and Pricing Management

Medium Size (5,000 users)



1993 Toyota Camry 2008 Lexus LS 600H

Real-Time DecisioningSmall Decisions Add Up

• 8% sales lift overall at BT

• 40% churn reduction at Canal+

• Major insurer– $25 additional annual revenue per

policy – Reduced cycle time for testing on

new products / messages from 3 months to days

Real Results with Pricing Management

• “These projects can raise revenue by 1% to 2%, increase gross margin by 10% to 15%, and increase contribution margin by up to 50%.”*

• Provide bottom line benefits averaging $3 million to $45 million, with some projects delivering as much as $200 million

*Source: AMR Research, How To Select the Right B2B Price Management Vendor, June 29, 2005

Increase Business AgilityOracle CRM On Demand to On Premise

Resource/Cost Requirement

CustomAIA/PIP (Oracle)

Savings

Workload 1280 man-day 20 man-day

Implementation$1,280,000

($ 1K@day × 1280 man-days)

$20,000($ 1K@day × 20

man-days)98%

PIP License $0$ 60,000

($ 30K@CPU × 2 CPU)

Total Cost $1,280,000 $80,000 94%

* Above comparison sheet is estimated for an Oracle customer. Excludes installation of SOA suite.

‘Value Add’ Upgrade Scenario


Medium Complexity


Adding RTD and Pricing Management

Upgrade Costs $550,000

Maintenance Savings Total 3 Year Savings: $3.05 million*

* Savings based on hardware and software costs

RTD Value 3 Year Sales Uplift: $12 million

License/deploy: $1.5 million

Pricing Mgt. Value 3 Year Sales Uplift: $5.5 million

Cost to implement: $1.06 million

Results Total Cost: $3.11 million

3 Year Sales Uplift/Savings: $21 million

Payback in 5.3 months

“Upgrading to the latest version of Siebel CRM will cost you $50 MILLION!”

I don’t want to disrupt my business…I don’t want to disrupt my business…

I can’t justify an upgrade…I can’t justify an upgrade…

Our current release is working just fine…Our current release is working just fine…

It’s too expensive…It’s too expensive…

There’s no value in upgrading…There’s no value in upgrading…

It’s more costly to maintain existing systems…It’s more costly to maintain existing systems…

We work with you to help ensure business continuity…We work with you to help ensure business continuity…

But at two times the cost to maintain…But at two times the cost to maintain…

You save money and gain functionality by upgrading…You save money and gain functionality by upgrading…

You can’t afford not to consider an upgrade…You can’t afford not to consider an upgrade…

Why You Should Upgrade


Customer and Partner Case Studies

John Shedd, Operating VP of Technology – Home Shopping Network

Alok Pareek, Vice President of Technology – GoldenGate Software

John DeLaney, IT Director of Customer Service Systems – UPS

Michael Malinchock, CRM Managing Partner – Accenture

John Shedd

Operating VP of Technology

Home Shopping Network

Alok Pareek

Vice President of Technology

GoldenGate Software

COMPANY OVERVIEW• Interactive Lifestyle and Retail destination• Created television retail industry 31 years ago• 4,000 employees • Reach 90 million homes• Ranks in top 30 of top 500 internet retailers• Among top 10 most trafficked e-commerce

sites

CHALLENGES / OPPORTUNITIES

• Upgrade to Siebel 8 without downtime

• Take advantage of evolving technology and functionality

• Any downtime = lost revenue & impact to customer satisfaction

• VBScript to eScript conversion of 400K lines of code

• Two-step upgrade

• 30+ real-time interfaces • 100 batch interfaces

ROI

• Stability for the business

• Sunset older HW and OS/DB versions

• Lower maintenance costs

• Positioned to take advantage of new 8.0 features

• More efficient use of capacity with web-based load balancing

DEPLOYMENT PROFILE

• 2,000 users process 44 million calls annually

• 24/7/364 business measured in $ / minute

• Highly customized Siebel 6.2 base• The hub of all HSN customer touch-points,

transaction processing and servicing events• The engine for all channels of commerce;

agents, IVR, Internet and Interactive TV – as well as reserving inventory, up-selling, customer information, order status and post sales service

Home Shopping NetworkSiebel 8.0: The “Heart” of HSN’s Business

Migration Requirements

• Gradually migrate users from Siebel 6.2 to Siebel 8.0 while limiting disruption to the business

• Continuous operations for mission critical order processing

• Provide application upgrade and downgrade logic to enable both systems to run live in parallel

• Real-time data movement for high volume transactions

• Reporting as necessary to identify "out of sync" problems with operational environment

• Perform the database, application and hardware upgrade at the same time

DOWNTIME

GoldenGate Active/Active Solution

• Eliminate downtime during the migration• Gradual cutover with two active systems • Switch users back and forth on a schedule• Run both environments in parallel to perform final testing

SourceDatabase

TargetDatabase

GoldenGate Capture GoldenGate Delivery

Verify

GoldenGate CaptureGoldenGate Delivery

Phased Cutovers

Future Direction: Joint development of zero-downtime upgrade solution

for specific release paths.

GoldenGate Zero Downtime Upgrade Solution for Siebel

Low Medium High GoldenGate Zero Downtime Upgrade

Average Downtime

4-12 Hours 8-16 Hours 12-20 Hours No Downtime

Cost of Downtime

$660K – $2.0M $1.3M - $2.6M $2.0 – $3.3M $0

Impact on Users

Moderate High Unacceptable None

Test Prior to Go-Live

Limited Limited Limited Unlimited(Live Testing with

Production Quality Data)

Fallback Option

None None None Yes(Multiple Options To

Preserve Prior Environment)

Extra Cost? No No No Yes (software & Services)

2006 2007 2008

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4Q3 Q4

J F M A M J J A S O N D J F M A M J J A S O NJ A S O N D

Planning and Mock Upgrades($600K)

7 Months

Application/eScript Remediation ($5M)

12 Months

Integration and UAT

($1M)

4 Months 3 Months

Phased Implementation

($700K)

Two fully live systems during 3 month phased roll-out

• 5/29/08 – 30 agents and 1 Sales IVR

• 6/29/08 – 600 agents, all Sales IVR’s, 1 of 2 Service IVR’s

• 8/8/08 – 1200 agents, all Sales and Service IVR’s

• 9/9/08 – 2000 agents, all Sales and Service IVR’s, and HSN.com Sales and Service

Project Timeline

Total: 26 Months and $8 Million Budget

The Results• Project Staff

– 3 upgrade consultants for ~12 months

– 40 internal FTE’s for the upgrade (Siebel, BackOffice, Infrastructure)

• Solid data integrity between the two sync’d databases– Sub-second transfer of data between systems

• Trained and migrated 2,000 users– 4 hour training to move from 6.2 to 8.0

• Zero downtime implementation

• Positioned to take advantage of new 8.0 features

John DeLaney

IT Director of Customer Service Systems

UPS

Michael Malinchock

CRM Managing Partner

Accenture

COMPANY OVERVIEW

• $50B global corporation

• World’s largest package delivery company and a leading global provider of specialized transportation and logistics services.

CHALLENGES / OPPORTUNITIES

• Standardize customer service processes for greater effectiveness and efficiency

• Replace multiple instances of customer service software with 1 global Case solution

• Enable higher first call resolution rates and customer satisfaction

• Provide enterprise visibility to customer requests and cases

ROI and RESULTS

• Increased efficiency of customer care agents and operations personnel, with reduced average handling time

• Process improvements resulting in lower operational expenses and greater accountability to resolve / close cases

• Improved accuracy and reduced re-work in the handling of customer service requests, including the proper routing of cases

• Improved first call resolution rates

• Ability to measure SLA compliance

• Consistent customer treatment across all business units, providing an enhanced overall customer experience and higher customer satisfaction

• Projected cost savings: $20.9 million over 5 years

• Projected revenue uplift: $17.2 million over 5 years

DEPLOYMENT PROFILE

• Siebel 8.0 Call Center

• 12,000 Call Center agents and Operations personnel (by October 2008)

• Global deployment across 26 countries in Asia, Australia, Europe, and North America

UPSBenefits from Siebel 8.0

Reasons for Choosing Siebel 8• Business Justification

– Leverage the latest functional capabilities available, including: Task Based UI, for the guided automation of specific tasks Case Insensitivity, for improved querying functionality Enhanced Deployment Tools, for the minimization of user downtime New UI “Look and Feel”, for better navigation, ease of use, and user experience

• Take advantage of end-user performance capabilities inherent in Siebel 8

• IT Justification– Leverage the latest technical capabilities available, including:

Business Rules Engine, for easier development and deployment of business logic Enhanced SOA Capabilities, for broader and more effective use of web services

– Siebel 8 platform stability comparable to Siebel 7.8, with all the benefits– Total Cost of Ownership

Reduces need for a near-term Siebel upgrade, and provides for a future, supported path to Oracle Fusion CRM

Provides increased levels of product support via Siebel Support Web, with the benefit of knowing that Oracle Product Management and Engineering are focused on Siebel 8

Q1 Q2 Q3 Q4

J F M A M J J A S O N D

2007 2008 2009

Q1 Q2 Q3 Q4 Q1 Q2

J F M A M J J A S O N D J F M A M J

FeasibilityConfirm business requirements and overall scopeConduct functional designDetermine phasing strategy

Phase 1 – UPS Freight Division 400+ users in U.S. and Canada Replaces Excel-based tools and manual processes

Phase 2 – Small Package International 4,000+ users across 26 countries supporting Small

Package InternationalDeployed in 6 languagesReplaces custom-built, AS/400 legacy application

6,000+ users in the U.S. supporting Small Package Domestic

Replaces custom-built, AS/400 legacy application

Phase 3 – Small Package Domestic

Deploy ECM to Poland and Supply Chain Solutions

Plan for ECM Release 2, starting Q1 2009

Next Steps

Implementation Timeline

• Broad view of Siebel 8 upgrade business cases across all industries

Communications, High Tech, Life Sciences, Retail, Financial Services, Public Service

• Typically recommend Siebel 8 for our new implementations

• Client benefits Improved Usability Enhanced Performance New Functionality Enhanced Integration Lower Cost

• Difficult hurdle for our clients has been “Getting to START”

Accenture Learnings and Experiences


Customer and Partner Roundtable

How did you justify the business case of an upgrade to the CFO, CIO, or business?

How did you minimize the impact of an upgrade to your business users?