CRM faces integration blues

Software as a service (SaaS) has gone beyond the realm of rogue deployments, and CRM software, most notably, has led the way through the enterprise front door. IT pros have learned plenty about the pros and cons of on-demand CRM.

Among the lingering concerns: Can you make and other on-demand CRM apps play nicely with your ERP and other core systems? How much work and what arrangements will this integration require? Results still vary.

Calvin Do, CIO of color equipment manufacturer EFI, knows firsthand the limits of SaaS integration to enterprise processes. For example, he’s discovered that SaaS providers don’t typically support single sign-on, an obvious enterprise need.

And they often don’t support APIs of other enterprise applications, at least not out of the box. For example, connecting to Oracle and SAP applications requires buying additional connector software or creating your own connectors via Web services.

The limited cross-vendor integration is why Do initially restricted his SaaS deployments of and talent management application SuccessFactors to department-level applications. (He later added an enterprisewide deployment.) In the department-level applications, integration is handled at the data-exchange level and via simple API calls to trigger, for example, a data upload and the related process.

The trick: Don’t let on-demand CRM’s advantages blind you. Enterprises must carefully consider the scope of their on-demand CRM goals and whether potential software has the integration capabilities to fit with the larger software portfolio.

“You can’t simply outsource CRM. It will ultimately need to integrate into your people, processes and technology,” says Isher Kaila, research director for CRM at Gartner. “Only a minority of implementations out there have gotten this [trade-off] right,” he adds. Where on-demand works

A primary advantage of on-demand CRM continues to be that IT needs to expend little effort to deploy, maintain or integrate the application. Typically, the vendor does most of the work at its site: maintaining the code base, managing the servers, handling security and ensuring availability. This reduced effort also means business units don’t have to wait long to get the CRM functionality in place. That’s a powerful incentive for many CIOs trying to satisfy backlogs of user demands.

Still, on-demand CRM software doesn’t work for everyone since it cannot be customized for complex business processes, says Gartner’s Kaila. (It can be configured, of course, within the bounds set by the vendor.) Furthermore, on-demand CRM software is typically less capable than self-hosted applications, even when both come from the same vendor, Kaila notes.

And CIOs should note that although, NetSuite CRM, and SugarCRM use the CRM label, their functionality focuses on the sales-force automation capabilities such as contact management and sales tracking, a subset of CRM functions. Other applications hosted in-house tend to do the heavy lifting of transaction management.

For many CIOs, that’s a good thing. For example, E-LOAN realized that its mortgage loan transaction management system was highly efficient, tracking all the details of each customer. But the roughly 150 mortgage loan officers needed a framework for providing proactive loan status updates to customers, recalls CIO Jay Shah.

So Shah deployed as the online lender’s “communications system of record,” using straightforward data feeds from the transaction system to Salesforce .com to keep all customer contact records updated. No programming was required in, just configuration to pipe data updates from the loan transaction system to Loan agents could now have a customer’s current loan status available in the same application they used to get the customer’s contact information and display their calendars.

Also, E-LOAN could now create business rules within to alert loan agents when deadlines were nearing. Even better for Shah, those rules could be written by business analysts so IT staff could work on other projects.

At emergency medicine management firm The Schumacher Group, is also integrated with other software through data exchange. But in Schumacher’s case, is the primary source of data rather than a consumer of it, notes CIO Doug Menefee.

Placement staff members use it to track physicians and other healthcare providers’ contact information and availability, as well as information on candidates they’re trying to recruit. The hiring and assignment data are then uploaded nightly to an SQL database that the company’s Oracle PeopleSoft resource management software uses to validate contractors’ licenses, insurance coverage and specialties.

As these two deployments show, integration is easiest if the SaaS application can do its job alone, then batch-update other systems with its results.

Calling all core apps

Although integration solely via API is easy, this approach limits the ability to integrate SaaS applications into broader enterprise processes. And as on-demand CRM applications do interact with core systems, the integration issue will be harder to avoid, notes Chris Barbin, CEO of the SaaS consultancy Appirio.

He sees CIOs now beginning to realize this: “A lot of existing Salesforce .com customers are looking to migrate off Siebel, Clarify and Vantive,” Barbin says, turning from using as a contact manager and sales reporting tool to using it as an extension of the core enterprise apps. “That’s a big issue because now you have to integrate into your financial system and your master customer data,” he says.

Integration limits in an on-demand CRM app can truly hinder your options. Research firm Common Sense Advisory found this out the hard way: It licensed’s professional edition and later wanted to integrate it with Constant Contact, QuickBooks and MySQL.

“We called customer support about the API, which, it turns out, is available only with the Enterprise or Unlimited ( editions,” says Don DePalma, president of the firm. And those editions cost US$1,500 to $2,400 per user per year, compared to the roughly $700 that Common Sense had been paying. He ended up dropping

On the other hand, where SaaS applications are accessible via their own APIs, the fact that SaaS applications are unchangeable benefits IT, notes EFI’s Do. It’s harder to do in-house hacks that later complicate maintenance, upgrades and support. “SaaS forces you to be disciplined; you have to use the APIs to do your integration,” he says.

Dan Tabori, executive VP of business operations at Prudential Locations in Hawaii, has taken advantage of the APIs in NetSuite CRM to integrate it with his real estate brokerage’s financial systems and customer Web portal. “Three years ago, we realized we needed to centralize all client data, not just property data,” says Tabori, whose duties include the CIO role. Tabori wanted more than a contact manager; he wanted a portal that agents could use for managing both their clients and transactions.

The firm uses Fidelity National Real Estate Solutions’ DPN software for the financial transactions, and a homegrown Web portal to help clients search for homes. To make all three applications work together, Tabori’s IT staff uses NetSuite’s APIs to invoke tasks within the CRM software, such as sending an e-mail survey to a customer once a transaction has occurred in DPN.

He also uses the APIs to request tasks of other applications, such as registering a new client within the Web portal. For the other two applications, Prudential Locations uses a combination of Web services and JavaScripts to access particular functions.

Web services prove key

Most CIOs who deploy on-demand CRM should expect to use Web services as the primary integration mechanism across applications. Unlike the situation about three years ago, Web services APIs are now common in current versions of both traditional and on-demand applications. Web services-based APIs provide a common framework for accessing various applications’ capabilities, which makes integration easier for IT developers.

The use of Web services also discourages the use of custom code that requires ongoing maintenance once deployed. But not all functions are exposed as Web services, so it can be harder, or even impossible, to integrate with some functions in your legacy applications.

The reliance on Web services does require a different kind of developer than many IT shops have, says Schumacher’s Menefee. That’s why he maintains two development staffs: one that’s experienced with custom code to handle the traditional applications, and one that’s experienced with Web services to handle modern applications and SaaS applications. But he mixes up their work to ensure that developers can work with both types of applications since they’ll coexist for years.

The key to successful use of on-demand CRM is understanding the integration needs up front at the business process, technology infrastructure and application portfolio levels, says Tina Phillips, a principal at Deloitte Consulting. Only then can you tell if it’s the right technology for sales-force automation. “Unfortunately customers still typically see it as a Band-Aid.”

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