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Home > Oracle News > Weighing the value of hosted Siebel |
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Michael Connolly, an offering manager with IBM's Applications On Demand division, told Collaborate '07 attendees that many firms continue to harbor serious concerns about hosted applications providers and about outsourcing in general. For one thing, companies considering hosted Siebel providers are often concerned that they'll lose control over the application's deployment -- that the provider won't be agile enough to make changes quickly when needed. Others are concerned about security.
Meanwhile, company IT workers, who for years have read headlines about in-house applications managers losing jobs to both domestic and overseas outsourcing, worry that their professional futures will be placed in jeopardy if their company chooses a hosted provider. They're all valid issues to consider, Connolly said, and determining whether or not to host a Siebel deployment usually means conducting a deep analysis that weighs those concerns against the culture and history of your company, the strengths and weaknesses of the provider in question and, perhaps most importantly, the total cost over time of going with a hosted provider. "There's always pressure around keeping costs down," Connolly said. "Evaluating the viability of outsourcing is a complex endeavor." Outsourcing concerns persist The topic of outsourcing hit home for conference attendee Bob Everson, a Siebel administration lead with the Boeing aviation company. His division, which manages its Siebel Enterprise CRM deployment in-house, is looking at ways to reduce costs and is considering going with a hosted Siebel provider such as IBM in the future. Everson said there's definitely some initial trepidation in the ranks, as some in IT are concerned that a hosted deployment could result in layoffs. But he thinks that cooler heads will ultimately prevail and that a hosted deployment doesn't necessarily mean lost jobs. Instead, Everson said, it's possible that a hosted Siebel provider would free up IT workers to concentrate on other IT projects and more strategic, business-related issues. "People are concerned about losing their jobs, but maybe they don't have to be because there are opportunities to do other things," he said. Hosting considerations Managing a Siebel implementation in-house can be very expensive and requires companies to purchase and manage a complex infrastructure, purchase and occasionally refresh hardware, and perform ongoing application tuning and database administration, Connolly said. If a company is comfortable with making those investments, or even better, has the necessary infrastructure and human capital for a Siebel implementation already in place, then, Connolly said, managing the system in-house is often the most viable choice. But new companies or existing firms considering brand new Siebel deployments don't always have the time or resources to find and retain the right IT staff, and therefore, Connolly said, they're more likely to choose a hosted provider. "If you're embarking on a new implementation it just makes sense that you should entertain this model," he said. What to look for in a hosted Siebel provider Companies that are sold on hosting will want to find a provider that truly acts as a partner and a collaborator. Connolly said it's important to seek assurances that the lines of communication are wide open. In fact, he said, it's a good idea to have those lines of communication agreed to at both executive and IT worker levels, documented and worked into the contract. That way if things break down the client can always point to the contract as proof that needs aren't being met.
Firms will also want to choose a hosted Siebel provider that works precisely worded service-level agreements into the contract, much for the same reason. Remember, Connolly said, going with a hosted provider often requires a major upfront financial investment and may indeed be more expensive than managing in-house over the long haul. But, he added, some companies prefer the hosted approach because the costs are more spread out and predictable over time. Companies considering hosted Siebel will want to conduct a deep cost analysis that weighs the total cost of ownership (TCO) over time and takes into account the return on investment (ROI). Doing so will provide an accurate assessment of the true value of hosted deployments versus in-house deployments over time. The critical thing is that you have to look at TCO and you have to look at ROI as well," Connolly said, "because nine times out of 10 you're going to have to create a business case for [or against] hosting." |
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