Delayed gratification

January 22, 2001 —

It's easy to get lulled into a false sense of well-being listening to a pitch from an application service provider. "Come with us," purrs the salesperson. "No upfront installation costs. We'll do the integration, take care of training and support. Don't worry about your business processes -- we'll straighten that out."

It's a fine daydream, but you'd do better turning your winter reveries to images of the Caribbean. That's because if you buy into this sales talk without question, you could end up facing a mess like Intraware just went through. Midway through 1999, the online marketplace for software and IT services outsourced its Siebel salesforce automation (SFA) application to SiebelNet, a unit of Siebel Systems that hosts its product through USinternetworking.

Intraware had recently gone public and was growing quickly. The sales staff had never used an automated tool to track leads and customer data. Intraware executives figured going with an ASP would be an efficient way to put a powerful weapon like Siebel in their hands as quickly as possible.

But Intraware failed to take into account the following things that needed to be done before Siebel and USi could start up the SFA application:

Intraware's IT team didn't stop to model the customer data that would populate the system.
IT failed to ensure the sales team's business processes were sound prior to giving them the tool.
The team also failed to make adequate training and change management provisions.
The executive sponsorship for the project was unclear.

As a result of these pitfalls, the first implementation of the Siebel tool was a dismal failure.

"S. Fenn" "We trashed the whole thing and seriously thought about walking away at that point," says Shaun Fenn, director of sales information systems for Intraware, in Emeryville, Calif. Intraware management decided to press on a with a second Siebel implementation -- also hosted by USi -- which was successfully completed last November.

Many customers tend to think the ASP will handle everything needed to deploy the application. But that kind of thinking is a trap, warns David Caruso, senior analyst at AMR Research. "ASPs want you to think they'll take care of everything. Most of them grossly oversimplify the story to cut short the selling cycle," Caruso says.

The truth is that farming out an application to an ASP is a lot like any other software project. Especially in the implementation stage, there is no way to shortcut the amount of work you'll have. Now part of the select group that has been through a successful SFA implementation, Fenn shares the wisdom he acquired as part of the initial ASP failure:

Put enough people on it. One problem with the first Siebel implementaation was that there were only two full-time staff working on the project from Intraware's side. Just because the ASP has a good-size project team doesn't mean you can afford not to devote in-house resources. "We didn't give it the necessary resources in terms of personnel," Fenn says. For the second implementation, the in-house project team doubled to four full-timers during the rollout phase, and two full-time IT people are now in charge of maintaining the data in the sales system.

Another change for the better in the second implementation: Intraware made one in-house person the single point of contact for the Siebel-USi team, according to Nick Pournader, Siebel's vice president of outsourcing services in San Mateo, Calif. "Our recommendation for the second implementation was that Intraware have someone on-site who was responsible for the deployment 24-7 with the right training to manage this internally. Before, any [Intraware] IT person could pick up the phone, which led to a lot of confusion," he says.

Don't skimp on consulting help. One of the flaws of the first project: Intraware's IT team was too busy to get the salespeople involved in configuring the SFA tool. As a result, the sales processes were unclear and the configuration was unusable. The second time around, Intraware contracted with Siebel for consulting help. The new project team also made the salesforce an integral part of the rollout.

Do a pilot project. Intraware was in such a hurry the first time it deployed Siebel to the entire sales force of 150 people, rather than starting with a pilot. This was a critical error, Fenn says, because it was too much change to thrust onto the organization at once. "Nobody likes change. That's always the most difficult hurdle to overcome." Get a small pilot group comfortable with the application before rolling it out to the rest of the group. The first users will help the others over the rough spots.

Don't stint on training. Training for the first implementation was held at USi's facility in Milpitas, Calif. "It was too generic to be effective," Fenn says. The second time around, Intraware customized the training materials from Siebel and USi to be more relevant for its sales team. And Intraware personnel did the training themselves. Intraware customized the software manual to be more useful, too.

Don't rely on the ASP for support. Although USi provided support for the application as part of its agreement with Intraware, it was not as helpful as it could have been. "We didn't have a lot of luck with the support. You had to go through several people at the help desk to get to the right person," Fenn says. For the second round, Fenn trained a few internal people to be the support team. "We found it was best to have people who are very close to our processes do the support," he says. Siebel provides second-tier support to the internal help team, according to Pournader.

Despite the first failure, Fenn thinks Siebel and USi did as good a job as it could have done. The faults were more on the Intraware side, he says: "I think we had to go through this. It's been a wonderful learning experience. I'm just happy that we ended up a success."

Fenn is now so experienced with the Siebel tool that he will soon leave Intraware and join a software vendor. (At press time, Fenn was considering several offers but had not made a decision).

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