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Home Shopping Network gets ROI from a Siebel 8.0 upgrade

Savings in maintenance and hardware costs were enough to convince the Home Shopping Network to upgrade from Siebel 6.2 to 8.0, but it was not an easy project.

Upgrading to Siebel 8.0 from previous versions can be a tough sell for many organizations, and making the move often demands hard ROI.

At the recent Oracle OpenWorld conference, the software vendor's executives pitched their case that moving to the latest version of Siebel is not only less painful than many might think, but it will also provide ROI.

For HSN, with a call center running 24 hours a day, 364 days a year, a Siebel upgrade was a considerable challenge.

"It is the hub of everything we do," said John Shedd, operating vice president of technology with the Clearwater, Fla.-based company. "We service all of our agents, all of our IVR, which takes about 40% of our calls, Internet and interactive TV, as well as upselling and customer inventory."

So moving from Siebel 6.2 to 8.0 meant potentially disrupting the work of 2,000 live customer service representatives and affecting the 44 million calls that are processed by the network on a highly customized installation. Additionally, Siebel handles data from the network's website, which receives about 250,000 unique customer visits per day.

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"We could not have downtime," Shedd said, during a presentation at OpenWorld. "In every model we looked at, there was some period of time when, in moving data over, you're not taking orders -- and that was not acceptable for our industry."

Yet staying on Siebel 6.2 was no longer an option for HSN either. Oracle has kept to its Applications Unlimited pledge to develop new versions and continue to support Siebel, PeopleSoft and JD Edwards Software after its string of acquisitions, but support for older versions of those applications won't last forever. That was a point Oracle executives made clear at Shedd's session. Extended support for Siebel 7.0 and 7.5.3 will end in December and Premier Support for Siebel 7.7 will end in September 2009.

According to Oracle, a Siebel upgrade with 5,000 customers and a medium amount of customizations will save customers 51% on their total cost of ownership (TCO) for those moving from Siebel 7.0 to 8.0; 43% on TCO for those moving from 7.5 to 8.0 and 27% on TCO for those moving from 7.7 or 7.8 to 8.0.

"How'd we get those reductions?" asked George Jacobs, group vice president for CRM applications. "We're taking something that was essentially manual and putting it in an automated process."

There is also hardware ROI in upgrading from Siebel 7.8 to 8.0, thanks to 30% scalability improvements from 7.8 to 8.0, Jacobs said. Additionally, customers using Intel processors can support three times as many users on 8.0 versus 7.8 on the same equipment, and those using other Dell processors can support 4.5 times as many users.

Yet, the biggest savings may come from maintenance and support. For a customer upgrading from Siebel 7.5 to Siebel 8.1, maintenance will fall from $2.5 million per year to $1.3 million per year. Even with an estimated $550,000 spent on the upgrade, customers should see ROI in six months, Jacobs said.

Oracle provides a Siebel CRM upgrade calculator with a number of scenarios on its Metalink site. Oracle also provides customization profiles that factor in changes customers have made to the software specific to their organization.

However, Oracle's presentation conveniently ignored the savings customers can get by getting third-party maintenance and support from companies like Rimini Street Inc., which pledges savings of 50%.

Keeping live through a Siebel 8.0 upgrade

The Home Shopping Network was definitely interested in the maintenance savings, and also wanted to increase performance and free up CPUs, but the Siebel upgrade was complicated by the need to keep the network's systems online throughout.

HSN contracted with San Francisco-based GoldenGate Software Inc. to keep both the 6.2 Siebel application and 8.0 application live together, transferring data between both in real time. That way, customer service representatives could run either CRM system with the data passing underneath and HSN could identify and fix any bugs while keeping its systems operational.

That led to some complicated challenges, including how to handle hardware upgrades and minimize the impact on users. Ultimately, the upgrade cost HSN $8 million and took 26 months -- $800,000 and one month over what had originally budgeted. Shedd was pleased with the project anyway. Last month, HSN moved the last of its users from Siebel 6.2 to 8.0.

"We did this as an in-place upgrade, but we will begin to take advantage of features now that we're stable," Shedd said.

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