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IT Governance and Compliance Management

Group Assignment (SaaS Case)

University of Applied Sciences Northwestern SwitzerlandMSc Business Information Systems

IT Governance and Compliance Management

Elaborated by:- Odilia Müller- Renato Melliger- Roger Böhlen- Marcel Dubach

June 13th, 2009

IT Governance and Compliance Management - Group Assignment (SaaS Case)

Table of Contents

Table of Contents......................................................................................................................................................2Preface....................................................................................................................................................4Executive Summary.................................................................................................................................5

1 Introduction..............................................................................................................................................62 Scenario...................................................................................................................................................72.1 ALPIQ Introduction..................................................................................................................................72.1.1 Strategic Alignment..................................................................................................................................72.1.2 ALPIQ’s Current CRM Situation..............................................................................................................82.2 Reason for the new System.....................................................................................................................82.3 Software Options Make or Buy Strategy..................................................................................................82.3.1 Make........................................................................................................................................................ 82.3.2 Buy........................................................................................................................................................... 82.3.3 SaaS a Specialty of Buying.....................................................................................................................93 Business Case.......................................................................................................................................113.1 Stakeholders..........................................................................................................................................113.2 Quantitative Cost-Benefit Analysis........................................................................................................113.2.1 No CRM System....................................................................................................................................113.2.2 Bought CRM System.............................................................................................................................123.2.3 SaaS CRM System (Enterprise Edition Variant)....................................................................................123.3 Qualitative Analysis...............................................................................................................................133.3.1 Option 1: No CRM System....................................................................................................................133.3.2 Option 2: Traditional CRM System........................................................................................................133.3.3 Option 3: SaaS CRM System................................................................................................................143.3.4 Summary of Qualitative Cost-Benefit Analysis......................................................................................143.4 CRM Option Recommendation..............................................................................................................143.5 Risk Assessment of a SaaS Solution....................................................................................................153.6 Risk Mitigate Recommendations of a SaaS Option...............................................................................164 Service Level Agreement and IT Balanced Score Card of the SaaS Option.........................................184.1 Service Level Agreement of SaaS Option.............................................................................................184.1.1 Introduction............................................................................................................................................184.1.2 Service Hours / Support Hours..............................................................................................................184.1.3 Performance Requirements...................................................................................................................194.1.4 Issue Priority Definition / Performance..................................................................................................204.1.5 Release Update.....................................................................................................................................204.1.6 Test Environment...................................................................................................................................204.1.7 Penalties................................................................................................................................................204.2 CRM IT Balanced Score Card of a SaaS Solution................................................................................214.2.1 CRM IT Balanced Score Card...............................................................................................................214.2.2 CRM IT Balanced Score Card Map.......................................................................................................235 Conclusion.............................................................................................................................................24

Directories / Glossary............................................................................................................................25Illustration Directory...............................................................................................................................25Table Directory......................................................................................................................................25Glossary.................................................................................................................................................25

A) Appendix................................................................................................................................................26A.A) General Calculations over the whole Lifecycle......................................................................................26A.A.A) Basic Calculations for Revenues and Sale Forecast:............................................................................26A.A.B) Revenues and Sale Forecast for the Option “No CRM”:.......................................................................26A.A.C) Revenues and Sale Forecast for the Option “Traditional CRM”:...........................................................26A.A.D) Revenues and Sale Forecast for the Option “SaaS CRM”:...................................................................26A.B) Implementation Costs............................................................................................................................27A.B.A) Infrastructure Investment Costs.............................................................................................................27A.B.A.A) Basic Calculations for the Infrastructure Investment Costs...................................................................27A.B.A.B) Revenues and Sale Forecast for the Option “No CRM”:.......................................................................27A.B.A.C) Revenues and Sale Forecast for the Option “Traditional CRM”:...........................................................27A.B.A.D) Revenues and Sale Forecast for the Option “SaaS CRM”:...................................................................27A.B.B) Project Effort Costs................................................................................................................................28A.B.B.A) Basic Calculation of the Project Costs...................................................................................................28A.B.B.B) Project Cost Estimation for the Option “No CRM”:................................................................................29A.B.B.C) Project Cost Estimation for the Option “Traditional CRM”:....................................................................29A.B.B.D) Project Cost Estimation for the Option “SaaS CRM”:............................................................................29A.C) Operation and Maintenance Costs........................................................................................................29A.C.A) Employee Cost:.....................................................................................................................................29A.C.A.A) Basic Calculations for Employee Costs:................................................................................................29A.C.A.B) Employee Cost Estimation for the Option “No CRM”:...........................................................................30

Elaborated by: Odilia Müller, Renato Melliger, Roger Böhlen, Marcel Dubach 18.05.2023 / of 33


A.C.A.C) Employee Cost Estimation for the Option “Traditional CRM”:...............................................................30A.C.A.D) Employee Cost Estimation for the Option “SaaS CRM”:.......................................................................31A.C.B) License Costs (based on Employee Costs):..........................................................................................31A.C.B.A) License Costs Estimation for the Option: “No CRM”.............................................................................32A.C.B.B) License Costs Estimation for the Option: “Traditional CRM”.................................................................32A.C.B.C) License Costs Estimation for the Option: “SaaS CRM”.........................................................................32A.D) Decommissioning..................................................................................................................................32A.D.A) Migration for the Option: “No CRM”.......................................................................................................32A.D.B) Migration for the Option: “Traditional CRM”...........................................................................................32A.D.C) Migration for the Option: “SaaS CRM”...................................................................................................33



PrefaceThe aim of this document is to get more know how and the usage of the IT governance and compliance management. The document has been elaborated during the study of Master in Business Information Systems. The assignment is the practical experience of the framework, methods and techniques which have been discussed during the master lectures. The following assignment was elaborated in a group work of four students.



Executive SummaryThis document describes the business case of a future CRM system for ALPIQ. ALPIQ maintains currently their customers in different spreadsheets and different self made databases. The disadvantages of such a customer data management are quite obvious.Due to the future growth strategy in different regions within Europe a new company wide CRM system needs to be introduced within ALPIQ. The management of ALPIQ has already decided to implement a new CRM system. Previous project have already bee executed for a first overview about different solutions. Currently ALPIQ has three scenarios (make or buy options) elaborated. Due to the fact that a self made CRM might be to expensive and current standard CRM systems offer a lot of different interfaces as well as functions the make option is already excluded. This business case has regarded the following three options:

No CRM solution process with the current customer treatment management Traditional CRM solution (Buying of a CRM solution and operation within ALPIQ) Software as a Service (SaaS) CRM solution (Renting of a CRM solution)

The SaaS concept works like a rent model. The system / licenses are not bought from a supplier instead they are rented. In addition is the necessary infrastructure like servers, network components etc. outsourced and not in the responsibility of customer. The maintenance and operation is provided by the supplier of the CRM system. Therefore no additional costs for infrastructure and maintenance are necessary. Those costs are covered in a monthly or yearly rental fee. This reduces the investments costs for infrastructure which normally occur at the beginning of an IT project dramatically.

A supplier of such Software as a Service (SaaS) CRM solution has already be identified in a previous feasibility study project. Salsesforce.com has been identified as the best potential SaaS supplier for ALPIQ’s needs. This business case only dealt with the CRM solution supplier Salseforce.com and has not taken in consideration other CRM SaaS provider anymore.

For the analysis of the best option for ALPIQ’s future CRM system all the necessary stakeholders have been incorporated and taken in account. Based on the stakeholders, a quantitative analysis as well as a qualitative analysis has been executed in this business case to identify the different benefits of the different options. Due to the high benefits and the scalability of the strategic direction of ALPIQ management, the project team suggests the management to consider the SaaS solution as a future ALPIQ CRM system. As evaluated, the SaaS solution offers the most benefits and cost advantages compared to the other options. In addition to the suggestion of which option should be taken, this business case uncovers the risks with might occur with such a SaaS solution. All imaginable risks have been taken in account and appropriate mitigation strategies have been mentioned in the business case. Most of the identified risks are avoidable with an appropriate set up of a Service Level Agreement (SLA). For those risks which can not be covered by a SLA other approaches to mitigate those risks have been provided. The proposal of the SLA between ALPIQ and Salseforce.com is included in this business case.

To track the performance and the agreed performance indictors (PI) of a potential partnership between ALPIQ and Salseforce.com an IT Balanced Score Card has been elaborated which points out the most important fulfillment criteria of the SLA and provides therefore a measurement for the service.

The SLA as well as the Balanced Score Card provides a good basis for a potential partnership between Slasesforce.com and ALPIQ. Due to the fact that the potential relationship is going to change during the contract period changes / amendments might be necessary in the SLA as well as the Balanced Score Card.



1 IntroductionThe intention of the assignment is to make up a business case for a SaaS (Software as a service) scenario. A company (Company I) plans to implement software as a service. Before moving ahead, the company establishes a comprehensive business case analysis to confirm that the intended approach is a profitable investment. Company (Company II) is a supplier of software as a solution.

The content of this assignment covers the following scenario:

1. Made up and describe a case study by concretizing a generic scenario Describe the company which is looking for a SaaS solution Describe the aim of the CRM solution Describe the SaaS supplier

2. Analyze the business case and draft the business case for the use of the SaaS solution based on the scenario

Identify viable alternatives which solve the business case Conduct a stakeholder analysis Conduct a quantitative and qualitative cost benefit analysis Define relevant risks and conduct a risk Assessment

3. Elaborate an IT Balanced Score Card about a SaaS scenario and document assumptions (The IT Balanced Score Card only needs to cover objectives in reference to the SaaS environment

4. Formulate a SLA (Service Level Agreement) between the SaaS provider and the SaaS consumer companies and document assumptions



2 ScenarioThe following chapter is structured as the follow:

Introduction of the ALPIQ company which intends to implement a new customer relationship management (CRM) system

The reasons why ALPIQ intends to implement a new system Make or Buy Options Introduction of SaaS and a possible supplier of a SaaS CRM

2.1 ALPIQ IntroductionALPIQ is Switzerland’s leading energy service provider, active all over Europe. From producing of retailing and trading, ALPIQ covers the entire supply chain of energy business. ALPIQ’s headquarter is located in Olten, Switzerland. With more than 10’000 employees serves ALPIQ subsidiaries in 29 countries European countries. In 2008, ALPIQ achieved a turnover of over 10 Billion Swiss francs and earned a profit of 780 Million Swiss francs. An ALPIQ division operates as the distribution department, which serves around 80 employees. This division is responsible to acquire different business customers. These are major Swiss company customers like Migros, Coop, Von-Roll which have high energy consumption and are interested in tailor-made energy services. For ALPIQ on the other hand, it is an interesting business model which becomes more and more important during the last few years, to treat major customers individually.

Illustration 1 – ALPIQ Subsidiaries in Europe

2.1.1 Strategic AlignmentDuring the strategy workshop on October 4th, 2008 ALPIQ defined their strategy for the next five years. ALPIQ’s strategy is based on five main pillars these are the production, the net, the trading, the distribution and the supply. The retail business is handled within the “Distribution” pillar. The main strategic focus within this pillar is to “increase the market share in Europe”.

Illustration 2 – ALPIQ’s Strategic Pillars

The above mentioned distribution pillar consists of different other activities and objectives in which will be drilled in. The strategic alignment of ALPIQ’s management is to grow in all settled region in Europe with a focus on energy distribution for business organizations like medium-sized costumers or high end customers like the steel or aluminum producing branches. This is as well illustrated by the following figure of ALPIQ.



Illustration 3 – ALPIQ’s Strategic Distribution Pillar

The target sales trend which is defined by the ALPIQ management is to increase the energy distribution from 40 TWh to 108 TWh within the next 5 years. For the management of the distribution division it is clear that this goal is very ambitious. First the infrastructure has to be in place to deliver such an amount of energy and secondly someone needs to have a demand for the produced energy. Therefore more customers are needed or the current customers need to have higher energy consumption.A first step has already taken due to the commitment of the distribution division management to introduce a new CRM system, as already previously mentioned.

2.1.2 ALPIQ’s Current CRM SituationCurrently ALPIQ maintains only a database with the most important customer data. This database is a self made and grown system over the last 15 years. In addition the company maintains a lot of different spreadsheets with customer data. Special agreements with customers are sometimes in written form in different word documents and stored on a network drive. It is not amazing and worth to mention that such working methods ends in wrong treatment of customers due to a lack of transparency.

2.2 Reason for the new SystemWith the new defined energy distribution targets from the ALPIQ’s management an appropriate treatment of the current customers is indispensable as mentioned in the sub chapter ALPIQ’s Current CRM Situation 2.1.2. This system and the current treatment would never support an individual treatment of business customers. A lot of standard functions of the current CRM are not available on the current ALPIQ CRM solution. Before such a CRM project can be kicked off, the decision about make or buy need to take place. This decision about the make or buy depends again on the financial benefits compared to the financial costs of the one or the other solution.Due to the fact that the major customer business is going to increase, the management of ALPIQ predicts a high demand of a new customer relationship management activities which helps to supervise the customers in a more professional and reliable way. To handle all this activities a new CRM system needs to be introduced within the company.

The ALPIQ management has launched a feasibility project about different options of new customer relationship management software. The result of the feasibility study which takes different solutions into account like a buy or make approach including a SaaS option should be the decision about the future CRM software solution.

To sum it up again, the most important points are listed again which are mentioned in the strategy and support the implementation of a new CRM system:

The strategy of ALPIQ is to growth in all European regions In future more individual services should attract even more customers The current customers are almost impossible to handle with the current customer database. Business customer is a very profitable business but complex All of the five mentioned pillar in chapter 2.1.1 Strategic Alignment are supported by an

appropriate IT application expect the distribution pillar Maintain customers in one single system

2.3 Software Options Make or Buy StrategyMake or Buy strategy persuades to optimize the economical value added chain of software. Following three different scenarios will be introduced. The scenario SaaS is a sub concept of buy. This concept will be introduced in more details the other two because those should be known to most.

2.3.1 MakeManufacturing / developing a product or software instead purchasing it is called make. Sometimes such software solutions are called as well individual software even though individual software can be industry specific which has been produced for a special industry and therefore as well bought be a company to use it.

2.3.2 BuyA buy solution is normally the process of buying software from a vendor and the implementation of it within the company. A supplier of such software normally charges a license fee. In addition the company which would to implement the software needs to set up an infrastructure to run the software.



2.3.3 SaaS a Specialty of BuyingA special buying solution is the SaaS solution. The company does not buy the software licenses but they rent the software for usage as a service. Compared to other businesses it is more comparable with a rental fee to use the software. In addition the infrastructure is maintained by the service suppliers and runs in their data centers. Therefore the company does not need a data center environment to run the application.Software as a Service (SaaS) is a new, fast growing and future oriented business model of computer software. With the SaaS model software developer companies are able to provide the developed application on a rental based model. Customers of such a solution are getting with such a solution a cost effective and convenient solution via the internet and can avoid investment and license costs. Based on current studies such SaaS solutions (renting the license instead of buying it) are growing very fast. The advantages for the customer of a SaaS solution are the following:

Higher competitor advantage Flexibility of supplying of new features and functions based on the demand Attractive price models and less previous investment costs Less time consuming and less cost intensive Accelerated market enlargement Faster extend of the business with current customers

To implement the SaaS CRM solution with an optimal value from IT-enabled business investments at an affordable cost on a known and acceptable risk level ALPIQ’s management has decided to use the VAL IT Framework as an implementation guide.

Trough the analysis of SaaS and corresponding CRM supplier with a SaaS solution different providers have been already taken in account. The best impression of the different SaaS CRM solution provider made Saleforces.com. If ALPIQ decide to go for a SaaS CRM solution the suggestion is to prefer Saleforces.com. In the next sub chapter Salceforce.com will be introduced.

2.3.3.1 Salesforce.com (Provider of Customer Relationship Management Systems on Demand)Salesforce.com is the worldwide leader in on-demand customer relationship management (CRM) services. More than 55’400 companies trust Salesforce.com. Salesforce.com was founded in 1999 by former Oracle executive Marc Benioff who pioneered the concept of delivering enterprise applications via a simple website. Salesforce.com delivers integrated, completely customizable enterprise applications for companies of all sizes. In fact, thousands of companies worldwide trust in Salesforce.com CRM to manage their sales, marketing, customer service, and other critical business functions. Salesforce.com reported in 2007 revenues of 748.7 million, an increase of 51% compared to 2006. Fuelling this growth was the addition of more than 11’000 net new customers.Salesforce.com offers 4 different options for their SaaS CRM solution. This is a group edition, a professional edition, an enterprise edition and an unlimited edition. The differences will be shown in the illustration below.



Source: http://www.salesforce.com/de/products/editions-pricing/feature-comparison/

Illustration 4 - Saleforces.com CRM Solution Services


http://www.salesforce.com/de/products/editions-pricing/feature-comparison/


3 Business CaseAs already mentioned in chapter Software Options Make or Buy Strategy 2.3 each software can be either made or bought. Due to the fact that a made solution for a CRM would not make sense in reference to development costs it will not be treated as an option in the following business case. In addition are current CRM systems very flexible and provide a lot of interface options to other system already as a standard. The following chapter is structured as the follow:

Stakeholder analysis Quantitative cost benefit analysis Qualitative analysis Recommendation of a solution Risk analysis of the recommended solution SLA based on the solution IT Balanced Score Card

3.1 StakeholdersIn the following table the stakeholders which are part of the analysis will be described. The idea is to describe the business of every single stakeholder group which is influenced by the system.

Stakeholder DescriptionManagement The employee of ALPIQ which decide about the system, the employees who are

responsible that the business generates value (e.g. retail or distribution management)

Retail User of the system. This department is mostly impacted by the system itself. They need the System daily in reference to satisfy the customers as much as possible.

IT Employees of ALPIQ who are responsible for the implementation, integration, support and maintenance of the system. If the system is not running properly this stakeholders are responsible to solve the issues as fast as possible.

CRM / SaaS provider Provider of the system. The provider of the system is interested in selling as many services as possible to ALPIQ.

Customer Customers of ALPIQ who buy energy services. The customers will be administrated in a CRM system in future.

Table 1 – Stakeholder Analysis

All stakeholders are considered in the Quantitative and Qualitative assessments.

3.2 Quantitative Cost-Benefit AnalysisIn the following quantitative cost-benefit analysis are the following options considered:

Option 1: Proceed with the current CRM system / CRM approach Option 2: Buy a CRM system and maintain it internally of ALPIQ Option 3: Rent a CRM system with the model SaaS

The approach and the detailed figures how the costs and benefits have been analyzed are described in Appendix A). The tables below only show a summary of the different identified costs and benefits.

3.2.1 No CRM SystemThis cost benefit scenario covers the costs and benefits which occur without any new system or processes around the system. Therefore the current work flow will be retained.

Option 1: No CRM system

Reason Year 0 Year 1 Year 2 Year 3 Year 4 Year 5(CHF) (CHF) (CHF) (CHF) (CHF) (CHF)

Benefits: Revenue Energy sales 28500000 36045000 42585000 48120000 52650000 56700000

Total benefits: 28500000 36045000 42585000 48120000 52650000 56700000Costs: Non-recurring

---

Recurring Retail employee

12000000 16852500 21105000 26730000 31185000 37260000

Total costs 12000000 16852500 21105000 26730000 31185000 37260000Net sum (Benefit - Costs) 16500000 19192500 21480000 21390000 21465000 19440000Yearly NPV calculation 16500000 18454326.

919859467.

519776257.

419845599.

117973372.8



Total NPV 112409024Table 2 – Cost Benefit Analysis: Use current CRM for future Purposes

3.2.2 Bought CRM SystemThis cost benefit scenario covers the costs and benefits which occur with nowadays a standard solution. Software will be bought from a CRM software supplier and will be implemented in the company. The company pays the supplier a fee for the license to use the software.

Option 2: Traditional CRM system


Benefits: Revenue Energy sales 28500000 36045000 50100000 60150000 70200000 81000000Total benefits: 28500000 36045000 50100000 60150000 70200000 81000000Costs: Non-recurring

IT Project 8250000 8250000 0 0 0 0

Recurring Retail employee

13200000 18537750 18994500 22963500 28066500 32076000

IT employee 1500000 1500000 1500000 1500000 1500000 1500000 Licenses 162737.8 221829.9 226886.4 270825.6 327318.9 371706.5 Infrastructure 1571712.7 150000.0 150000.0 150000.0 150000.0 1571712.7 Migration 300000 300000 300000 300000 300000 300000Total costs

24984450.528959579.

921171386.

425184325.

630343818.

9 35819419.1Net sum (Benefit - Costs)

3515549.57085420.0

828928613.

634965674.

439856181.

1 45180580.9Yearly NPV calculation 3515549.5 6812903.9

326746129.

432327731.

536849279.

941771986.7

Total NPV 148023581Table 3 – Cost Benefit Analysis: Buy CRM and Maintain it Internally

3.2.3 SaaS CRM System (Enterprise Edition Variant)This cost benefit scenario covers the costs and benefits which occur with a SAAS CRM solution. The application is installed by the partner company (Saleforces.com) and ALPIQ only rents the rights to use the application.

Option 3: SaaS CRM system


Benefits: Revenue Energy sales 28500000 40050000 50100000 60150000 70200000 81000000

Total benefits: 28500000 40050000 50100000 60150000 70200000 81000000Costs: Non-recurring

IT Project 8250000 0 0 0 0 0

Recurring Retail emloyee

13800000 15967743.8

19996987.5

25259850 29469825 35117550

IT employee 450000 450000 450000 450000 450000 450000 Licenses 157756.05 181754.27

4226360.42 284623.46

5331230.41

5393754.119

Infrastructure 0 0 0 0 0 0 Migration 150000 150000 150000 150000 150000 150000

Total costs22807756.1

16749498.0

20823347.9

26144473.5

30401055.4 36111304.1

Net sum (Benefit - Costs)5692243.9

23300502.0

29276652.1

34005526.5

39798944.6 44888695.9

Yearly NPV calculation 5692243.9 22404328.8

27067910.6

31440020.8

36796361.5

41502122.7

Total NPV 164902988



Table 4 – Cost Benefit Analysis: CRM Operation as a SaaS

The three options in comparison with each other shows that the SaaS solution is the most profitable one for ALPIQ. If option 1 is compared with option 3, it could be concluded that option 1 does not take in account potential future profits, due to missing of a CRM system. The additional work which is needed to coordinate all the clients increases exponentially, through that a lot of revenues are lost. Evidentially better looks option 2 compared to option 3. Only the first year shows a difference between option 2 and 3 because it is assumed that a traditional CRM system has much higher project costs than a SaaS solution. On SaaS solution avoids a lot of initial costs like infrastructure, licenses, maintenance etc. After the first year the revenues are quite similar, but the SaaS option has still higher revenues than the traditional CRM option.The quantitative cost-benefit analysis brings the evidence that the SaaS option might be the best choice for ALPIQ.

Ranking after cost benefit analysis1. SaaS solution (Option 3)2. Tradional CRM (Option 2)3. No CRM solution (Option 1)

To compare the three options also on another level, than the financial one, in the next section a qualitative analysis will be done.

3.3 Qualitative AnalysisThe qualitative analysis compares intangible elements, which are other than numbers, not comparable. In order to make an accurate comparison, the determinations were weighted and ranked in a quantitative form. At the end of the analysis and overall score of all alternatives will be presented.

Ranking: L (Low), M (Middle), H (High)

3.3.1 Option 1: No CRM SystemQualitative Summary Description Stakeholder

Impacted Ranking

BenefitsNo changes on processes

There are no changes on processes and systems needed, cost avoidance on every level

All L

No project costs No implementation project is needed IT M

No additional training No additional training for Retail and IT users needed

Retail and IT L

IT independence No IT system must be supported and maintenances

IT L

Costs:Organizational overhead Trough fast increase of clients and additional

sales a bureaucratic overhead is the result when no CRM is needed

Retail H

Table 5 – Qualitative Analysis for Option “No CRM”

3.3.2 Option 2: Traditional CRM SystemQualitative Summary Description Stakeholder

Impacted Ranking

BenefitsClientsatisfaction

More client satisfaction trough better treatment. The results are more clients and higher revenues

Clients M

Employee satisfaction The employees are happier and more motivated through easier processes and additional functions (e.g. analysis functions).

Retail M

Single information base A lot of old databases and Excel sheets can be destroyed. The clients are added and administrated on one single platform.For ALPIQ’s IT is it easier to administrate one platform than a lot of Excels and Access databases

Retail and IT M

More customization possibilities

With a traditional CRM solution, the system can be exactly customized to the needs of the Retail employees.

Retail L



Costs:Interdependence to provider of SaaS solution

With a decision for an IT system, the customer is interdependent with the software developer/provider

CRM provider M

High IT project costs With this solution, the IT project costs are huge, because the system must be implemented in the actual IT landscape

IT and Retail H

Additional IT resources needed

With this solution a lot of additional resources are needed for support, maintenance and infrastructure

IT M

Table 6 – Qualitative Analysis for Option “Traditional CRM”

3.3.3 Option 3: SaaS CRM SystemQualitative Summary Description Stakeholder

Impacted Ranking

BenefitsClientsatisfaction

More client satisfaction trough better treatment. The results are more customer and higher revenues

Clients M

Employee satisfaction The employees are happier and more motivated through easier processes and additional functions (e.g. analysis functions).

Retail M

Single information base A lot of old databases and Excel sheets can be destroyed. The clients are added and administrated on one single platform.For ALPIQ’s IT is it easier to administrate one platform than a lot of Excel sheets and Access databases

Retail and IT M

Overall costs The costs for an SAAS solution is much deeper than for a traditional CRM solution

Management H

Costs:High Interdependence With an SAAS solution, the interdependence

to provider of SaaS solution is much higher than with a traditional CRM solution. With the outsourcing of support, maintenance and development of the CRM system, the cost grows.

SAAS provider H

Coordination costs Because a lot of processes are outsourced, a lot of coordination between ALPIQ and Salesfoce.com is needed. The costs are coordination costs.

IT / Retail / Management / SAAS

provider

M

Table 7 – Qualitative Analysis for Option “SaaS CRM”

3.3.4 Summary of Qualitative Cost-Benefit AnalysisIn the next table a short summary about the above mentioned qualitative cost benefit analysis follow:

Summary of qualitative cost-benefit analysis Option 1 Option 2 Option 3

Summary of Total Benefits L L - M H

Summary of Total Costs H M M - H

Overall qualitative value of each alternative L M -H HTable 8 – Summary of Qualitative Cost Benefit Analysis

Out of the qualitative cost benefit analysis it could be mentioned that option 1 has on one hand a lot of benefits, but compared to the other two options, option 1 has no chance. Option 1 also has a clear disadvantage, when the costs are compared with the benefits. So it could concluded, that Option 1 is the worst option out of this three in the qualitative cost analysis.

With the other two options, the benefits on Option 3 are much higher than on Option 2. On the other hand, the total costs are also higher on Option 3 compared to Option 2. All in all it is really hard to decide, at the end we decided on Option 3 because the Benefits are all in all much higher than in option 2 and the costs are not that much higher in option 3.



3.4 CRM Option RecommendationAs shown in the previous sub chapter option 3 has the best rating in the quantitative as well as the qualitative analysis. The suggestion for ALIPQ is to proceed with option 3 to implement a CRM as SaaS. Due to the already executed feasibility study of the SaaS CRM from Salesforce.com the suggestion of the project team is to use this system as for a future CRM system of ALPIQ.The following chapters of the business case will be focused on option 3. The other options will no longer be taken in account.

3.5 Risk Assessment of a SaaS SolutionIn SaaS solutions different risks are involved, which do not occur in other solutions like traditional make or buy. In make or buy solutions are similar risks involved as in an outsourcing project. Due to that fact the following risk assessment has been elaborated to uncover such risks. The risk analysis does not take into account ALPIQ internal organization problems. This risk analysis focuses only on the relationship between Salseforce.com and ALPIQ.

Risk Probability SeverityThird Party Risks (External)T1 The third party company Saleforces.com has access to all customer

data of ALPIQ Frequent Critical

T2 Saleforces.com does not keep ALPIQ’s data confidentially Unlikely Critical

T3 ALPIQ has no idea what kind of employees from Salceforce.com has access to the CRM data of ALPIQ and what they do on the database

Moderate Negligible

T4 Bankruptcy of the Salesfore.com company (what will happen with ALPIQ’s data and the CRM application) Unlikely Catastrophic

T5 ALPIQ is online one of dozens of customer and not the most important one. If things are not running well it will takes a lot of time to solve it

Unlikely Critical

T6 Main issues are not reported to ALPIQ like successful hacker attacks or data loss Moderate Marginal

T7 Salseforce.com conceals important information instead of provide it to ALPIQ Frequent Critical

T8 Saleforces.com does not have a disaster scenario for all imaginable catastrophes Remote Catastrophic

T9 Salseforce.com will be overtaken by another company which is no longer to provide the CRM as SaaS Unlikely Negligible

T10 Salesforce.com highly raises their prices Unlikely CriticalT11 ALPIQ is dependent on Salesforce.com after the service is

reinsourcing to ALPIQ Moderate Negligible

System / Connection Risks (External / Internal)S1 The CRM solution might contain security issues or vulnerabilities

which can be used by hackers to get access to the system data Occasional Critical

S2 Interruption of the data connection between Salseforce.com and the different locations of ALPIQ Frequent Marginal

S3 The system does not deliver the expected services Occasional CriticalS4 There are not as many configuration possibilities as ALPIQ wishes Frequent NegligibleS5 The system does not deliver the expected performance Occasional CriticalS6 The system is frequently not available for longer periods Frequent MarginalS7 The system cannot connect new interfaces to other systems in

future Unlikely Critical

Law Related RisksL1 Laws are going to change and current procedures or processes are

no longer possible (cross border) Remote Marginal

L 2 Salesforce.com is an American company, ALPIQ is Swiss, the law is maybe different Frequent Critical

L3 Mover/Joiner/Leaver process cannot be complied (e.g. former employees have still access to customer data) Moderate Critical

Employee Risks (Internal)



E1 Employees within the ALPIQ are against the new CRM system and work against the project and the future operation of it Occasional Marginal

Fulfillment RisksF1 The Saleforces.com company is not going to fulfill the contract or the

SLA Remote Critical

Collaborative IssuesC1 Communication between Saleforces.com and ALPIQ does not work Occasional MarginalC2 Interest conflict between Salseforce.com and ALPIQ pops up Remote Critical

Table 9 – Saleforces.com SaaS Risks

The next illustration identifies risks from the above mentioned table (Table 9 – Saleforces.com SaaS Risks) which are presented in a risk profile matrix according to their rating in reference to probability and severity. The risks in the red present the risks which should get most attention by ALPIQ first. The risks in the yellow area are critical risks with a probability of occurrence which is moderate but need management attention and mitigation strategies / mitigation activities as well. The green area shows the risks which are unlikely to happen but need to be tracked and should be covered by contracts as well. The risks in the green area are unlikely to happen but might have a huge impact. Let’s assume that Saleforces.com gets bankrupted. The probability is currently unlikely but the impact on such an event could be critical of even a catastrophe. If the green area is not taken in account in the SLA or other contract documents between Saleforces.com and ALPIQ such risk can have a huge impact once they occur. Therefore this risks need to be taken in account as well. Such a risk analysis needs to be updated frequently and the risks have to be reassessed. If no risks pop up which have not covered or if the risk probability and severity is going to change new contracts need to be agreed on.

Prob

abili

ty

FrequentS4 S2,S6 T1,T7,L2

ModerateT3,T11 T6 L3

Occasional E1,C1 S1,S3,S5

RemoteL1 F1,C2 T8

UnlikelyT9 T2,T5,T10,S7 T4

Almost Impossible

Negligible Marginal Critical CatastrophicSeverity

Illustration 5 - Risk Profile Matrix of the SaaS CRM Solution

As already mentioned, it is very important to reassess the risk situation after frequent time slots or major events. Therefore, after first actions have taken place, it is necessary to reassess the current risk situation again and to mitigate the high probability and high severity risks again. Such mitigation actions might have an impact on the current contractual agreements.

3.6 Risk Mitigate Recommendations of a SaaS OptionA lot risks which are mentioned in the sub chapter 3.5 Risk Assessment of a SaaS Solution can be avoided by an appropriate SLA between the service provider (Salesforce.com) and customer (ALPIQ). The Service Level Agreement (SLA) has evolved to become a useful tool which governs both service expectations and the consequences of failure to meet these agreed upon metrics. The next chapter deals with this issue of SLA and how to measure the agreed performance indicators (PI’s). A SLA is normally only based on system or service performances and do not control or provide suggestions about other issues which could occur during a partnership like bankruptcy of the provider ( risk T4) or interest conflicts (risk C2). Those risks need to be taken in account and if necessary mitigated and treated appropriate by other instruments.

The following risks from the risk analysis from the risk table Table 9 – Saleforces.com SaaS Risks can be covered by the appropriate elaborated SLA which will be presented in chapter 4.1 Service Level Agreement of SaaSOption.

T5, T9, T10, S1, S2, S3, S4, S5, S6, S7, L2, L3, F1

Risks which can not be mitigated by a SLA should be handled with the following strategy / tactic. Even though the green area risks are almost impossible or do not have high impacts, the company should take them although in account.



Risk Number Risk Mitigation / Risk Elimination What Needs to be Done to Avoid or Mitigate the Risk

T6/ T7 / T8/ T11 / L1/ C1/ C2

Partnership Service Contract These risks can be avoided by an appropriate contract between ALPIQ and Saleforces.com. The contract should contain as well instructions about a potential reinsourcing after the contract ends.

T1 / T2/ T3 BSI GrundschutzALPIQ Directives

Salsesforce.com employees need to sign and agree on the same data protection and directives as ALPIQ’s employees.

T4 Escrow Agreement To avoid a service unavailability in the case that Salsesforce.com runs into a bankruptcy, the application code will be deposited by an escrow agent. In case of a bankruptcy has ALPIQ the possibility to access the current application code of the CRM system.

E1 Change Management ALPIQ needs to set up an internal change management which deals with the changes of the company. If agitations are present in the company a change management need to take up those concerns and need to mitigate them.

Table 10 – Risk Mitigation / Risk Elimination which are not covered in the SLA



4 Service Level Agreement and IT Balanced Score Card of the SaaS OptionThis chapter describes the Service Level Agreement SLA between ALPIQ and Saleforces.com. Based on the SLA an IT Balanced Score Card for the CRM service has been elaborated to track the performance of the SLA based on performance indicators (PI) and other important management figures which are impacted by the CRM system.

4.1 Service Level Agreement of SaaS OptionThe following SLA between ALPIQ and Salesforce.com defines the emergence of the Software as a Service (SaaS) model which is necessary for relationships between the service provider (Saleforces.com) and the consumer (ALPIQ) with respect to service availability, service performance and response times.

4.1.1 IntroductionParties of the SLAThis is document describes an SLA between ALPIQ an energy provider company and Salsesforce.com a SaaS supplier of a CRM system.

Service DescriptionSLA of Salesforce.com CRM SaaSALPIQ a Swiss energy provider decided on March 24th, 2009 to sign the contract with Salsesforce.com a CRM provider with the SaaS model for the next 5 years. With the signed contract ALPIQ made a strategic step towards a SaaS CRM with is supplied by Salsesforce.com.Salsesforce.com offers a CRM system based on the SaaS model for ALPIQ which reduces operation and maintenance costs. ALPIQ is able to decide weather they want to use function which are implemented for other customers to use as well. Therefore the CRM system provides the opportunity to use common developed functionalities.

Scope of the Agreement and ServiceThis SLA document covers only the CRM SaaS service which is provided by Salesforce.com and used by ALPIQ. All other services are excluded from this SLA.This SLA has four main scope areas:

Salesforce.com environment up to the internet note Salesforce.com internet provider ALPIQ’s internet provider ALPIQ’s environment

Responsibilities of each ParticipantSalesforce.com is responsible for the operation of the infrastructure, including hardware and software. Salesforce.com is in charge of keeping the infrastructure including all Salesforce.com network components up to date. Salsesforce.com responsibility of the service ends at the internet service provider note.

ALPIQ takes over the responsibility of the service at the company internet connection entry point and is responsible for all infrastructures after the entry note of the internet provider.

The service in between the end note of Salesforce.com and the entry note of ALPIQ lays in the responsibilities of the server providers of Salesforce.com and ALPIQ. Each party is responsible to agree on SLA with their own service providers. The SLAs with the internet service provider need provide an equal of even better availability than the SLA between Salesforce.com and ALPIQ to guarantee the agreed server availability and breakdown definitions.

In addition is Salesforce.com responsible to back up ALPIQ’s CRM data according the agreed backup scenario defined in this SLA. Salesforce.com does not take over the responsibility of ALPIQ’s data quality based on the information which has been entered by ALPIQ’s employees. Salesforce.com is responsible for a secure and appropriate data management and is not permitted at any time to provide ALPIQ data to a third party.Both parties are obliged to bring up potential SLA improvement which will be clarified in a SLA update after the agreement of both parties.

4.1.2 Service Hours / Support HoursWorking Hours and Non-Working HoursThe CRM service which is provided by Salsesforce.com is 365 day and 24 hours available. This does not include the downtime which is defined under availability and the in advance agreed maintenance



windows. All other time of nonuse which is not agreed on between both parties falls under denial of service.

Support Hours and Non-Support HoursHelp desk from Salesforces.com needs to be provided for the following weekdays and time slots:

Monday - Friday, 7:00 AM-5:00 PM Saturday, No Service Sunday, No Service

On the following bank holidays is no help desk provided:

January 1 January 2 January 3 Ester Friday, Monday Ascension day August 1 December 24 December 25 December 25 December 31

4.1.3 Performance Requirements AvailabilityThe provided CRM service availability is 99.5%. This 99.5% availability excludes maintain windows which have been advised in advance and both parties have agreed on. In addition are the windows for defined release updates as well not part of the availability. If the service is not available without a previous notification of ALPIQ and their acceptance of the downtime, the time will be added to the unavailability of the service.The maximal unavailability of the service in a row is 2.5 hours. After three hours the service needs to be available in its full functional scope at least for a week until the next unexpected breakdown occurs.

Maintenance Windows: Accepted maintenance windows are excluded by this rule Maintenance windows must be placed outside of the defined work hours. There is no limitations of the amount of maintenance windows per year

Release Update: Announced and agreed release updates belong not to the unavailability time of service Release updates need to be installed outside of the defined working hours Interruptions which are caused by release updates and occur after such an update fall under

the availability regulations.

BSI Grundschutz / ALPIQ Directives: Salsesforce.com is obliged to keep up to date according to the BSI Grundschutz

recommendations as well as ALPIQ internal directives which have an impact on IT. ALPIQ is in charge to provide the new directives on a monthly basis which have an impact on the relationship with Salesforce.com to the Salesforce.com Account Manager. The Salesforce.com Account Manager is responsible for the enforcement of those directives within Salesforce.com.

Escrow Agreement: Salesforce.com is obliged to send the source code of the CRM system ever other month to the

Escrow Agent.

Backup: The CRM data which are stored on Salesforce.com database are stored twice a day. The

backup starts everyday at 01:00am. At the same day a second backup will be recorded at 12:30pm. Which backup method Salesforce.com pursues is Salesforce.com owns decision. The requirement is to restore all executed transactions of the last two years.

Restore works of backup falls under service availability measurements as long as nothing else has been agreed on in advance of the restoring activity

The backup process does not impact the performance as well as the availability of the service.

Disaster Recovery Scenario: Disaster recovery scenarios don’t have an impact of the availability If an interruption is announced in advanced and agreed from both parties, the downtime will

not be part of the availability calculation.

Denial of Service / DowntimeIn a case of denial of service a ticket needs to be opened from the user who diagnoses the issue. This



ticket is afterwards treated according the defined priorities. If more than 10 users report the same issue, the ticket changes it status to high priority and a case manager from Salsesforce.com and from ALPIQ to identify where the current problem has it sources.

Downtimes which occur based on the responsibility of Slasesforce.com need to be reported in a detail report to ALIPQ with the reason why the system was unavailable and future mitigation activities to avoid similar future issues.

4.1.4 Issue Priority Definition / PerformanceThe following response and fix times are provided. The priorities of the tickets are defined according the service function importance. This is an additional list which will be updated and adjusted according the needs of ALPIQ. Those priorities are currently not definable due to the lack of information. As soon as someone calls the CRM support a ticket will be opened and a priority is added to the ticket.

Priority Description Response timeCritical Critical infrastructure components or customer

service down or degraded; significantly operational impact. If more than 15 ALPIQ employees are impacted a ticket need to be treated as critical.

Immediate resolver group member needs to investigate the problem and takes action. 24 hour trouble shooting necessary. Tickets need to be solved after 2 days

Urgent Non-Critical Network components or function which does not work as specified but a work around is available, Non-critical restricted function and some operational impact.

Problem needs to be looked at after three hour during normal business hours. Trouble shooting during normal business hours within 3 days.

Low Network components or less used functions but work-around possible with no operational impact, non-critical, deferred maintenance acceptable.

As soon as a resolver group member has time to investigate the issue. First status update to ticker opener after 24 hours. Low priority tickets need to be solved after five business days.

PerformanceThe performance of Salesforce.com CRM service is measured according the balanced score card which is presented after this SLA. The performances are reported as well to the key account executive of Salseforce.com.

Transaction performances, scalability etc. of the service, need to fulfill the requirements according the non functional requirements list (not part of this SLA).

4.1.5 Release UpdateRelease On Productive SystemNew release updates are installed in the productive environment after an announcement period of at least 4 weeks and APLIQ confirmed the implementation date and time as well as the provided time frame of unavailability. Release updates never take place during the defined working hours. ALPIQ is responsible to provide a defined amount of dedicated resources for a first functional test as soon as the new release has been rolled out.

4.1.6 Test EnvironmentThe CRM test environment is covered by another SLA which is customized for test purposes and therefore none of the paragraphs which are mentioned in this SLA apply for the test environment.

4.1.7 PenaltiesMonthly Measurement of Violations and their PenaltiesNumber of Violations Penalties

1>5 30% reduction of the SaaS fee 5>10 30% reduction of the SaaS fee and in addition a penalty of USD

3’000.-. In addition is Salsesforce.com obliged to provide a corrective action plan which takes place after 3 weeks

10> No SaaS fee for the service with a penalty of USD 10’000.-. In addition is a corrective action plan necessary which takes place within 3 weeks on a weekly reporting to ALPIQ.

If Salsesforce.com provides a quarter year without violation ALPIQ is going to pay an extra premium of USD 2’000.-.



4.2 CRM IT Balanced Score Card of a SaaS SolutionAn IT balanced score card consists of four views. The views are learning and growth, internal business process, customer and financial. Between the different views of the IT balanced score relations exist. Each view consists of objectives, measurements, targets and initiatives to achieve the targets. Those objectives are based on the CRM system with the service model SaaS of the ALPIQ Company.

Illustration 6 - Overview Balanced Score Card of SaaS CRM Solution

4.2.1 CRM IT Balanced Score CardFollowing the IT Balanced Score Card objectives, measurements, targets und initiatives in reference to the Salesforce.com CRM system of Salesforce.com are presented.

Objective Measurement Targets InitiativesFinancialF1 Total costs

of service Additional costs

apart the normal service fee

No additional costs apart of the normal agreed service fee

Tracking of issues Issues which not covered by the

agreed contract / SLA need to be avoided in future

Amendments on basis of the contract

F2 Stabilization of service costs

Costs of the service fee

The target is to keep the costs over the next 5 years lower than USD 3000.- per month.

If changes in the scope of the service occur this target need to be amended

Increasing of process efficiency between Salesforce.com and ALPIQ

Reduction of Salseforce.com support by additional training of the CRM application

Creating of a knowledge group within ALPIQ for CRM questions

Maturity of service F3 Standardizati

on of reporting

Reduce amount of reports

Reduce the amount of reports by 30%

Workshop about a reduction of the current reports

Introduction of slightly amended reports to cover different reports by one report

CustomerC1 Increase of

response time Appropriate

response time of the system

Lower than 2 seconds Performance measuring and appropriate improvements

Code optimization to accelerate transactions

C2 Complaint reduction

Faster solution in cases of complaints

Time needed to resolve tickets

Inform system user in advance about possible

Accurate ticket handling process Improvements on ticket handling

process Communication management



issues about current issues and possible walk around

C3 Customer satisfaction

Survey feedbacks

Amount of complains

Customer satisfaction higher than 80%

Less than 2.0% complains about ticket handling process

Service quality improvements Complain tracking and future

activities to prevent the same complains

User CRM trainingC4 Issue

escalation Amount of

escalations per month

The amount of escalations muss be less than 0.2 per month

Appropriate issue tracking Close cooperation between

Salseforce.com and ALPIQ.Internal Business ProcessI1 Availability of

the CRM system

Availability of the system

Availability of 99.5% Frequently risk analysis Frequent system hardening

exercises Monitoring system of the CRM Increase awareness of CRM

system by business- and IT management

I2 Communication management

Effectiveness of communication management

Gap analysis of what employees know and what employees should know

Request of employees know-how about the last communications

Less than 10% hits

Improvement of communication media

Communication mix -> What will be communicate how

Narrow, more precise communication

Training of employees who write communications

I3 Issue pattern recognition

Identification of issue patterns

Gap analysis what kind of issues pop up and which could have been recognized in advance

Less than 10% hits

Allergization of support people Analysis of all issues and

appropriate potential follow-up issues

I4 User manual amendments / changes

Changes of the manual which could have avoided of the issue

Less than 2% changes on the manual to avoid issues

Replay of the issues and identification of further user improvements to avoid certain issues

I5 Customer oriented processes

Availability of Salesforce.com Account Manager

Account Manager need to be available on the second day of request

Every other week a meeting with the Salesforce.com Account Manager to discuss current topics

I6 Enforce IT security

Number of successful hacker attacks per year

Overall number of system accesses per employee

A maximum of two successful attacks per year

Reduce the number of access-rights per employee by 20% until the end of 2010

Restrict the number of persons with access to a particular system to the minimum

Establish a well-defined joiner/mover/leaver process

Maintain all system rights in a centralized user access system/database

Learning and GrowthL1 Issue

prevention Occurrence of

same issue Less than 5% issues

which could have been avoided by an appropriate prevention strategy

Analysis of occurred issues and identification of avoidance by previous taken arrangements

Issues meetings to clarify the source of the issues

Implementation of a Knowledge database

L2 Friendliness of support employees

Survey feedbacks

Amount of complains

90% satisfaction feedback about Salesforce.com support employees

Increase of Salesforce.com internal communication

Training of support employees Issue tracking process

improvements within the organization of Salesforce.com

L3 Competency of support employees

Survey feedbacks

Amount of complains

70% of positive feedback based on the surveys

Detailed research on complaints

Education of support / resolver group employees

Optimization of support employee hiring process

L4 Improvement of issue clarification

Increased speed to solve issues

Time needed from the ticket issuance to the resolution

Improvement of processes Education of support / resolver

group employeesL5 Familiarization

of new support Time to get up

to speed Time which is needed until

a new support employee is Efficient on job training for new

employees



employees able to work autonomous Documentation of top issues for fast resolution

Three month parallel work on the job with a senior support employee

Table 11 – IT Balanced Score Card for Salesforce.com CRM

4.2.2 CRM IT Balanced Score Card MapIn the next illustration are the different objectives on the different perspectives linked to each other. Therefore each objective supports another objective either in the same perspective or in another perspective. The financial perspectives are the main perspectives. Therefore all objectives are connected over other objectives or directly with at least one financial objective.

Illustration 7 - Strategic IT Balanced Score Card Map of Salesforce.com CRM Solution



5 ConclusionThe elaborated document about a new implementation of an ALIPQ CRM system shows the benefits of such a new company wide application / service. The recommendation of the business case team is to implement a common standard CRM system within ALPIQ. This need is in addition supported by the persuaded strategy of ALPIQ’s management which foresees a growth strategy in all European regions.As the quantitative analysis and the qualitative analysis brought up, the CRM option with a SaaS solution emphasized as the best and most profitable choice for ALPIQ. Salsesforce.com should be taken in account as the preferred partner in reference to a SaaS CRM system. If the ALPIQ management decides to pursue a SaaS solution several activities are necessary before such a contract can be signed. To use a CRM as a SaaS solution different legal questions and contractual exercises need to be executed in advance. As soon as all legal questions are clarified and both agree on the compiled legal paragraphs the established SLA in the business case must be verified and extended / amended if necessary. Such extensions / amendments on the SLA might have impacts as well on the IT Balanced Score Card which need to be aligned with the SLA afterwards.

This business case uncovers the benefits and cost saving expenses which might be possible to cut down with Salsesforce.com CRM solution and which increases the efficiency of ALPIQ. The following approach is suggested if ALPIQ’s management decides to implement the SaaS option from Salsesforce.com

1. Get together with Salsesforce.com for legal clarifications of such a solution 2. Present the requirement list (not part of this business case) / non functional requirement list (not part of

this business case) and the proposal of the SLA 3. Asking for a quote based on the requirement list / non function requirements and the proposed SLA for

the Enterprise Model version 4. Speak about exclusions / extensions and changes of the SLA and agreed on a final version 5. Negotiate with Salsesforce.com about the methods how the performance is measured -> BSC6. Agree on the performance measurements

Sign the contract



Directories / GlossaryIn the following chapter the illustration and table directory will be summarized. In addition a glossary about mentioned words in this document are listed.

Illustration DirectoryIllustration 1 – ALPIQ Subsidiaires in Europe...............................................................................................................................................................7Illustration 2 – ALPIQ’s Strategic Pillars.......................................................................................................................................................................7Illustration 3 – ALPIQ’s Strategic Distribution Pillar......................................................................................................................................................8Illustration 4 - Saleforces.com CRM Solution Services...............................................................................................................................................10Illustration 5 - Risk Profile Matrix of the SaaS CRM Solution.....................................................................................................................................16Illustration 6 - Overview Balanced Score Card of Saas CRM Solution.......................................................................................................................21Illustration 7 - Strategic IT Balanced Score Card Map of Salesforce.com CRM Solution...........................................................................................23

Table DirectoryTable 1 – Stakeholder Analysis..................................................................................................................................................................................11Table 2 – Cost Benefit Analysis: Use current CRM for future Purposes.....................................................................................................................11Table 3 – Cost Benefit Analysis: Buy CRM and Maintain it Internally.........................................................................................................................12Table 4 – Cost Benefit Analysis: CRM Operation as a SaaS.....................................................................................................................................12Table 5 – Qualitative Analysis for Option “No CRM”...................................................................................................................................................13Table 6 – Qualitative Analysis for Option “Traditional CRM”......................................................................................................................................14Table 7 – Qualitative Analysis for Option “SaaS CRM”..............................................................................................................................................14Table 8 – Summary of Qualitative Cost Benefit Analysis............................................................................................................................................14Table 9 – Saleforces.com SaaS Risks........................................................................................................................................................................16Table 10 – Risk Mitigation / Risk Elimination which are not covered in the SLA........................................................................................................17Table 11 – IT Balanced Score Card for Salesforce.com CRM...................................................................................................................................23Table 12 – Glossary....................................................................................................................................................................................................25Table 13 – Basic Revenues and Sale Forecast Calculations.....................................................................................................................................26Table 14 – Revenues and Sales Forecast for the Option “No CRM”..........................................................................................................................26Table 15 – Revenues and Sales Forecast for the Option “Traditional CRM”..............................................................................................................26Table 16 – Revenues and Sales Forecast for the Option “SaaS CRM”......................................................................................................................27Table 17 – Basic Calculations for the Infrastructure Investment Costs......................................................................................................................27Table 18 – Infrastructure Investment Costs for the Option “No CRM”........................................................................................................................27Table 19 – Infrastructure Investment Costs for the Option “Traditional CRM”............................................................................................................27Table 20 – Infrastructure Investment Costs for the Option “SaaS CRM”....................................................................................................................28Table 21 – Resource Estimation for Project...............................................................................................................................................................28Table 22 – Basic Calculation for the Project Effort.....................................................................................................................................................28Table 23 – Factor Cost Estimation for a SaaS Project...............................................................................................................................................29Table 24 – Project Costs Estimation for the Option “No CRM”...................................................................................................................................29Table 25 – Project Costs Estimation for the Option “Traditional CRM”.......................................................................................................................29Table 26 – Project Costs Estimation for the Option “SaaS CRM”...............................................................................................................................29Table 27 – Basic Calculation for the Employee Costs................................................................................................................................................30Table 28 – Employee Cost Estimation for the Option “No CRM”................................................................................................................................30Table 29 – Employee Cost Estimation for the Option “Traditional CRM”....................................................................................................................31Table 30 – Employee Cost Estimation for the Option “SaaS CRM”............................................................................................................................31Table 31 – Yearly License Costs for the Option “No CRM”........................................................................................................................................32Table 32 – Yearly License Costs for the Option “Traditional CRM”............................................................................................................................32Table 33 – Yearly License Costs for the Option “SaaS CRM”....................................................................................................................................32Table 34 – Migration Costs for the Option “No CRM”.................................................................................................................................................32Table 35 – Migration Costs for the Option “Traditional CRM”.....................................................................................................................................33Table 36 – Migration Costs for the Option “SaaS CRM”.............................................................................................................................................33

GlossaryALPIQ Energy and Energy service companyBSC Balance Score CardCRM Customer Relationship ManagementEscrow Agreement Source code deposit in case of a dispute between contract partners or bankruptcy of

the software developer company NPV Net present valuePI Performance IndicatorROI Return on InvestSaaS Software as a ServiceSalesforce.com Provider of a SaaS CRM systemSLA Service Level Agreement

Table 12 – Glossary



A) AppendixThis appendix describes how the costs for the quantitative analysis in chapter Quantitative Cost-Benefit Analysis 3.2 have been gathered and what kind of different costs are involved.

A.A) General Calculations over the whole LifecycleIn this part it is mentioned how much ALPIQ revenues can be, when they achieve their target. In 2009 the retail group achieved revenues of 30 Mio CHF by an energy distribution of 40 TWh. This results in revenues of 0.75 CHF per MWh. It is extinguished that this revenue factor can be hold during the next years. Therefore the calculation for the next upcoming years will be calculated with the factor of 0.75 CHF / MWh.The following table shows how much ALPIQ can earn at their maximum. The tables which follow afterwards, the revenues for the three options are calculated. The options are, “No CRM”, “Traditional CRM” and a “SaaS CRM”.

A.A.A) Basic Calculations for Revenues and Sale Forecast:Basic calculations:

YEAR 0 YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5

Energy Sales (in TWh) 40000000 534000006680000

0 80200000 9360000010800000

0

Revenues (in Mio CHF.) 30000000 400500005010000

0 60150000 70200000 81000000Revenue per CHF / MWh 0.75 0.75 0.75 0.75 0.75 0.75

Table 13 – Basic Revenues and Sale Forecast Calculations

A.A.B) Revenues and Sale Forecast for the Option “No CRM”:There exists no company wide CRM solution at ALPIQ today. A lot of small Excel and Access Tools are available to support the customer needs. With the aspired aim to sell 108 TWh within the next five years, it is no longer possible for the Retail department to reach this goal without a proper CRM solution. If no CRM solution will be implemented, it is no longer possible for ALPIQ to keep the revenues of 0.75 CHF / MWH. It is estimated that the coordination costs will increase per year of 5%. This is because it is planned that every year more employees are working for ALPIQ and in addition the coordination costs will increase massively.

Yearly cost estimation: No CRM

YEAR 0 YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5Coordination costs (no CRM) 1500000 4005000 7515000 12030000 17550000 24300000Coordination costs (no CRM) (%) 0.05 0.1 0.15 0.2 0.25 0.3

Total Revenues: 28500000 360450004258500

0 48120000 52650000 56700000Table 14 – Revenues and Sales Forecast for the Option “No CRM”

A.A.C) Revenues and Sale Forecast for the Option “Traditional CRM”:With this option the same problems are addressed which are already mentioned on the previous option. The main differences are that the estimation indicates that after 2 years a CRM system is successfully implemented and trough that the coordination costs sink back to a normal level.

Yearly cost estimation: Traditional CRM

YEAR 0 YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5Coordination costs (no CRM) 1500000 4005000 0 0 0 0Coordination costs (no CRM) (%) 0.05 0.1 0 0 0 0

Total Revenues: 28500000 360450005010000

0 60150000 70200000 81000000Table 15 – Revenues and Sales Forecast for the Option “Traditional CRM”

A.A.D) Revenues and Sale Forecast for the Option “SaaS CRM”:In this scenario the same problem occur which is already described under the option “No CRM”. The main difference is that the SaaS CRM system implementation is massively shorter than with a “traditional CRM” system. So, it is calculated, that after 1 year the project is implemented and trough that the coordination costs sink back to a normal level.

Yearly cost estimation: SaaS




Coordination costs (no CRM) 1500000 0 0 0 0 0Coordination costs (no CRM) (%) 0.05 0 0 0 0 0

Total Revenues: 28500000 400500005010000

0 60150000 70200000 81000000Table 16 – Revenues and Sales Forecast for the Option “SaaS CRM”

CRM implemented

A.B) Implementation CostsThis chapter illustrated the costs. The Project costs contain two positions, which are discussed in the next few sub chapters. The first position shows the infrastructure investment costs and the second point shows the costs of the project itself.

A.B.A) Infrastructure Investment CostsThe calculation is based on the assumption, that a traditional CRM project will be implemented. Afterwards all three options are calculated on a detailed basis. ALPIQ’s server farm contains exclusively Sun Servers. ALPIQ has calculated to buy two servers for a traditional CRM implementation, because of a clustered environment. The other entire infrastructure is already available. ALPIQ’s estimation calculates with two servers of the type: SEJASY11Z which have to be bought. The price for one server is about 471’800 Euro. It is estimated, that an additional Infrastructure employee is needed to make all the settings and configurations which are needed for the server. Additionally it is assumed that after 5 years two new servers have to be ordered. To calculate with this estimation the following calculation sheets have been elaborated:

A.B.A.A) Basic Calculations for the Infrastructure Investment CostsBasic calculations:

Amount Cost per unit Total Cost in Euro Total Costs in CHF.Server costs: 2 471800 943600 1421712.684Additional employees 1 150000 0 150000Total costs: 3 1571712.7

Table 17 – Basic Calculations for the Infrastructure Investment Costs

A.B.A.B) Revenues and Sale Forecast for the Option “No CRM”:For the option with “no CRM” no server and no additional employees have to be taken in account. So the costs for the infrastructure are 0 over all years.

Yearly cost estimation: No CRM

YEAR 0 YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5Server Infrastructure (in CHF) 0 0 0 0 0 0Additional employees 0 0 0 0 0 0Total costs: 0 0 0 0 0 0

Table 18 – Infrastructure Investment Costs for the Option “No CRM”

A.B.A.C) Revenues and Sale Forecast for the Option “Traditional CRM”:This option shows all the costs which are calculated on the basic calculations. So the servers as well as the additional employee are needed.

Yearly cost estimation: Traditional CRM

YEAR 0 YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5Server Infrastructure in CHF: 1571713 0 0 0 0 1571713Additional employees 150000 150000 150000 150000 150000 150000Total costs: 1721713 150000 150000 150000 150000 1721713

Table 19 – Infrastructure Investment Costs for the Option “Traditional CRM”

A.B.A.D) Revenues and Sale Forecast for the Option “SaaS CRM”:In this case, ALPIQ runs a CRM system, but the costs are 0, due to the fact that the needed infrastructure and the service technicians are part of the service and therefore provided by Salesforce.com. Yearly cost estimation: SaaS



YEAR 0 YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5Server Infrastructure in CHF: 0 0 0 0 0 0Additional employees 0 0 0 0 0 0Total costs: 0 0 0 0 0 0

Table 20 – Infrastructure Investment Costs for the Option “SaaS CRM”

ALPIQ has already a datacenter and all the necessary connections are established. So, it is assumed that all other costs concerning Infrastructure could be neglected. The following link lead to the Sun website, where the costs for the server was evaluated: http://de.sun.com/products/highend/m9000.jsp

A.B.B) Project Effort CostsIn this chapter the costs for a traditional CRM project are calculated. On the basis of that, the costs for the next 5 years will be presented for all 3 options.

A.B.B.A) Basic Calculation of the Project CostsResource estimation for a traditional CRM project:

Phase Needed persons DurationRequirement 40 Retail / 15 Project Team 8 monthImplementation 40 Retail / 15 Project Team 12 monthUAT 40 Retail / 15 Project Team 4 month

Table 21 – Resource Estimation for Project

Cost forecast for a traditional CRM project. The average yearly costs for a project member are defined with 150’000 CHF.Basic Calculations:Phase: Type of employee: No. of employee: Duration (Yearly): Cost:Requirement Phase Retail 40 0.666666667 4000000

IT 15 0.666666667 1500000

Total cost per phase 5500000 Implementation Phase Retail 40 1 6000000

IT 15 1 2250000

Total cost per phase 8250000 UAT Retail 40 0.333333333 2000000 IT 15 0.333333333 750000.0002 Total cost per phase 2750000.001

Total cost of project: 16500000

Duration in month: 24Table 22 – Basic Calculation for the Project Effort

After the costs are calculated for a traditional CRM system the cost calculation changes now to the calculation for a SaaS system. The cost calculation is according the costs of Salesforce.com which are provided on their website. For the cost calculation three different options are prepared (best, most likely, worst). The most likely option was chosen afterwards for the cost calculation. The different options will be presented in the next sections.

Best case:“When the Glovia team’s application development skills and domain expertise were combined with Salesforce.com’s high productivity, rapid development cycles resulted. “ This project moved very quickly,” says Ehler. “It was an order of magnitude faster than previous dev efforts. And the cost was about 1/10 th of what it would have been if we had used .NET or J2EE.” The following link lead to a experience report about Salesforce.com, where it is described how much faster, the implementation project was realized: http://www.salesforce.com/platform/innovators/glovia.jsp

With an implementation of a SaaS system a cost saving of 90% might be achievable, because a lot of functions are already available. Instead of spending 16’500’000 CHF for a traditional CRM system the SaaS option costs only1’650’000 CHF.

Most likely case:It is assumed, that often this statements are extreme, so a more possible case with which will be calculated is 5/10th.


http://www.salesforce.com/platform/innovators/glovia.jsp

http://de.sun.com/products/highend/m9000.jsp


Worst case:There exist a lot of problems, with interfaces, communication and in reference with the Third Party Company, etc. Therefore it is assumed that the project for the SaaS option needs as much resources as a traditional CRM project. In the worst case the traditional costs are equal to the SaaS option.

Benefit calculation:Case Project costs with CRM Solution SaaS Factor Project CostsBest 16’500’000 1/10 1’650’000Most likely 16’500’000 5/10 8’250’000Worst 16’500’000 10/10 16’500’000

Table 23 – Factor Cost Estimation for a SaaS Project

A.B.B.B) Project Cost Estimation for the Option “No CRM”:In case the ALPIQ management decides not to implement a CRM system, the costs for the implementation could be saved. The cost estimation for all 5 years is therefore 0.Yearly cost estimation: No. CRM

YEAR 0 YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5Total costs per year 0 0 0 0 0 0Total costs: 0 0 0 0 0 0

Table 24 – Project Costs Estimation for the Option “No CRM”

A.B.B.C) Project Cost Estimation for the Option “Traditional CRM”:If ALPIQ decides for a traditional CRM system the costs would be extremely high, due to the fact that the entire system must be configured for the need of ALPIQ, bugs must be fixed and tested, interfaces have to be established, etc. It is assumed that the implementation is as twice the costs as for the SaaS solution. The initial costs are in the costs analysis split by two years. The estimated costs for such an approach are at CHF 16.5 Mio.- Yearly cost estimation: Traditional CRM


Table 25 – Project Costs Estimation for the Option “Traditional CRM”

A.B.B.D) Project Cost Estimation for the Option “SaaS CRM”:With a SaaS CRM solution, the costs are between the options “no CRM” and “traditional CRM”. The costs for a SaaS solution are empirically deeper than in case of a traditional CRM, because the system is already available and the knowledge about the standard interfaces is available. Therefore the assumption is that the project effort is only one year. The costs for the project are half of the traditional CRM project and are about CHF 8.25 Mio. Yearly cost estimation: SaaS


Table 26 – Project Costs Estimation for the Option “SaaS CRM”

A.C) Operation and Maintenance CostsIn this chapter, all the operation and maintenance costs will be listed. These are mainly the costs for the employees as well as the licenses which are needed.

A.C.A) Employee Cost:ALPIQ’s management calculates to increase the sales within the next 5 years of 68 TWh to 108 TWh. For this strategy, ALPIQ needs additional employees to handle the workload. In case ALPIQ implements a CRM system additional IT and support resources are needed as well.

A.C.A.A) Basic Calculations for Employee Costs:Under constant circumstances the conclusion is that ALPIQ needs in total 216 employees within the next five years. In this assumption the theoretical need of employees are calculated, without usage of synergies or additional costs. The reason is because there work already 80 employees in the retail environment. Therefore are 136 new employees needed. The following table shows the costs for the additional employees.Basic calculations:



YEAR 0 YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5Estimated no. of employees 80 107 134 162 189 216Employee costs 12000000 16050000 20100000 24300000 28350000 32400000

Table 27 – Basic Calculation for the Employee Costs

A.C.A.B) Employee Cost Estimation for the Option “No CRM”:For this option are only some minor changes necessary in the basic calculation. There are no savings instead additional costs pops up due to the fact that new employees cause coordination costs which have a massive impact. The additional costs are covered under the point additional facts.

It is assumed that with 100 employees no coordination effort is needed and therefore no additional costs occur. Between 100 and 150 employees an additional 5% of the basic wages is needed for the coordination of them. Between 150 and 200 employees an additional 10% of the basic wages is needed for coordination. For more than 200 employees an additional 15% of the basic wages is needed for the coordination.

With this assumption, the following yearly cost calculation can be presented:

Yearly cost estimation: No. CRM

YEAR 0 YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5Synergies processes (%) 0 0 0 0 0 0Synergies tools (%) 0 0 0 0 0 0Coordination costs (system supplier) (%) 0 0 0 0 0 0Total costs Retail excl. CC employee 12000000 16050000 20100000 24300000 28350000 32400000No. of needed employee 80 107 134 162 189 216Coordination costs (employee) 0 802500 1005000 2430000 2835000 4860000Total costs Retail incl. CC employee 12000000 16852500 21105000 26730000 31185000 37260000IT Employees 0 0 0 0 0 0Total costs employees 12000000 16852500 21105000 26730000 31185000 37260000

Table 28 – Employee Cost Estimation for the Option “No CRM”

A.C.A.C) Employee Cost Estimation for the Option “Traditional CRM”:For this option different synergies and additional costs need to be considered. These are mainly cost savings which can be reduced by process improvements as well as using of synergies by better analysis and dashboard functions. On the other hand additional costs pop up as well with this option. These are the coordination costs for employees (already mentioned under A.C.A.B) and the coordination costs for the system supplier as well as costs for additional IT employees. It is assumed that approximately 10% of the employee costs could be saved yearly with better and easier processes. Of course, this benefit comes initially into account after the project implementation, which might be the case after the second year.

Additional facts: Synergies processes: It is assumed that around 10% of the employee costs could be saved yearly

through better and easier processes. Of course, this benefit comes initially into account after the project implementation, what is in this case after the 2nd year.

Coordination costs (system supplier): When a system is bought by a software supplier, the software supplier is in charge for bug fixing and new releases. So ALPIQ has to be in a steady connection with the system supplier. This coordination cost a lot of time and effort. So, in this case it is assumed that ALPIQ’s employee costs will rise by 10% in this option.

Coordination costs (employees): It is assumed that under 100 employees no coordination cost is needed. Between 100 and 150 employees an additional 5% of the basic wage is needed for the coordination. Between 150 and 200 employees an additional 10% of the basic wage is needed for coordination. Over 200 employees an additional 15% of the basic wage is needed for the coordination.

Additional IT employees: In this case, the CRM system is in the responsibility of ALPIQ. Therefore ALPIQ needs additional IT employees for the support and maintenance of the system. It is assumed, that 10 additional IT employees are needed. This causes yearly costs of 1’500’000 CHF.

With this calculation, the following yearly cost calculation can be presented:Yearly cost estimation: Traditional CRM




Synergies processes (%) 0 0 0.1 0.1 0.1 0.1Synergies tools (%) 0 0 0.1 0.1 0.1 0.1Coordination costs (system supplier) (%) 0.1 0.1 0.1 0.1 0.1 0.1Total costs Retail excl. CC employee 13200000 17655000 18090000 21870000 25515000 29160000No. of needed employee 88 117.7 120.6 145.8 170.1 194.4Coordination costs (employee) (%) 0 882750 904500 1093500 2551500 2916000Total costs Retail incl. CC employee 13200000 18537750 18994500 22963500 28066500 32076000IT Employees 1500000 1500000 1500000 1500000 1500000 1500000Total costs employees 14700000 20037750 20494500 24463500 29566500 33576000

Table 29 – Employee Cost Estimation for the Option “Traditional CRM”

A.C.A.D) Employee Cost Estimation for the Option “SaaS CRM”:For this option different synergies and additional costs come into account. These are mainly cost savings trough process improvements as well as synergies trough better analysis and dashboard functions. Also additional costs rise in this option. These are the coordination costs for employees (already mentioned under the point A.C.A.B) and the coordination costs for the system supplier as well as costs for additional IT employees. The single points are mentioned more detailed under Additional facts.

Additional facts: Synergies processes: It is assumed that around 10% of the employee costs could be saved yearly

through better and easier processes. Of course, this benefit comes initially into account after the project implementation, what is in this case after the 1st year.

Synergies tools: It is assumed that around 10% of the employee costs could be saved yearly through better analysis and dashboard functions. Of course, this benefit comes initially into account after the project implementation, what is in this case after the 1st year.

Coordination costs (system supplier): A SaaS solution needs a lot of coordination, because the system is no longer in ALPIQ’s responsibility. So, the coordination costs are higher than with a traditional CRM system. It is estimated, that the employee costs are around 15% higher in this case.

Coordination costs (employees): It is assumed that under 100 employees no coordination cost is needed. Between 100 and 150 employees an additional 5% of the basic wages is needed for the coordination. Between 150 and 200 employees an additional 10% of the basic wages is needed for coordination. Over 200 employees an additional 15% of the basic wages is needed for the coordination.

Additional IT employees: In this case, the CRM system is installed at the suppliers Salesforce.com. So ALPIQ need not as many additional IT employees for support and maintenance as with a traditional CRM. It is calculated, that 3 additional IT employees are needed. What are yearly costs of CHF 450’000.-

With this calculation, the following yearly cost calculation can be presented:Yearly cost estimation: SaaS

YEAR 0 YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5Synergies processes (%) 0 0.1 0.1 0.1 0.1 0.1Synergies tools (%) 0 0.1 0.1 0.1 0.1 0.1Coordination costs (system supplier) (%) 0.15 0.15 0.15 0.15 0.15 0.15Total costs Retail excl. CC employee 13800000 15207375 19044750 22963500 26790750 30537000No. of needed employee 92 101.4 127 153.1 178.6 203.58Coordination costs (employee) (%) 0 760368.8 952237.5 2296350 2679075 4580550Total costs Retail incl. CC employee 13800000 15967744

19996987.5 25259850 29469825 35117550

IT Employees 450000 450000 450000 450000 450000 450000

Total costs employees 14250000 16417743.820446987.

5 25709850 29919825 35567550Table 30 – Employee Cost Estimation for the Option “SaaS CRM”

For further calculations within the work the “new employee costs” will be relevant.

A.C.B) License Costs (based on Employee Costs):



In this chapter the license costs are determined. These costs depend on the employee costs, which were calculated before. The costs are estimated for every option and the basis was the “Total costs employees” of every option from the “employee cost” point.

A.C.B.A) License Costs Estimation for the Option: “No CRM”Under the point “No CRM”, no system will be implemented and so, no license costs occur. Therefore the cost for the option “No CRM” are 0.Yearly cost estimation: No. CRM

YEAR 0 YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5Retail licenses 0 0 0 0 0 0IT and support licenses 0 0 0 0 0 0Total licenses needed 0 0 0 0 0 0Cost per license ($ / license) 1500 1500 1500 1500 1500 1500Total cost (in $) 0 0 0 0 0 0Total cost (in CHF) 0 0 0 0 0 0Total cost (in CHF) 0 0 0 0 0 0

Table 31 – Yearly License Costs for the Option “No CRM”

A.C.B.B) License Costs Estimation for the Option: “Traditional CRM” This option shows the license costs for the Traditional CRM solution. It is estimated, that the license costs are 1500 $ per license.Yearly cost estimation: Traditional CRM

YEAR 0 YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5Retail licenses 88 124 127 153 187 214IT and support licenses 10 10 10 10 10 10Total licenses needed 98 134 137 163 197 224Cost per license ($ / license) 1500 1500 1500 1500 1500 1500Total cost (in $) 147000 200377.5 204945 244635 295665 335760Total cost (in CHF) 162737.8 221829.9 226886.4 270825.6 327318.9 371706.5

Table 32 – Yearly License Costs for the Option “Traditional CRM”

A.C.B.C) License Costs Estimation for the Option: “SaaS CRM” This option shows the license costs for the SaaS CRM solution. The assumption is that the license costs are 1500 $ per license.Yearly cost estimation: SaaS

YEAR 0 YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5Retail licenses 92 106 133 168 196 234IT and support licenses 3 3 3 3 3 3Total licenses needed 95 109 136 171 199 237Cost per license ($ / license) 1500 1500 1500 1500 1500 1500

Total cost (in $) 142500 164177.4375204469.87

5 257098.5299198.2

5 355675.5Total cost (in CHF) 157756.1 181754.3 226360.4 284623.5 331230.4 393754.1

Table 33 – Yearly License Costs for the Option “SaaS CRM”

A.D) DecommissioningThis chapter shows the costs and benefits which occur when the system is decommissioned. The point which is mentioned here are the costs for the migration of the data, which ALPIQ needs to do when they migrate to a new system.

A.D.A) Migration for the Option: “No CRM” Yearly cost estimation: No CRM

YEAR 0 YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5Migration costs 0 0 0 0 0 0Total cost (in CHF) 0.0 0.0 0.0 0.0 0.0 0.0

Table 34 – Migration Costs for the Option “No CRM”



A.D.B) Migration for the Option: “Traditional CRM” Because the old data has to be migrated to the new system, this has needs to be taken in account. For this reason every year 300’000 CHF will be saved. It is assumed, that the system has a life cycle of ten years. After 10 years 3’000’000 CHF will be needed for the migration of the new system.Yearly cost estimation: Traditional CRM


Table 35 – Migration Costs for the Option “Traditional CRM”

A.D.C) Migration for the Option: “SaaS CRM” Because the old data has to be migrated to a new system, this has to be calculated. It is assumed that a SaaS system is already well prepared for the data migration, because Salesforce.com needs to offer a customer after the sign off of the contract to start within a few time periods with the migration. The data needs to be prepared for the migration. So, it is assumed, that the migration costs are as half as high as with a traditional CRM.For this reason every year 150’000 CHF will be saved. It is assumed, that the system has a life cycle of ten years. After 10 years the 1’500’000 CHF will be available for the migration of the new system. Yearly cost estimation: SaaS


Table 36 – Migration Costs for the Option “SaaS CRM”


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