For CIO Ernest Gmünder, the moment was the culmination of a two-year project that began shortly after he took up his role at Touring Club Suisse at the end of 2010:
"This AS/400 was always considered as a risk. Everyone always talked about, how are we going to replace this centerpiece of our information system?
"We have now an environment that offers us possibilities that are immense and we know that it will be future proof. We know that it will evolve with what's coming in the IT industry in general and we can focus our organization on what is business critical rather than just following what is happening on the technology front."
Achieving this in such a short time demonstrates one of the key advantages of cloud systems, he says, while acknowledging there are constraints, too:
"We have done in two years what everyone told us we should have done in four years. You can be very rapid.
"The constraint is, they don't allow you to do everything you want. There is a lot of flexibility, but you need to stay within these constraints and use the best development practices, because with high volumes you may hit limits that could be problematic."
Touring Club Suisse is Switzerland's equivalent of AAA in the US or Britain's AA, counting almost half of all Swiss households among its members. Founded in 1896, it offers a range of products including breakdown assistance, driving tuition, and vehicle and travel insurance, with a customer base of 2.5 million, including both members and non-members.
Six cloud-native apps
The journey to rebuild its IT system began in 2011 with a decision to implement a new CRM system based on Salesforce. This went live in May 2012:
"We completely replaced the call center processes with pretty much a full 360-degree view of the customer and a new IP telephony system that pushes the task to the agent based on business value.
"We actually gained huge savings in productivity with that kind of approach."
The remaining sales and product processes, replacing everything that had previously run on the AS/400, went live in September 2013. The entirely cloud-native system comprises six applications:
- Salesforce is the core CRM environment used by sales agents in the call center.
- Cameleon CPQ is built into Salesforce to add the configure-price-quote processes that guide agents through the questions to ask during a sales enquiry.
- Zuora handles all subscription management and billing, along with partner management and commission payments.
- Aprimo is integrated with Salesforce for campaign management, lead management and related activities such as closed loop segmentation.
- IBM Varicent calculates commissions and provides sales performance metrics in the partner portal.
- Dell Boomi is the cloud-based integration platform that ties everything together and back to the remaining legacy systems.
Not all applications have gone to the cloud. The roadside assistance and insurance claim handling applications were both developed in-house and still run on-premise. That's unlikely to change in the near future, says Gmünder:
"A 100 percent cloud strategy is not what were trying operate. There are not cloud solutions that are able to cover all our needs.
"There are things where the mentality is not ready for it ... Insurance claim handling is a bit more tricky to put into the cloud because the mentalities are not quite ready to put legal information in the cloud — or more particularly, outside of Switzerland."
Hitting Salesforce limits
Although meticulously planned, it is perhaps inevitable that moving a system that handles millions of transactions each year, just in time for its busiest period, would run into some problems.
One of the challenges was the sheer time it takes to transfer data to a cloud system, says Gmünder:
"It takes a lot more time to create another copy of your environment with the same dataset than it does on-premise."
Migrating the subscription data alone took three weeks. It was a multi-step, batch process that involved extracting the data, mapping it correctly and then streaming it to the cloud.
The second problem struck when loading the payments data into Salesforce. The sheer volume of records triggered governor limits the vendor imposes to prevent one tenant's actions from impacting performance for others. As Gmünder explains:
"One of the pitfalls we fell into was that we did quite a bit of testing, even with what we thought were high volume — millions of records — but we didn't test with the full five million accounts that we actually have in our database.
"When we went into production we were hit with some of these limits that hit you for executing some of the code. These limits stopped some of the things that had worked in the test environment ...
"We had batches loading payments into the system and we were hitting some governor limits in Salesforce. We had to redesign the code.
"We still have certain bugs linked to that where we do find volume issues."
The result was a three-month period during which some invoices, documents and papers were not sent out when they should have been, and periods when changes of address couldn't be processed for certain customers. According to a report on the Swiss ICTjournal website, as many as 30,000 were affected by the glitches.
TCS is still resolving some issues on a case-by-case basis. The governor limits are still impacting the production system because of processes such as a full load that runs from Zuora to Salesforce each month for data cleansing purposes.
"That full load is a real difficult task because of the sheer volume of data we're trying to transfer."
The lesson to learn, says Gmünder, is to carefully think through the implications of operating separate cloud systems that have to work together:
"You need to take it very much into account what it means when you have high volumes and you're dealing with other systems that need to respond and [when they are] not all colocated on the same Salesforce platform."
Positive changesDespite these setbacks, Gmünder emphasizes the positive impact of the new subscription management system on activities such as introducing and changing products, giving more options in how members pay their subscriptions, and improving productivity in the call center:
"Easy pricing, easy billing is absolutely key. We have built an environment now where the system adds a lot of value ...
"With Zuora we do get that kind of flexibility where we do manage the whole payment cycle [separately] from managing the subscription itself."
Bringing in the new system has meant big changes for the organization. When everything ran on the AS/400, it used to be the job of IT to run off documents. A newly created sales operations team now has that task.
"When it comes to just operating the whole thing it was about rethinking what are the competences and processes needed. We had to completely adapt the whole organization."
There is plenty more scope for improvement, says Gmünder:
"A lot of the initial objective has been to at least be able to do what we have been doing. Now that the system is in place, one of the big initiatives will be to get people away from paper into electronic formats ...
"We have been a club where, at the end of the day, everything is paper-based. Now we're designing a system having electronic payments and electronic messaging in mind."
This is the kind of business-oriented issue an IT department should be focusing on, he believes:
"I am convinced that the added value of an internal IT organization is not so much building and operating the technology. but much more making the link of the business with technology. I needed a team focused on bringing technology in to focus on business process, business value."
It's important to be ready for a future that could involve far-reaching changes, says Gmünder — for example, reductions in car ownership as people turn to peer-to-peer taxi services such as Uber, Lyft and Cabify, or car-sharing services like Zipcar and Car2go.
"We start to hate calling ourselves an automobile club. We prefer to call ourselves a mobility club — we're much more focused on individual freedom for mobility."
The new system is a platform that enables TCS to face the future with confidence, he believes:
"Our vision is to be future proof. And to be much more personalized. The whole project is so that we have much more information about our customers and therefore we can be much more personalized in the way that we communicate with our customers."
That includes tapping into new modes of communication, in particular social networking.
"Our vision is also to leverage today's technology of virtual clubs. Social networking is nothing more than today's way of looking at what a club is. TCS can go back to its roots of members helping other members.
"We wanted a technology that evolves with us and with social networking technology because those things are changing so quickly."
The real benefit of a cloud-based system is this flexibility to evolve rapidly and introduce new products and services, he concludes:
"We will have a quick time to market that we wouldn't have had in a more traditional solution."
Disclosure: Salesforce.com is a diginomica premier partner. Zuora introduced TCS for interview.
Image credits: courtesy of Touring Club Suisse.