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Choosing the Best CRM
for Your Organization

Total of customer information and In this increasingly competitive analytics to leverage that data environment. The Internet has lowered of the most compelling operational buyers have the luxury of choosing the cost of switching and made concepts of the past 15 years. businesses must CRM revenues reached toward better sales differentiate not only their $8. but most don't integrate well with the market-leading packaged solutions or with legacy systems. the software tools to retention. up 7 percent performance.Choosing the Best CRM for Your Organization By Paul Gillin Executive Summary CRM buyers have a wealth of deployment options available to them. application integration and functionality. providing unprecedented flexibility. This gives IT organizations the power to fine-tune CRM deployments to match their needs. With consolidation inevitable in the market. a 21 percent from existing customers than to to anticipate and respond to compound annual growth rate. users need to choose vendors wisely. The focused ability to $18 billion in 2010. AMR Why is CRM experience is emerging as the Research. CRM has relationships. but their customer experience. These so-called software-as-a-service (SaaS) products also have a wide range of capabilities for customization and standards compliance. though. cost- efficiency and business value.0-style five times the cost of customer Introduction engagement. CRM problems. But with choice comes complexity. using comparative of tasks. Vendor stability and reliability also are important issues. acquire new ones. strategic objectives and the budgets of business users. predicts that the market Common sense dictates that it's differentiator between vendors in will grow from $8. from the previous year. for custom solutions to their expanded to include a wide range · Broadly defined. host their own on-demand solution or deploy a combination of those approaches. analytics and encompasses everything shopping services and freely engagement tactics that maximize companies use to manage available rating systems to pit the value of the customer customer relationships. customer to Forrester Research. collaboration and Web 2. 1 . according products. which includes a broader range of applications in its important? most important competitive forecast. Customer relationship support it have grown and become Retaining customers isn't easy. In fact. Not only must IT managers carefully analyze their business scenarios. companies against each other. Beginning with humble roots in help develop and nurture customer Customers increasingly are asking sales force automation. the cost of finding new market leaders from also-rans.4 billion in 2006. they also must understand the strengths and weaknesses of the available products. from a vast selection of products to markets more price-sensitive. subscribe to one of the new breed of on-demand services delivered via the Internet. This white paper describes and analyzes the four most popular deployment scenarios. Today. They can opt for a traditional on-premise packaged software installation. then offers a guide to choosing a hybrid approach that best matches the needs of the business while delivering superior performance. management (CRM) has been one more diverse as well. According to customer needs will separate surveys. All rights reserved. As CRM has expanded to customers is estimated at three to encompass elements of Copyright © 2007 Oracle Corporation and IT Business Edge. There are many new hosted solutions. relationship and contribute to including capture and analysis sustainable revenue growth.6 billion in 2006 cheaper to generate more revenue many markets.

integration. Choosing the Best CRM for Your Organization CRM systems support business growth in two critical ways. database-oriented sales-force. robust their preferred programming and Recently. they show great services. All rights reserved. Internet horsepower for transaction- service representatives can commerce servers and customer intensive applications and to use address each situation uniquely. e-mail For many organizations. enabling a business to track every However. 2 .0. data gathered from multiple customer touch points targeted products. application’s functionality. knowing that customers who buy red sports cars also are highly likely to buy premium sound systems can help an automaker shave costs and deliver more In the CRM feedback circle. so analytics and data mining can reveal hidden information about include data mining. CRM tools have begun CRM systems can give a 360. option because it provides superior care applications enable The best CRM systems enable customization and integration businesses to deliver highly buyers to extend capabilities as capabilities. Secondly. they enable sales and support personnel to gather detailed information about individual customer needs. This While these efforts are still at an more targeted set of goods and is the next generation of the early stage. These are stored in centralized databases. and other sophisticated features. to take on an exciting new dimension by leveraging Web 2. Users have complete customized service. Integrated with core ability to apply additional history and satisfaction. For example. customize the solution to their infrastructure. From the early had few choices in CRM services offer superior scalability. automation applications. Whereas early ASP services were which involved significant up-front often plagued by outages and systems have blossomed to Copyright © 2007 Oracle Corporation and IT Business Edge. new alternatives are customer "touch. Proliferate differences between SaaS and the Technology has evolved to support Just a few years ago. each customer and deliver a much software as a service (SaaS)." This helps the emerging. business build a robust profile of The most popular of these is channel partners and suppliers. call-center and customer. financial systems. customer behavior that can greatly alerts. Today's SaaS these needs. level and further drive growth in Deployment Options However. like social media features to build online communities of customers. service industry. deployment. cost and often long deployments. First. multimedia. customers old ASP model. free-form text analysis premise deployment is still the best Finally. By knowing in their business demands and to control over the application and detail the customer's background. application service provider (ASP) promise to take CRM to the next model popular in the late 1990s. contact center software. discern patterns of customer behavior and to craft custom products and programs for customers and groups of customers. CRM was an on-premise installation. The standard option reliability and data integrity. customer. dashboards. an on- benefit the business. there are night-and-day the market. customization tools to extend the degree view of the customer. analytics provide insight about customer behavior on a broad scale. giving them the product configuration. enabling them to offer custom products and services the customer can’t find anywhere else. Sophisticated analytics are then applied to correlations aren't always evident.

including can be the least expensive option us in breaking down those silos Customers who choose data was scattered in silos SaaS isn't for everyone. The SearchCRM." he says. Customer-Managed Acquiring hardware and software "People are starting to realize that On-Premise infrastructure is expensive and there are causes and effects In a traditional on-premise time-consuming. Alaska Airlines has long infrastructure. operating systems. databases and other system Recommendations: Choose on- software. stretch to a year or more and may state-of-the-art security. this option can achieve a high level throughout the company. and so it is truly affecting leases infrastructure. but way to go. James Archuleta. ticket Next. redundant services and infrastructure and data. needed. Finally. exposure and embarrassment due collect a variety of information to another party's mistake. the customer buys or time an on-premise deployment business. legacy applications and can executives could aggregate data demand deployments before customize the deployment as from various legacy systems. over between all of the elements of a deployment. which into customer loyalty. service-oriented architecture make percent of CRM sales . demands that carriers identify control over every aspect of the This is why many customers now every possible opportunity to cut deployment and maintenance of look at SaaS as a complement to costs and maximize customer the CRM application and its or a replacement for on-premise loyalty. on-premise is the deployments. about scheduling. · Multi-tenant On-Demand (SaaS) Disadvantages: The primary The use of on-premise CRM has · Private On-Demand (SaaS) downside of on-premise changed the company. storage and protection. involve the use of dedicated IT Siebel Systems (now part of resources and external There also are big differences Oracle) was a pioneer in on- consultants. tracked customer behavior. The customer has years. the company could white paper. choosing a course. Forrester Research other CRM applications because of modern SaaS. It knew it Buyers should carefully consider of integration with operational and needed an on-premise solution so the merits of on-premise and on. Using This will be discussed later in this minimizes the risk of legal dashboards. seat selection. it possible for SaaS services to be User View: The intensely Advantages: For customers who customized to a much greater competitive airline industry need complete ownership and degree than their predecessors. Customers are alternative has recently emerged also in complete control of data It chose Siebel CRM to gain insight that offers compelling benefits. says deployment is cost and time. we will discuss four basic some CRM providers and purchases. A new hybrid much they want. Web services estimates that on-premise the need to realize a return on standards and the emerging solutions still make up about 90 1 investment on the up-front cost. This · Privately Managed and deployments with a level of insight has helped the airline target Hosted On-Premise sophistication that on-demand offers to customers based upon services can’t match. Customers also have between the relatively inflexible premise CRM and is still the limited options for migrating to ASP services of a decade ago and market leader. 2006 commitment to CRM as a Copyright © 2007 Oracle Corporation and IT Business Edge.” premise if you are ready to make a application in its data center. CRM director. However. 3 . Nov. All rights reserved. 14. Choosing the Best CRM for Your Organization performance problems. and installs a packaged Forrester study says. modern customer owns the entire package if a customer deploys the SaaS applications are based on and is free to customize it as application widely over a period of much more reliable technology. within the organization. though. 1 “CRM market to grow steadily. their history and behavior. Deployment times for highly incorporating world-class data complete control over the customized applications can centers. on-time options for CRM implementation: specialized third parties offer flight performance and other · Customer-Managed highly customized vertical industry metrics to gain a richer view of the On-Premise solutions that extend on-premise factors that drive loyalty.

The customer protection. The vendor also might be able to improve functionality with custom and industry-specific deployments. This architecture provides the illusion of a customized computing space while time to learn the specific needs of achieving efficiencies through economies of scale due to consolidation. In a typical software-as-a-service resources. complete does not maintain software or Hosted On-Premise infrastructure control and the hardware and pays for access to highest levels of security and data This approach is identical to the the application only. the ability to customize and investment. Virtualization is used to create built into the per-user costs. The customer typically Privately Managed and of-breed functionality. All aspects of find an application that meets your might involve additional infrastructure management and requirements. On-premise management overhead to application delivery are handled by deployment is also a wise choice if coordinate the activities of external the service provider. with hundreds of the advantages of the customer. SaaS services are application at its hosting site. Each group of customers sees only its own applications. Because the application provider has extensive knowledge and experience with the CRM software. a service-level agreement needs or an interest in controlling negotiated with the customer. This approach also customers. Multi-tenant On-Demand is presented in multiple views Modifications may be done with a (Software-as-a-Service) customized as if they belong to the mix of internal and vendor-supplied individual customer. unless otherwise and Hosted On-Premise approach vendor provides most or all negotiated with the vendor. physical servers although these costs are typically share data center resources on the back end. deserves serious consideration. without extensive ramp-up time. service that is licensed by multiple companies delivering all kinds of managed approach as well as the added advantages of shorter deployment and access to outside expertise. Delivery is typically over the public who want the advantages of best- Internet. (SaaS) deployment. Disadvantages: The biggest downside is cost. Copyright © 2007 Oracle Corporation and IT Business Edge. In this simplified representation of a multi-tenant architecture. 4 . Using contracted skills is often more expensive than relying on in-house resources. customers cut the staff learning curve and can be up and running in less time than a traditional on-premise deployment requires. Choosing the Best CRM for Your Organization foundation of your business and the business. multiple virtual machines (VM) and application spaces (AS) that are independent Vendors also may need additional of physical devices. The negotiate service agreements delivered through a multi-tenant customer preserves all the carefully to be sure they have a architecture. customers should Typically. a vendor The SaaS market is growing Advantages: This option has all provides the application as a rapidly. All rights reserved. Recommendations: For users the infrastructure. operational support for the However. conforming to you have specific integration and internal staff. In this approach. the Privately Managed one outlined above except that a owns the data. system software and databases integrate with legacy systems with are shared and a single application a high degree of control. all functionality of the application and clear picture of the required underlying server resources.

SaaS switching are important. There have been no implementations also can carry a is the right solution for you.3 billion deployed on-premise. because SaaS costs are usually departments. All rights reserved. In its early years. Pipeline analysis is now overlaid almost no up-front investment. Demand SaaS is the ideal option all sales activities and stages. the this market because basic CRM proprietary toolset. CRM has been a prime driver in programming language or a With Siebel CRM On Demand. the on.3 billion in 2006 and customer’s needs as software locally by individuals around the predicts it will grow to $19. From purchase to go- reputation for unpredictable agreements need to be negotiated live. Recommendations: If flexibility. and carefully to minimize surprises and implementation process took just security was always a question disruptions. service provider. particularly if proprietary coding is for customers with limited capital Managers no longer had to sort out involved. maintenance for IT staff. Data ownership three and a half months. SaaS enabled Heat and Control to applications also are more difficult Advantages: Multi-tenant On. While integration can be resources. In the SaaS world. customization is usually communication was required to get compound annual growth rate. be added or dropped as business SaaS customers also give up the engineering and manufacturing demands. There is oriented architecture. However. modern SaaS issues also have been an issue systems housed in world-class when data is hosted off site. handled with a high-level deals done. need to be deployed in different managing a large number of users. enhancements and planned what future production demands the SaaS model acquired a downtime. costs are usually borne as an disadvantages in this area. with a corresponding some control over upgrades. option for customers who want fast one of the world’s leading results at a relatively low start-up Disadvantages: Although service manufacturers of food processing cost. Web services and a service- specific CRM application. This minimizes SaaS is an increasingly popular User view: Heat and Control Inc. Choosing the Best CRM for Your Organization applications this way. Depending on where an operating expense and users can opportunity is in the sales cycle. on-premise solutions still quickly. borne as an operating expense. develop a standard terminology for to integrate with legacy systems. even noticing. Heat and Control’s performance and availability. might be the better bet. information was stored was worth $6. SaaS reported security breaches of hidden cost disadvantage. large installations might as opposed to many tens of practices approach to deployment be more expensive over time than thousands – or if different solutions because vendors learn from on-premise solutions. providers have come a long way and packaging equipment. Also. demand model has inherent with production planning. a 25 percent model. firm Gartner estimates the market be as easily molded to a Previously. Again. SaaS also offers a best. For example. For maximum each with different needs. short term. teams can get a clear picture of impact on costs. This may company quickly gained access to functions apply to many present training issues and could best practices for lead tracking and businesses and rapid deployment increase switching costs if the pipeline status. Research software delivered as a service to better handle on sales activities. variable work force the terms used by individual sales streamlined through the use of needs or reluctance to commit to a reps and organizations. which meant that a lot of by the end of 2011. 5 . it is impossible for Demand SaaS service to get a Copyright © 2007 Oracle Corporation and IT Business Edge. often without the customer and could affect profitability. While also makes sense if the user base SaaS systems operated by major per-user pricing is attractive in the is in the hundreds or thousands – vendors. mark. flexibility and long-term cost Upgrades and fixes are done the cost could be less predictable control. Service-level might be. However. data centers provide superior careful attention to contractual speed of deployment and ease of performance and "five-nines" obligations is required. is attractive to companies seeking customer later chooses a different Siebel’s Sales Process Coach immediate sales impact. toward delivering customization deployed the Siebel CRM On features. then SaaS availability.

consideration. a Private For an on-premise deployment. which Finally. same schedule as with a multi. SaaS without giving up control. where any kind of shared-space customization. support and much of the cost of servers and deployment would be considered maintenance all carry cost. It has all the benefits of extensive configuration before tenant hosted model except that SaaS without the perceived risks. godsend. But vendors those of a multi-tenant SaaS products as being easy to use and are beginning to innovate with deployment. Customers also can’t to customize. minimum-user guarantees of a delivers the most customized Historically. otherwise consider a SaaS this into your staffing costs. so programming. Here are some key several years. solution may require IT helpdesk Factors for IT support. An on-premise implementations can generally be than that of multi-tenant SaaS. Also. There is no standard Recommendations: For customization or legacy terminology for this model. In contrast. carefully when choosing a the cost of their CRM project over expert service and variable cost – deployment. some customers like to overhead of providing dedicated installation and custom have the peace of mind of knowing technology. negotiate service-level agreements customer. On-Demand service may cost these costs fall almost entirely on tenant environment. deployments generally cost more. factors to consider: solutions are usually paid out of operating expenses and those Copyright © 2007 Oracle Corporation and IT Business Edge. installation will require server considered very reliable and Vendors must cover the additional administration as well as software secure. contractors. 6 . rapid implementation. This is clearly the that there is an infrastructure the per-user charges and most costly option. deployment. all the advantages of SaaS – the business. but even a SaaS higher cost. been a full on-site deployment of a almost certainly be higher than SaaS vendors promote their packaged application. and possibly staff. but few IT versions of their SaaS products expect to have as much control organizations want to put that deliver the cost and availability over upgrades and customization programming in the hands of benefits of a hosted solution while as they would for an on-site business users. All rights reserved. it's a good idea to Advantages: A Private On- Demand model potentially opens to Consider negotiate these costs and the SaaS option to a class of Implementing and managing a responsibilities with a service customer that wouldn’t consider it CRM system invariably falls to the provider before making a otherwise. These license fees is allocated and too risky. training and helpdesk to bandwidth. functionality are provided on the a number of areas. Contract more than an on-premise the IT organization and its terms are similar. Be sure to ask the SaaS application is run on an However. and the associated commitment. Choosing the Best CRM for Your Organization Private On-Demand Disadvantages: The cost of this Staffing: All options include some Although multi-tenant SaaS option is understandably higher staff expense. this option is not a vendors about these options. Upgrades and new offer the customer more control in support also consume resources. Licensing fees. These include IT organization. so we’ll organizations that couldn't integration. If your SaaS adding a level of customer deployment. infrastructure dedicated to one replacement for Customer. installation requires extensive ownership. this option could be a SaaS implementations also require identical in every way to a multi. This includes servers Managed or Privately-Managed carefully and budget appropriately. Again. although at a deployment in the long run. customers in highly regulated or resource demands require careful Budget: Although on-premise security-conscious industries. but it also dedicated to their application. meaning that IT and This may be desirable for including best-of-breed end-users must collaborate companies that want to amortize functionality. and software and may also extend On-Premise deployments. Many A Private On-Demand service is solution. you'll need to factor call it Private On-Demand. their only option has Private On-Demand option will results. These customers can get must be matched to the needs of depreciated as a capital expense.

or business units that also. solution from a vendor that also provides ERP and database Best of both worlds Business structure: A crucial but engines might significantly reduce Choosing a CRM solution involves often-overlooked factor in CRM your costs. All rights reserved. In customers will find the perfect implementing a single solution and some industries. Integration projects CRM solution may thus be more carefully how much customization may require special testing and easily mapped to specific business your deployment will require. The with legacy systems. cost. Few enjoy the economies of scale of amounts of customer data. vertical industry still make a leap of faith by putting workgroup. look for vendors with downsides. The use of a applications and company-specific data in the hands of a third party. CRM users can opt for the on- Copyright © 2007 Oracle Corporation and IT Business Edge.” and it delivers the decision-making power down to compliance issues. staging sites should be negotiated call centers. backup and intermingle deployment models percent of the functionality they data protection. SaaS Maximum flexibility – IT extending packaged solutions. Consider. training on a schedule that the IT units needs. reluctant to give up control over a integration and database sharing. However. this Although most SaaS vendors offer their needs and may even will deliver 80 percent to 90 excellent security. 7 . demand and on-premise solutions Features: CRM solutions. this is easier to match for all their needs. industries. In these situations. Users mix solutions according to For many sales organizations. come with a basic set of features. implementations is the nature of the business itself. so the availability of are transaction intensive. whether Control: Some companies are with a high degree of back-end packaged or delivered online. users are delighted to log in and may choose the on-premise If you are using a service-oriented find new features available to option. Heavily is an intriguing new option solutions are more appealing in regulated industries such as health emerging that may satisfy most this environment. flexibility that business owners significant expertise in these A hybrid deployment uses both on- often desire. Consider upgrades. tools to extend this functionality or the needs of many customers to Workgroups or business units that whether they must learn a consider. while highly collaborative architecture. Match this against the features the organization needs to control. While many need a high level of customization systems for this kind of integration. On-premise accomplish than in others. Decentralized care and banking need to pay requirements. Highly External issues: CRM involves customizability. customers must within the same department or need. but there sharing it broadly. choosing an on-premise or SaaS premise solutions with few of the SaaS solutions offer the kind of solution. making tradeoffs in flexibility. number of users changes If you All vendors have different degrees then an on-premise or privately choose SaaS. If control is an important issue. Purchasing a CRM provides extra peace of mind. such as proprietary language. or A hybrid CRM deployment offers vendors provide and inquire about projects may need to be released the following benefits: the cost and complexity of in stages to production. period of years. Choosing the Best CRM for Your Organization costs may very widely as the custom programming is required. the readiness of your legacy carefully in advance. Whether best features of SaaS and on- business units. then integration is them. they have sense for their customers. convenience centralized organizations may the gathering and analysis of large and speed of deployment. precious asset like customer data. IT organizations aren't field representatives or occasional more straightforward than if always comfortable with this idea. as will integration control over downtime and and IT helpdesk expense. vendors usually are willing to organizations can deploy the CRM Consider whether developers can preview planned upgrades to approach that makes the most use off-the-shelf programming customers. It's called “hybrid organizations typically push particular attention to privacy and deployment. However. consistent data model and user features will require custom Many customers also will want interface minimizes user confusion programming. negotiate a price of expertise in back-end managed on-demand service schedule you can live with over a integration.

enterprise data to drive profitable broad range of capabilities to bear demand solutions truly customer interactions. result of an acquisition. diversified infrastructure? Each business function may organizations are most likely to · Does the vendor maintain a choose the deployment option that benefit from a hybrid approach world-class infrastructure to makes sense for its particular because their needs are so deliver its on-demand services? variable. Oracle's integrated? If either was the Siebel CRM products cover the to solve a specific customer need. to meet the demands of real- · Does the vendor have the time business? demand options without extensive expertise and resources to fully education or administrative support both models and to · Does the vendor help the expenses. needs before choosing this legacy computing Superior business alignment – approach. information-driven CRM customers can freely move applications leverage enterprise between on-premise and on. This puts more decision. and businesses should vendor already have a combination of the two. provides IT organizations with the to customer service. The carefully assess their long-term presence in the customer’s choice is up to the customer. provide world-class service no customer calculate return on matter what the deployment investment and total cost of Best-of-breed functionality – ownership to determine the scenario? Only a few vendors have the optimal deployment scenario? resources and market experience · Is the vendor truly neutral in its approach to this option. a key benefit of that approach interaction costs and increase that they would lose with customer value. users Considerations in hybrid · Can legacy integration be share a common database that deployment handled flexibly on both the on- can be located on site. premise versioning to be create new revenue opportunities. Oracle's support multiple deployment costs and configuration. · Do product features match the customer’s need in all cases? information from all areas within demand models. All rights reserved. In all cases. They can also locate customer synchronized? Typically. at the premise and on-demand sides? A hybrid deployment isn't right for Equally important. · Does the vendor enforce the making capability in the hands of organizations may find the hybrid highest standards of data the business units without model attractive as a way to protection and security. from IT control: A hybrid deployment probably aren’t. However. synchronization. Copyright © 2007 Oracle Corporation and IT Business Edge. keeping requiring IT to maintain and "bridge" into a full on-premise in line with government and synchronize separate database solution. marketing and e-commerce. reduce quicker access to new features. does the hosting provider’s location or a everyone. Each particular model and is merely Siebel CRM Solutions requires a different set of skills and offering the hybrid choice as an Oracle offers information-driven industry focus. Features are matched to user there are a few key questions to · Does the vendor offer 24/ 7 requirements and users can move ask: support and on-site field service easily between on-premise and on. they breadth of CRM functionality. multi-channel solution that has evolved to highest degree of control over interaction and analytics. or does to compete in both the on-premise it have a bias toward a About Oracle’s and SaaS businesses. incremental revenue. they can tune organizations to help achieve their configuration to match · Do you need on-demand an on. on- demand customers have Solutions help customers drive data where they wish. these areas? When investigating this option. The vendors who obligation or trial balloon? can successfully address both CRM applications that leverage markets are more likely to bring a · Are the on-premise and on. The ideal hybrid model involves a single sales. Large. regulatory agency mandates in functions and business rules. 8 . Because scenarios. even small needs. Choosing the Best CRM for Your Organization demand model. optimal business performance and budgetary and strategic needs.

Choosing the Best CRM for Your Organization Oracle Oracle (NASDAQ GS: ORCL) is the world’s largest enterprise software company. Subscribers access our practical content and useful decision-making tools through a rich Web site. Our editors monitor all these sources — plus many others — for critical IT information that they translate into actionable advice for high-level IT and business managers.000 abstracts summarizing content from 2. and the world’s second-largest independent software company. Visit our Web site at: www. targeted e-mail newsletters. Visit our Web site at: http://www. news service or analyst firm. providing organizations of all types and sizes with rapid time to business value. Copyright © 2007 Oracle Corporation and IT Business Edge. and varied RSS In 1999. helping technology companies connect with their customers through quality content and innovative communications strategies. All these outlets feature our business-focused blogs. IT Business Edge provides content different from that of a traditional IT publisher. As a technology intelligence agent. exclusive interviews with field experts and industry insiders. Oracle is the world’s leading supplier of software for information management. Oracle's Siebel CRM On Demand delivers the industry's most complete subscription-based solution for About the Author Paul Gillin has chronicled the information technology revolution since the dawn of the PC IT Business Edge IT Business Edge delivers the information. and service.itbusinessedge. Oracle technology can be found in nearly every industry around the world and in the offices of 98 of the Fortune 100 companies. He joined Computerworld as a staff writer in 1982 and served as senior software editor at PC Week and founding news editor at Digital Review before returning to Computerworld in 1987. 9 . where he engineered its transition into a leading source of original news and technical advice. All rights reserved. marketing. He now operates his own firm. he became the sixth employee at a startup soon renamed TechTarget. plus our database of more than 20.500-plus sources. analysis and context business technology decision makers need to maximize returns on IT investments and align IT initiatives with business objectives.