SIEBEL SYSTEMS

Analysis
 Questions
1. Why did CRM applications develop
initially as separate and often stand
alone un-integrated applications and
why did that change?
 Questions
2. What made Siebel Systems
successful in the sales force
automation and the customer
relationship management software
markets?
 Questions
3. Who are Siebel Systems actual and
potential competitors in the rapidly
evolving CRM space. How would you
assess their potential impact and
Siebel Systems competitive
responses?
 Questions
4. What is the impact of the internet on
customer relationship management
systems and software suppliers. Is
the evolving internet environment a
threat, an opportunity or both. Please
analyze. How should Siebel Systems'
strategy change or adapt?
 Facts
• Adapt to new e-business environment
• Number 1 in fastest growth
• Number 1 in CRM: $2.3 billion of 16.8
billion
• Focus on future strategic challenges
 Facts
• Companies are shifting focus in IT from
internal processes to external ones
• The internet is changing the
relationship between customers and
companies
• success of company depends on it
• “100% customer satisfaction” slogan for
Siebel
 Facts
• Technology affected customer
relationships
– Banks with ATM machines
– Telephone and telemarketing
– Databases
– Internet provides more info and choices
 Facts
• Open channel communication in
internet destroyed “structured channels”
• Companies have to be prepared to do
business anyway customer wants
• CRM technology emerged from
enterprise software to figure
relationships
 CRM software
• Sales Force Automation
• Customer Service and Support
• Not integrated: sales separate from
customer service
• Information about all relevant customer
information in one screen
• Internet interfaces are easy
• Ease of Updating computers
 CRM
• Web gave customer power: once click
away is another company
• Web-based computing is different than
client-based computing
• Need to maintain “look and feel” of
product: lower cost for corporations
 Tom Siebel
• Worked for Oracle
• OASIS - Oracle Automated Sales and
Information System was “hot”
• Oracle did not want to market it
• Siebel left and made money in new
software startups
• Started Siebel with Patricia House
 Start-up
• Company financed to get product out
fast
• Team interviewed companies to find out
needs
• Optimized systems for new servers
• Strategic relationship with Andersen
Consulting
 Partners
• Major partners included
– Microsoft
– Cambridge Tech Partners
– Deloitte and Price Waterhouse
– More than 250 partners
 Growth
• Leader in Sales Force Automation
market within 21/2 years
• Strategy of tradeshows and high
visibility presentations
• Respect for the customer
• Develop the human capital necessary
for growth
 Markets
• Consolidation of SFA and Customer
support functions
• Siebel acquires Scopus making it the
largest company in CRM but only 5% of
potential customers used CRM and
many more to go….
• Product evolution was fast
 Marketing Strategy
• Customer satisfaction
• Customer references (customer saying
good things about you..)
• Respect for customer: no shorts, food
on desk, etc.
• Different than other Silicon Valley
companies
 Product line
1. Enterprise Products
2. E-business Products
3. Mid-market Products
4. Tools
5. Products for Individuals
6. Services
 Competition
1. Established top-tier CRM firms:
Vantive, Clarify and Baan
2. Smaller, second-tier CRM firms
3. Developers of “e-business
applications,” including numerous
start-ups; and
4. Major ERP firms: SAP and Oracle
 Issues Faced - Challenges
• Make the customer successful at a high
level of professionalism
• Keep pace with CRM market
• Oracle and SAP have huge resources
to compete
• E-business developers were
competitors
 Lessons Learned/e-commerce
• Internet has changed the way
businesses work:
– Open channels of communications
– Customer relationship management
– Your competition includes the traditional
ones as well as others: Siebel’s
competitors are applications developers
 Lessons Learned/e-commerce
• Market moves fast and the successful
companies are the ones that anticipate
change
• Importance of right personnel working
for company
 Lessons Learned/business
• Strategic Alliances: with companies that
are in different field that can refer
customers to you (and you to them!)
• Analyze customer needs before you
build product
• Change product as market and
customer needs change
 Lessons Learned/business
• Know your competitors: analyze their
strengths and weaknesses
• Siebel everywhere: on every platform
with 100% satisfaction
• Finance company by revenue and not
by borrowing
 Problem facing Siebel
– How can Siebel stay in the high growth
mode
– Need to get more employees accustomed
to Siebel’s culture and company ideals: no
jeans or food on desk, etc
– How can one maintain that?
Options to solve current problem
• Anticipate growth and plan for hiring
before you need it: give new employees
time to absorb company culture
• Build relationships to universities or
headhunters
• Psychological exams to pick right
people
 Pros and Cons
• Anticipate growth
– Pros: have time to execute hiring with no
more than 10% of total employees as new
to get the new ones accustomed to
company culture
– Cons: might need more and cost (real and
reputation) could be high if growth does not
materialize
 Pros and Cons
• Build relationships to universities and
head hunters
– Pros: get a large number of fresh talent
– Cons:
• could be a long term proposition and not
available for short term,
• requires nurturing, ..
 Pros and Cons
• Psychological exams
– Pros: easy
– Cons:
• how good of a profile does it create?
• mistakes if people answer questions
untruthfully, etc.
 Recommendations
• Short term:
– Hire 10% new employees using
psychological exams to get by with new
growth, speed acculturation process thru
use of mentors, etc
– Start relationships to get new talent
• Long term:
– Build relationships to universities