Siebel Analysis

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1. Why did CRM applications develop
   initially as separate and often stand
   alone un-integrated applications and
   why did that change?
2. What made Siebel Systems
   successful in the sales force
   automation and the customer
   relationship management software
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
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?
‡ Adapt to new e-business environment
‡ Number 1 in fastest growth
‡ Number 1 in CRM: $2.3 billion of 16.8
‡ Focus on future strategic challenges
‡ Companies are shifting focus in IT from
  internal processes to external ones
‡ The internet is changing the
  relationship between customers and
‡ success of company depends on it
‡ ³100% customer satisfaction´ slogan for
‡ Technology affected customer
  ± Banks with ATM machines
  ± Telephone and telemarketing
  ± Databases
  ± Internet provides more info and choices
‡ Open channel communication in
  internet destroyed ³structured channels´
‡ Companies have to be prepared to do
  business anyway customer wants
‡ CRM technology emerged from
  enterprise software to figure
           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
‡ Web gave customer power: once click
  away is another company
‡ Web-based computing is different than
  client-based computing
‡ Need to maintain ³look and feel´ of
  product: lower cost for corporations
            Tom Siebel
‡ Worked for Oracle
‡ OASIS - Oracle Automated Sales and
  Information System was ³hot´
‡ Oracle did not want to market it
‡ Siebel left and made money in new
  software startups
‡ Started Siebel with Patricia House
‡ Company financed to get product out
‡ Team interviewed companies to find out
‡ Optimized systems for new servers
‡ Strategic relationship with Andersen
‡ Major partners included
  ± Microsoft
  ± Cambridge Tech Partners
  ± Deloitte and Price Waterhouse
  ± More than 250 partners
‡ 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
‡ 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
               Product line
1.   Enterprise Products
2.   E-business Products
3.   Mid-market Products
4.   Tools
5.   Products for Individuals
6.   Services
1. Established top-tier CRM firms:
   Vantive, Clarify and Baan
2. Smaller, second-tier CRM firms
3. Developers of ³e-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
  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
‡ 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
± 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
‡ Psychological exams to pick right
             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
             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.
‡ 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