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Siebel Exec Proposes 'Customer-driven Enterprise'

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Posted May 25, 2004 By Clint Boulton     Feedback

A Siebel EVP touts the firm's hybrid theory of large enterprise application centers and hosted, on-demand CRM applications to fulfill customers' needs.

NEW YORK -- Hosted delivery and business intelligence software will create surging demand for customer relationship management (CRM) applications, a Siebel executive said at during a keynote at DCI's Customer Relationship Management Conference and Technology Showcase.

Executive Vice President David Schmaier filled in for last-minute scratch Thomas Siebel, the former CEO and company founder who stepped down earlier this month. The DCI CRM Conference is part of CeBIT America trade show.

CRM addresses all aspects of interaction a company has with its customer, whether it be sales or service related. The Internet age has both changed the game and raised the stakes for Siebel and rivals Oracle , PeopleSoft and (in the hosted CRM space), because it has also changed consumer buying behavior.

Noting that Siebel and the industry is just "beginning chapter 2 of a 20-chapter book on CRM," Schmaier said he sees four key steps that will propel CRM from its current position as a $23 billion market, to a rosier one where service-oriented architectures (SOAs) and Web services help connect "people, processes and technology in a customer-driven market."

Those steps include: hosted, or on-demand CRM, in which applications are fed to small- and medium-sized businesses via the Internet as they request them; an emphasis on improving total-cost-of-ownership; proper application integration; and an explosion in business intelligence software that provides executives and IT staff a window into their business processes.

Schmaier said that one of the ways San Mateo, Calif., company is preparing for a jump in demand is with a hybrid of traditional enterprise CRM, in which large, monolithic systems of servers and software are put to work in major locations to handle multiple seats, and hosted or CRM.

"When we say 'CRM for everyone,' we realize it's not one-size-fits-all," Schmaier said. "We're trying to offer the best of both worlds by using a hybrid combination of the world's most powerful engines for CRM on the premises with more cost-effective hosted CRM to far-flung enterprises."

Moreover, with Web services and SOAs fostering greater application-to-application communication, Schmaier said the barriers to enterprise-wide application integration are slowly but surely being dashed.

Schmaier said CRM represents a multi-billion-dollar growth opportunity because analysts have estimated that as little as 3 percent to 5 percent of the potential worldwide market for packaged CRM applications has been tapped. This is mostly because companies have a traditionally developed their own. "Eighty-seven percent of custom CRM applications are homegrown," Schmaier said, citing figures from research firm Gartner.

But as companies change, businesses evolve, and customers demand new technologies, custom-built CRM products, such as reservation software built by airlines are no longer the answer, Schmaier said.

Ultimately, the executive said companies need to stop focusing most of their energy on software and address people -- the customers and process, or the way they go about doing their business.

"The company should act as one organization to every single customer, knowing who I am, what I want, whether I'm happy, or not happy," Schmaier said.

Siebel benefits from deep partnerships with companies such as IBM, through which it takes care of 60,000 customers with a combination of enterprise-grade and hosted CRM applications.

As if the battle for control between Oracle and PeopleSoft isn't casting enough fear, doubt and uncertainty in the applications space, Siebel experienced its own major change earlier this month when founder Thomas Siebel stepped aside as CEO, giving the reins to Michael J. Lawrie, former IBM senior executive and vice president.

Siebel remains chairman of the board and a full-time employee of the company, representing the company with business and government leaders and handling customer and partner relationships.

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