Case Study: IBM and Siebel Systems
Company:
Everyone knows IBM. This multinational technology company has been leading industries for years. With almost 320,000 employees and revenue of more than $85 billion, IBM is, by any measure, an incredibly diverse and complex organization. The company operates in 164 countries around the world, hosts Web sites in 31 languages, and derives about 60 percent of its revenue from customers outside the US. Selling a broad range of computers, mainframes, servers, software, and professional services, IBM interfaces with millions of customers.
For a business of this magnitude, small inefficiencies and little improvements can add up. No matter a company’s size, it must deal with each customer one at a time to ensure success. Where a smaller company might be able to survive additional operating time and non-standard customer interactions, the scale of IBM’s business means that every small problem is magnified.
Problem:
Even an advanced company like IBM can always do something to become more customer-centric. Convinced of the power of CRM technology, IBM had implemented more than 900 unique CRM applications by the late 1990s. These solutions were typically focused on specific divisions or objectives, but the result was a splintering effect, as there was never one view of a customer, but many different views.
With the size of IBM and the quantity of customers, not having a unified view of the customer can give rise to a dangerous situation. Crystal Holmes, Vice President, Small and Medium Business, called having different views of the customer problematic, wanting to be “prepared to call on that customer without having to chase down five or ten people first.” IBM needed a coordinated approach by which to serve customers.
Where customers used to feel like they were dealing with a “different IBM” each time they interacted with someone in the organization, IBM needed to present a unified, integrated face. Every customer touchpoint needed the same understanding of the customer’s history, profile, and needs, whether it was sales, marketing, customer service, or technical support. IBM wanted to push the envelope on adapting to customer needs, but needed to adapt itself first; if all departments could access a unified customer profile, both IBM and the customer could do more with less time and work.
While the overall CRM effort is slated to take over two years to fully implement and be used by over 80,000 employees, IBM chose the ibm.com customer centers as the first phase. Affecting over 4,000 employees around the world, the first phase would tackle the immediate problems of customer service in call centers and online.
Vendor:
IBM chose the Siebel Call Center application from Siebel Systems for the first phase of the CRM program. The evaluation and review process started in early 1999, involving a list with over 1,400 key business capabilities and 400 technical criteria. IBM was looking for a leader in the field, one with proven success and with strength and capabilities that could be relied upon. Siebel fit the bill, as a major CRM player, with over 7,000 employees and revenue above $2 billion.
IBM wanted an application that required little customization, as every individual change would add time, cost, and complexity to the final solution. At the same time, it needed flexibility and serious functionality to handle the tasks. Siebel’s solution was comprehensive and robust enough to handle the job. Mike Kalinowski, ibm.com’s vice president, CRM, says, “We were looking for something that would be easily adaptable to our business without a lot of modification. Siebel eBusiness Applications give us the flexibility and the rich functionality we need right out of the box.”
Just as important as the other items was Siebel’s ability and willingness to work hard for the project. At one point, almost a quarter of the Siebel workforce had assisted with the IBM implementation. That kind of commitment helped IBM decide that Siebel was the best vendor for the program.
Solution:
The first phase of IBM’s CRM program was installing Siebel Call Center in 26 ibm.com sales and service centers worldwide. Roughly 4,000 employees were to be involved in the change, and these are important customer touchpoints. The ibm.com customer centers support inbound and outbound telesales and are often the first gathering point for customer information.
The implementation was put on a fast-paced schedule. As Kalinowski reports, “We thought we’d have about six to eight months to deploy the Siebel Call Center in Atlanta. Instead, we were given about 68 days.” By May 2000, the first installation was complete. The others slated to form part of the first phase followed in short order. One key to ensuring that change was complete and consistent was that legacy systems were taken down and completely replaced with the Siebel software. That meant that employees had no choice but to move ahead and work with the new system.
The size of the project was massive. At one point in the changeover, IBM had migrated over 72 million records from legacy databases to the Siebel system. More than 100 IBM employees participated directly on the project team, and IBM Global Services’ own CRM Alliance Services group acted as the lead implementation partner. Due to the manpower and brainpower IBM focused on the implementation, installation and adoption went fairly smoothly.
One complicated issue in implementation was ensuring that IBM’s critical existing legacy systems could interface and communicate with the new Siebel software. IBM technicians and the project team worked to adopt an open, standards-based architecture and used various IBM software applications to smooth out any bumps in the process.
IBM Learning Services helped immensely by leading development of end-user education tools, with input from Siebel. Combining in-classroom training and Web-based learning, IBM was able to educate and communicate with the thousands of employees who would have to make the quick change. This heavy focus on education eased the implementation process considerably.
Results:
Since the whole CRM program is still in its first phase, the whole picture is not yet clear as to results. Still, IBM is very happy with its program and is actively working towards the completion of the project. Initial benefits have been quite substantial. In the customer service centers, operators have more customer and product information available. They are able to see more and produce better reports while entering less data and doing less work. The best part of the system is the unified customer view. With everyone able to track and see on one unique profile, duplicated efforts are greatly diminished. Customer service has improved; service representatives are better able to assist, since they have a deeper understanding of the customer’s history, needs, and interactions.
The sales people in the organization are also seeing great benefits in the early implementation stages. Shelley Moffit, ibm.com’s Healthcare Solutions Manager said, “On Monday morning, we had an education session for our representatives on strategy. By the end of the week, we had generated millions of dollars worth of new opportunities. We couldn’t have done that without Siebel eBusiness Applications.” The extensive customer profile data available and the more complete picture of customer needs has allowed IBM’s sales teams to create better outbound marketing campaigns. “You gain a lot of credibility with your customers, and that has a lot to do with sales.”
Lessons:
IBM’s experience, even in the first stages, provides several lessons. One key when working towards a CRM solution is the unified customer profile. You cannot have customer data separated and broken up into different views; this leads to incomplete customer knowledge and duplication of efforts. The CRM application allows a single, consistent view of a customer that is quite powerful in enabling different employees in different departments to move the business ahead.
Minimizing customization can shorten the implementation cycle. The closer your business hews to the out-of-the-box solution, the faster you can implement, train, and rollout. It also works to diminish cost and complexity going forward as you update and upgrade the system.
Many companies will not have the sheer mass of resources of an IBM when they undertake a CRM implementation, but the philosophy is powerful. IBM threw resources from many different specialties into the project and made everything work together. Making a change to a completely new system will bring up many difficulties, but the better the communication and education, the easier the process will be.
It is also important to note that moving employees from one CRM system to another is a very different proposition from moving them from a nonexistent, manual, or paper system. When moving from a legacy CRM system, a company can, like IBM, simply shut one down and start fresh with the new system. With an old paper system, employees may be more likely to fall back on old habits than quickly move ahead with the new system.