Siebel User Week 2003

Siebel User Week has always meant different things to different people. For some it is a good place to hear the latest industry gossip, for others a chance to reconnect with old colleagues. For still others it is an opportunity to meet with new prospects and develop new business relationships. A few even come just for the entertainment. This year's event in San Diego promises to mean more things to more people, because it is built around the customer.

Beginning with a reception that allows customers to meet other customers, followed by keynote speeches given by customers, ending with an open evening to give customers a chance to network with one another, Siebel User Week 2003 promises to be more about customers than any past User Week.

"We stepped back and took a look at the content and all the different roles of the people attending," said Jeff Pulver, Vice President, Worldwide Marketing at Siebel Systems. "This year, we have really tried to drive content by roles. We looked at the kinds of sessions people attended in the past and at what sort of content are they interested in seeing."

Resulting from this analysis are specific tracks for business executives, IT executives, sales management, call center and field service managers, and project teams. The event also maintains a strong industry focus, with special sessions for Automotive, Communications and Media, Consumer, Energy, Chemical, Oil & Gas, Financial Services, High Technology, Hospitality, Travel, Transportation, Industrial Manufacturing, Life Sciences, Retail, and Public Sector.

There are some special deep dive tracks for general topics such as analytics, performance management, integration, and reducing total cost of ownership. One interesting track promises to give insight into how Siebel Systems' own IT organization runs Siebel applications. Over the past seven years, Siebel Systems has developed one of the most extensive implementations of Siebel applications and has learned best practices that the company intends to share with its customers.

Another very interesting track promises to be the Project Team Track, at which attendees will be able to drill down and dive deeper, focusing on real world questions such as, "Why do some CRM projects fail while others succeed?" The Project Team Track will examine the strategies and tactics needed to better manage an upgrade process, teaching best practices for implementation, adoption, and integration. The conference track will also provide exclusive hands-on technical training and comprehensive project team workshops. Special content for dedicated support contacts has also been developed.

"One of the things we have encouraged companies to do is to send the whole project team," said Pulver. "Not only are there a lot of great sessions for the team itself, it is a good opportunity for the team to step away from the project and pull together as a group."

To facilitate that process, Siebel Systems is planning a number of social activities, beginning with a welcome reception organized by vertical so attendees can meet people from their own industry and network with each other.

On Tuesday night Huey Lewis and the News will be this year's featured entertainment. Finally, Wednesday is an open night during which customers can explore San Diego together or go to one of the events partners are planning.

"Our hope is the group will go out with a partner or with each other," said Pulver.

Dirty Little Secrets of Data Quality: An Interview with Frank Dravis of Firstlogic

In his 16 years at Firstlogic, Frank Dravis has learned a lot about data and the problems poor data causes organizations. As the Vice President of Information Quality, Frank wears a number of hats. He acts as the point person for data quality strategies, engages in product evangelism, leads market research projects and pursues strategic investment opportunities. Frank also serves as Firstlogic's liaison to the Massachusetts Institute of Technology Total Data Quality Management Program. We sat down with Frank to learn a few of the "dirty little secrets" of data quality.

SO: So what is the first dirty secret of data quality?

FD: A primary problem with data is that it ages. It degrades over time. The dirty secret is that most organizations discount that fact and fix their addresses just once, often in response to a crisis. They don't worry that 17% of the U.S. population moves on an annual basis, or that the rate is even higher for changes in phone numbers. We partner with an organization called Qsent to help obtain phone information; they tell us there are between 500,000 to 1,000,000 directory changes to phone numbers a day.

SO: The statistics you quoted were for the consumer market. Does business data change at the same rate that personal data changes or is it more stable?

FD: The average student graduating will have, I believe, 10 different jobs in their lifetime and will likely change careers - not just jobs - as many as 5 to 7 times. Each one of those job or career changes impacts data that needs to be reflected - cascaded - through all the data systems of organizations who have been marketing, tracking, or just selling to that person over the years. Consider what a single merger and acquisition will do to a set of records that encompass all the employees in the merged company. Now, remember, there are records of data on those employees across maybe 50, 100, 200 different other companies who have been selling to those employees. So, one merger potentially disrupts hundreds of instances (records) of just one individual. Multiply that by all of the other individuals at the merged company. So you can see that data aging, in this case caused by merger events, is a significant challenge for businesses.

SO: Does data quality directly effect adoption of Siebel applications? Is there a direct correlation between better data quality and higher adoption or conversely lower data quality and lower adoption?

FD: There is a direct correlation. I know Gartner, Inc. did a report last year that had listed seven key reasons CRM implementations fail and the first thing that they listed was "data issues." Gartner recommended that organizations spend 50% of their time dealing with data issues and I wholeheartedly agree with them. Think of what you can do to the system if you populate it with duplicate customer records or duplicate account records. Bad data doesn't let you identify which records are duplicates or which records to merge when you go though account consolidations. You can really wreck the user's confidence in that application. People don't want to use a system they can't trust.

SO: Are there any organizations that do a great job of maintaining data quality front to back?

FD: I know of some departments rather than whole organizations that do an excellent job. There are huge organizations, like Microsoft or Lockheed Martin, that have earned solid reputations for maintaining quality data, but the secret is that one small 25-person department within the much larger organization is usually responsible. I can't think of any organization that has obtained the highest level of data quality throughout the institution.

SO: Does better data quality result in a positive return on investment?

FD: To continue to use the CRM system example, the answer is clearly yes, because you will have more people using the system if the quality of data is good. They will use it more often, and will base their decisions on the system because the view of the customers is more accurate. They will make fewer bad decisions, and the end result is the business operations will be more effective. Data quality impacts ROI of any information-based operation whether it be CRM, ERP, data warehousing, or any corporate IT initiatives.

I have been working with a bank that originates mortgages. They told us, "Our home loan business has been very good, but our capture and approval processes were slow, so we were forced to cut corners on validating the data because of high volume. Where that started to hurt us was when we wanted to resell those home loans to the secondary markets like Freddie Mac." They couldn't do it. The secondary markets would review the data and not acquire the loan if there were discrepancies or conflicts, like a first payment date being prior to the origination date. These things happen. They were stuck holding loans a lot longer than they expected, tying up their capital. This forced them to go back through and re-contact accounts and clean up the data conflicts. So cutting corners on data quality dramatically increased their operational costs. That is an example of how improved data quality can improve the ROI of a whole mortgage origination process.

SO: Why do people forget about data? What is the secret there?

FD: People tend to focus on the implementation of the new system, like the new CRM system they are putting in place, and forget that if the data is no good, the system will not work effectively. They have to keep in mind that successful operations are not about how the screens look, but how the system delivers data to people. It's all about the data and its usefulness in fueling business operations.

Siebel CRM OnDemand Released

In a move that promises to mark a turning point in the enterprise software market, Siebel Systems (Nasdaq: SEBL) and IBM (NYSE: IBM) have launched a hosted customer relationship management service called Siebel CRM OnDemand. The two companies will jointly develop, sell, and market the new offering.

Joint Development
Siebel CRM OnDemand is the first fruit of a three-year, 200-person joint development effort begun in January 2003. Expect other joint offerings to be announced soon.

Joint Sales
To push Siebel CRM OnDemand, the two partners have created a multi-channel sales force thousands of people strong. The product will be sold by the IBM's sales team dedicated to the small and medium-sized businesses, IBM business partners, Siebel's global field sales organization, and a dedicated telesales group. The dedicated telesales team will use Siebel CRM OnDemand for its own lead and account management.

Considerable flexibility in pricing is also a feature of the new product. Individuals and companies can sign up for Siebel CRM OnDemand for as little as $70 per user per month or buy multiple user, multiple year subscriptions.

Marketing
To market the new offering, Siebel and IBM are launching a multimillion-dollar marketing campaign.

"This is part of a pretty significant go-to-market partnership," said David Schmaier. "The two parties have agreed to spend tens of millions of dollars to go after the market."

The Industry Impact
For the companies that already sell enterprise services online, such as Salesforce.com, NetSuite (formerly NetLedger), Upshot, and Salesnet, the news is a mixed blessing. On the one hand it represents a powerful endorsement of their business model, which is always appealing to a startup. On the other hand, the Siebel-IBM partnership could rapidly assume market leadership, setting standards for a new industry that will be difficult for others to surpass or even match.

Not Your Father's Hosted Solution
For example, Siebel CRM OnDemand will offer an upgrade path to an on-premise Siebel application. Since maintaining an application yourself is often cheaper in the long run, this is a more appealing option than it first might appear. Thanks to IBM's involvement, Siebel CRM OnDemand is also more scalable than most of its competition. Recently IBM announced a 30,000 concurrent user benchmark for Siebel running on an IBM DB2 database. This is particularly important to large organizations or organizations with extensive dealer networks. Since Siebel CRM OnDemand is built to according to UAN and IBM WebSphere Business Integration Server standards, it promises to tie more easily into existing applications. >From the perspective of functionality, Siebel CRM OnDemand offers built-in analytics, providing management with a more information to manage their business.

With less development resources to dedicate, the current generation of competition may have its development plans dictated to them by the market. This is not to say the current competitors will not be successful selling to their traditional market of small and mid-sized companies - there will always be room for an alternative in this market. But competitors may find over time, as Siebel is well poised to take the larger businesses opportunities away, their go-to-market strategy will increasingly focus on how to be second, third, or fourth in a rapidly consolidating market.

What Does it Mean for the Customer?
This is not the first time Siebel Systems has offered a hosted solution. In 2001 it shut down its first attempt, Sales.com, because of lack of customer demand. What is different this time?

"Understanding the big picture of CRM," said IBM's Adam Klaber. "Customers ask, how do I get into CRM more simply, more easily, and in a more straightforward way?"

The difference now is that the market has become more attuned to buying computing services as a utility like electricity. This is in part because many of them have been forced to do more with less. By not requiring an upfront financial commitment, installation effort, hardware, software, or a dedicated IT staff, while still providing a clear growth path, Siebel Systems and IBM have made buying CRM much easier for the customer by assuming most of the risk.

"Ultimately the customer wins with today's announcement," said David Schmaier, Executive Vice President of Siebel Systems.

Siebel Systems Reports Preliminary Results

In anticipation of its annual user meeting, Siebel Systems (Nasdaq: SEBL) has announced preliminary results for the third quarter. The company expects total revenues to be in the range of $320 million to $322 million and license revenues to be in the range of $109 million to $110 million. This is in alignment with the guidance management gave analysts last quarter.

The company also expects to generate $30 million in cash from operations during the quarter. This gain will be offset by a reduction of $308 million from the redemption of convertible debt. The company expects its earnings for the quarter, excluding restructuring charges, to be around $0.03 per share.