Siebel CEO Preaches Seamless E-commerce Service

CHICAGO (02/17/2000) - To succeed in e-commerce, businesses have to serve customers through multiple sales and service channels seamlessly, said Thomas Siebel, the chairman and CEO of Siebel Systems, speaking at a CRM (customer service relationship management) exposition here yesterday.

Siebel said the rise of the Web has expanded options for customers dramatically.

To learn about, buy, and get service on products, customers will fumble blindly through a variety of sales and distribution channels including dealer showrooms, call centers, WebTV, the Internet, and wireless devices, he said.

"As they randomly navigate channels, they are going to want to pick up the thread of conversation where they left off," Siebel said at DCI's CRM Conference and Exposition.

So, he suggested, corporations must build their business and systems to offer a single face to the customer no matter which, or how many, channels they choose.

The issues surrounding this unified, multichannel approach is not strictly a technical one. "It's a strategic business management problem," he said.

A few years ago, Siebel noted, company leaders thought, "Life was good. We had a distribution channel and we knew how to manage it."

The channel the company chose "defined the possible universe of communications between the customers" and the business, he said.

The reality for customers, according to Siebel, is that they had to follow lockstep in the distribution rules set by the company. For example, he said, "we could do business with IBM anyway we want to as long as we talked to the field [representative]."

With the popularity of the Internet as a channel of commerce, "everything has turned upside down," he said. "There's general panic out there" among corporations as they scramble to figure out how to leverage the Internet, he said.

In response, he said managers often erroneously believe, "I have to get from my old distribution channel to [the Internet] and I have to get there quickly."

It's not that simple, he warned. Companies have to be prepared to do business with customers, "any way our customers want," he said.

Rather than measuring success on profit margins or market share, corporations should measure their success in terms of customer satisfaction, Siebel suggested.

The changes in the customers service market and the rise of the Internet have encouraged the evolution of the CRM market. In 1993, roughly 400 companies vied for a piece of a $100 million market, according to Siebel. Now a much smaller number of vendors compete for $4 billion in business.

In the early 1990s, the market emerged with relatively simple applications such as solutions that helped the sales to staff track sales opportunities and customer service centers to track trouble reports.

Then in the mid-1990s, industry consolidations resulted in suites of products that handle customer concerns from sales to service. Those CRM solutions involved hundreds of screens and databases, utilized hundreds of person years to develop, and involved gigabytes of data.

The issue becomes scalability, performance, synchronization, and global support. Customers, he said, basically asked, "Does it perform better?"

By the end of the decade, as companies realized those CRM systems could yield valuable business intelligence, CRM evolved as marketing automation and e-business tools. E-business solutions involve thousands of screens and databases, take up to a thousand person years to develop and involve terabytes of data, he said.

According to Siebel, the key question for e-business solution buyers is, "Will it support my ability to go to market through a multiplicity of concurrent business channels and what will the impact be on customer satisfaction?"

CRM products used to be sold to department heads, such as vice presidents of sales and service. Now top executives consider the purchase of CRM e-business products.

"The CIO's job used to be to keep people like [them] away from people like me," he joked. Now, "[it] is a CEO-level discussion -- a chairman level discussion."

Siebel's company is casting itself as the "world's leading provider or multi-channel, e-business applications," he said. At the show, it showcased its Siebel eChannel, a set of tools for managing and measuring partner performances.

Siebel attributed his company's success -- as a global company with more than 3,200 employees and run rate of $1 billion in revenue -- to its focus on customer support and good luck.

"We happened to be at the right place, at the right time and managed to not foul up the opportunity," he said.

Siebel Systems Inc., in San Mateo, Calif., is at http://www.siebel.com.

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