CRM evolves upward

Rather than deploying generic CRM applications, many enterprises are opting to purchase vertically oriented solutions with boilerplate, industry-specific functions, thereby minimizing customization. CRM vendors such as Siebel Systems, PeopleSoft, and E.piphany are pursuing opportunities to meet the growing demand.

E.piphany may soon add solutions for specific vertical industries to its lineup of generic, horizontal products. Siebel already has established a lengthy roster of vertical applications, with more than 20 offerings in industries such as apparel, health care, and CPG (consumer packaged goods).

"The vertical strategy actually started about five or six years ago when we were shipping a horizontal-based Siebel application," said Ed Abbo, senior vice president of industry applications at Siebel in San Mateo, Calif.

Customers in CPG began looking for more, according to Abbo. "That's where we started the idea of working jointly with customers to configure our applications to better meet their needs and deliver something to them that's a closer fit and therefore has a lower cost of ownership to reduce the deployment cycle and reduce their investment going forth," he said.

"Today, roughly 75 percent of our revenue is derived from our vertical product," Abbo added.

Each vertical application offers roughly 85 percent to 90 percent of the functionality customers need, with the remaining 10 percent to 15 percent requiring customization, Abbo said. Siebel's utilities package, for example, features processes tuned for tasks such as handling residential telephone accounts, he said.

Atlanta-based Cbeyond Communications, a provider of telephony and broadband Internet services, uses Siebel's eCommunications package for a variety of functions, including order entry and management, customer care, and incentive compensation, said Joe Osterling, vice president of IT at Cbeyond. The telephony and broadband provider has also deployed a customer and channel partner self-service portal.

"What the communications vertical provides is that it takes basically generic functionality, like order entry or customer care, and it already has a communications slant to it before we even get it," Osterling said. "We were able to implement our processes much more quickly and do less customization because our starting point was closer to the end goal."

Pleasanton, Calif.-based PeopleSoft is planning new releases of its communications and financial services packages this month and also is pondering products for industries such as CPG, utilities, and government.

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