Survey slams Siebel; company fires back

Users are having considerable difficulty getting a return on the multimillion-dollar investments they have made in customer relationship management (CRM) software from Siebel Systems Inc., according to a recent report.

Customers also raised other issues about the software, citing the difficulty of training employees to use the software and problems with implementations going over budget and over time, according to the survey, just issued by Wellesley, Mass.-based Nucleus Research Inc. The survey was conducted in June through interviews with 23 referenced customers from Siebel's own Web site.

Most damning, perhaps, is the finding that 61 percent of the customers were convinced that they had yet to achieve return on investment after two years with the Siebel applications, which cost an average of about US$6.6 million over a three-year period.

Officials at San Mateo, Calif.-based Siebel dismissed the results.

"We don't believe any company would take a report that is based on a statistically insignificant survey of 23 companies seriously," said a Siebel spokeswoman. She pointed out that the software company has 3,500 customers, and has "maintained steadfast focus on customer satisfaction and increased our majority market share. Those types of numbers count -- not a random survey that lacks depth, breadth and credibility."

However, Nucleus analyst Rebecca Wettemann noted that the companies interviewed were handpicked by Siebel itself. "It is pretty astonishing that these are Siebel reference customers and they are not getting a return on investment. ... If you have three best friends and two say you're a jerk, what does that tell you?" she asked.

Among some of the survey's other ROI-related findings were: 65 percent of Siebel's customers had customization and performance problems; 78 percent said the product suffered from a "lack of user-friendliness," making adoption more difficult; 57 percent said it took longer than planned to deploy; and 55 percent said it cost more than was budgeted to complete the rollout.

Other analysts didn't find the report exactly shocking.

"It should be no surprise that the world's largest CRM vendor has had its share of CRM failures," said Erin Kinikin, an analyst at Cambridge, Mass.-based Giga Information Group Inc. "The Siebel sales force automation product is, in fact, one of the hardest applications to implement ever."

However, that problem isn't limited to Siebel, she said. The CRM market itself is still in its infancy. Better analytical tools, integration and more flexible embedded business processes in the software will help companies improve success rates next year and beyond, she said.

One user chimed in to say he was happy with Siebel. "In our call center implementation we are on track to hit the projected return on investment and have reaped many of the anticipated benefits," said Tim Arnold, IT manager at Bose Corp. in Framingham, Mass.

Additionally, Siebel has been very responsive to the sound system maker's requests for technical assistance. "We are satisfied with the Siebel product and our relationship with them," said Arnold.

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