Hewlett-Packard expects to save millions of dollars in IT costs, standardize business processes and create a single view of its customers through a large-scale implementation of sales, marketing and partner management applications from Siebel Systems.
The deal with Siebel is HP's second attempt to create a consolidated system for its sales force. In August 2001, Oracle announced an installation of its Oracle Sales Online software at HP and said it expected the application to be rolled out globally by the end of last year.
HP changed the plan to standardize its sales processes on Oracle's software after acquiring Compaq Computer in May 2002, said Steve Bonadio, an analyst at Meta Group in Stamford, Conn.
Mike Overly, vice president of customer operations at HP, said an analysis done after the Compaq deal showed that Siebel's technology was more advanced than rival products.
Using the Siebel applications gives HP "an opportunity to improve the customer experience faster," he said, adding that Oracle's software "was one of many legacy CRM systems that were retired."
Oracle said its technology produced "significant cost savings for HP." The software vendor added that it was "disappointed HP decided to go with another CRM vendor for their merged company," but said it continues to partner with and support HP.
In all, HP plans to transition about 90 existing CRM and partner relationship management systems to Siebel's software, Overly said. The project involves installing software for more than 16,000 internal end users. In addition, about 130,000 people at HP's resellers and distributors will have access to Siebel's collaborative sales and marketing tools via a Web portal.
Overly declined to disclose the cost of the project. But he said that consolidating on San Mateo, Calif.-based Siebel's applications will save HP tens of millions of dollars as a result of reduced IT maintenance costs and product simplification, and it's expected to produce increased sales and higher customer-satisfaction levels.
"We're living proof of having too many siloed solutions," Overly said. He added that HP expects to get a return on its Siebel investment by the second half of next year.
The company has been using Siebel's sales automation software since May. The next step is to install integrated marketing and call center applications by the first half of next year. After that, HP plans to add Siebel's analytical software supported by a global data warehouse to conduct more sophisticated customer analysis, according to Overly.
It might be risky to install so many applications so quickly, noted Joshua Greenbaum, an analyst at Enterprise Applications Consulting in Daly City, Calif.
Internal politics, conflicting international business requirements and "plain-old corporate inertia make these kind of projects more failure-prone than most companies like to admit," he said.