Oracle offers CRM in bite-sized chunks

Looking to boost software sales in the downward economy, Oracle Corp. on Tuesday unwrapped predesigned software and service packages that it said will make it easier for companies to install a CRM (customer relationship management) system one piece at a time.

The packages include Oracle applications necessary for discrete CRM operations, such as managing a call center or organizing a marketing campaign, and will be offered at fixed prices ranging from US$150,000 to $395,000, Oracle officials said. The database vendor pledged to have the systems up and running in 90 days, which it said will provide customers with a faster return on investment.

Businesses shouldn't build complex CRM systems that are molded to their existing business processes, according to Oracle. Instead, customers should use Oracle's predesigned CRM modules and then implement new, simpler business practices around the software, said Jeremy Burton, senior vice president, Oracle marketing. The message echoes Oracle's mantra of encouraging customers to standardize on Oracle software rather than using "best of breed" products.

Burton acknowledged that the predesigned modules won't meet all of a customer's needs, but argued that it's better to have a system in place in 90 days that offers some return on investment than to spend months or years building a more complex system that meets every requirement.

"The goal is to get 80 percent of what the customer needs in the first 90 days, and then once you've got what you need, then worry about what you want," Burton said in a press conference at Oracle headquarters here Tuesday.

One analyst called the offer "coherent and concise." The idea that companies should install CRM in discrete stages isn't new, but makes sense for Oracle in a climate where companies have apparently cut back on large-scale IT purchases, said Katherine Jones, managing director for enterprise applications with research company Aberdeen Group Inc.

"Sometimes when the economy is tight it's easier to see the more logical way of doing things," she said.

The packages each include several components from Oracle's E-Business Suite of applications. Oracle will host the software on its own servers while it builds the systems and adds customer data. After 90 days it will move the software to the customer site, or offer to host them on its own servers.

Two modules, or "Internet business flows" as Oracle calls them, were available from Tuesday: Call to Resolution, which includes software for tracking and managing customer care issues, priced from $275,000 to $325,000; and Opportunity to Forecast, for managing and forecasting sales opportunities, priced at $150,000 to $395,000. The company will roll out an additional seven flows in the weeks ahead.

While such packages appear to target midmarket firms, they are actually applicable to businesses of all sizes, said Karin Maday, a partner with the consulting arm of KPMG who joined Oracle at the press conference. "You get a return on an ongoing basis."

The CRM applications must be installed on a new copy of Oracle's database, and will be available initially only for Hewlett-Packard Co. and Sun Microsystems Inc. servers. The fixed prices don't cover any software customization or integration with "legacy" systems, according to terms published on Oracle's Web site.

Like some other high-tech firms, Oracle's sales suffered in its most recent financial quarter after several large customers declined to sign off on large deals towards the end of the period. At the time, Chairman and Chief Executive Officer Larry Ellison said Oracle would tweak its marketing to emphasize reduced installation hassles and a speedier return on investment. The "90 days to global CRM" initiative is the first incarnation of that. "Individual projects will be shorter and should cost less, but we'll have more of them," Ellison said at Tuesday's press conference.

As usual, the Oracle chief had plenty to say about his competitors. Oracle's predesigned packages help cut labor and consulting costs, while ERP (enterprise resource planning) systems built by rival IBM Corp. increase consulting costs because they include software from multiple applications vendors such as Broadvision Inc. and E.piphany Inc.

"IBM will come in and look around and build you a custom something or another. We're trying to build you an engineered solution in a set number of days for a set price -- you can't do that with IBM and Siebel (Systems Inc.)," Ellison said.

IBM retorted that Oracle has greatly oversimplified the issue. Installing a large CRM system is always complicated regardless of who builds it, and the fact that Oracle's systems are based on its own applications doesn't make them any less complex to build and install, said Jeff Jones, senior program manager for IBM's Data Management Solutions division.

"You don't put in software of that magnitude from any vendor without assistance. (Ellison) has oversimplified the amount of effort required to use even his own applications," Jones said. "We want to leave the applications to the experts; IBM is pointedly not in the applications business."

IBM turned up the heat on Oracle Tuesday, saying it would acquire the database business of Informix Software Inc. in a deal valued at $1 billion. IBM said it's goal is to surpass Oracle and become the number-one database vendor. Ellison was having none of it, saying he "couldn't imagine" why anyone would switch from Oracle to IBM's DB2 product.

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