8.4 The enterprise suite-based approach 123
8.4
interworking between parties and an interaction audit trail. Although other
vendors (Siebel, for instance) provide limited functionality in terms of work-
flow, they lack the functional depth of these best-of-breed players and the
institutional knowledge of the vertical market. A company that needs capa-
bilities in this area will, therefore, be better served by the deeper solution than
by a generic one. In short, companies should think process, brand, and fitness
for purpose first and then select the software.
What differentiates this approach from a departmental solution is that:
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The enterprise has given forethought to how all the CRM pieces
will integrate with one another.
The enterprise has also made plans to integrate legacy data where
necessary.
The software selections are made to meet the needs of the entire
division or enterprise. While consideration might be given to a par-
ticular region or department, it is not the overriding concern.
The software solution is capable of growing with the enterprise (it is
scalable and distributable and has the proper failover routines).
The enterprise suite-based approach
One of the important caveats relating to a fit-for-purpose approach is that
there
are
instances in which a suite-based software solution is appropriate.
What is, once again, of primary importance is that the enterprise has a solid
understanding of its customer-facing processes. If that investigation reveals
that the company's customer objectives require broad, low-level enablement
rather than functional depth, suite-based solutions will be appropriate to
achieve them. In addition, all suite-based solutions available today originally
came from a best-of-breed legacy or, in SAP's case, have best-of-breed added
(through its acquisition of Top Tier's portal functionality). Some of these
components (e.g., Siebel's sales force automation solution or SAP's portal
functionality) remain strong and are worthy of consideration as individual
components~but not necessarily strong enough to provide the infrastructure
for all customer-focused systems.
The primary suite-based CRM solutions available today come from Sie-
bel, Oracle, SAP, and PeopleSoft. In addition, there are several vendors that
focus on the "e" side of CRM but still take a suite-based approach to that space
as well. These vendors include Kana and e.Piphany. For a brief and admittedly
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124 8.4 The enterprise suite-based approach
subjective view of the functional abilities of these software suites, please refer
to Figure 8.1.
Without question, the largest suite-based solution vendor (in terms of
both market presence and market capitalization) is Siebel. In essence, the
company has grown from a sale force automation company in the early 1990s
to a broad CRM vendor supplying functionality across a number of areas.
Without question, Siebel has the broadest array of functionality; moreover,
although most of the functionality is weaker than best-of-breed offerings in
each functional area, Gartner believes that Siebel has the greatest depth of
functionality when taken as a whole. ~ That said, it is important to realize that
Gartner's conclusion is driven primarily by the fact that Siebel's broader array
of functionality gives the company marginal functionality in more areas than
the competition~more ticks in the box, if you will.
The Siebel suite does have several strong spots. The sales force auto-
marion and configuration suite achieves best-of-breed status and is highly
functional. The analytical suite, while not excelling, is at least up to standards.
In addition, implementation of the Siebel suite typically results in a single cus-
tomer data mart. What the company has attained is a certain ubiquitous
quality, which, when viewed in a certain light, passes for a CRM backbone
m
l
Functionality Comparison: Business-to-Business Large Enterprise CRM Suites,
Gartner Publication
R-14-8300, November 6, 2001.
8.4 The enterprise suite-based approach 125
technology. Many companies, particularly in these tough economic times,
have elected to purchase Siebel's solution because:
1. It seems to provide all the CRM functionality necessary.
2. The size of the vendor provides assurance that the solution will
continue to receive support.
Several competitors, most notably SAP, have attacked the Siebel package
for its poor integration capabilities. In one competitive instance, SAP claimed
that its solution required approximately one-third the integration points that
Siebel's offering required. While the customer data mart exists with the Siebel
offering, it is difficult to connect this with back-end applications such as sup-
ply chain solutions.
In addition, the Siebel solution has a reputation for being somewhat
difficult to implement. The suite's internal integration typically happens at a
data level, and implementation typically is done by a "big five" consulting
organization. The combination of these factors can make for an expensive
consulting bill.
Siebel certainly has competition. In the past year, four out of the five
remaining vendors mentioned previously have indicated that they will dis-
place Siebel as the number-one vendor.
PeopleSsoft and Oracle have each announced their desire to be king of the
mountain as well. Each comes from an ERP legacy with mixed success com-
peting against SAP in that market. PeopleSoft has been quite effective in
leveraging its experience with its HR components in particular. The company
uses portals to organize disparate information and has recently rewritten most
of its code to be more compliant with XML/HTML. In light of the fact that
Siebel has also been working on this issue, PeopleSoft has been making
inroads with the press and analysts regarding whose Web application or thin
client is best. Frankly, this argument is not only a bit esoteric, but it generally
ignores the fact that PeopleSsoft's CRM functionality is significantly less
complete. While the vendor does provide passable sales force automation
capabilities (by no means as functionally rich as Siebel's) and tie-ins with its
HR functionality, the solution is, comparatively speaking, weak.
What PeopleSoft has that Siebel lacks is a reputation for being flexible and
easy to work with. I should also point out that PeopleSoft's product suite has
vastly improved during the past several years. While its functionality needs
more depth, the company's desire to dominate the market will undoubtedly
push it along in the next several years.
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126 8.4 The enterprise suite-based approach
Larry Ellison, too, has made challenging statements about Siebel in the
past (although his most recent set of challenges has been aimed more at SAP's
CRM suite). Whomever the challenge is directed toward, Oracle would cer-
tainly like to be CRM's 500-pound gorilla. Oracle has pushed hard for market
share, heavily discounting its CRM suite in the past. While the company has
some large reference accounts, the general reaction of the community is "You
get what you pay for." As with SAP and PeopleSoft, Oracle's legacy in enter-
prise software comes from the ERP side (with the Oracle manufacturing
suite); consequently, the vendor understands the issues of the B2B market far
more thoroughly than the B2C marketplace. Not surprisingly, Oracle's best
modules are the product configuration set of its sales force automation suite
and its field service module.
The one ERP legacy player that seems to be learning the fundamental dif-
ferences between ERP and CRM is SAP. As with PeopleSoft and Oracle,
SAP's chairman, Hasso Plattner, has indicated that SAP, not Siebel, will some
day rule the CRM market. SAP's early forays into this market were clumsy at
best. As many analyst companies were quick to point out, the suite not only
lacked functionality, but the company seemed not to grasp the fundamentals
of CRM. As a result, the installed base consisted primarily of a limited number
of ERP customers. Luckily, the vendor recognized the problem. After signifi-
cant restructuring, SAP's CRM operations have ostensibly been moved from
Germany to the United States, additional CRM experience has been brought
on board, and the product set has been significantly revised.
Today, SAP's CRM suite is making serious inroads into the CRM mar-
ket. Although the product's functionality is not as broad as Siebel's, the depth
of the functionality that is present has improved significantly. In addition,
SAP has strongly embraced a portals approach to both CRM and to internal
constituents. With embedded features such as "drag-and-drop" portal views
of CRM data~internal and external~many within the IT community
believe that SAP has a strong chance of winning the front-office portal space
race. Two other points strongly favor this company as well.
A fundamental feature of SAP's ERP suite was the centralization of"mas-
ter files." These files included (but are not limited to) a master vendor file, a
master product file,
and
a master customer file. To be fair, the evolution of
this master customer file into a customer data mart is not as simple as it might
seem. However, for a large number of Fortune 500/FTSE 100 companies,
SAP largely controls the customer data and, in the CRM world, the firm that
controls the data controls the process.
8.4 The enterprise suite-based approach 127
Of course, there is a dark side to this situation as well. SAP's ERP installed
base is composed primarily of B2B companies. As a general but not absolute
rule, B2C companies typically have more CRM need that B2B~for one
thing, the customer burden in B2C is typically much greater. While sales of
the SAP CRM suite increased tenfold in 2001 over sales in 2000, much of that
success is still derived from SAP's installed ERP base. In order to become
the 500-pound gorilla, SAP will need to appeal to companies outside that set
as well.
Another fundamental strength of SAP is that the company has a strong
knowledge of back-end integration. The mistakes of SAP's ERP past have led
the vendor to take a much more reflective approach as to how integration is
done. Not only are the APIs fully developed, but SAP claims to have focused
on the number of integration points as well. As alluded to earlier, in a specifi-
cation that SAP wrote for one of its recently acquired clients, IBM Global
Leasing, the company claimed fully one-third the number of integration
points necessary relative to Siebel, its direct competitor for the bid.
While I am very optimistic about SAP's CRM future, it is important to
point out that this is
not
an exception to the fit-for-purpose approach
espoused previously. SAP's product set has several gaps, most notably in
e-service and workflow. In addition, several analysts have criticized the ven-
dor's approach to its marketing suite. While I feel that some of the budgeting
functionality offsets a few of the inherent weaknesses, it is important to evalu-
ate aspects of this product carefully. That said, of all the suite-CRM players,
SAP has the best chance of displacing Siebel.
On the periphery of the suite approaches are two companies that have
taken a similar approach to the "e" aspect ofCRM: Kana and e.Piphany. Dur-
ing the past 18 months, Kana has grown its company significantly through
acquisition, only to then lay off approximately 40 percent of its workforce as a
result of profitability concerns. The target of the initial acquisitions has been
to increase the scope of the CRM offering, (which started life with e-service
and e-marketing) to include analytics as well. In addition, the company has
put a great deal of effort into its IBM relationship. The result is that for
e-service and e-marketing, Kana is still a viable contender; exercise a degree
of caution, however. While many analysts consider Kana to be tier one in
these categories, the emphasis on acquisition, integration, and adoption of
a more IBM-friendly environment (DB2, WebSphere, among others) has
deemphasized product enhancements in these core suites. Consequently, for
e-service the company has fallen behind smaller, more focused companies,
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