Hosted CRM Goes Vertical

Few companies these days are interested in vanilla CRM. Most are looking for applications that customize easily or are created to meet the specific needs of the vertical industry. "CRM is defined differently by different industries," says Rob Chen, group director of product marketing for Siebel Systems' CRM OnDemand. "Different industries have specific business processes, needs, and requirements." Siebel, recognizing that interest in vertical CRM is building among users of both on-premise and hosted CRM applications, has announced what it calls verticalized on-demand CRM solutions designed to meet specific industry needs. The CRM OnDemand Industry Editions are the latest versions of the OnDemand product launched by Siebel and IBM in October 2003. "This will help companies improve their sales effectiveness," Chen says, adding that it's easy for remote sales offices to get up and running on the product, which they wouldn't be able to do so quickly if on-site customization were necessary. An automotive company, for example, might want to track by month sales by region. If there's a decline the company can analyze the information to see if the sales drop is a seasonal or regional problem, or if there are other issues. From that analysis the company can devise appropriate marketing programs to attempt to recover the lost sales. To do such tracking the company would need to have the CRM capability available at its different locations. Most dealerships wouldn't have the technical expertise to operate such a system themselves, according to Chen, who also says that 80 percent of Siebel's on-premise customers already use one of its 23 vertical CRM solutions. The OnDemand offering available via the Web could provide this capability for customers, without the need for a lot of in-house technical expertise. "Siebel is selling to its install base, leveraging its vertical industry domain expertise to keep its current customers happy," says Sheryl Kingstone, CRM program manager at The Yankee Group. "Large enterprise customers have already deployed Siebel in certain verticals." The OnDemand editions will provide additional industry-specific tracking and analytic capabilities, according to Kingstone. The industry-specific solutions will be offered at $100 per user, per month. Customers signing a one-year service agreement can secure an introductory price of $70 per user per month. "We wanted to provide a CRM application that was fast, easy, and affordable," Chen says. Kingstone agrees that providing a low-cost option is important to Siebel customers. Siebel CRM OnDemand Industry Editions that will be available this summer are insurance, high technology, automotive, and communications and media; industry editions for financial services, life sciences, manufacturing, and consumer goods will be added in the fall. Chen expects Siebel to release versions for other industries in 2005, at the rate of three to four editions every three to six months. Other vendors that offer CRM as a service, such as NetSuite and Salesforce.com, assert that their customization capabilities are so robust and easy to use, they don't need to offer vertical versions. Salesforce.com, for example, offers users the ability to customize its Spring '04 offering, released in April, using new, custom tabs. The Siebel offering comes with prepackaged, industry-specific tabs. Spring '04 users can add or rename tabs to fit their company's terminology, industry, and business environment, according to Adam Gross, director of product marketing for Salesforce.com's sforce division. He adds, "You can't predict what tabs customers will need."