According to Datamonitor, 1999 revenue from analytical CRM technologies in North America totaled $1.4 billion. As demand heightens, the New York-based research firm expects CRM-driven initiatives will grow to $4 billion by 2004.
It's no wonder that CRM software vendors have been working toward seizing a piece of that growing pie, while at the same time filling a hole in their existing product lines. "The analytics piece has been the Achilles' heel of all the major CRM suite vendors," says Liz Shanham, vice president, CRM Infusion Program at the META Group. "From what we can tell, Siebel has been working most diligently to enhance its product in that area."
"For a long time, people viewed these as separate initiatives, and we think they're vitally connected," says Daniel Lackner, vice president and general manager of Marketing and e-Business Analytics products at Siebel Systems. "We think it's important that the analytics include data from all the different customer touch points so you can take information from your call center, field service, previous marketing programs and perhaps even external and back-office data. You bring that all together into an analytic environment, study the data and that allows you to deliver the right message to the right customer at the right point in time to the right channel."
Through partnerships with business intelligence software vendors, Siebel Systems, of San Mateo, Calif., has incorporated that elusive analytical piece into its recent 2000.3 release. At the crux of its e-business analytics is a pre-built e-business data warehouse. Embedded into the product is technology from Informatica, of Palo Alto, Calif., and San Jose, Calif.-based Business Objects' e-BI technology.
"To the end user, it's not real clear where one stops and the other starts," says Scott Nelson, vice president and research director at GartnerGroup. "Informatica helps them with a lot of the areas of the creation of the data environment, the extraction tools, the data modeling; it's that whole front end to populate the Siebel environment. Informatica especially brings them a number of adapters to allow them to plug into other data sources more efficiently so the client doesn't have to always be rewriting those themselves."
Siebel has leveraged Business Objects' technology to create what it calls eIntelligence, which provides easy-to-use query, reporting and analysis functionality and includes more than 300 pre-defined reports and charts. "There are a lot of clients with a strong pre-disposition to using Business Objects already," says Nelson. "It's a very popular approved AFS tool that many organizations use."
While there's always room for tighter integration whenever third-party software is being used, Nelson says the Siebel offering is pretty well integrated. "It's not something we would be pointing to as a flaw in the product," he says. "As with most companies, it usually takes two or three iterations of a significant advance to get everything really working, and I'll expect we'll see that with this offering. They have some shortcomings they still need to address. Real-time analytics are not really incorporated into the product yet."
Plug and Play Partners
The partnerships don't end there. To provide higher-end analytical and optimization capabilities, Siebel's analytic adapter strategy provides an open API that allows companies to attach to its data warehouse. "Many companies have elected to use technologies like Ithena, Marketswitch, Hyperion, Cognos and Brio," says Lackner. "We don't want to walk into clients' offices and say you have to throw out these investments. We want to be able to say Siebel is a good corporate citizen. If you've invested in those technologies, they will plug and play with Siebel's e-business data warehouse."
Managing those multiple relationships could be a challenge, according to Shahnam. "The number of Siebel's partners has grown at a much faster rate than even they might have imagined," she says. "Because Siebel is the market leader, everybody wants to partner with them. They're trying to accommodate their clients and trying to be market-driven, but some partnerships are going to be deeper than others."
Hyperion's agreement calls for joint development, marketing and selling. "For any alliance like this, the biggest challenges are always in the sales force," says Daniel Druker, vice president and general manager of the Hyperion eCRM analysis division. "It's relatively easy for the product people to integrate products. The hard stuff is to change the behavior of employees and make sure the sales force understands the value propositions of the two products working together."
There's also pressure from customers and integration partners to make the partnership work. According to Hyperion, many Siebel customers are already using Hyperion's Sbase, an online analytical processing server, as well as its Customer Interaction Center. "We've had many customers ask us, 'When can you get together?'" says Druker.
He says the same is true for its partners. "IBM is a major strategic partner for both Hyperion and Siebel, and they've been pushing us both very hard to do an alliance and work together, because they see the karma between these two things."
To keep the partnership working on the technology front, Siebel has a process in place to certify that partners' applications work as described and that the integration with Siebel is smooth and seamless. Ithena, Hyperion and Marketswitch are in the final stages of that certification.
"For us, as a relatively young company, Siebel is a very important strategic partner for us to work with," says Charles Nicholls, president of Ithena, San Jose, Calif. "Obviously their market position makes them an extremely attractive partner to want to build an alliance with. But you also have to look at our strategy. Here we are tracking changes in customer behavior, which enables you to treat different customers differently according to their value and how that value is changing over time. But at the end of the day, knowing who they are is only part of the puzzle. We need the operational system integration."