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The Siebel Effect—And Its Survivors
Failed CRM projects of the past may lead to a promising future.
For the rest of the July 2010 issue of CRM magazine please click here
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Fair or not, Siebel Systems—the CRM pioneer later acquired by Oracle—is often considered the poster child for failed CRM system implementations. I’ve heard dozens of war stories about overaggressive and excessively large CRM implementations that did not come close to realizing their promised benefits—and wasted a lot of money. We can blame Siebel all we want, but an enterprise had to commit to the project before Siebel could have the opportunity to fail. And to be fair, some Siebel implementations produced satisfied customers. 

The so-called “Siebel effect” is a fear of large, expensive, and often very lengthy projects intended to revamp all aspects of an enterprise’s customer-facing solutions. For contact centers and customer service organizations, this involved a “rip and replace” of the entire service-and-support application. This process could also involve sales, marketing, and analytics. 

The first few cycles of CRM taught managers a few things they already should have known:

  1. If it looks too good to be true, it probably is.
  2. Speak to references and find out what does and does not work before signing a contract.
  3. Include rewards and penalties in system contracts; if vendors won’t commit, neither should you.
  4. Systems cannot change culture.
  5. Selecting system implementation resources is at least as important as selecting the system. 

But often the most important, painful, and expensive lesson that companies learned was that large and complex projects should be broken down into manageable and measurable phases. The Big Bang approach may have worked in the past, but it’s unlikely to work again in an enterprise environment. 

Many organizations that did not realize the expected results and benefits from their CRM implementations have shied away from making additional investments to improve their servicing environments or finish what they started. Quite a number of companies halted their efforts and tried to make the best of what they had. This often included a combination of old systems and a new CRM application. Since these companies originally intended to replace servicing applications because they were outdated and unable to address customers’ needs, these failures were a major setback. 

Having been burnt badly, many companies “limped” along with perhaps decades-old servicing applications not designed for today’s complex contact center environments. Some of these firms, however, are now reaching a critical juncture: Their servicing applications have simply run out of gas and can no longer meet their needs. 

Managers in the United States and around the world are now looking for flexible servicing applications that can grow with their businesses, but are fearful of signing up for long-term and complex system conversions. Instead, they want quick fixes and are seeking ways to enhance what they have, with minimal risk, by adding a new layer of functionality on top of an existing servicing infrastructure.

While many CRM initiatives may have failed, the CRM movement itself did not. It helped bring a great deal of senior management attention and resources to customer-facing departments, including contact centers. Most organizations, however, have yet to achieve the two primary goals of the CRM movement: (1) creating a system that provides a holistic, 360-degree view of the customer, and (2) getting sales, marketing, and servicing organizations to work together. 

It’s well past time for most companies to invest in and replace their servicing systems. But this time around, it’s understood that projects should be broken into short-term phases, and that process and training changes are as important as the system itself. It’s time to stop invoking the spectre of Siebel when trying to avoid making the necessary infrastructure investments to enhance productivity and improve the customer experience. We need to apply those hard-earned lessons to mitigate risk and greatly improve the chances of success. 


Donna Fluss (donna.fluss@dmgconsult.com) is founder and president of DMG Consulting, a leading provider of contact center and analytics research, market analysis, and consulting.


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