Rethinking the case for CRM
Published: 09 May 2002 10:55 BST
Siboni is chief executive of Epiphany, a CRM software company in San Mateo, California, that makes applications that are supposed to help businesses improve customer satisfaction and loyalty.
But increasingly, the news about CRM has been anything but encouraging. Recent studies indicate that CRM projects often fail, and that the software doesn't always work as billed
Siboni, who was a 20-year veteran of consulting company KPMG when he joined Epiphany in 1998, insists that his customers are not among the ranks of the disillusioned. Epiphany's customer list includes such marquee names such as Bank of America, The Home Depot, Verizon Communications and Walt Disney. According to banking group ABN AMRO, Epiphany has captured 3 percent of the CRM software market since its inception in 1996, facing off against bigger competitors Oracle, PeopleSoft, SAP and Siebel Systems.
Nonetheless, Epiphany is struggling with the same market downturn that's gripped the entire business applications market for the past year. The days of triple-digit growth now seem like ancient history. In 2001, Epiphany lost US$2.6 billion, and the company still has a battle ahead in 2002. A 44 percent downturn in revenue in the first quarter forced Epiphany to join the throng of software companies issuing profit warnings.
But with US$300 million in cash and a new version of its CRM package released in March, Epiphany is braced for the storm, says the 47-year-old Siboni. What's more, he says observers need to look beyond the headlines to get a fuller appreciation of what's going on in the CRM marketplace, as well as a more sober view of what it can -- and cannot -- do for business.
CNET News.com recently talked with Siboni to talk hear about the state of the CRM market and the prospects for his company.
Q: Customer relationship management software is getting a bad rap. Recent studies show that a large number of CRM projects fail to deliver on their goals, while dissatisfaction with the technology runs high within executive ranks. Is this another case of reality not living up to the hype?
A: You really have to look a little below the surface. CRM is a fairly large world. There are four big categories of CRM you have to look at independently. There's the customer analytics area, the area of marketing, the area of service, and the area of sales-force automation. Most of the negative things you hear are about sales-force automation. People who say they didn't get the bang for buck, they're talking about sales-force automation. But generally, people are feeling pretty good about (the other pieces).
What is sales-force automation exactly, and why has it been so disappointing?
The promise of sales-force automation is that by giving salespeople these tools, productivity will go up and the cost of sales will go down. The truth is, that hasn't really happened. Because if you really look at what sales-force automation has been so far, it's been about achieving contact management, sales-lead tracking and pipeline reporting. If you look at these three pieces of functionality, what you find is the technology is very hard to work with.
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