For the Web 2.0 generation, CRM is a clunky interface that discourages take-up. So, as Oracle's Anthony Lye explains, the coming together of social networking and CRM is long overdue.
By Stuart Lauchlan, news and analysis editor
For the Facebook generation, traditional business applications like CRM are out of date, clunky interfaces that discourage user take-up. For salespeople of any age, CRM has not represented the productivity increasing boost that its vendors claimed it would as again its look and feel has deterred rather than encouraged take-up. So the coming together of social networking and CRM is clearly long overdue – or so companies like Oracle are banking on.
“If we look at CRM, in the early form of its current definition it never delivered value to salespeople,” argues Antony Lye, senior vice president of CRM at Oracle. “Marketing and services people got value out of CRM, but not salespeople. Sales managers get value out of it by telling salespeople to tell them everything that they do. The enablement of Web 2.0 and social content is changing the first generation value proposition of CRM which was to report more, sell less. It's now about sell more, report less.
“The focus is on end users and their applications. We chose to make it architecturally different to existing CRM assets. Existing products were never designed to be shared. There is no concept of sharing with them. We had to design that and with good luck or judgement we've succeeded. I've never seen better feedback to anything I've been involved with during my career. CRM 1.0 was about reporting and forecasting, now it's about sharing information.”
Anthony Lye, SVP of CRM, Oracle
This surely runs contrary to perceived wisdom about salespeople who notoriously never want to share their information with others? “It's not about sharing contacts or leads, it's about sharing information that might help in the gathering of requirements for example,” explains Lye. “What we support is the sharing of meta data, information that will help companies to define an opportunity and help them to run a better campaign.
"In sales, people can track and run their own campaigns within social networks. You can see all the campaigns that you've run and share those, but people can't see who you've sent them to. You can work across organisational boundaries so I could run sales campaigns with a guy at HP and create a joint message, but get our own results. I'll never see the HP audience list, HP will never see mine.”
Oracle, of course, has CRM a-plenty to sell, what with its on-premises and on-demand versions of Siebel CRM. So which one is most appropriate to which customers? “That's quite a simple conversation to have,” says Lye. “It's about understanding the kind of business that the customer is in and the size of the firm. If you look at Amazon and Boeing for example, they are different sorts of companies, but they both have customers. Amazon has hundreds of millions with customer relationships that last a couple of minutes and where really they hope never to have to talk to customers at all. The primary value of CRM for Amazon lies in the processes.
“Then you look at Boeing and you see it's very different. If you're going to buy a plane, you don't go to Boeing.com and get out your credit card. It has maybe 70 customers and a complex organisational structure where there's not just one person who's managing the processes. You have many types of people involved in a sale as well, such as politicians and lobbyists. So Boeing's CRM systems need to be built far more around the people than the processes. In other words, if you have a high volume, high transactional process business like Amazon, then you go with Siebel; if you're more people-centric, social and colaborative, then you'll deploy CRM On Demand.”
“CRM on-demand was developed to address the small and mid-sized market. It leaked into the enterprise because the requirements of those enterprise was to have little or no IT. You had to design systems that could be put in the hands of the business, not the IT people. That's something that resonates strongly with firms that have very simple processes that require simple, self-administering systems.
A 'pod' approach
Other sorts of companies want to invest in processes. If Amazon can find a country with cheaper people to answer their hotline, then they'll move their customer operation there. They need to get customers off the call as quickly as they can because every time they have to answer the phone they lose money. The goal of any support person is to get the customer off the phone as quickly as possible. It's very different in sales.”
An area in which Oracle differs from software as a service (SaaS) pureplays is its rejection of the idea that multi-tenant architectures are necessary. Multi-tenant architectures have multiple customers data residing on a single instance of a database. While that database is up and running, it enables cost benefits that vendors can pass on to customers; the downside is that if that single instance database goes down, then everyone crashes.
Oracle prefers to take what Lye describes as a 'pod' approach, whereby there are different bits of data residing on different databases using Oracle's grid computing technology. This, of course, does imply the underlying benefit to Oracle being the sale of more databases – something that Oracle co-president Charles Phillips controversially suggested last year was a good thing about SaaS.
“Siebel CRM On Demand was originally multi-tenant on IBM's DB2 database, but after the acquisition of Siebel we wanted to move it on to an Oracle stack,” says Lye. “There is nothing better than having everybody up and down the stack all in one building and using products from the one vendor. We also moved away from the multi-tenancy in order to offer more flexibility and choice in the infrastructure. Multi-tenancy doesn't offer benefits to the customer, it offers benefits to the vendor. Some customers run CRM On Demand in multi-tenant deployments, others in private single tenancy deployments. We can offer that choice.
“If Salesforce.com goes down, it's front page news. I have hundred of pods running. If one goes down, 99 are still running. It also makes it easier to do maintenance and upgrades as we can create windows that are convenient to the customers. If Salesforce.com is upgraded, it happens all at once at a set time. Now if you're running your business 24/7, only having that one maintenance window could inconvenience you. We can offer maintenance windows across different days and different time zones.
“More is made of the need for multi-tenacy than is necessary. I believe that in a perfect world, no-one would choose it. Customer would not say 'please put my data in the same database as everyone elses's'. People have just assumed there is no choice. Through good marketing by some people, it's become assumed that if you are in the SaaS business you need multi-tenancy. What we provide is appropriate tenancy.”
So what does Lye reckon to the prospects of other vendors in the on-demand game, such as SAP, Salesforce.com and NetSuite – which of course has a majority stakeholder in the form of one Larry Ellison. “SAP has taken on a significant amount of risk [with Business ByDesign]. They've already said it would have a significant impact on earnings per share and overall costs will take many years to prove or disprove,” he reckons. “As for Salesforce.com and NetSuite, every company reaches a fair value point and they do so by certain corrections that happen at the market level, If they don't, then the companies miss. It's a matter of when that happens.”