Can you handle CRM?

What are the keys to a successful CRM implementation in the mid-market? what kind of results can you expect? ZD writers went to PeopleSoft and Oracle to find answers.

Trying to master customer relationship management (CRM) suites these days is somewhat akin to attempting to eat not-quite-solid Jell-O with a fork.

CRM suites tackle sales-force management, customer communications (call centers, e-mail and Web chats), internal help-desk operations, and even self-service Web sites.

But in trying to do everything, some CRM packages wind up doing nothing. By some estimates, half of CRM implementations ultimately fail. The reason: Every business is just a little different and wants to perform each CRM function just a little differently. And CRM software is, by its nature, completely customizable. Historically, the CRM suites from Siebel, J.D. Edwards, Oracle, SAP and PeopleSoft, among others, have been delivered in their raw forms as little more than templates ready to be customized with the features, functions and connections to external systems for a particular customer. It then becomes the job of the consultant, integrator and/or service provider to determine the scope of the project and start planning—with plenty of customer interaction. As Lee White of Answerthink says, "The biggest problem is just getting all the [people] within the customer's organization to agree" on project parameters.

Open Arms Across the Bay

By contrast, PeopleSoft was much more responsive to our inquiries than Oracle. In no time flat, we had a half-day visit scheduled at the company's corporate campus in Pleasanton, Calif. Naturally, the company was bullish about its CRM suite, which started shipping the day before our meeting.

Jeffrey Read, a general manager and VP at PeopleSoft, sees lots of opportunity ahead in the midmarket, which the company defines as customers with less than $500 million in annual sales. "In the upmarket category, there are leaders in every segment. But in the midmarket, there are no established leaders. It's wide open," he claims.

With this release, PeopleSoft has completely integrated the functionality of the Vantive CRM product suite into what the company terms the "PeopleSoft Internet Architecture." (PeopleSoft acquired Vantive in December 1999.) The architecture, introduced with the release of PeopleSoft 8 in September 2000, provides an environment where applications are now completely Web-based. The heart of the system, known as the application server, sits squarely between the Web server and the database.

Components for Success

Eyeing the midmarket as the sweet spot, Read has an idea how to get there. First up is identifying the target customers for PeopleSoft's CRM suite.

For PeopleSoft, the ideal customer falls into one of four categories—telecommunications providers, banking, financial services and high-technology concerns. This is not to say that the products are unsuitable for other industries or markets, it's just that the majority of the existing CRM customer base falls into one of these categories.

Next up is the way he can provide a product that will appeal to the "masses"—the right set of modules and functionality. For the Accelerated CRM solution, PeopleSoft bundles the Sales, Support, HelpDesk and Marketing modules. According to the company, these are the core components of any successful CRM solution, encompassing every customer-facing business process. Each is the full-blown version of PeopleSoft's CRM modules, but the company realizes that not every customer needs the other modules, such as Interaction Management, Field Service or Analytics.

While the customers are identified and the product features and functions are ready, Read is well aware that it's only half the battle. The company continues to look for implementation partners, especially in the midmarket arena. "There's no way that one vendor can do it all by themselves," he admits, adding, "I'm constantly looking for partners and new opportunities."

Well aware of implementations that have gone sour, the company is continually looking to ease the way in which product is delivered to customers. Developing partnerships is one mechanism, but PeopleSoft isn't stopping there. For instance, the company is developing new certification requirements for its PeopleTools development environment, which it expects to roll out later this summer.

In addition to using PeopleSoft's 33 integration labs across the country, where partners and their customers can set up a system in a controlled environment, it's extremely important to set the expectations of the customer. PeopleSoft calls this scoping the project and claims to have the experience of more than a thousand implementations locked up in the scoping process. In addition to detailing the core functionality of the product, the scoping process details the integration, workflow and any customizations necessary for the implementation to succeed. Read maintains that this is a key differentiator for the company.

Simon Walls of PeopleSoft's Global Consulting Services maintains that ERP "used to be an IT-driven opportunity. Now it's business-driven, which is a very different beast." Walls observes that the change is driving more "well-thought-out" implementations.

To capture the success factors present in such engagements, PeopleSoft has developed Compass, a Web-based project management framework that can be used as the starting point for any implementation of the company's products.

Compass contains process and project flowcharts, sample work documents, checklists and best- practices recommendations—just about everything needed for a systems integrator to get going and add their specific domain expertise, whether it be cost accounting, or, in this case, customer relationship management. Walls sees Compass as providing a proven methodology that can be used, over and over, "to bring implementations in on time and on budget, with the functionality promised."

Although not a part of the Accelerated CRM suite bundle, PeopleSoft is very excited about its CRM Analytics package. Besides calculating customer profitability, the package provides the tools necessary for some fairly sophisticated behavior modeling, useful for determining cross-selling opportunities, future products and target demographics.

PeopleSoft has been developing the analytics package for upwards of three years, using the activity-based cost-management methodology first espoused by Robin Cooper and Robert Kaplan in the late 1980s. Greg Wynne of PeopleSoft's Enterprise Performance Management group claims that the capabilities of the product are "a year ahead of Oracle and SAP."

All that remains is the choice of where the application will be hosted. As it is accessed via the Internet and all of the processing is server-based, a PeopleSoft 8 application is relatively distance-insensitive. The customer can host the application itself, or let PeopleSoft or one of its partners host it at a remote data center. It all depends upon the customer's set of priorities and relative comfort levels with allowing data outside of the enterprise.

Customer Relief Management?

With this combination of strategy, tactics and set of components, what sort of results are being achieved?

Read claims that for the midmarket applications, the sales cycle has been reduced—sometimes to as little as six weeks. That's pretty amazing, when you consider that the license fee for PeopleSoft 8 CRM begins at $100,000. PeopleSoft estimates that, on average, the fee is about $500,000, exclusive of hardware, implementation and customization costs.

While he quotes an implementation timeframe on the order of 10 weeks (yes, that's 70 days) for a very basic midmarket system, it appears that the company has a way to go to meet that goal. PeopleSoft 8 CRM beta customer Carreker Corp., which is converting from an Onyx CRM system to the PeopleSoft Accelerated CRM suite, has some different numbers. "We received the code in mid-May and expect to go live in October," says Lori Faris, VP of infrastructure services for the financial services provider. Carreker has signed up to be a hosted customer for the PeopleSoft applications, which will be deployed to 700 users. Faris cited the reduction of back-office expenses as one of the primary factors that led Carreker to outsource its computing infrastructure.

Still, the company looked at several competing suites from the likes of J.D. Edwards, Baan and Oracle before deciding to go with PeopleSoft's Human Resources, Financials and CRM suites. "For us, it was features, function and cost," says Faris.

That's an endorsement that Jeff Read can get his arms around.

One Size Doesn't Fit All

We went to Oracle and PeopleSoft for answers. But only one company offered us timely help.

CRM often succeeds in large companies that spend heavily to customize their implementations. But smaller firms typically don't have the funds necessary for complicated CRM projects.

To that end, vendors have responded with a variety of products that offer high-end power within simplified packages for small businesses. We wanted to examine two such offerings from Oracle and PeopleSoft. Both vendors are gunning for Siebel, the market leader in the CRM space. Oracle and PeopleSoft both offer rapid-deployment options for their packages—PeopleSoft's Accelerated CRM product suite and Oracle's "Global CRM in 90 Days" campaign.

We had a difficult time putting Oracle's 90-days campaign to the test. Oracle directed us to the company's Web site for information about the CRM product line. However, the company's PR representative didn't return our calls until after our deadline.

Frustrated, we asked Oracle's Telesales Group to call us and show us the product, which they did, in under a minute. A point in Oracle's favor: They have a slick setup with WebEx, and a Telesales representative was able to demonstrate the CRM Telesales/call-center application. The person was friendly, professional and courteous.

Still, our overall experience with Oracle was disappointing. We couldn't get our hands on the suite or put the company's 90-day implementation guarantee to the test, because Oracle PR didn't meet our stated deadlines for assistance.