New Siebel boss admits: 'We can do better'

Facing journalists for the first time, CRM specialist Siebel's latest chief executive has admitted that his company could improve its game, but ruled out a strategy of slashing costs
Written by Andrew Donoghue, Contributor

Siebel's newly appointed chief executive has defended his company amid speculation that it is an acquisition target, but admitted that the CRM specialist has made costly mistakes in the past.

Speaking at the company's annual user conference in Barcelona on Monday, chief executive George Shaheen remained defiant in the face of hard questioning from journalists about the fate of the company which he took over last week. "We intend to be here next year and for years beyond that," he said, in his first press conference as Siebel chief executive. "This is a very strong company and we will be here."

Shaheen said that concerns over the company's financial health, following disappointing first quarter results for 2005, are unjustified given the company has cash reserves of $2.2bn (£1.2bn). "We have financial strength. We harvest around $200m a year in cash. This is not a company that is standing on its laurels, this is not a company that is standing pat on previous successes and its customer base," insisted Shaheen.

However Shaheen admitted that the company had made mistakes in the past that need to be addressed. "I think what our customers and Wall Street are saying to us is that we can do better. Frankly I think we can do better. We can do a better job of reacting to our customers' needs," he said.

On the specific issue of whether Siebel would consider a takeover by rival Oracle, Shaheen, said that as chief executive of a publicly traded company he has limited control over acquisition attempts but ultimately his strategy is to look after investors. "I have a responsibility to do the best for the shareholders," he said.

Former chief executive Mike Lawrie left the company abruptly last week — days before the user conference was due to begin. So unexpected was this announcement that Siebel's official event schedule had Lawrie down to deliver the main keynote speech that kicks off the week-long event.

Shaheen used this keynote to announce that Siebel was putting renewed efforts into serving its customers.

Part of Lawrie's strategy, which he had less than a year to implement before his tenure was cut short, involved cutting non-essential costs such as marketing and advertising. When asked about his plans to reduce outgoings, Shaheen said that he didn't believe that drastically reducing costs was the way forward. "I do not expect to go into this in slashing mode. I have never seen a company deliver success through slashing costs," he said.

Hosted CRM providers, of which Salesforce.com is the most prominent example, have been credited by industry analysts as the architects of Siebel's current struggling form. Shaheen admitted that his company had failed to see the threat that Salesforce.com and its ilk posed but was working hard to compete more effectively in the future. "I think we took our eye off the ball. We let a competitor get entrenched in our space while we were focused on our existing business. They have our attention now but shame on us for not getting there earlier," he said.

Siebel general manager of OnDemand & SMB, Bruce Cleveland, claimed that his company could make up ground and even overtake Salesforce's success by 2007, based on current sales forecasts. "If they continue on their run-rate and we continue on our run-rate, then we should overcome them in two years time," he said.

Industry analyst AMR Research recently hinted that Tom Siebel, company founder and chairman of the board, was instrumental in the decision to remove Lawrie and is still involved in the day-to-day direction of the company. Commenting on the likely future for Sheehan, AMR analyst Laura Preslan, said: "Tom Siebel and the board must give his plan time to take effect."

Questioned on Tom Siebel's continued involvement in the running of the company, Shaheen said that the founder had handed over the reins completely. "He is not involved in the day to day running of the company. He said to me 'Let's get through this, this is your company'. I have taken that literally," Shaheen said.

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