An Interview with Charles Sword of Headstrong

To help give us some perspective on recent news, we asked Charles Sword of Headstrong to share his insights.

The Siebel Observer: There seems to be a lot of controversy over Siebel version 7 and how stable the product was when released. What have you and your team experienced with Siebel 7?

Charles Sword: Given the significant shift in the application architecture of Siebel 7 and the accelerated release cycles that are commonplace in the software industry today, I don't believe the application had more than its share of product defects. However, I believe the technology community likes to save its harshest criticism for anyone that achieves a dominant market position and over the past 5 years Siebel achieved a market position within CRM similar to Microsoft's dominance of business productivity software. I believe that that, along with a vocal minority of dissatisfied customers, helped put a spotlight on the shortcomings of the product.

The Siebel Observer: Is Siebel 7 any less stable than a major release from vendors like Microsoft, PeopleSoft, or Oracle?

Charles Sword: If you compared the defect rate for these products at similar maturity points in their product lifecycle I think you'd find a similar story. As mentioned above, I think Siebel invited an extra dose of scrutiny when they had the hubris to claim the title of the largest enterprise software firm in the world.

The Siebel Observer: Why do you think that Siebel Systems has these problems?

Charles Sword: I can sum it up simply: they grew too rapidly and in too many directions. They expanded the amount of functionality in the base, or horizontal, product and then compounded that with expansion into a dozen verticals. On top of this, they then lost focus on the core mission - to deliver the finest CRM software in the world - instead expanding into the employee portal, analytics, and integration markets almost simultaneously. Given their growth rate and this diffusion of focus, it was nearly impossible to maintain consistently high levels of quality and customer satisfaction.

As for the engineering team, I believe what they've achieved is borderline extraordinary given what's been asked of them. On the contrary, it's my opinion that the most significant issues have been caused by turnover in the sales organization and quality concerns associated with the Technical Account Manager (TAM) organization. These functions represent the 'face' of Siebel for most customers and I think they've fallen short of the standard set in the earlier years of the organization. Finally, Siebel suffered from what in essence is a 'technology generation gap'. By this, I'm referring to the cynicism and malaise that characterizes the employees that joined the fray too late to participate in the technology boom that ended in March 2001 and is hardly limited to Siebel. Many organizations are still suffering a cultural hangover from those heady days of seemingly limitless upside and technology idealism.

The Siebel Observer: Is Siebel 7.5 an improvement on Siebel 7?

Charles Sword: I believe the Universal Application Network (UAN) support found in Siebel 7.5 represents a significant shift in the Siebel product strategy over all previous versions of Siebel. Traditionally, Siebel integration capabilities have been limited in capability and challenging to execute and maintain. With the introduction of the UAN, Siebel has provided the platform for Siebel to become a true service component in an overall enterprise architecture - which is a significant shift. I believe that CRM will ultimately be viewed as more of an infrastructure layer that interacts with the process and application layer within your enterprise architecture, as opposed to an application in and of itself. This should also be the primary frame of reference for Siebel migration decisions. For most, there probably isn't enough incremental functionality to justify the investment required for migration. However, when viewed from a strategic platform and architecture perspective, the conversation shifts to how CRM services will be constructed and delivered in the future, and the benefits of migration to the improved Siebel 7.5 product begins to make a lot of sense.

The Siebel Observer: Is there anyway to recover from a failed Siebel implementation?

Charles Sword: People are successfully implementing CRM as a business strategy and many are achieving this using Siebel technology, so it is a reachable goal. However, for those who are struggling, I liken our role as a service provider to a doctor treating a patient. The key is to make a quick, accurate diagnosis based on the symptoms and prescribe an effective course of treatment. Often this will involve both tactical and strategic programs to address, for example, short term adoption woes and longer term return on investment concerns. Over the past half dozen years spent working on these initiatives and having achieved a 100% satisfaction rate, we've created an extensive case history of these symptoms and the most effective remedies.

The root causes of failed implementations are clustered into a few major categories which allow us to be very efficient and effective if we catch them early enough. By that, I mean that you only have so much user equity to expend and then I don't think you can overcome the negative perceptions. Organizations that have suffered multiple failures or acutely negative experiences have programs that are in some cases unrecoverable and are better served by a change in their technology platform at a minimum. But for most, there is hope if they see the right doctor.

The Siebel Observer: Tolstoy said all happy families are alike. Unhappy families are each unhappy in their own way. Is this true of Siebel implementations as well? Do those companies that fail at implementing Siebel tend to do so for different reasons?

Charles Sword: Amongst the unhappy Siebel children, we've noticed some definite trends that led to their discontent:

• Lack of senior sponsorship, which allows program direction to drift and often results in an unruly expansion of scope and/or dissension in the ranks.
• Lack of business process alignment, which sub-optimizes overall return but more fundamentally creates the equivalent of cognitive dissonance in the experience of users and management.
• Haphazard customization, which often leads to significant performance issues and high total cost of ownership (TCO).

The Siebel Observer: Have you seen any examples of companies that failed in their initial implementation but later were able to come back and be successful with Siebel?

Charles Sword: Absolutely. They range from the simplest cases where the issues were primarily performance-related or technical in nature to more complex cases that involve organizational alignment issues, change management shortcomings, and senior management ambivalence, all resting on poorly architected technology. In the former, recovery is often straightforward and can be achieved in very modest timeframes. In the latter example, the issues and the remedy are more complicated and in all likelihood will involve a larger commitment in terms of stakeholders and overall recovery time.

Charles Sword is Vice President of the CRM Practice at Headstrong Corporation. He can be contacted at Charles.Sword@headstrong.com.