Management Information System

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Submitted By: Submitted To:

Group: E 5 Batch 2010-12 2010219 2010231 2010232 2010233 Shivashankar Pillai P.N.V.Sriram Sugandha Kumari Sumeet Gupta

Prof. Agam Nag

MIS-Project

Customer Relationship Management

Contents
Acknowledgement: ................................................................................................ 3 Customer Relationship Management: .................................................................... 4 Oracle Seibel CRM: ................................................................................................. 4 CRM customer service contact centers: ..................................................... 5 Complementary contact center infrastructure: ......................................... 5 Web customer service: .............................................................................. 5 Field service management: ........................................................................ 5

Sales force.com: ..................................................................................................... 6 Analysis: ................................................................................................................. 6 Conclusion: ............................................................................................................ 8 References: ............................................................................................................ 8

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Acknowledgement:

We wish to express our gratitude to all people who helped us during this report.We are grateful and thankful to undertake the present report under the able guidance of our esteemed guide Prof. Agam Nag (Professor). We sincerely thank him, for his persistent,encouragement and vigilant supervision.This section is a vote of thanks and gratitude towards all those who have directly or indirectly contributed in thier own special way towards the completion of design phase of this report.

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Customer Relationship Management

CRM evolution can be traced back to the 1980s when the organizations started using databases to track existing and identify potential customers. In the 1990s companies began to improve on Customer Relationship Management (CRM) by making it more of a two-way street. Instead of simply gathering data for their own use, they began giving back to their customers not only in terms of the obvious goal of improved customer service, but in incentives, gifts and other perks for customer loyalty. This gave rise to various initiatives such as frequent flyer programs and bonus points on credit cards and others which are based on the CRM tracking and mapping of the customer spending patterns. The use of CRMs improved the fluidity of information within an organization. This flow of data / information between the various functions of an organization led to better decision making and policy framing which ultimately improved the productivity in the long run. The three sectors of business that rely most heavily on CRM -- and use it to great advantage -- are financial services, a variety of high tech corporations and the telecommunications industry. Having discussed the merits of CRM, it must be mentioned that there are some glaring shortcomings in implementing the CRM. CRM requires investment which can be quite substantial. But the effects will need time to realize the benefits. But organizations work on a quarterly basis and expect results to tangible in the shortest possible time. Another major predicament which the CRM faces today is that there have sprung up many companies that effectively integrate the CRM with ERP applications or SAP. This sounds a death knell to the creators of standalone CRM application providers. Organizations tend to go for an all-inclusive product which gives them a better return on their investment like ERP / SAP .

Oracle Seibel CRM

Siebel had established itself as a solid CRM provider founded in 1993 by a fellow Oracle executive Mark Siebel. In 2010, Siebel remains the CRM application most in use globally by large enterprises. It is the second-largest CRM vendor by revenue. It has strong near-term viability, broad functional coverage, the largest partner ecosystem and areas of deep industry expertise. The Siebel product is a separate product that is not architected as a multitenant SaaS In the past 15 months; Oracle Siebel CRM has had varying levels of success with upgrades and new wins. It has had the greatest overall vertical industry success in the past two years in the pharmaceutical, public sector, consumer retail customer service, financial services, travel and hospitality (especially loyalty), high tech software and services, and medical equipment and supplies industries. Loyalty is perhaps the strongest driver of new sales growth in Oracle Siebel CRM. Oracle Siebel CRM is the most commonly deployed CRM application by the major CRM consultants and system integrators. Consultants and system integration partners with the largest Siebel CRM practices are: Accenture, IBM, Deloitte, Capgemini, Tata Consultancy Services, Infosys, Wipro Technologies, Cognizant, BearingPoint, CSC, Business & Decision, T-Systems and Siemens. In Technology and scalability Oracle Siebel CRM has a long track record of scaling to high performance levels and supporting complex integration projects. It has also been making investments to enhance

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its architecture further. In Cost of ownership Oracle Siebel CRM enjoy equal or lower pricing for comparable functionality offered by competitors Oracle Siebel CRM's future is influenced by four factors: 1. The speed of success of the Oracle Fusion Applications strategy. The more quickly the Oracle Fusion Applications for CRM develop the less need Oracle may have to invest in new Siebel functionality. 2. The ability to regain its power to sell to business users rather than IT buyers. 3. Its ability to retain the "mind share" of consultants and system integrators. 4. Its ability to invest with enough depth in industries where it is not seen as a serious option today. Oracle Siebel CRM is the most-deployed, packaged customer service contact center product globally. The complexity, time to deploy and high project costs have made the upgrade process harder for clients with large contact centers and highly customized systems to justify. Siebel holds three positions in customer service: CRM customer service contact centers: The Siebel product is making few inroads with new customers in insurance and banking, but is having success in consumer retail and utilities. The work of the system integrators reinforces that the Siebel product is mostly for rework or expansion, but few net-new Siebel deals. The innovation has slowed. The interest of new customers and legacy customers in the Siebel Contact Center product has diminished, as measured by inquiries to analysts, searches on websites and mentions by partners. However, it remains the standard for large-scale call/contact centers looking for scalability and access to a global pool of third-party professional services, and with an inclination for the Oracle product line. A key factor in customer service is loyalty, and Oracle-Siebel has several marketing analytics tools, campaign management tools and decision support capabilities to drive loyalty through the service function. Complementary contact center infrastructure: Oracle Contact Center anywhere is recommended on shortlists for organizations deploying Siebel in a contact center not requiring global reach. The product is highly scalable and can support multiple sites, yet Oracle has limited ability to provide contact center infrastructure solutions and support for global deployments. Web customer service: Oracle-Siebel is a Niche Player on the "Magic Quadrant for Web Customer Service," due to a lack of functionality in a number of Web customer service building blocks, most notably is the absence of a knowledge management solution with advanced features to support the Web customer service channels. Field service management: Oracle's Siebel Field Service v.8.x is sold as a part of a broader Oracle offering for service management. The applications handle parts, logistics, technical support and dispatch. The solution includes laptop, handheld and wireless mobile field service software.

The main strength Oracles Siebel CRM are as follow: The customer service contact center applications are highly scalable. There are more third-party professional service resources for deployment of Oracle Siebel CRM applications than any competing product, worldwide.
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Strong integration with Siebel analytics products. Oracle's Siebel Field Service v.8.x integrates well with Oracle service management applications for parts, logistics and technical support.

Sales force.com
Sales Force CRM basically is an online web-based Customer Relationship Management (CRM) service from Salesforce.com. As with all CRM software, it captures and organizes communications and information from current or prospective customers from many departments across a company.SalesForce.com was founded in 1999 by CEO Marc Benioff. Benioffs vision was CRM delivered on-demand. He made perfectly suited bridge the complex CRM application world with delivery over the Internet. Salesforce.com CRM solution is broken down into several broad categories Sales cloud, Service cloud, Data Cloud, Collaboration Cloud and Custom Cloud. But main cloud is Sales Cloud and Service Cloud as follow: Sales Cloud: The Sales Cloud includes a real-time sales collaborative tool called Chatter, provides sales representatives with a complete customer profile and account history, allows the user to manage marketing campaign spending and performance across a variety of channels from a single application, tracks all opportunity-related data including milestones, decision makers, customer communications, and any other information unique to the company's sales process. Service Cloud: The Service Cloud provides companies with a call center-like view that enables companies to create and track cases coming in from every channel, and automatically route and escalate whats important.

If we see both side of the coin of salesforce.com CRM then upside is successful installations report lower costs to attract and retain customers, increased employee productivity, a more efficient call center, more accurate sales forecasting and increased customer sales and satisfaction. And downside Software must initially be well integrated to be successful, and the complexity of CRMs often requires ongoing technical support. Data can quickly become obsolete if employees do not use the system correctly.

Analysis
If we compare SalesForce.com to Oracle Siebel, then SalesForce first started signing up customers in 2000. SalesForce charged $50 per month for the first five users and $50 per month for each additional user. For 25 sales reps that is $50 user/month x 21 users x 12 months/year = $12,600/year. Siebel CRM vendor would cost about $63,000 for just the installation. You add in maintenance and support cost which is typically 17-22% the original licensing fee per year. The maintenance cost alone at 20% of $63,000 is $12,600/year.
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SalesForce.com did not initially meet many customers performance needs especially the larger organizations. Their first group of consumers was in the market segment neglected by the Oracle Siebel CRM vendors. Yet over the last few years, SalesForce.com has captured the market of more traditional CRM providers. SalesForce has grown in users. The paying subscribers are 646,000 at 29,800 companies with revenue of $144 million. Probably the most telling number is the largest subscribers for a single customer are 25,000. Therefore, SalesForce.com is meeting the needs of larger organizations. Many traditional software vendors including Siebel and SAP entered into the SaaS CRM market. Therefore, it is evident the market is demanding SaaS and no longer just a disruptive technology. Searching in Google for CRM SaaS many new players are listed as well. With respect to performance, SalesForce.com had high profile outages in late 2005 early 2006.The absence of Service Level Agreements (SLAs), denial by SalesForce.com that an outage actually occurred and poor configuration management highlighted the performance did not necessarily map to the customers needs. A core area of SaaS is solid operations especially since most if not all the customers data is hosted by the service provider. If the service providers site goes down or experiences degradation in performance, the customer has no alternative path of execution. SalesForce.com recovered as there seems to be little abandonment of their service. In lieu of detailed accounts, the FY 2009 annual report was analyzed. To understand the disruptive technology (i.e., SaaS) influence, Siebel Systems last annual report was analyzed to compare with SalesForce.com. The tables below document the comparison in revenue and expenses based on percentages. Revenue SalesForce.com Siebel Systems Operations 91.79% 38.27% Professional Services 8.21% 61.73

From Table 1, the operations (monthly subscriptions) for SalesForce.com are the dominant driver of revenue. Siebels operations (software licenses) are much smaller than the professional services (consulting) that integrate the CRM system into the customers environment. A common complaint in complex software integrations is the army of high priced consultants required to make the system work. Cost of Revenue Operations Professional Services SalesForce.com 52.78% 47.22% Siebel Systems 3.45% 96.55% As shown in Table 2, SalesForces costs are almost equally split between operations and professional services. Regardless of how easy a software product is to use, there is still a mapping of the customers business process to the CRM operations. It appears SalesForce.com may keep the

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customers cost of professional services down to avoid the stigma of high priced consultants. Siebels cost of revenue is completely dominated by professional services. Operating Expenses SalesForce.com Siebel Systems Research and Marketing and General and Development Sales Administrative 9.92% 67.57% 22.51% 39.50% 47.09% 13.41%

Operating expenses are show in Table 3. Although SalesForce.com is considered state of the art for web applications, the cost of research and development in comparison with Siebel is quite low. SalesForce.com explains this difference by the fact there is less complexity and legacy software support. Siebel must support software that runs on many different platforms and operating systems which is more complex and requires much more testing. By hosting on a single platform and operating system and also keeping all the instances in a single location (i.e., central hosting facility), the required research and development required by SalesForce.com is greatly reduced. Revenue and expenses illustrate the different structure SalesForce.com takes over traditional software vendors. SalesForce.com focuses more on operations and support although maintains a large professional services arm. Marketing and sales dominates the operating expenses.

Conclusion
SalesForce.com leveraged the disruptive technology of SaaS to capture market share in CRM. While the CRM competitors focused on the sustaining path, SalesForce.com successfully navigated the disruptive path. Entering 2011, more and more providers are building applications that are delivered over the web. SalesForce.com has a first mover advantage in the emerging market of third-party application integration. With the lessons learned from early adoption of the SaaS technology, SalesForce.com should continue to lead in the CRM space and possibly other on-demand areas.

References
1. 2. 3. 4. 5. 6. 7. 8. 9. www.salesforce.com http://www.salesforce.com/assets/pdf/investors/2009AnnualReport.pdf http://www.salesforce.com/assets/pdf/investors/2010AnnualReport.pdf http://www.oraclesiebel.com/ http://www.oracle.com/us/products/applications/siebel/index.html http://www.salesforce.com/company/leadership/executive-team/index.jsp#benioff www.wikipedia.org www.google.com http://www.oracle.com/us/products/applications/siebel/crm-technology/index.html

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