online.wsj.com
Oracle Shifts Priority
To Customer Service
Software Maker Revamps Sales Force
To Address Regional, Technology Needs
By MYLENE MANGALINDAN
Staff Reporter of THE WALL STREET JOURNAL
Oracle Corp. has always been known for its aggressive sales force, a group so strong it could deliver quotas on the last day of the quarter to meet Wall Street's estimates. Now, the second-largest software concern wants to be known for its customer service and its deep knowledge of customers' industries and business.
Oracle's change of heart, illustrated by the software maker's recent reorganization of its sales and consulting group, indicates the challenges facing technology companies, which have endured lackluster sales as corporations have slashed computer-related spending for the past two years. Facing emaciated budgets and a rocky economy, corporate buyers are calling the shots, taking their time and demanding better service. That is forcing technology companies to adjust their orientation toward selling their wares, as they recognize it is in their best interest to seed the way for repeated purchases.
"It's more than just the sale," said Paul Ciandrini, an Oracle senior vice president who heads up the company's commercial sales in the western region of North America. "I can make the sale and be a hero, but I can't go back in and expand that sale if it's of no value to the customer."
Oracle realizes it has to change. Total sales dropped 12% from a year ago to $9.67 billion in fiscal 2002, the year ended May 31. The company is coming off a dot-com high, a period when it sold heavily to Internet companies funded by venture capital; many don't exist anymore. In the most recent reported quarter, ended Nov. 30, new sales of Oracle's database were little changed from a year earlier, while new sales of applications, software to automate processes such as financial accounting, fell 34% from a year earlier.
Oracle, which has weathered the downturn, now needs to show its business can grow.
To that end, the Redwood Shores, Calif., company's recently completed reorganization of its 5,500-person North American sales and consulting staff is intended to improve sales by better addressing customers regionally and by technology needs. It has segmented salespeople and consultants into four groups -- overseeing its largest 250 customers, its commercial customers in the Eastern region of North America, its commercial customers in the Western area, and one to handle smaller businesses that it reaches through telemarketing and the Internet. It has asked its employees to choose a product specialty: software application programs such as financial-accounting systems, or other "infrastructure" technology such as database software. It has brought in new executives, whose consulting experience emphasizes customer service.
Even the smallest details are being reconsidered. Oracle used to offer slick presentations on its products and the features that distinguished them from those of PeopleSoft Inc. or SAP AG of Germany. Now, it uses demonstrations that map its customers' specific technology environment, so it can put itself in its customers' shoes, by focusing on problems as they see them. Oracle Direct, the telemarketing and Internet sales unit run by Hilarie Koplow-McAdams, is playing a greater role in supporting those types of conversations with customers as well as closing transactions with small companies.
"Oracle has always been aggressive," says Keith Block, executive vice president in charge of North American sales and consulting. "I don't think that's a bad thing. If it's channeled appropriately, it's a dynamite thing." That will be a big part of the message Oracle will be outlining Tuesday when it hosts a daylong presentation for analysts in San Diego.
Still, Oracle's task won't be easy. Oracle, which has been known to reorganize sales every few years, will be running into people such as Jeffrey Campbell of Burlington Northern Santa Fe Corp. The chief information officer at the railroad and transportation company, which uses Oracle software, will be spending nearly the same amount this year on software that he did last year, he says.
Most purchases will be made toward initiatives the company already started, such as expanding its use of sales-related software through other areas of the Fort Worth, Texas, company, or developing customized programs internally. The company isn't going to invest in "these huge megaprojects" that it has in the past, he said.
Write to Mylene Mangalindan at mylene.mangalindan@wsj.com
Updated January 21, 2003 |
