>>what do you think of my theory that Siebel's future success will be tied to customer service business, rather than SFA?
Well if Siebel is going to have a multi-billion dollar market cap it better succeed in more than just SFA as the market for best of breed SFA is not HUGE. You are now talking about the 'integrated approach' Siebel has adopted.
Back to ROI:
This is taken from Siebel Magazine (at siebel.com )
"Compaq Computer Corporation estimates that it will realize a full return on its investment in Siebel Enterprise Applications in 90 days, and productivity gains are projected to be in the 30 percent range.
Digital Equipment Corporation's world-class call center in Littleton, Massachusetts, uses Siebel Enterprise Applications to handle all inbound and outbound activity. Not only was the implementation of Siebel rapid, but Digital also reports a 20-point increase in customer satisfaction since the Siebel-based call center opened.
Montgomery Securities, a leading investment bank and brokerage for emerging-growth industries, implemented a Siebel solution in order to empower its bankers, resulting in 20 to 40 million dollars of revenue in terms of not missing a deal. "
I note that Siebel Software IS helping these organizations -- no doubt. I also note that the figures above are guesses and projections. What is Compaq going to say, "we just spent a ton of money buying and implementing Siebel Software and we are sorry to say we are not projecting much return from this investment"??? With regards to the Montgomery Securities reference, SOFTWARE being the difference in "not missing" 20 to 40 million dollars worth of deals??? This is totally misleading . You could have bought a good contact management system for a fraction of the cost and earned the same return (resulting in a much higher ROI).
I guess the real point about the SFA business is: if SFA and other software is the catalyst in truly helping a business redesign its focus into more efficient processes, then it deserves HUGE credit. It deserves a big portion for the marketing, and some portion for the automation the software provides. Sorry techies, marketing wins again.
The other issue is that when talking about the stock market, you also have to factor in the premium placed on the company's ability to generate earnings and its ability to reinvest cash flows. Siebel has enjoyed a big premium because its growth has been there. Tom has built a company capable of potentially becoming a very large software vendor - you just have to pay up for a marketing company rather than a true high-ROI company and I tend to let other people play high-PE, high hype investments. I am certainly not trying to predict how this all exactly unfolds, anybody who thinks they know for sure is a fool. I would be willing to make a small investment in Siebel if I thought the entry point was a great low-risk opportunity. There was a great entry point last Spring when Clarify blew up and there may be another one coming so stay tuned. Are you in SEBL stock??
|
