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Technology Stocks : Siebel Systems (SEBL) - strong buy? -- Ignore unavailable to you. Want to Upgrade?

To: Clam Clam who wrote (1014)	12/20/1997 2:04:00 PM
From: Lee L.	Read Replies (1) \| Respond to of 6974

Expected ROI from a Sales Enterprise implementation has a couple of key components: 1. Improved sales rep productivity 2. Improved revenue forecasting though opportunity reporting 3. Revenue enhancement through opportunity management 1. For large enterprises, a Siebel implementation cannot be justified on the basis that it makes the sales rep's day more productive. If this is the business driver for a company's SFA project, then a low end contact management, office productivity (word processing, faxing, etc.) and communications (email, internet, etc.) configuration would suffice. This type of configuration could possibly be achieved for under $4K per person in initial expense (med/low end notebook, MS Office, Outlook, SFA software) plus ongoing technical support. This type of approach would be welcome by the sales guy, but buys little for executive management and has minimal ROI potential. 2. For businesses that operate in very dynamic and competitive markets, executive management could justify a Siebel implementation as it could provide the very best means to forecast customer and product revenue. To make this successful, all sales reps would be required to quantify everything at a customer account in terms of a sales opportunity. At minimum, the opportunity should have a quantified revenue potential for a specific product for a specific expected order date. Adding opportunities like this is of little value to the sales rep, but of great importance to executive management. Ascend is a classic company that would benefit from implementation of an opportunity reporting processes. These guys don't have a clue as to what their quarterly revenue numbers are until the last days of the quarter. This is because (IMO), they don't have a clue as to what's going on in sales. Ascend's business would make effective opportunity reporting a big challenge -- lots of customers in different industries, lots of dynamic products, very competitive market place. The sales guy has a lot of reporting work to make the data meaningful. Since this reporting typically doesn't result in sales commissions, then the sales guy isn't inherently motivated to participate. This business driver has little direct ROI and can be difficult to implement effectively. But, for large enterprises, Siebel sells very well for this purpose. 3. This is where the money is in a Siebel ROI, but this is the most difficult to implement. Taking opportunity reporting to the next level would result in the integration of the sales cycle into other key functions of the enterprise like manufacturing, customer service, etc. As an example, suppose our Ascend guys accurately recorded and managed every sales opportunity. And for each opportunity, a list of activities or issues where identified -- pricing concerns, competitive products, delivery issue -- that quantified barriers to closing the opportunity. Since revenue is associated with each, the entire enterprise can participate in quickly closing key opportunities -- Pricing can quickly recognize and react to pricing on a particular product that isn't competitive (or better yet, visa versa, pricing can be increased due to lack of competitive pressures!), manufacturing has the earliest visibility into shifting product demands in advance of the order cycle.... Thousands of new business transactions would be generated and routed through the enterprise. Siebel on its own can't make all of this happen, but its integration into the enterprise can. If successful, the result can be big-time revenue improvements and inventory savings. Low and medium-end SFA products don't play here. Right now, Siebel's the only game in town. To argue that Tom Siebel's sales message is full of hype is to argue that #3 can be rarely achieved. This is a good argument considering that only exceptionally well managed companies with strong leadership can make this happen. Siebel's magic software won't do it alone. One last comment on the topic -- I believe that Siebel's future success will be less and less dependent on the success of sales implementations. I believe that their future is more closely tied to their success in providing customer service solutions to the service sector. So, if I'm correct, discussions like this will become less relevant to Siebel's future growth. Clam, my intent is not to lecture here, but to provide MHO. I appreciate that you have a broader, more balanced perspective on this market -- and it's even possible that you understand Siebel better than me! ; )