Software For The Hard Sell

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March 2, 1998

Software For The Hard Sell

By adding functionality, sales-force automation systems are overcoming a bad reputation

By Tom Stein with John Foley

fter years of unsuccessful implementations, immature product functionality, and lack of acceptance by salespeople, sales-force automation software may finally be hitting its stride. Market leader Siebel Systems Inc. will introduce a major upgrade to its product suite this week at an industry confere nce in Chicago. Also, Oracle will unveil a revamped SFA system as part of its enterprise application strategy. Both are designed to address SFA's traditional limitations by easing implementation, improving usability, and connecting better with back-office applications such as accounting and manufacturing systems.

SFA applications can dramatically reduce selling cycles and facilitate closer relations with customers. A typical SFA application suite comprises several integrated parts, including an opportunity-management module that tracks sales prospects, a sales-analysis system that analyzes customer data and predicts future sales, and a sales-configuration system that helps users determine products and pricing arrangements.

But SFA software has been hampered by complexity and negligible payback. Jeff Golterman, a research analyst with Gartner Group Inc., says about 55% of SFA projects fail to see a measurable return on investment. Tom Siebel, chairman and CEO of Siebel Systems, in San Mateo , Calif., acknowledges that companies have had problems with SFA projects. "In a lot of cases, they've failed twice, two VPs have been fired, and the CEO is spitting mad," Siebel says.

Pat Robitaille, CIO of Tab Products Inc., an office-products dealer in Palo Alto, Calif., has survived several generations of SFA software. Tab rolled out its first sales system nearly three years ago. "At that time, our greatest challenge was getting over the learning curve," says Robitaille. Six months ago, Tab purchased Vantive Corp.'s SFA suite and plans to have 750 salespeople on the system. "The problem with early SFA systems is that people tried to measure the benefits way too fast," Robitaille says. "This software is evolutionary--give it time, and you will be very successful."

More users are giving SFA time. "When we first started thinking about sales-force automation back in 1994, there was nothing out there for us," says Lisa Fearon, manager of sales-systems development at the Ritz-Carlton Hotel Co . in Atlanta. Ritz-Carlton plans to roll out software from Sales Vision Inc. in Charlotte, N.C., to 700 of its sales reps by this summer. "This is our first attempt to unify all our hotels and salespeople on a single system," says Fearon. In the past, because information was not shared among sales reps, corporate customers such as meeting planners might receive phone calls from 10 different Ritz-Carlton sales reps, Fearon says. "This system should help us be proactive and better understand the needs of our customers," she adds.

Chris Selland, a research director at the Yankee Group Inc., says there are two reasons why SFA has traditionally underperformed. "First, SFA has no vertical focus," he says. As a result, considerable customization is required, which affects implementation times. Also, SFA suites were originally tailored more to the sales manager than the salesperson. "Salespeople rebelled," says Selland. "They refused to use this stuff because it didn't help them sell and it made them feel li ke they were being micromanaged."

Vendors are starting to address both those issues. Vantive, in Santa Clara, Calif., is adding an "online coaching" function that should make it easier for salespeople to locate and retrieve critical information while in front of the customer. Siebel Systems, meanwhile, is reshaping itself around vertical markets. By year's end, the vendor plans to have products for five different industries: insurance, banking, telecom, consumer packaged goods, and pharmaceuticals. "This should dramatically reduce implementation times," says Bruce Cleveland, Siebel's VP of marketing. "Things that had to be customized before will now be standardized and done in advance."

This week, Siebel Systems will roll out its next-generation SFA suite, Siebel 98. The product features a sales configuration engine, a browser-based interface that will let salespeople navigate the system more easily, and a module dubbed Siebel Marketing Enterprise that will let marketing execs and business managers crunch data gathered in the field by sales reps.

Also, Oracle will formally unveil Oracle Front Office, a suite of applications that will include new call-center functionality as well as a sales-analysis module and a customer-retention and "churn" module that will warn users when customers are about to defect. Oracle officials say Front Office, which is a refurbishing of Oracle's sales and marketing application, should be ready by April and will be priced at about $2,500 per user.

Onyx Software Corp. in Bellevue, Wash., will announce this week a process module for its Onyx Customer Care software package that's specifically designed for high-tech companies, aggressive adopters of SFA, and customer-care applications. The module will include user screens, industry-process maps, and workflows.

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Newcomers
Meanwhile, a handful of vendors will make their formal entries into the SFA arena. Moss Micro, an Irvine, Calif., startup, will debut ActiveSales, which company officials characterize as an easy-to-use suite of SFA applications. Rubric Inc. in San Mateo, Calif., will help launch a software segment called "enterprise marketing automation," which is designed to improve such marketing tasks as campaign management and lead qualification.

The growing interest in sales-force automation also has attracted the attention of major ERP players such as SAP and Baan. This week, Baan subsidiary Aurum Software will introduce the Baan Solution Pax 2, a tool that should provide tighter integration with Baan's back-office ERP applications. Aurum also will announce that Deloitte Consulting is readying a team of 200 consultants dedicated to implementing the Aurum suite.

Late last year, SAP bought a 50% stake in a European SFA firm called Kiefer & Veittinger. But SAP has been quietly developing its own SFA product, which company officials say will include an opportunity-management module, as well as a marketing encyclopedia, reporting functions, and a product configurator. Officials say the SFA product will be tailored first for the high-tech, pharmaceutical, and consumer packaged-goods industries.

The potential for sales efficiency and increased productivity has made sales-force automation a high priority. "We were daunted by what we heard about SFA failures," admits Bob Epstein, CIO of Sybase Inc. The struggling database company is implementing Siebel's system and hopes to roll it out to 1,200 users later this year. Says Epstein: "We came to the conclusion that the only thing scarier than doing this project was not doing it."