Deal Brings Analytical CRM to the Fore

Siebel Systems Inc.s purchase of nQuire Software Inc. last week gave clear evidence to many that the next phase of CRM—using software that analyzes customer interactions in the hope of making those interactions more profitable—has arrived.

The combined software will enable users to not only plan and execute marketing campaigns and other customer relationship management activities but also analyze the results of those events.

Siebels CRM software, like that in much of the rest of the industry, has traditionally been focused on selling to and servicing the customer with so-called operational systems. Software such as nQuires, which is targeted at nontechnical business users, adds a new element—analysis—which some users are already working with.

“If youre just operational-driven, without the analytics, thats not a good way to do business,” said Harry Egler, division vice president for market planning and CRM at retailer Eddie Bauer Inc.

The need for analytical CRM is particularly acute for companies with multichannel operations, like Eddie Bauer, which sells clothes in stores, online and through catalogs.

“Now vs. five years ago, its much more important to understand the total customer contact environment, both inbound and outbound,” said Egler, in Redmond, Wash. “You have to have more and more data, navigate that data and convert it to meaningful information.”

Eddie Bauer builds statistical modeling applications from SAS Institute Inc. analytic application development frameworks and uses packaged SAS applications such as Enterprise Miner with marketing automation software from the Teradata division of NCR Corp.

Mark Smith, president of Full Circle Strategies, in Truckee, Calif., praised Siebels acquisition as the companys first “serious investment” in analytical CRM. Siebel had relied on OEM relationships and partnerships with analytical software vendors. “They were just doing a lot of me-too stuff in the past,” Smith said.

With nQuire, which has offices in San Mateo, Calif., and Minneapolis, Siebel gets technology thats adept at drawing in data from disparate sources and analyzing it in real time without having to build a separate database, Smith said. This provides faster and more accurate analysis, he added.

Siebel, of San Mateo, plans to eventually integrate the nQuire analytic server and Web-based reporting capabilities into its new Siebel 7 release, which was announced last week.

In a further sign of shifting CRM sands, Nortel Networks Ltd. last week sold its Clarify Inc. unit, which sold traditional operational CRM software, to St. Louis-based Amdocs Ltd. for $200 million. Nortel, of Brampton, Ontario, bought Clarify in March 2000 for stock valued at $2.1 billion at the time.