PeopleSoft Bets Its Life on CRM

PeopleSoft has bet all its chips on the hand it will play today in Las Vegas, as it unveils its first front-office software suite, designed to run on the Internet.

PeopleSoft has bet all its chips on the hand it will play today in Las Vegas, as it unveils its first front-office software suite, designed to run on the Internet.

The company, its customers and competitors will soon learn if PeopleSoft is going to be a winner or walk away from the table empty-handed.

PeopleSoft 8 CRM is the culmination of two years of directing revenue toward research and development of customer relationship management software — when the company could have been resting on the success of its back-office solutions instead.

"Its the defining moment for PeopleSoft," said Craig Conway, president and CEO. "Were convinced this is the next generation of CRM."

PeopleSoft claims it will be the first software company to have a complete front- and back-office suite, which means employees in accounts receivable will have access to the same data as salespeople, and those in human resources will have access to the same information as the call center operators.

To get to this point, PeopleSoft reshuffled the deck when David Duffield, founder and longtime CEO, retired in 1999 to allow Conway to take over. Immediately, Conway brought in his own management team and spent $433 million to acquire Vantive, a successful CRM company.

Most important, Conway issued a corporate directive: Begin designing every application for the Internet, rather than building software based on clients and servers.

That means customers that purchase PeopleSoft 8 CRM wont even have the option of installing client software. The product includes only the applications that run on the companys server and a browser needed to use those applications.

"We bet a lot just in terms of delaying the release [of CRM] just to get to the Internet," said Stan Swete, senior vice president of product and technology at PeopleSoft. "We had people debating it right up to the launch, but I always thought thats what made it an interesting product."

Its also what attracted customer Paula Casey, director of channel sales, support and order management at Polycom, a video and voice technology company. Casey, who has been beta testing PeopleSoft 8 CRM, was embarrassed to admit her salespeople are still using Microsoft Excel spreadsheets to keep track of data. However, she said she looks forward to providing them with PeopleSoft 8 CRMs sales force capabilities.

One-Click Information

Not only will salespeople have immediate access to customer data without any client install, but Polycom can open the platform to its partners as well. "Theyll have access to a lot of their information at the click of a button, where before they would have to make a couple phone calls," Casey said. Casey was scheduled to attend the PeopleSoft Leadership Summit in Las Vegas this week for the official introduction of the new product.

Coming off quarterly earnings that were better than expected, and relying on a successful Enterprise Resource Planning (ERP) business, CEO Conway believes the company is well-positioned to compete in the CRM space with Siebel Systems — which has a commanding lead in the market — as well as Oracle, E.piphany, Nortel Networks Clarify and a host of others. PeopleSoft also wants to get a head start on rival SAP, which has begun writing its own CRM software.

PeopleSoft was started on a bet 14 years ago, when Duffield wagered that client-server was going to be the new architecture for network computing. He founded PeopleSoft, which became one of the fastest-growing software companies in history.

Competitors have criticized PeopleSofts Internet-only approach to CRM, saying browser screens arent appropriate in certain environments.

"The key to being Internet-enabled is not just running Web-based applications," said Steve Mankoff, senior vice president of technical services at Siebel. "Windows applications have a high level of interactivity, while the Web is simplistic. For the internal call center, using the Web is simple but not appropriate."

Conway countered, "Not only does [PeopleSoft 8 CRM] have full interaction, but it has the same performance response that the client-server application does."

Along with embedded analytics and eXtensible Markup Language integration in PeopleSoft 8 CRM, PeopleSoft claimed it will integrate data for front- and back-office workers. Previous attempts to make this possible involved integrating systems from multiple software vendors. However, Conway said the industry has shifted away from this best-of-breed philosophy, which has met with long implementation times and unrealized return on investments. Instead, hes betting his customers want one software company with one system.

"When you build an organization where your customer management systems are collaborating with your supply chain management systems, collaborating with your capital management systems, you really cant afford to have multiple vendors," Conway said. "I think the days of best-of-breed are over."

Some analysts agreed that PeopleSoft 8 CRM leapfrogs the competition in functionality and front-office to back-office integration.

"I think this is what a mature edition of CRM is going to look like," said Bob Chatham, principal analyst at Forrester Research. "This is really just the articulation of PeopleSofts journey, but its only the beginning."

Chatham also warned that there is a disadvantage to being so far ahead: Not only does the competition have to catch up, but so do customers — and they might not be ready.

"Theyre correct in their recognition that the front end needs to be tied to the back end, and customers understand that theyll need that someday," Chatham said. "But, in terms of adoption, its really a 2002 event."