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An independent study by market research firm Nucleus Research Inc. concluded that a disproportionate number of Siebel Systems Inc. reference customers are not getting a return on investment from their Siebel CRM implementations.
Nucleus Research, a Wellesley, Mass.-based firm specializing in research on the return on investment companies get from deploying various IT systems, contacted 66 customers referenced on Siebels Web site. It spoke to 23 of the customers, with an additional 12 declining to be interviewed. The rest did not respond to the companys survey.
Nucleus reported that 61 percent of the customers it surveyed did not believe they had achieved a positive ROI from their Siebel investment. In addition, 78 percent of the surveyed customers said the product was not user-friendly, and 65 percent derided Siebels customization capabilities and performance.
Most of the customers interviewed by Nucleus conducted large-scale deployments of the market-leading customer relationship management software, with the average cost of a three-year deployment at $6.59 million, including software, consulting services and support personnel. That cost works out to about $18,000 per user, according to the study.
Ian Campbell, chief research officer at Nucleus, said the research firm set out to find best practices for Siebel implementations to share with its clients, many of whom are looking to deploy CRM systems. What it found instead was that even those customers lauded as success stories on Siebels Web site have had a great deal of difficulty deploying the software.
“We found so many reference customers who were disappointed with their [Siebel] implementations,” said Campbell. “It was a little shocking.”
A Siebel spokeswoman dismissed the Nucleus survey as “statistically insignificant,” since it did not take a large enough sample of the companys customer base.
“We dont believe that 23 customers are statistically relevant,” the spokeswoman said.
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Campbell, while conceding that the report did not represent a statistically significant sample of all of Siebels 3,500-plus customers, defended the research, saying it showed a common theme of dissatisfaction among customers recognized on Siebels Web site.
“When theyre holding these people up as their best customers and we get responses like this, its either incredibly bad luck or there has to be a problem,” he said. “Theres quite a discrepancy between what Siebels marketing material conveys and what these customers told us.”
Siebel executives continually tout the companys customer satisfaction levels as the highest in the software industry. The companys Web site lists that figure at 96 percent, according to research performed by Satmetrix Systems Inc., which also develops customer survey software that works in conjunction with Siebel and other CRM applications. Siebel Systems is a minority investor in Satmetrix.
A spokesman for Satmetrix, in Mountain View, Calif., declined to comment on the discrepancy between the Satmetrix numbers and Nucleus survey, referring all inquiries to Siebel.
Siebel, on its Web site, says its customers on average see a 12 percent increase in revenue, 20 percent in employee productivity, and 20 percent in their own customers satisfaction, with ROI typically in less than 10 months.
The Nucleus study concluded that companies deploying Siebel software should take a phased implementation, starting first with the applications that will deploy the greatest returns, and establish a way to measure the costs and benefits of such a deployment. The Siebel spokeswoman said the company agrees with these recommendations.
Nucleus also recommends that companies consider other vendors applications and non-technology alternatives to CRM deployments. Companies that do decide to go with Siebel should negotiate aggressively on price and maintenance contracts, Nucleus says, renegotiating if necessary if implementations go awry.
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