When Torsten Becker, Siemens' corporate program director for CRM, took the stage at a session at Oracle OpenWorld...
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last week, the topic everyone wanted to hear about was off limits – Siemens’ attempts to get out of its SAP maintenance contracts.
Yet Becker's brief appearance on stage with a handful of other European Oracle CRM customers was still instructive.
For years, a wide range of CRM vendors have used the electronic engineering giant's name in press releases and "money" slides showing customer wins. Given how well known the Siemens brand is and just how large the company is, even the smallest vendor with the smallest of installations would want to claim Siemens as a customer. And Siemens had CRM systems spread across hundreds of divisions.
Management, Becker said, decided it was time to get a handle on it all.
The process has taken some time, and apparently, a number of turns.
According to Becker, in 2004 Siemens determined that it needed to build its own CRM system for its 40,000 users.
"We thought, because we are so very individual and so special, we needed to build an individual solution," Becker said. "We found ourselves with 3,000 users on the system after two and a half years, and we had spent [more than 10] million euros on our own development."
So custom development was not the answer. And while Becker did not discuss it at OpenWorld, for a while, SAP was the answer.
Two years ago, at SAP's Sapphire conference, Siemens' senior corporate vice president David McCaulay said that, thanks in part to SAP's re-vamped user interface, the company was standardizing on SAP CRM. It was rolling out SAP CRM with the new UI to 3,000 users. That was to ramp up to 10,000 users in July 2008. Ultimately, by the end of 2009, the company would have 33,000 users running off one instance of SAP CRM, with three physical instances in Vienna, Georgia and Thailand, McCaulay said. At the time, Siemens had 500 different CRM systems.
"None of them connect to ERP and the supply chain, and they're from every vendor you've ever heard of," McCaulay said at the time. "A year and a half ago, we changed our approach. Our customers needed to be more than a series of transactions.”
That project was apparently scrapped as well.
As Becker discussed last week, Siemens again undertook a detailed evaluation of CRM systems, calling in Oracle, SAP and Salesforce.com, specifically evaluating the vendors’ on-demand products. Oracle won out, based on 11 different criteria, six based on the tool itself and five on other factors, including references from large customers.
While Oracle CRM On Demand won out as the corporate standard for CRM, Siemens isn't forcing its divisions onto the new system.
"We are not rolling out CRM; we are selling it," Becker said. "We don't force our sales organizations to use it."
Becker and his organization provide the divisions with the business case for Oracle CRM, calculate the cost savings and let them decide whether they want to move to the new system. Of course, there is a caveat. Any organization that wants to invest more in CRM must invest in Oracle CRM On Demand.
So far, the initiative is working, Becker said. By next July, Siemens is scheduled to have 15,000 users on Oracle CRM, he said -- twice what he had initially estimated.
Siemens, for its part, is making a convincing case for large enterprises deploying software as a service (SaaS). Siemens is also investing in SaaS HR applications. It's begun a well-publicized deployment of SuccessFactors’ on-demand talent management software to 420,000 users.
Maintenance and support appears to be a significant factor. At his OpenWorld appearance, Becker said the company hopes to cut its CRM costs by 90% by moving to an on-demand model, and the company continues to scrap with SAP over maintenance.
How can SAP custom development be limited?