Has PeopleSoft Bridged the CRM ERP Gap?

Will PeopleSoft's latest software release make corporate users happy?
Jackie CohenJune 20, 2001

There’s nothing like starting out with a bang, and PeopleSoft certainly has sought to make a loud impact with the rollout of the customer-relationship-management portion of its PeopleSoft 8 system.

The Pleasanton, Calif.-based software developer says the launch earlier this month integrates its CRM and enterprise-resource-planning functions on the front end via a browser-based interface and on the back end.

“This is all about getting PeopleSoft back on the map,” says Sam Clark, program director at the Meta Group, a research firm in Stamford, Conn.

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Still, it’s worth noting that the leading supplier of CRM systems, Siebel Systems sold a large installation to personal computer-maker Gateway Inc., which had been an existing PeopleSoft user, on the day that PeopleSoft launched the CRM 8 product. While Gateway has licensed Siebel as an enterprise-wide installation, it will use PeopleSoft for some departmental functions.

PeopleSoft acquired Vantive in 1999, and Clark says Vantive’s system was highly regarded for its customer-service features, but less well thought of for its sales and marketing functions. PeopleSoft needed nearly two years before this month’s release of an integrated package.

Clark says the CRM system may find its most receptive audience among PeopleSoft’s existing client base for its financials and other systems.

At least one user of a test version of the system seems pleased with the results.

PolyCom, a supplier of teleconferencing equipment based in Milpitas, Calif., was already using PeopleSoft’s financials and human resources systems, and it opted for the CRM component after looking at rival offerings from Siebel Systems and Nortel Networks’ Clarify division.

Paula Casey, Polycom’s director for channel sales, support and order management, says, “One of the strong points is that we’re already using [PeopleSoft] HR and financials, so integration is very easy. It’s Internet based, and our salespeople travel a lot, so all they need is a browser and they can get into the system.”

While PolyCom is running PeopleSoft’s financials internally, Casey says the company opted to outsource the CRM component to avoid having to hire any additional technical staff.

The software will be used by 250 people in the inside sales, marketing, and management departments. But rather than license the software on a per-user basis, PeopleSoft is moving toward “value-based pricing,” which benchmarks the value of a software contract against the size of an organization and its revenues. The goal is to make it more economically feasible for a company to provide access to business partners and customers.

However, not everyone sees this as more economical.

For example, John Ragsdale, research director at Giga Group, which is headquartered in Cambridge, Mass., says this method exposes some customers to the risk of being overcharged for the software.

Some companies may use a CRM system in only one or two departments. But a software license based on their revenue may leave them paying a fee that would be more appropriate to an enterprise-wide installation.

The problem is many companies may not be ready for an enterprise- wide installation, even though they’re forced to pay for it.

“Many CRM implementations are departmental,” Ragsdale says. “CRM should be enterprise-wide, and companies are on that route, but they get into customizing the product, and then all of a sudden it’s more relevant for some departments than others. It’s only in the last year that companies are actually purchasing software intending to have a full enterprise rollout of CRM.”

PolyCom is installing PeopleSoft CRM 8’s various components one at a time, having begun beta testing in May. After a bit of tweaking, the software will be ready to go live by mid August, says Casey.

“Even though this is a beta, we’re already beginning to build our prototype for going live,” Casey says. “We’re trying not to fully customize it, because it’s expensive and harder to upgrade later. However, the software is easily configurable.”

Casey also says that PolyCom will avoid overloading its customized version with excess features so as to avoid getting stuck with a slow, and clunky system. “We’re lucky we have the caller on the phone for a minute and a half,” she notes. A system that’s too slow risks having a frustrated customer do a slow burn while the service rep waits for the hourglass on the PC desktop to retrieve the account information.

The company is setting up the CRM software as a repository for customer information from across its operations, a significant improvement over the six departmental databases that are a constant headache for the IT staff.

Yet the company is not sending its legacy databases to the scrap heap. It will continue to use them for historical data, but will house all new data into the data mart that comes with PeopleSoft.

Not only will employees be populating the software with information, but so will PolyCom’s customers. CRM 8 includes a Customer Portal, which lets PolyCom give each client a personal home page within the company Web site. The goal is to provide tracking and account information to the channel partners that PolyCom sells to, and vice versa.

“Right now if our customers want to know the status of their orders, and what their most recent purchases were, they’d have to phone up two different departments,” says Casey. “But with PeopleSoft, every single area a customer deals with is represented by the portal page. By making it easier for them, we’ll get to do more business with them.”

As for whether PeopleSoft will get more business for its newest software, analysts say it could pose a threat to the reigning champion of CRM, Siebel, provided that PeopleSoft can drum up business beyond its core customer base in the ERP sector.

At the very least, with the launch of PeopleSoft 8, corporate clients have more options to pick from. “Balancing best of breed with the cost of integration is the classic CRM problem,” says Giga’s Ragsdale. But now there will be more choices as more enterprise software providers offer integrated ERP and CRM systems.

For related stories:

Did Siebel Steal PeopleSoft’s CRM Thunder?

Can PeopleSoft Handle the Software Slump?