2001 Jan 01
Siebel Systems Siebel Marketing Solutions
David M. Raab
DM News
January, 2001

One of the most dependable patterns in the software industry is that integrated suites will displace multiple stand-alone products. The advantages of integration are overwhelming from a customer standpoint: faster deployment, lower integration costs, and less risk of failure. The main disadvantage of integrated suites–less-than-best functionality for specific components–diminishes over time as requirements for once-new applications become better understood and therefore easier to incorporate into integrated packages. (A cynic might add that the greatest benefits of suites accrue to the IT staff whose risk and effort are reduced, while the disadvantages are suffered chiefly by users who often have relatively control over the final decision.) The result is that “best of breed” stand-alone systems sell to an ever-shrinking upper tier of the market where the users are sophisticated enough to understand their advantages, large enough to that the incremental value outweighs the added deployment cost, and skilled enough to undertake custom integration with a reasonable expectation of success. Whether it is office suites replacing stand-alone word processors and spreadsheets, customer contact centers replacing specialized call center and sales automation systems, or enterprise management suites replacing stand-alone manufacturing and logistics systems, the result is the same.

So it is utterly unsurprising that marketing software has seen a similar evolution from stand-alone systems for data extraction, segmentation, campaign management, reporting and analysis toward integrated marketing suites. But the outcome of this process is not self-evident despite the inevitability of integration in general. What’s unknown is exactly how the integration will occur.

Siebel Marketing Solutions (Siebel Systems, 650-295-5000, www.siebel.com) represents one vendor’s approach to marketing integration. Siebel dominates the market for high-end customer service and sales automation systems. Its Marketing Solutions comprise three modules–for campaign management, data analysis and Internet marketing–that incrementally extend its existing products. This is a sharp contrast to vendors with their roots in outbound campaign management and analysis, whose idea of an integrated marketing solution neatly excludes the operational contact systems themselves.

In practical terms, Siebel’s approach means that its marketing solution is centered on the same customer database as its operational systems. This statement should immediately alarm every veteran of the database marketing industry, which spent much of the past decade arguing that marketing and operational database should be physically separate. In a nutshell, the difference is that marketing databases read data on many customers at once, while operational databases write data on one customer at a time. Efficiently executing both functions in the same physical structure is generally considered impossible (although a few systems, notably NCR’s Teradata database, make a credible claim to the contrary).

The good news is that Siebel has not made this mistake. The analytical component of its marketing solution is built on star schema data structures, which are indeed the approved structures for classical marketing databases. Data is periodically extracted from Siebel’s operational databases and loaded into the stars, which are used for analysis and selections. In fact, this portion of the system is so distinct from the rest of Siebel that the vendor has chosen to built it with third party software: Informatica for data extracts and transformations, and Business Objects for reporting and analysis.

So far, so good, although the use of third party software weakens the integration benefits from Siebel’s solution. (Actually, Siebel only claims it has simplified implementation by preintegrating the different pieces of its solution, which is true. The final changes necessary to complete a real-world installation must still be made in the three separate systems.)

But Siebel has not just built an analytical database extracted from its operational systems. The heart of Siebel Marketing is its ability to link analytical and operational systems so the distinction largely disappears from the user’s view. At the data level, Siebel does this through integration technology acquired in its January 2000 purchase of Paragren Technologies. This technology lets users define customer segments using a combination of operational and analytical data, as well as external data that has been mapped into the system via ODBC connections. In practice, selections are made first against the analytical data–these tend to involve the complicated queries that analytical databases are good at. The resulting list of customer IDs is then passed to the operational database, where names and addreses are appended and simpler selections are made using the up-to-the-minute information. Because the last step in the selection process occurs in the operational database, Siebel can record the selections in its main contact history file, thereby ensuring a single, comprehensive contact record is immediately available to all operational systems.

The complexity of this process is largely hidden from the end-user, who instead sees a reasonably powerful, reasonably easy campaign management interface. Marketing programs are laid out on a flow chart that lets users include multiple customer segments and outside lists, allocate names among multiple offers, and execute multiple steps over time. This should be adequate for most purposes, although sophisticated database marketers may have complaints: complex selections rely on an administrator or advanced user to predefine calculated measures; large numbers of segments are awkward to manage in a flow chart; and the interval between program stages must be built into segment definitions rather than defined explicity on the flow chart itself. But other portions of the system are quite advanced: it captures cost and revenue estimates for pro forma calculations, links each contact to offers listed in a separate database, lets users create complex source code definitions and export formats, and can apply standard filters with separate inclusion and exclusion logic across selections.

But while competent campaign management is important, the real advantage of the system is its close relationship with other Siebel components. At the functional level, this means it has access to standard Siebel functions including a scheduler to run campaigns on a regular basis, fine-grained security to control user access to different data elements and capabilities, and work flow to manage the tasks involved in building and approving a marketing project. More important, campaigns designed in Siebel Marketing can be directly deployed to operational systems to execute in real time–something that requires complicated custom integration in most other marketing systems. This could be an overwhelming consideration for marketers struggling to coordinate outbound and inbound customer contacts. Of course, it only works if they use Siebel operational systems as well.

In addition to campaign management (Siebel Marketing) and analytics (Siebel eBusiness Analytics), Siebel Marketing Solutions also includes Siebel eMarketing, which generates personalized email messages, newsletters, surveys and Web pages. Like the campaign manager, this is a respectable tool whose primary advantage lies in its close ties to other Siebel functions. For example, Web surveys are written in the same scripting language as telephone survey, so they can easily be deployed in both places and can post replies directly to the main customer database.

The current release of Siebel Marketing Solutions runs on Windows workstations and Windows NT servers, although a browser-based version is due in the first quarter of 2001. Marketing and eMarketing are priced on the number of users and database size and start at $250,000. The cost of eBusiness Analytics depends on the reporting modules and number of users and starts at about $200,000. Components of Siebel Marketing Solutions have been sold to about 60 firms.

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David M. Raab is a Principal at Raab Associates Inc., a consultancy specializing in marketing technology and analytics. He can be reached at draab@raabassociates.com.

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