Thomas Siebel's book is more likely to be cheered
by his company's shareholders than by anyone interested in using technology
to manage customer relationships
Books by chief executives aren't what they used to be.
Once, they were written at the end of a career to contribute to management
knowledge, as with Alfred Sloan's "My Years at General Motors," or David Packard's
"The HP Way." Lately, however, CEO authors have seemed mainly interested
in self-aggrandizement, either as intellectuals (Walter Wriston's "The
Twilight of Sovereignty") or heroes (Donald Trump's "The Art of the
"Taking Care of eBusiness" by Thomas M. Siebel, founder
and chief executive of Siebel Systems Inc., exemplifies the latest phase
of this sorry devolution: the CEO book as sales brochure. While shareholders
may applaud this trend, it is less clear how it serves the reader.
Siebel Systems specializes in high-end databases and
applications to manage customer servicing "Taking Care of eBusiness"
sets out to demonstrate the necessity of using advanced technology to
manage customer relationships. It defines eBusiness not as how businesses
use the Internet, but as "the strategic use of information technology
to interact with customers, prospects, and partners through multiple
communication and distribution channels."
Its early chapters argue that product differentiation
is no longer a viable means to compete; "delighting customers" is the
royal road to success, since high customer satisfaction correlates with
higher retention rates. It sets forth eight precepts of "eBusiness,"
such as "optimize the value of each customer," with case studies from
companies like IBM, Honeywell, and Quick & Reilly , and concludes with
a five-step implementation program.
A dispassionate treatment of this topic would be very
valuable for both senior executives and information technology managers.
"Taking Care of eBusiness" is anything but that.
Too often, its grandiose and heavy-handed style strains
credulity. Consider: "....boardrooms and executive offices everywhere
are filled with debates at the highest level, centered on one question:
How do we turn our business into an eBusiness? Organizations of every
size, on every continent, and in every industry are engaged in this
sober introspection." I have trouble imagining either the head of the
research station in Antarctica or the owner of the local nail salon
giving this issue any thought.
"Taking Care of eBusiness" suffers from three major flaws.
First, it advocates collecting and analyzing data beyond the point of
likely utility. One of the precepts of managerial economics is that
information has a cost, and decision-makers must deal with uncertainty,
because developing perfect information is too expensive.
While "Taking Care of eBusiness" describes projects where
the technology clearly improved productivity - such as integrating disparate
databases and enabling call center personnel to see the content of recent
customer e-mails - it also advocates dubious undertakings. For example,
it repeatedly recommends implementing an "optimized ROI based multichannel
system of sales, marketing, and service."
The allocation of the numerous shared sales and marketing
costs make this exercise suspect. And how would you ever capture the
fact, much the less properly allocate revenues, for a customer that
visited a retailer's web site multiple times before buying in a store?
Similarly, much of the gathering and massaging of customer
data that it recommends is tantamount to data mining, and historically,
70% of data mining projects have failed. New concerns about consumer
privacy add a further, unacknowledged, impediment to this process.
Second, the advice on executing projects is too general
to be of much value. The section on implementation is old hat for those
who know a smidgen about managing technology or change management Exhortations
like "maintain a bias for action" and "prototype rapidly, test, and
adjust" are not explained in sufficient detail. And the case studies
largely skipped the implementation process. By contrast, Charles Pottruck,
CEO of Charles Schwab & Co., in "Clicks and Mortar," provided tips on
managing technology projects that were far more practical and helpful.
Third, and most glaring, is that Siebel incorrectly creates
the image of unalloyed client success. Yet a Gartner Group study found
that 50% of the customer relationship management projects fail; The
Economist recently cited a failure rate of two-thirds. While mergers
and acquisitions show equally dismal results, the principals understand
the odds and (hopefully) take steps to mitigate risks. Without acknowledging
and seeking to understand why many CRM projects founder, how can companies
will steer a better course?
Perhaps the fundamental flaw of this work is that it
is two years behind the time. It is an artifact of an era of blind faith
in technology, when companies that took a sober approach were derided
as "not getting it" or worse, roadkill in the making. This headlong
rush to invest in overhyped technologies produced a massive financial
hangover. But that's what results when fear and greed gain ascendance
over critical thought.
Since "Taking Care of eBusiness" is all about selling Siebel Systems,
readers are better off using the Siebel.com web site. It's more straightforward
about its motives, the graphics are better, it's a faster read and it's