Thought Leader Interview
Denis Pombriant: So let’s just dive in. Anthony, you've been in and around the CRM world for a long time, and you were a big part of bringing
Siebel into the Oracle fold. What are some of the big issues that you've seen and dealt with in all of this time?
Anthony Lye: I think what makes this industry so much fun is first and foremost I really do enjoy the customer side of a business, much more so than the supplier side of the business. And I don't mean that in any detrimental way to my friends who work on supply chain and financials. Customers are very tricky things. Customers are people with emotions.
There aren't any rules and regulations that define a customer relationship. And so companies that manage their customers better than others tend to do better than others. Now, within the space of CRM I think we're constantly challenged by business transformation and technology transformation. And over the last five, six, seven years and I think for the next five, six, or seven years there will be a number of these transformations that we have to work with our customers to solve.
DP: Such as?
AL: Well, on the business side I think the whole concept of customer centricity is a journey that some are taking, some have taken, and some are still waiting to take. I think we're seeing business transformations around multi-channel and cross-channel customer experiences. I think we're seeing business transformations around sales effectiveness, around loyalty, lifetime value and clienteleing. They're all great examples of business transformation that we in the software industry have to understand and have to model and provide as part of our solution.
It's the same on the technology side. There are continuous technology transformations that we have to be aware of, that we have to anticipate. And some of these, I think, are obvious. I think business intelligence has been a very significant technology transformation. Putting business intelligence into the transactional applications is something that some customers have done, some are doing, and some have yet to start.
Mobility is an enormous technology transformation. Cloud computing, another significant technology transformation. Social relationships. Java as a standard. There are all sorts of technology transformations. So my job here is to anticipate, to understand, to interpret the business and technology transformations and to ensure that we leverage those and provide those as part of our solution to our customer base.
DP: That’s a lot of transformation!
AL: Transformation or change is generally what creates opportunity. With change comes resistance typically from the incumbents. And it presents an opportunity to the companies that can take advantage of that change, that can deliver solutions in a market that will affect market share. I think you have to look at both business and technology as sort of the primary drivers of change.
DP: Now, you talk about change as sort of the generator of new opportunities. When we look at CRM and what it was, say, 10 years ago -- half a dozen stovepipes that include marketing and sales and service, et cetera -- what do you think about the possibility or the opportunity for more green fields opening up as time goes on? Have we done everything that can reasonably be done in CRM or what are the new green fields that you see?
AL: I think there are green fields. I'll tell you that I believe that the basic business flows or the basic transactional definitions that drive a marketing organization, a selling organization, servicing organization have been well defined. I think those are now commoditized within the basic application suites. I believe that those sort of transactional flows account for about 80 percent of the base value of a CRM system.
I still believe that there is opportunity within that 20 percent. I think it's increasingly more and more difficult for independent companies to create sustainable businesses in the CRM sort of software applications market because now so much comes from the base data, the base transactional system, the base data warehousing system that drive this 80 percent.
So there definitely is opportunity. I just think that that opportunity now is more and more associated to the base system. I think that there are different opportunities that exist in business-to-business and different opportunities in business-to-consumer.
There are some that cross both, but CRM is a very, very big market. And really you have to sort of step back and understand that we are all customers of companies. And we exist in both businesses and as individual consumers. I think that as the markets commoditize and the main vendors extend their application suites, the opportunities look more and more like features as opposed to brand-new solutions.
DP: As you were talking it reminded me that when CRM started out it was primarily a client-server kind of application. We basically had to rebuild the whole suite -- not me, personally. But we had to rebuild the suite to accommodate the browser and cloud computing or whatever variant it was called at the time. As we're looking at the marketplace now, mobile technology and tablet computing is providing another platform.
And the possibility exists that we may have to port or rebuild a lot of the suite to accommodate or to take advantage of the functionality of the tablet. What do you think of that?
AL: I do think that mobility is a very significant transformation for an audience within the CRM market. I certainly believe it's a significant opportunity for field sales people where I think the mobile devices and tablet devices as a technology offer a much richer experience with gestures and touch screens.
I think they offer more significant value from simple things like the boot time. There are basic elements of the technology that's being delivered in the mobile devices that will affect the selling part of the organization as well as the field service parts of an organization. I don't think you're going to see call centers replaced or desktop personal computers replaced with iPhones.
So I don't think it's for everybody, but certainly in sales and field service it makes sense. Now I believe that mobility is having a very significant impact on the end customer. As consumers, the mobile device is becoming a very significant channel upon which we want to do business. We want to receive offers and promotions through our mobile devices. We want to conduct commerce on our mobile devices.
And we want to use the mobile device as a catalyst for us to move from one channel to another. I may start an interaction as a consumer online at home on my personal computer, and I may want to conclude the transaction in a store. To get me from the browser on my personal computer to the store, my mobile phone provides me with a very, very good catalyst. So mobility will change consumer behavior as well as sales and field service behavior.
DP: Just parenthetically, are you still an iPhone user?
AL: I am an iPhone user. I am a MacBook user. I am an iPad user. I like the simplicity. I like the idea that the software and the hardware were manufactured to work together. That provides me with a value and an ease of use and experience that I can't get from a number of independent vendors in a more sort of layered approach.
DP: I know what you mean, I recently got an iPhone 4… Hey, let me ask you a question about e-commerce and ATG. You guys just spent a billion dollars to buy ATG. Is that because e-commerce is becoming more strategic?
AL: Actually we chose to acquire ATG for something much more transformational than e-commerce.
DP: Tell me about it.
AL: We really believe that ATG has a tremendous platform, a platform that we believe will enable something we call cross-channel CRM retail and commerce. And note that I dropped the "e" from the commerce. So we certainly believe that in the short term owning the best of breed e-commerce vendor on the planet will give Oracle an abundant amount of opportunity, opportunity within our installed base to extend the investment that people have made with Oracle, opportunity within the ATG installed base to bring in Oracle products, applications, technology and even the Exalogic machine.
I think it gives us a wonderful solution footprint in the sort of business-to-consumer as well as business-to-business market to compete in the white space, in new areas of opportunity. But the short term aside, what we really see happening is a fundamental business transformation. The customer experience that we have spent so long to define on what we call multi-channel strategy is where you try to have a consistent treatment of the customer on each channel.
What I mean by that is if you interact with me on the Web site, you should be able to start and end the process online. If you choose to interact with me through the call center, you should be able to start and end the process on the phone. Same for the store, same for field sales. That's what multi-channel is. The truth is the customer experience and the customer journey is more suited to a cross-channel experience where they may start the process on one channel and end it on a different channel.
They may cross other channels in between the start and the end of the business process. The simplest way to think about this is the experience we all have with Best Buy. Best Buy has a wonderful cross-channel experience. I can peruse the products and make my decisions about products like televisions online. And then I can get the instant gratification of placing the order online but picking that order up in five minutes as I drive down to the store.
That's a wonderful example of a cross-channel process. And I believe every single customer wants a cross-channel experience with their vendor, both B2C and B2B. And ATG has a platform that enables the use of Web technology to persist on all of those channels, on the Web, in the call center, on the mobile phone, at the point of sale device, at the kiosk, within social networks.
And behind it they have a merchandising platform that enables a single person within an organization to merchandise consistently across the different channels. So the Web enables the cross-channel flows, and the merchandising application enables consistency of price, promotion, and placement across all those different channels. That, to me, is a fundamental transformation and one that will differentiate companies that implement these cross-channel customer journeys.
DP: I think you're absolutely right. It occurs to me again as you're speaking that there's a huge difference between the commerce side and the customer service side. I suppose as long as the customer is the one deciding when, if, and how to cross channels, it's okay. I think I sent you an article from Harvard Business Review recently that actually talked about how customers are put off by changing channels in a service situation and how they're really not interested so much in being "delighted" as they are in having a very simple and effort-free service experience.
AL: Yep.
DP: The unifying concept there seems to be ease of use.
AL: Yes, but let me be very clear. Oftentimes at service organizations the strategy has been to move the customer to the lowest cost channel and to try and get the customer through the process on the lowest cost channel. I fundamentally believe that customers are kings. They will control more and more of our destiny. They will control more and more of [the spend]. And it's critical that we enable the customer to do business with us on the channels that are effective and efficient.
I think customers want an experience that is both effective and efficient, and so do we. I think what you're going to see is that certain processes are better driven in a cross-channel process and certain processes are better executed in a single-channel process. What I'm saying, Denis, is if you are without cross-channel workflows you will be at a disadvantage to your competitors if they have enabled cross-channel flows.
DP: Right. A minute ago you were talking about B2B and B2C. It seems like CRM's always been more at home in a B2B setting. Do you see the B2C setting becoming more important over time?
AL: It's interesting that you say that. I think the perception that CRM has been more at home in B2B I would sort of challenge. I think CRM has been more at home and more significant as an application, as a process transformation in B2C. I think the market sizes will show you that the B2C CRM market is significantly larger than the B2B market.
I think in B2C you have a higher volume of customer. You rely there for a lot more on the business process to optimize your efficiency and execute your strategy. In a B2B environment you tend to rely a lot more on people than you do on process. And the processes in a B2B environment are much simpler than they are in a B2C environment. It's really people that make a difference in sales. It's the relationship that they have with customers.
In a B2B environment with a high average selling price you can justify a salesperson. You can't do that in B2C. You can't afford to have people knock on your -- Amazon couldn't afford to have salespeople come knock on your door to sell books. CRM applications have had a significant impact in the B2C areas. And we really have sort of been able to do incredibly well as a company by having solutions that address the needs of both the consumer-oriented companies as well as the business-oriented companies.
I mean think about hotels. They have customers. Think about airlines. They have customers. Think about retailers. They have customers. They all want to or have deployed CRM systems. And Oracle powers most of those systems. So I think to say that CRM is most at home in B2B may just be very good marketing from the competition.
DP: I appreciate what you're saying. But on the other hand, it occurs to me that it seems like sales and marketing may be more of a B2B orientation. Products like SFA had their beginnings in B2B. And customer service or things that go through the call and contact and service center may be more of a B2C orientation.
AL: No, I think they're just different. People market heavily in B2C of course. You just have to look at how much people spend on Google and how much people spend on traditional media to see that marketing is a very, very important part of a consumer-based strategy.
DP: That's more advertising.
AL: It's more advertising. It's placement. It's more segmentation. There tends to be a lot more sophistication in the segmentation of marketing in a B2C environment. Selling of course is facilitated largely through auto-capture engines, e-commerce being one of them, call center being another one. Retail stores being another one. These are all your selling functions.
And your servicing again is slightly different. So all of the basic things still exist. You still have to segment a customer, present a value proposition to them, capture and order and manage the order through to its completion through service. All of those things still exist. While they share some of the same goals, they are oftentimes executed quite differently.
Loyalty, for example. Loyalty is now a well-understood concept in the consumer space. It's not that well understood yet in the business-to-business space. So there are certain products that are more unique or more specific to one market over the other. Forecasting, for example. In a consumer space you can't really forecast who's buying books at Amazon.com because the pipeline from open to close lasts about two minutes. So there are differences, but there are similarities.
DP: Ok, let’s change subjects. Talk to me a little about Oracle Fusion. Is it on track? And what can we expect from Oracle this year with regard to Fusion?
AL: Yeah, I am very, very excited with the prospect of Fusion applications. It's been an enormous project and one that I think takes advantage of a number of business and technology transformations. It's a unique and forward-looking application. It covers all of the aspects of a business, not just CRM. It covers financials, supply chain, projects, procurement, human capital, GRC as well as CRM.
It's based on a single data model. It's based exclusively on standards. It leverages business intelligence in ways that we could only have dreamt of a few years ago to drive a business process, to provide insight. It leverages a lot of the social networking capabilities that people have an interest in today. It's a single code line that can be deployed on demand or on premise.
It's a suite of applications that can be deployed together or independently of one another. The applications can work with each other or with the existing applications that people have from Oracle. There isn't another vendor on the planet that's made such a commitment to the modernization of the applications and the infrastructure. And they really are game-changers.
They really do provide the next generation of user experience, the next generation of process optimization, the next generation of integration and the next generation of deployment. So yes, the Fusion applications are on track. We already have customers. We have a number of customers accessing the product on a daily basis through our cloud-based sandboxes.
We're very excited as more and more customers switch on the Fusion applications and start to take advantage of them. In CRM we're going to be releasing I think the next generation of sales force automation. That's going to include a very strong customer hub, a very strong business-to-business marketing engine, as well as things like contracts.
So we really believe that with the advances in technology, building and designing the Fusion applications puts us and our customers in a wonderful situation going forward.
DP: Okay, now, with all this flexibility in Fusion, many people — and I know we talked about this at Open World — but many people continue to wonder what that means for all of the different brands that Oracle has and has acquired over the last few years. Is there any possibility that we'll see brands merge into one as Fusion becomes everything for everybody?
AL: Well, let me clear. To the customers who use our products, of which there are many thousands, we made a commitment four or five years ago now with Siebel, and we've maintained that commitment. That customers [can] continue to leverage the Siebel product, the PeopleSoft product, the Business Suite products and all the others.
We continue to have dedicated groups of engineers, and we continue to enhance those in markets that serve the installed base and markets where we believe that is the best product for that market. Now, I hope — my wish with Fusion is to build the best product ever. And I think we're tracking well to deliver it and customers will want to take advantage of it.
So if I build the better product, will Siebel customers want to take advantage of it? I hope so. Will CRM On Demand customers want to take advantage of it? I hope so. Will SalesForce.com customers want to take advantage of it? I hope so. By building the best product, by providing the value that we're putting into the application and to the suite, to the platform and to the delivery options, I believe every vendor and every legacy application will look to Fusion.
I think some companies will take advantage of it sooner and some will take advantage of it later. What we're not going to do is to force people or push people unnecessarily towards our applications. We will continue to advance and extend all of our applications because they are mission critical to our customer base. So you will see more versions of Siebel. You will see more versions of CRM On Demand.
We're not stopping the investment in those products. We really wanted to challenge ourselves and challenge the market and try and build the best product that's ever been built. That's what we're working towards with Fusion.
DP: Well, that's really the end of my questions. If you've got something else you'd like to add or something that is top of mind that I haven't asked about, please go ahead.
AL: My only comment is again CRM is a fun place to work. It really is. It increasingly is the difference for a company between winning and losing. It's lot more of an applied science than a pure science. It touches every one of us, as we are all customers of something. And it's an enormous market that covers business relationships and consumer relationships.
It really is I would say a privilege for me to have been able to serve in this industry for as long as I have. And I hope that I can continue to serve within this industry. I don't think you're going to see me running any kind of supply chain strategy or financial strategy any time soon. I'm still very much in love with the customer and the challenges around managing customers and delighting customers.
DP: Very well said. Thank you, Anthony.
AL: Thanks.
