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October, 2001 CHIEF GUEST |
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"If you don't depend on a platform shift, you don't have a reason to exist" Besides i-flex Solutions' Flexcube, Talisma is possibly the only other leading Indian software brand in the world market. Pradeep Singh, who founded Talisma Corp. in 1994 after spending nine years in various management positions at Microsoft, sees his CRM package overshadowing offerings from IBM, Siebel or Clarify. He is an electrical engineer from IIT, Delhi and an MBA from Harvard Business School. The self-professed "customer database consultant" spoke at length with Atanu Roy and R. Srinivas of Computers Today. Excerpts: Managing customers has been a part of business practice for centuries. Why do you suddenly need a CRM package for it?
What's wrong with ERP's deployment model? The roll-out itself. In a typical deal, a sales person, after a simple presentation, generally brings in his regional sales manager. The latter doesn't talk of a product but gives you a 60-slide PowerPoint presentation on architecture: connected/disconnected clients, Web clients and so on. At the end of his presentation, he asks not for a deal but when can he hold the next meeting. In the next meeting, he shows the sales module, and asks, "Are you interested in our marketing module too?" Thus, after many visits and three months, he negotiates a contract-for a mid-size firm with 1,000 seats it is about $5 million (Rs 24 crore). He gives you a discount of 50-60 per cent. Throws in an extra 10 per cent for "being able to meet his targets". You sign. The monkey shifts from his back to yours. Next comes a guy in a consultant blue-suit. He gives you a "wet dream" sales pitch: "Sir, whatever you want, this software will do." Over the next four months, he meets all key stakeholders, asks what they want, and makes a data model. So after a year you are ready to roll out. It takes 8-10 months for the roll-out itself and training. Every single Siebel roll-out was mirrored on this classic ERP model. Microsoft's was a three-year roll-out-a $30 million (Rs 143 crore) Siebel purchase with an additional $70 million (Rs 335 crore) to consultants. At the end of it all, two things happen. First, the end-user finds that the sales module has become extremely complicated as the package had to accommodate the wildest dreams of every stakeholder. Second, the very business structure has changed during the roll-out. Do you have a magical solution for it?
I don't, but a few structural changes can make things better. I respect IBM, Siebel and Clarify. Most of them have a mission-critical ERP perspective-a report-generation model. It starts with the notion of what kind of information somebody wants to generate, and everything else becomes a means to get to that point. We at Talisma talk of usability for the end-user as our design philosophy. That's why Talisma looks more like Microsoft Outlook. In Talisma, you have a table metaphor, not a form view. We are getting into the classic CRM space with an e-centric approach, where the dominant medium is e-mail. Our model is based on capturing data on Web sites and using e-mails as a documentation block for all other contacts. You take it for granted that all your clients would be Net-savvy and heavy e-mail users. Absolutely. A new player has to depend on a platform shift. In fact, if you don't depend on a platform shift you don't have a reason to exist. We depend on the fact that we can create a more usable application-a different design point than most of the earlier versions. We install in two weeks (we don't ask all stakeholders what they want). We advise our clients not to automate all their 1,000 seats, but to pick up a department and automate it. Let's understand how the business works; more departments can be automated later, is our message to customers. It's an economical model for rapid deployment in which data is gathered without the user's knowledge. It's called use-based evolution. Our only flaw is that we were relatively late to enter the market in comparison to some of our competitors. Even then, there are about 250 firms in the US using our solutions. What will happen if IBM and Siebel decide to include e-CRM in their packages? A traditional CRM player is stuck with the form interface module. And it takes a long time to turn a ship around. As far as our business is concerned, the fact remains that the dotcom bust didn't affect Internet growth; people are still using Web sites and sending e-mails. However, in today's changed scenario our sales model has undergone a change. Instead of dotcoms, it is now brick-and-mortar companies that are buying our products. Mind you, they have Web sites too. How did you manage to get second-round funding when companies are struggling for the first round itself? Talisma is privately held with investments from Oak Investment Partners, the Madrona Venture Group, The Carlyle Group, SeaPoint Ventures and Cedar Grove Investments. Growth in revenues, an increasing customer base, the quality of customers, the business model and emerging leadership (in the e-CRM space) were key factors that influenced VCs to invest further in our company. And CRM is an emerging category where potential for growth and profitability is huge. According to AMR's research, the CRM market will have a compound annual growth rate of 49 per cent through the next five years, bringing the total market value to over $16.8 billion by 2003. A study by Jupiter Research indicates that despite the slowdown in the US, 74 per cent of companies in the country are planning to increase CRM infrastructure spending in 2001-2002 by as much as 25-50 per cent to improve what they consider an increasingly important aspect of their business. What is the secret behind being a successful product company? In a product company, what you do is roll the dice. That's version one; mind you, the competition is doing that too. You then roll the dice one more time, that's version two. Keep doing that till you come up sixes. Remember, not everyone can do that. Success in a product company is built by those who are willing to stay on course. Also, since you are on a treadmill all the time, you need development teams that are smart and have a minimal attrition rate. The cost of losing even one developer is phenomenal and cannot be accounted for in terms of money. Additionally, you need a good sales and marketing set-up. Above all, it clearly helps to be persistent. |
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There
was no computing solution for it. Moreover, don't you want to use the
Internet or e-mail to streamline your customer database? The idea started
taking shape 10 years ago. Clarify, which had expertise in the call centre
business, and Siebel, with experience in sales force automation (SFA),
came in to build the core of a CRM package. Clarify created an instant
log for customer contact, while Siebel built a tool for field sales personnel-the
opportunity forms. But the core problem with CRM is that neither of the
two-the sales personnel or the corporate manager-who fills in the data
has any interest in entering them. Hence, the flaw with most CRM deployments
is two-fold: One, a salesperson can do million-dollar business, but still
doesn't like filling up a response form. And second, all CRM players have
the deployment model fashioned on the ERP pattern.
