"Nyah Nyah" Marketing and IBM/DWL
Tracey E. Schelmetic, Editorial Director of Customer Inter@ction Solutions, penned an article this morning, entitled CRM Companies Take Glee In Scoring Former Salesforce and Siebel Customers, in which two smaller CRM companies are touting recent competitive wins over their larger brethren. The ritual celebratory press releases are classified and denigrated by Ms. Schelmatic with the moniker "nyah nyah" marketing.
What I thought was interesting here was not that these companies are playing up their recent sales victories, which is, after all, just good selling tactics. And perhaps I've seen so many of these - indeed, written so many of these! - that I am numb to the perceptions that non-industry people might take away from the articles. But what I saw in reading through the article and the referenced press releases and quotes from customers was confirmation of a need for a healthy set of competitive players in the marketplace.
In the CDI field, which is after all closely related by both blood (evolution) and marriage (integration) to the CRM field, there has been much speculation about IBM's purchase of DWL and its impact on the vendor universe. DWL clearly has a functionally competitive product, and their greatest weakness was always the fact that they were a relatively small company - at least compared to IBM, Siebel, Oracle and SAP. Asking major international banks, brokerage firms and insurance companies to bet the future of their master customer records on a small-time player was always a tough sell, and the IBM acquisition solved that problem in one fell swoop. Now the opposite question is being asked: Are they in position to dominate the CDI market, perhaps even monopolize that market or certain segments of it?
And that's where the article on the Entellium and NetSuite wins comes in. If you read the comments of the corporate spokepeople talking about why these vendors were selected, they had very particular circumstances which were a good fit for some specific characteristics of these vendors.
At the risk of drastically oversimplifying the situation, Prepared Response, Inc. was scared by the depth of the functionality and the steeper learning curve associated with more complex software. Entellium was a simpler, lighter weight (and in all likelihood less expensive) solution that gave them just what they needed - and no more. Financial Engines, on the other hand, was primarily interested in how well the CRM solution would integrate with their existing ERP system, Oracle Financials. NetSuite not only had that integration to Orcale pre-built, but the product's strongest feature - business intelligence, analytics and reporting - was number one on F.E.'s wish list.
(Side note: Financial Engines is a nifty little company, by the way, especially if you are into modern portfolio theory. Founded by Nobel Prize-winning economist William F. Sharpe ("the Sharpe ratio" for you investment geeks), he started applying Monte Carlo simulations to portfolios to demonstrate ranges of likely return. Over time, the company has narrowed their focus to mutual funds, and specifically to corporate retirement plans, where this sophisticated modeling - changable by a user in terms of risk allocation among different funds - helps to make the upside AND the downside potential of equity investing crystal clear for employees who may not be seasoned investment professionals. This not only provides a valuable tool for retirement planning for the employee by helping them decide how much risk - volatility - to assume in their retirement accounts, but helps employers meet their fiduciary responsibilites by making the risk of capital loss explicit. I have no commercial interest in the company, I just think that bringing cutting edge financial modeling technology to the masses and making it easy to use is righteous work.)
This demonstrates a central fact that applies to CDI even more than CRM. CDI is a discipline. It is an amalgam of technologies, business processes, software, best practices, human interface workflow, real time analytics, and database implementation. No two CDI installations are identical, and that's precisely the point - they shouldn't be. And the vendor that runs best on J2EE is unlikely to be the vendor that runs best on .NET. The vendor with the most robust data model will compete with the vendor with the lightest weight implementation. The most componentized CDI solutions which play best in build-it-yourself IT organizations will compete head to head with the most pre-packaged, fully functional OOTB software. It is simply impossible for one vendor to meet all the disparate market needs.
Vendor, know thyself. The vendors that win in this competitive environment will be those that recognize their strengths early on and move to capitalize on them. Customer, that goes for you too. The customers who will enjoy the most success in implementing and running a CDI solution are those that best understand their own business and the requirements to drive the desired outcomes, and who evaluate vendors on their own custom criteria. How good is the fit for our problem, and what can we do to fine tune the solution even more?
That's an environment poised for market success. Competitive pressure amongst a variety of vendors will keep pricing under control on the software offerings, and force engineering investments to keep pace with competitors' progress even more than with customer requirements. Vendors are hungry for a slice of the CDI pie, and customers stand to reap the benefits. I'm all for a little "nyah nyah" marketing. It's a sign of a robust market, where vendors are committed to winning the next deal and prospective customers can watch them duke it out in the media.
What I thought was interesting here was not that these companies are playing up their recent sales victories, which is, after all, just good selling tactics. And perhaps I've seen so many of these - indeed, written so many of these! - that I am numb to the perceptions that non-industry people might take away from the articles. But what I saw in reading through the article and the referenced press releases and quotes from customers was confirmation of a need for a healthy set of competitive players in the marketplace.
In the CDI field, which is after all closely related by both blood (evolution) and marriage (integration) to the CRM field, there has been much speculation about IBM's purchase of DWL and its impact on the vendor universe. DWL clearly has a functionally competitive product, and their greatest weakness was always the fact that they were a relatively small company - at least compared to IBM, Siebel, Oracle and SAP. Asking major international banks, brokerage firms and insurance companies to bet the future of their master customer records on a small-time player was always a tough sell, and the IBM acquisition solved that problem in one fell swoop. Now the opposite question is being asked: Are they in position to dominate the CDI market, perhaps even monopolize that market or certain segments of it?
And that's where the article on the Entellium and NetSuite wins comes in. If you read the comments of the corporate spokepeople talking about why these vendors were selected, they had very particular circumstances which were a good fit for some specific characteristics of these vendors.
At the risk of drastically oversimplifying the situation, Prepared Response, Inc. was scared by the depth of the functionality and the steeper learning curve associated with more complex software. Entellium was a simpler, lighter weight (and in all likelihood less expensive) solution that gave them just what they needed - and no more. Financial Engines, on the other hand, was primarily interested in how well the CRM solution would integrate with their existing ERP system, Oracle Financials. NetSuite not only had that integration to Orcale pre-built, but the product's strongest feature - business intelligence, analytics and reporting - was number one on F.E.'s wish list.
(Side note: Financial Engines is a nifty little company, by the way, especially if you are into modern portfolio theory. Founded by Nobel Prize-winning economist William F. Sharpe ("the Sharpe ratio" for you investment geeks), he started applying Monte Carlo simulations to portfolios to demonstrate ranges of likely return. Over time, the company has narrowed their focus to mutual funds, and specifically to corporate retirement plans, where this sophisticated modeling - changable by a user in terms of risk allocation among different funds - helps to make the upside AND the downside potential of equity investing crystal clear for employees who may not be seasoned investment professionals. This not only provides a valuable tool for retirement planning for the employee by helping them decide how much risk - volatility - to assume in their retirement accounts, but helps employers meet their fiduciary responsibilites by making the risk of capital loss explicit. I have no commercial interest in the company, I just think that bringing cutting edge financial modeling technology to the masses and making it easy to use is righteous work.)
This demonstrates a central fact that applies to CDI even more than CRM. CDI is a discipline. It is an amalgam of technologies, business processes, software, best practices, human interface workflow, real time analytics, and database implementation. No two CDI installations are identical, and that's precisely the point - they shouldn't be. And the vendor that runs best on J2EE is unlikely to be the vendor that runs best on .NET. The vendor with the most robust data model will compete with the vendor with the lightest weight implementation. The most componentized CDI solutions which play best in build-it-yourself IT organizations will compete head to head with the most pre-packaged, fully functional OOTB software. It is simply impossible for one vendor to meet all the disparate market needs.
Vendor, know thyself. The vendors that win in this competitive environment will be those that recognize their strengths early on and move to capitalize on them. Customer, that goes for you too. The customers who will enjoy the most success in implementing and running a CDI solution are those that best understand their own business and the requirements to drive the desired outcomes, and who evaluate vendors on their own custom criteria. How good is the fit for our problem, and what can we do to fine tune the solution even more?
That's an environment poised for market success. Competitive pressure amongst a variety of vendors will keep pricing under control on the software offerings, and force engineering investments to keep pace with competitors' progress even more than with customer requirements. Vendors are hungry for a slice of the CDI pie, and customers stand to reap the benefits. I'm all for a little "nyah nyah" marketing. It's a sign of a robust market, where vendors are committed to winning the next deal and prospective customers can watch them duke it out in the media.
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