Siebel Systems Inc which is a well established company and a force to reckon with in its field of making business software, has over the past two years seen a downward trend in sales as also a steep decline in its popularity amongst present customers, making the future look very bleak in terms of its market share and growth in an activity which is otherwise forecasted to be having a consistent growth in the coming years. The revenues have fallen and although the company claims to have taken remedial measures, the slide in its revenues does not appear to abate immediately as narrated by a number of study groups and researchers, primarily due to the rigidity of the owner Thomas M. Siebel in not adopting a more practical and realistic approach to bringing a reversal in the downward swing in revenues, company performance and popularity. Matters appear to be more discouraging with the realisation that the stock value of the company has declined by 94% from its peak two years back.
The problem lies in the fact that present and past customers are dissatisfied for not getting utility value for the massive investments they made in purchasing the software, which cost them more than $ 10 million and which had taken up to one year to install. Additionally, a survey conducted by Merrill Lynch found that over 55% of present customers are not satisfied with Siebel’s software. Unfortunately for the company that in the face of such disclosures also Tom Siebel underestimates the risk the company faces of failure due to tougher competition as more and more companies enter the field with better and more cost effective software products. Under the circumstances it is implied that the company has certain inherent problems that need to be tackled and solutions found to effect a turn around in the company’s performance. The marketing strategies need to be re oriented towards more result oriented goals and be manned by professionals and experts who have proved their mettle before, of course under total patronage of the owner Tom Siegel.
Another problem that the company faces is the stiff competition it is going to face with the impending introduction of new software by other companies that is slated to be much cheaper and more convenient to use. Siebel Systems Inc is the leader in software that is used specifically to manage sales forces and customer service departments and which is in effect a very small part of the total software solutions that a company may need for its over all functions. So consequently, the utility value of the software provided by Spiegel is very less for the cost incurred since it takes care of only one activity i.e sales force management and customer service. The owner Tom Siebel continues to maintain his overconfidence in regard to his certainty that his company will soon take a turn towards positive growth and stability despite the fact that several research companies such as AMR Research Inc, in Boston, Nucleus Research Inc and Banc of America Securities have predicted his downfall unless he reverses the negative trend that the company is witnessing for the last two years. The product may have been very popular initially when there were very few competitors, but Siegel is now in the blue due to several better options available to potential customers presently as also in the coming times resulting from innovations and economies of scale.
Under the circumstances it is clear that unless the narrated problems are addressed proactively with a strategic reorientation of Siebel’s sales and management policies, the company is slated to eventually die a slow death in the face of the stiff competition that is forthcoming by way of new economical products to be introduced as a consequence of new technology and new entrants in the business software market. In view of the fast changing preferences for more convenient products for such functions, Siebel must make immediate changes in its marketing plans and set realistic goals keeping in mind the aspirations of its clients. It is due to such realizations that although the customer management software market is slated to grow annually at 10% but the prospects for Siebel are not bright The biggest hurdle that analysts have come to believe is the insistence of Siebel, despite the negative feedback being received, that they continue to enjoy customer satisfaction for their products, further justifying their opinion by stating that several new consultants have been employed to counsel clients so that they have realistic expectations from their product. Tom Siebel further asserts that it is ok if he offers specialized software for only sales functions despite the fact that customers prefer single software that provides a combination of functions including that of sales. It is essential that Siebel must understand the logic and reality of the consumer preferences and priorities instead of sticking to his own unrealistic ideology that his product continues to reign supreme.
The fact remains that all problems faced by Siebel today can be resolved only if there is a fundamental change in the outlook of its ownership and a dedicated strategic plan is put in place to bring about radical changes in the product mix and sales management techniques to meet the fast changing aspirations of clients. It is only in this way that the fortunes of the company can take a head turn towards greener pastures.
References
Can Siebel Stop its Slide, 2003, Web.
Stacy Cowley, Will Nexus Save Siebel, 2005, IDG News Service.
Joshua Greenbaum, Tom Siebel Hates Me, 2002, Web.
Pat Dillon, Tom Siebel, Web.