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PeopleSoft CRM chief: Flexibility is key to vertical success

With emphasis on addressing vertical markets growing among enterprise applications vendors, there is spiraling debate as to how effective many industry-specific CRM packages may currently be. In short, some wonder if the releases are largely repackaged versions of existing software.

As one of the firms most interested in leveraging vertical CRM applications to cut off a slice of market leader Siebel Systems Inc.'s business, PeopleSoft Inc., Pleasanton, Calif., is playing up the flexibility of its systems architecture as a major selling point. Barbry McGann, vice president of CRM product strategy at PeopleSoft, recently spoke with SearchCRM about her company's take on the vertical opportunity and its plans to further address specific market sectors.

Why are we hearing so much about vertical markets right now from CRM vendors and consultants? Is this just a way to drum up business or are customers truly asking for this approach?
It's the maturity of the market. CRM is finally following the same curve that ERP has followed. You get to a certain stage and the next step to take is to differentiate through vertical solutions. Also, in the past, a lot of CRM systems were home built or customized and now that packages have evolved to a certain level of functionality, a package makes more sense than building from scratch. If customers are looking for a package that best suits their needs, an industry specific package is the best bet. CRM does vary in terms of products and data models. Finding the right application is crucial. How does PeopleSoft decide which vertical markets it will address and the release order of the applications it will introduce to these markets?
We do a lot of analysis. We look at market opportunities, or where we think the market may be growing, and where we might compete best. Another factor is how much of a fit we think our solution is. We look at the cost to deliver the right application to a vertical and what the revenue opportunity may be. We also look at field readiness or if we already have field alignment or experts that can help us execute on the products we may deliver to a particular vertical. How does PeopleSoft gauge the amount of re-engineering that needs to go into CRM products when creating specific vertical suites?
It's different for each industry. One of the challenges is identifying the key pain points in any industry and figuring out where we need to make enhancements. This can either be a lot or it can be very little. For instance with the government market, it's sort of middle of the road. The business challenges that we're trying to solve specifically for government are the first step in providing a CRM solution. There are two issues we hear about across the board from federal, state and local entities. One is how they can better inform and serve their constituents, the other is how they can be more operationally efficient. They are always being asked to do more for the same or less budget. How has the flexibility of your architecture factored into this process?
The technology infrastructure is key because it is very configurable. The flexible data model allows us to uniquely model industry specific data models. The whole constituent data model and privacy importance is different in the government industry solution than you would have in communications or insurance. Because we made our data model to be data driven, we can deliver something that uniquely fits the vertical market. It also allows the customer to tailor it even more without extensive work.

On top of that, all of the components are configurable so we can tailor our business processes to uniquely meet the industry requirements. Instead of a government industry having to fit into our solution delivered out of the box, it can customize the application to address their needs. In addition, we allow easy extension of our data models again through just defining attributes. This allows for the addition of specific information to a constituent file or to a services file. But, on top of that, you do also have to make changes in the software to be completely successful. Of the markets PeopleSoft has addressed thus far, including its upcoming CRM applications for the energy, government, high tech and insurance verticals, which has been the hardest to put together?
The one that we're finding is the hardest is the insurance application. The hard part about it is creating a new data entity structure around insurance policies to handle the different nuances. We're going after property and casualty, life and health insurance. Those three areas have very different demands in terms of a flexible data structure to support each one of those lines and all the nuances. That was very tricky. What does this mean to PeopleSoft's core CRM offering?
It goes back to architecture. In building any industry solution, we're taking 80% of the functionality from our core product. The vertical solution is just a layer on top. The benefit of doing it that way is that we can continue to add more functionality to the enterprise solution and every industry solution still benefits. That's important because we're always adding functionality. And we definitely look at all the different verticals down the line when we do that. We know it will have to be versatile to be effective for government clients and financial services customers alike, who are obviously very different. The users in the end will determine a lot of the functionality; flexibility is king.


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