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Articles - Publication Date 2.1.2002
CEO Of The Year -- The King Of Customer
Tom Siebel's obsessions with customer service and technology have led to the founding of a successful company and a burgeoning industry.
By Doug Bartholomew
For most CEOs, 2001 was no picnic -- unless it's the kind where the bull, the red ants and the thunderstorms invite themselves. But for Thomas M. Siebel, chairman, CEO and founder of Siebel Systems Inc., IndustryWeek's CEO of the Year, it wasn't too bad a year. For the first nine months ended last Sept. 30, the San Mateo, Calif.-based maker of software that businesses use to manage their dealings with customers had racked up a gain of 29% in revenues over the same period the previous year, along with a boost in profits of 33%. At the close of the third quarter, the company was sitting on $1.5 billion in cash and short-term investments, up nearly 60% from a year earlier. Those are pretty impressive results for a company smack-dab in high tech.
It also was a year in which Siebel the author launched a third title, "Taking Care of eBusiness" (2001, Doubleday). His earlier books, both popular business tomes, were "Cyber Rules" (1999, Doubleday) with co-author Patricia A. House, vice chairman and vice president for strategic planning at Siebel, and "Virtual Selling" (1996, Simon & Schuster).
But what really sets this chief executive apart from the pack is that while many CEOs have founded a company or authored a book or two, Siebel has successfully created an entire industry. Customer relationship management, commonly known as CRM, is something Siebel not only conceived and built into a growing concern, but that he helped grow into a whole new software application for business.
"Tom Siebel is a different breed of CEO who has not only created a superb company of dedicated professionals, but (who) has also defined a completely new business area," says James H. Morris, dean of the School of Computer Science at Carnegie Mellon University, Pittsburgh, writing in the frontispiece of Siebel's latest book.
CRM allows companies to track customers, monitor revenue and expenses, and target marketing prospects. It enables sales managers to know exactly what point in the sales process a particular prospect or deal is at, so that decisions can be made to maximize revenues as well as customer service. The idea, says Siebel, "is to be able to respond real quickly." The payoff to companies using CRM effectively is better management of sales, marketing and customer service, all of which can yield improved sales productivity.
In person, Siebel comes on as a tiger in a tie and coat. At once both modest and competitive, he projects an odd mix of both aggressiveness and reserve. For one thing, he describes himself as a computer scientist. "Most of my career has been in the information-technology business," he says, stabbing at a plate of pasta and meatballs in the company cafeteria during a working lunch.
Siebel eagerly proselytizes about the importance of technology to help manage the way companies handle sales and customer service. He got the idea for CRM in 1993, after selling a company called Gain Technologies to Sybase Inc. Prior to that, he had been seven years with Oracle in its now-legendary sales division, which has spawned other high-profile CEOs, including Craig Conway at PeopleSoft Inc., and Greg Brady at i2 Technologies. "I learned a lot while I worked there," Siebel says of Oracle, where he worked in technical service, moved into sales, became a vice president, and later a group vice president for Oracle USA.
"I had been thinking about this company for about eight years," Siebel recalls. "There had been successful applications of IT and computer technology to change the way we manage accounting, personnel, manufacturing, shipping and a host of other business activities," he says, "Yet in the last decade, the problems of sales and customer service had been largely untouched by computer technology. It seemed highly likely that one could use computer technology to establish and maintain customer relationships. It seemed to me there would be an opportunity to build a pretty nice little business here."
No kidding.<
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"The focus of this company is to achieve the highest level of satisfaction
among our customers."
--Tom Siebel, Siebel Systems Inc.
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