From the Top


 
From the Top
- Executive to Executive -

The merger of Hewlett-Packard and Compaq is now complete. What does the new HP think about CRM? Read what HP's Bruno Castejon says about how an IT infrastructure provider views CRM and how it plans to work with a wide range of enterprise application providers and system integrators.

Bruno Castejon, Worldwide Cross Industries Solutions Director, Hewlett-Packard


 
RealMarket: You talk with CEOs from leading companies. What do they see as the number one issue or opportunity facing CRM today?
 
Castejon: I think it is difficult to reduce it to one issue. They have a set of issues - very similar to what HP faced when we implemented CRM across the company. Removing cost, gaining operational efficiencies with an implementation time in line with the speed of business. Those are the issues that CEOs have. Of course, there is also a big customer satisfaction objective. They are all striving to raise customer satisfaction and facing the difficulties of tracking total customer satisfaction.
 
RealMarket: Hewlett-Packard is best known as a systems and services company. Generally, the most widely recognized CRM solution providers are software companies. What is HP doing in CRM?
 
Castejon: Before I tell you how HP views CRM, allow me to highlight one important idea. HP does not intend to become an end-to-end CRM solution provider. When you look at the solution stack, there are many things in the stack that HP doesn’t own or control. Specifically, the applications are something we are not involved in. Currently, HP does not intend to be in that space. That will happen through strong partnerships.
 
What we want to be is the preferred IT infrastructure provider for CRM solutions. In other words, we won’t control the end-to-end solution but we want the IT infrastructure to be HP. We want to be recognized as the supplier that knows how to apply IT technology to CRM and business intelligence. However, in order to optimize and customize our IT infrastructure we must have a good level of intimacy with the customer needs, the CRM eco-system both from software providers and system integrators. We recognize the importance of every part of the solution stack and that is why we drive partnerships with those eco-system players. This is a partnership of equals where each partner in the consortium takes ownership for what they do best. Our contribution is taking ownership of the IT infrastructure.
 
"What we want to be is the preferred IT infrastructure provider for CRM solutions. In other words, we won’t control the end-to-end solution but we want the IT infrastructure to be HP. We want to be recognized as the supplier that knows how to apply IT technology to CRM and business intelligence."

 
 
RealMarket: Tell us about some of HP’s more important CRM partners.
 
Castejon: The three leading partners are Siebel, SAP and PeopleSoft. Siebel is a worldwide partner positioned as number one in most regions. Although SAP is important in North America and Asia, our focus with them is mostly in EMEA. For PeopleSoft, it is the other way around - more focus on North America.
 
We create additional value with these three in terms of intellectual property and go-to-market initiatives. What we do with each partner is focused on large enterprises and corporate accounts. This is done through planning - on an account-by-account basis. Obviously, since these partners address the same space and overlap geographically, we would be on a collision course if we didn’t handle this by understanding the unique requirements of each company we work with. We are also mapping a vertical industry focus. For example, SAP is probably more aligned with manufacturing and retail. Siebel might be more appropriate for financial services and telecommunications.
 
RealMarket: What about the mid-market?
 
Castejon: My comments so far apply to the objectives of our enterprise products and services. As a company, we focus on the mid-market and it is approached in a different way with solutions based on Microsoft NT solutions. We are intrigued with Microsoft’s recent moves in CRM and the evolution of .NET as well as the implication on the CRM solution stack. We are partnering with companies such as Onyx and others that are more affordable for the mid-market.
 
RealMarket: How does Hewlett-Packard differentiate itself in the world of CRM?
 
Castejon: We are differentiating ourselves with the IT infrastructure - scalable systems, high-availability, joint development with the application providers, etc. This is all done to make the whole solution stack more available and more manageable.
 
We are building consortiums of partners going after particular business problems. Let me give you an example. Recently we signed an agreement with Deloitte to proactively go after the outsourcing of call centers. We defined the customer problems, mapped out our capabilities, defined rules of engagement and laid out go-to-market activities. We are going where Deloitte has a strong presence as well as places where HP is strong. In places where we are both new, we share business development activities.
 
RealMarket: How does this position with HP’s services offering?
 
Castejon: I would say our HP managed services, is very high on the CRM agenda. I just want to make sure that you don’t under-estimate the managed services capabilities that we have. This is growing very fast and will be put in the forefront for customers and partners. That is the example I used with Deloitte. We provide the IT services and leverage our outsourcing capabilities. There is no issue with regard to positioning services between HP and Deloitte.
 
Now with HP consulting, what we do is the following: In most partnerships, we try to have a fair 50 / 50 split of the services revenue. The system integrator takes responsibility for the high-level application integration services and we take responsibility for the delivering the IT part of it. This works across all of CRM. As one might expect, there are some areas where our organizations might compete. We will probably compete in the call center space. We have intellectual and exclusive reseller agreements with companies like Cisco, strong domain knowledge, and call center capacity. For example, we have 400 consultants trained and experienced in delivering call centers.
 
In certain instances, we will be trying to go end-to-end even though some of the stack comes from partners. Other areas of CRM like sales, e-commerce, marketing automation, and campaign management will be partner led. For these implementations, our value-add will be limited to the IT infrastructure.
 
RealMarket: As an IT infrastructure player in CRM, who do you see as the competition?
 
Castejon: The only opponent in this space is IBM. They are the one organization that we are watching all the time. We don’t see Sun anymore.
 
"Specifically, web services should lower integration costs. As those costs go down, the effort to best of breed could become quite viable. What Gartner said 18 months ago might actually materialize. They said a suite at the center complemented with best of breed solutions might be the ideal configuration going forward."

 
 
RealMarket: Tell me more about Hewlett-Packard’s roadmap to providing better ROI and a more complete solution offering.
 
Castejon: I think the future direction of HP’s CRM offering will focus more and more on the call center. We see the call center as a very hot market space within the CRM eco-system. Our customers are consolidating call centers. Many existing call centers were built with a product centric perspective. Companies want to consolidate around a customer centric perspective and we can help accelerate that initiative. Other consolidation drivers include the need to improve operational efficiency, the move to IP telephony, and the move to multiple channel contact centers where customers communicate over a range of mediums. You will see HP tighten our existing relationships as well as bolstering our own capabilities.
 
We will be moving more in the area of mobile sales and service automation. Just exactly how e-commerce embraces mobility initiatives is of great interest to us. We have a business case for mobile field services solutions that shows a 1% improvement in first call fix rates will result in an ROI in 6 months. And 1% is very conservative. Lastly, we are also talking more about real-time business intelligence because we have a lot of intellectual property for real-time business intelligence.
 
RealMarket: There has been quite a bit of press in the last year about CRM failure rates. How do you balance delivery versus expectations?
 
Castejon: I don’t know what to think about failure rates. Is this something the analysts have said to sell more market research? HP is making the services to deploy solutions available so that we can measure satisfaction across the board - a customer satisfaction dashboard if you will. This is a very sophisticated model for those looking for better value. We are focused on time to results with rapid IT delivery services where we commit to the customer that we are going to deliver a particular IT solution in less than 90 days. We have pre-integrated components that can be delivered very quickly as a basic building block of rapid deployment.
 
RealMarket: Looking to the future, what is the biggest change you see on the CRM horizon?
 
Castejon: Some of the changes contradict each other. Let me explain. We see a lot of consolidation from a CRM vendor standpoint. The best of breed solutions providers like ATG, E.piphany, and Broadvision have had difficulties. The ERP players will take a more prominent role in the CRM space and that will challenge Siebel. So right now it doesn’t look good for the best of breed vendors. However, the web services area will revive the best of breed approach.
 
On one hand you have consolidation and on the other you have technology that could allow best of breed to make a come back. Specifically, web services should lower integration costs. As those costs go down, the effort to best of breed could become quite viable. What Gartner said 18 months ago might actually materialize. They said a suite at the center complemented with best of breed solutions might be the ideal configuration going forward.
 
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