SIEBEL

SYSTEM
ANATOMY OF A SALE: A FRICTIONLESS SOLUTION

Group 2 | Animesh | Praveen | Pravesh |Rangesh | Sabir |Susmit

A Frictionless solution to the case

The three stakeholders in the case have been shown in figure below:

Friction

Siebel is trying to sell its product to Quick & Reilly (Q&R), a deal valued at $2.1m. But Gregg Carman who
is Siebel representative for materializing the deal is initially unaware of Scorpus business deal with
FleetBoston (FB), the acquirer (merging was going to take place shortly) of Q&R, earlier. Marge Payne,
the representative of FB in the case is unhappy over the proposed deal between Siebel and Q&R. She
had been sold excess seats by Scorpus (now a part of Siebel) and was looking to offload them once the
merger between FB and Q&R was through. This is the source of friction in the case

Issue faced by Siebel

Siebel is facing the issue between customer satisfaction linked with correct product to be deployed for
its customer (Q&R) and customer relationship with FB. It seems they need to look at some trade off.
Also they are currently indecisive whether company policies and guiding rules apply to the deals done by
acquired firm, before the acquisition

Issue faced by Q&R

Q&R want the best product for their operations. And their team approved the one provided by Siebel
system as the best. But power to take purchase decisions lies with FB and hence they have to take what
decision FB makes.
Issue Faced by FB

They want their excess Scorpus seats to be used for Q&R’s operations with modifications done by Siebel.
Their entire stress is on the deployment of the existing resources to minimize additional cost. However
they are currently unaware of the illegality of such product transfers.

Solution

We propose the solution of buying back excess Scorpus seats from FB and sell the new product, which is
best fit for Q&R. The solution addresses all causes and effect of friction:

1) FB gets rid of excess capacity without losing money. This will enhance the Siebel’s customer
relationship with the company
2) Q&R will get the best product for them. This will lead to customer satisfaction, pillar of Siebel’s
core values
3) The excess capacity bought can be sold off to other customers, who may benefit from it, with
required customization
4) The new sale made, increases the chances of further business with the customer
5) Makes up for the mistake by Scorpus of making excess sales to FB, thus addressing the ethics
part of the issue

To convince FB on this solution, they can be shown cost-benefit analysis. And they will be ready to go
with the deal if the differential costs (New deal value-Sale back of excess Scorpus seats) are lesser than
differential performance gains (between customized Scorpus seat and new Siebel product)

Siebel may also look at giving the new product on discount, if it doesn’t hamper profit margin to more
than tolerable limit and if it goes a big way in convincing FB about the new sale deal. But providing too
much discount can be taken as Siebel’s weakness sign by FB. So, their lies a word of caution.

Contingency Plan

If still, Siebel has problems in convincing FB about pros of the deal, Siebel can install the new software at
Q&R for free-limited period trial offer on few systems and then ask Q&R to provide a feedback of
comparative performance between modified Scorpus seats and Siebel product. The practical result data
is most likely to convince FB upon the deal then.

Even then if FB doesn’t agree, then only solution left is customizing those excess Scorpus seats for their
best utility to be exploited by Q&R.