Schlumberger: Aligning People, Processes and Technology

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1 Case Studies, B. Wood, N. France Research Note 22 April 2003 Schlumberger: Aligning People, Processes and Technology Schlumberger is a worldwide technology service company with diverse offerings. Its customer relationship management initiative is focused on presenting one face to its customers. Core Topic Customer Relationship Management: Creating Business Value for CRM Key Issue During the next five years, how will skills, architectures and technologies evolve to enable enterprises to develop moreprofitable customer relationships? Note 1 Schlumberger Company Information Founded in 1927, Schlumberger is a global technology service company with corporate offices in New York, Paris and The Hague. Its employees represent more than 140 nationalities and work in nearly 100 countries. The company's revenue for 2002 was approximately $13.5 billion. Schlumberger is a $13.5 billion technology service company. It has a diversified set of product and service offerings that are operated in semiautonomous business units on a worldwide basis (see Note 1). Among these business units are Schlumberger Oilfield Services (OFS), a traditional area of strength for Schlumberger, and SchlumbergerSema, composed mainly of the IT services capabilities of Sema Group, which Schlumberger acquired in Due in part to a reorganization that followed the Sema Group acquisition and to the company's ongoing customer relationship management (CRM) initiative, Schlumberger found it necessary to re-examine many of its internal processes, as well as its client relationships. Problem: Because most of its clients are large, multinational oil companies with operations in many parts of the world, Schlumberger OFS was organized to meet client demand at a local level. Although this was, for the most part, a successful strategy for OFS, the group did not have an accurate view of the extent of its relationship with any given client. In OFS, and often within the client organization, the only real understanding of the relationship existed at the local point of contact. This was made more of an issue as Schlumberger's clients began to demand more globally oriented relationships and contracts. Some clients were also interested in self-service options for obtaining quotes, updates and the like. This meant that Schlumberger would have to address multichannel communication requirements. Schlumberger also realized it was not leveraging its customer knowledge base across regions and technology platforms to better understand evolving global demand. Not only did this mean that there was no single view of the customer, it also meant that Schlumberger was unable to capitalize on all of the business opportunities available with its clients. In effect, there was no means of sharing account intelligence. OFS undertook Gartner Reproduction of this publication in any form without prior written permission is forbidden. The information contained herein has been obtained from sources believed to be reliable. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of such information. Gartner shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof. The reader assumes sole responsibility for the selection of these materials to achieve its intended results. The opinions expressed herein are subject to change without notice.

2 the CRM program in an attempt to address these issues, and to improve and standardize sales and marketing effectiveness. Objective: OFS's objective was to increase: 1) customers' overall spending; and 2) Schlumberger's profitability as a result of increased customer satisfaction. It believed it could accomplish this by developing and maintaining the highest quality relationships at each level of the customers' organizations. To this end, it undertook a program to align people, processes and technology across the OFS organization. This program was also intended to rationalize and centralize information, while maintaining decentralized operations. Approach: Schlumberger s strategy was to improve its relationships with its customers by better identifying their needs and sharing this information across the enterprise. To improve account intelligence and customer responsiveness, the CRM initiative had two main elements: 1) to implement a sales force automation system that would be a centralized repository of customer account information; and 2) to develop a global sales methodology that would allow the organization to create, develop and implement more-effective worldwide sales techniques. Schlumberger's CRM program was intended to facilitate this sales methodology and lead to a more-effective sales force that better addresses customers' needs, new business opportunities and, in turn, increase revenue and market position. OFS agreed to four underlying principles for the CRM program: Keep it simple Move quickly Aim for the 80 percent solution, at least in the initial rollout Define a staged deployment, and take one step at a time When the OFS CRM initiative was begun, Schlumberger had not yet acquired Sema Group, which became SchlumbergerSema. The company initially used Grant-Thornton (now known as Experio) to help define the CRM strategy and implementation phases. After the Sema acquisition, the OFS CRM initiative was moved to SchlumbergerSema, thus leveraging the company's own IS organization and its experience in providing CRM services to the external market. Organizational Collaboration Because process changes require a keen focus on change management, it became an important priority during the technology implementation. As part of the plan to get representation of the business units on the CRM deployment 22 April

3 team, as well as executive sponsorship of the overall program, the company conducted alignment workshops with representation from all levels of the enterprise: the CEO, CFO, CIO, vice president of marketing and representatives from all end-user groups. The aim was to develop a comprehensive, cohesive plan for worldwide application deployment. In addition, these workshops fulfilled a crucial communication role, providing information on the upcoming changes, as well as the reactions and input of the users. In addition, Schlumberger OFS put in place a CRM support structure consisting of CRM champions, trainers and administrators. The division created the position of CRM product champion, with the responsibility for distributing success stories internally, defining best practices and serving as a focal point of user feedback. CRM Processes Because of the highly decentralized nature of OFS's operations, there was no common way of managing sales processes, customer information or customer relationships. One of the main tasks of the CRM initiative was to define a uniform global customer information tracking process. Once the CRM team defined this single common process, the team developed standard process training, which was rolled out to staff throughout the different regional operations by a specially qualified team of trainers. Information and Technology Many of the sales and customer management processes were decentralized, as were the various customer information databases. Therefore, a primary objective of the CRM initiative regarding information and technology was to define a common platform and consolidate local sources of customer information. OFS decided to use Siebel Systems for sales and marketing functionality, Lawson Software for billing and finance functionality, and Siebel Analytics for data warehousing and reporting. There were initial difficulties in deploying the CRM client software on employees' PCs because of inconsistent PC hardware and operating systems. OFS overcame this obstacle by aligning the client software deployment with a separate initiative to standardize PC hardware and software throughout Schlumberger. 22 April

4 Implementation Timeline June 2000 Phase 1 pilot deployed in five locations: Aberdeen, Denver, Calgary, Egypt and Jakarta August to December 2000 Rollout to 2,000 users 2001 Two upgrades increasing sales and marketing functionality and deploying Siebel Call Center; rollout to additional 1,000 users 2002 Upgrade to Siebel 7 with the addition of e-training, deployment of order entry and invoicing, and integration to Lawson finance system in 4Q02 Metrics At this stage, most metrics for determining the success of the CRM initiative are internal, focusing mainly on revenue growth. Initial goals were to increase projected revenue by 15 percent, customer satisfaction by 20 percent, and user productivity by 20 percent. Although Schlumberger OFS does not have any metrics in place to measure overall return on investment (ROI), it is tracking individual success stories and overall revenue growth. The company is implementing measures to track the rate of adoption of the new CRM systems and processes by staff as a gauge of overall effectiveness of the program. Based on a recent survey, more-important customer-centric metrics are being developed that will allow OFS to gauge the success and satisfaction of its customers. These metrics will measure customer retention, revenue growth and technology transfer. Results: The results of Schlumberger OFS's CRM initiative have been better than expected. Based on Schlumberger's metrics, the internal acceptance of the Siebel CRM system and its associated processes is approximately 70 percent; and after 30 months of operation, the efficiencies and benefits related to this initiative have generated an estimated ROI of more than 250 percent. The overall success of the program has served to "fasttrack" other related initiatives, such as integrating the knowledge management system with the CRM system and deploying a business intelligence initiative. Critical Success Factors/Lessons Learned: The project manager cited the following items as critical success factors for the CRM program: Strong business representation on project team Experienced systems integrator (SchlumbergerSema) Staged deployment 22 April

5 User feedback during development and deployment Support structure Communication Uniform worldwide laptop platform and image The most-important lessons learned were: Define business processes as soon as possible Align training with CRM processes as soon as possible Implement a strong communication program for communication of processes and successes Create a structure for end-user support (IT and help desk) Ensure proper resources for system support (hardware and software) Identify strong local administrators and project champions Align management objectives and incentives as early as possible Acronym Key CRM OFS ROI Customer relationship management Oilfield Services Return on investment Bottom Line: The main goals of Schlumberger Oilfield Services' customer relationship management initiative were focused on internal requirements, processes and goals. The customer experience was enhanced based on better understanding of customers' needs and sharing of customer data throughout the organization. The impact of the program has served not only to achieve many of these objectives, but also to improve overall customer satisfaction and create an organization that can respond to client demand at local and global levels. 22 April