Nortel Networks acquires CRM vendor Clarify Inc.

With plans to set off what they are calling the “second wave of eBusiness”, Nortel Networks Corp. and San Jose, Calif.-based Clarify Inc. announced in October that Nortel will acquire the front office software provider through a merger agreement.

At press time, the definitive merger agreement had been signed. But the deal had not been closed yet, and isn’t expected to be final until December or even as late as January 2000, according to Ben Kiker, vice-president of corporate marketing at Clarify.

Nortel, on a fully diluted basis, will pay an estimated US$2.1 billion in common shares for Clarify.

The companies say the agreement will unify Nortel’s Internet wares with front office solutions, giving businesses a better way to manage customers.

Federal Trade Commission regulations in the United States impede the companies from discussing specifics of the deal until closing, according to Kiker, but he did say that there are a few possibilities that could arise from the acquisition.

“I can tell you about a couple of things that you might see happening, combining, for example, the wireless Internet technology that Nortel is creating with our applications to run a host of different appliances that are now becoming very popular,” for both consumers and businesses, he said. For example, he mentioned cell phones that are incorporating the Web.

But the main focus of the acquisition seems to be on customer relationship management (CRM).

Susan King, vice-president of customer care at Nortel, said that the company is listening to its customers, and the customers are saying that the Internet is changing everything.

“Our customers are telling us that their customers are asking that they have really essentially a customer franchised experience, a unified customer touch-point that no matter how a customer talks to them, whether it’s through the Web, through the telephone or through their sales force, that they really want a single customer franchised experience,” regardless of how transactions are performed, she said.

The focus for everyone right now is on customer service, said Kiker, and “that means that executives are going to be demanding more out of their IT organizations to help deploy and implement those technologies and solutions.”

“We believe that the next wave of eBusiness is going to be focused much more on relationship building,” he explained, adding that service will be essential, because value won’t be enough.

While a lot of companies are finding success on the Web, King said it’s forcing them to open additional call centres to handle all the incoming traffic as a result. And then problems arise when the phone operators have no idea if

the customer has already sent an e-mail, if they’ve received a reply, or what else has happened.

“This acquisition and this strategy is all about how to really combine that Web experience with the phone experience with the sales force experience,” explained King, “so that you really do deliver that franchise customer experience, regardless of how your customer is touching you.”

Kiker said that this is a technology that is going to be essential in upcoming years.

“That is absolutely a key technology that is going to determine whether or not, or how successful, I should say,

a company is in the new millennium,” he said.

Studies on CRM indicate that Kiker’s optimism is probably justified.

A June 1999 survey by Cambridge, Massachusetts-based Forrester Research Inc. found that 92 per cent of respondents thought that the CRM concept was critical or very important to their company-yet only 2 per cent said that they’d achieved that single face to the customer.