Chordiant Software CEO Speaks About His Company

Jun. 4.07 | About: Chordiant Software (CHRD)

On June 4, The Wall Street Transcript interviewed Steven R. Springsteel, President, CEO and Chairman of Chordiant Software, Inc. (CHRD). Key excerpts follow:

TWST: Please begin with a brief historical sketch of the company and a picture of the things you are doing right now.

Mr. Springsteel: Chordiant Software was originally founded as a professional services company back in the early 1990s. The company had developed technology from a number of engagements they had performed for large enterprises and credit card companies. The company was then founded in May 1997 as Chordiant. Chordiant went public in February 2000 and has grown throughout the years. Most recently, in FY07 Q2, we had a quarter of record revenues, with a record backlog, really a number of record performances.

TWST: What have been the principal drivers of this success?

Mr. Springsteel: Chordiant has focused from day one on three principal verticals. Those three verticals are financial services, telecommunications, and insurance/health care. The customers in these three verticals hold three attributes in common: they have a large number of customers themselves, they have a large number of products that they are selling to those customers, and they have a very complex backoffice infrastructure of disparate databases that can contain various pieces of information relative to those customers. So we bring all of that information together into a particular touch point and that point could be through the Web, through a call center, teller or an ATM. What we've done to grow our revenues and to achieve the results that we've had is focus a lot of our effort on our customers. We have an internal mantra at Chordiant that we drive the company toward: "make every customer successful and never let a customer fail." That mantra has obviously resonated well with our customer base, and at the end of the day, our revenues are driven by our customers. They only buy from us when we have good customer references, and we have great customer references at this point.

TWST: Would you give us one significant case study or success story?

Mr. Springsteel: Let's just look at a company like Barclays. Barclays is one of our larger customers. Barclays is a perfect example of a growth customer whereby we go into one business unit, get established, and then grow into other business units. As a result of that, Barclays has up and running right now approximately 26,000 users on our technology. Just to give you one of the examples of what they use our technology for, it used to take Barclays 40 or 45 minutes to open an account. You can imagine how problematic that would be for the bank. With our technology, they've been able to get that 40 to 45 minutes down to about five minutes and that's worked out incredibly well for them. Look at another customer, O2, which is a cellular provider in Europe. Europe went through the same metamorphosis on the cellular side as we did, whereby the regulations changed such that you could take your cell phone number with you as you transferred to other cellular providers. That created basically a free-for-all in the cellular market in Europe. Acquiring new customers and, even more so, keeping the customers that you had became paramount. What ended up happening is O2 was able to use our technology and they saw sales conversion rates of 50% or higher and improved response rates to their offerings, because now the offerings that they are making are personalized to the specific customers. The response rates from those offerings went from 2% to over 50%. Those are two companies, anecdotally, that have done very well with our technology.

TWST: Could partnerships and alliances play a very big part in your future?

Mr. Springsteel: Actually, partnerships are a very big part in our current as well as our future plans, and let me expound on that. One of the shifts in strategy that we've initiated in the last year is switching to a partner-enabled model, whereby we are going to those partners and saying, we would love to strengthen our relationship, enable you to perform the professional services piece, because that's your core competency. We focus on developing and selling our technology, which is our core competency, and we'll provide high-level technical architects and business analysts to enable you as a partner. That relationship works out well. We have developed multiple relationships with IBM, Accenture, Cap Gemini, BearingPoint, etc., and all these relationships are paying off. The partners enjoy working with our transformational technology, and they are glad we don't compete with them for the consulting dollars.

CHRD 1-yr chart

CHRD