Siebel Systems Inc. and Electronic Data Systems Corp. this week will announced a partnership to help companies avoid many of the costs and complexities of managing customer relationship management systems in enterprises.

The companies will announce EDS' plans to add Siebel's software to its BPO (business process outsourcing) services. The pact calls for EDS employees who run customer-facing business operations for other companies, most typically contact centers, to use Siebel's CRM applications.

Those Siebel applications will be integrated with other business processes managed by EDS, such as human resources, supply chain and inventory management, using Siebel's Universal Application Network for business process integration between disparate applications, said officials of both companies.

The move lets EDS extend its BPO offerings into the front office as it adds Siebel's software—still the most widely used CRM software despite three straight years of falling license revenues—to the mix of applications it supports.

Siebel, meanwhile, gets a potential and much-needed new revenue stream from current EDS clients, as well as a new way to reach customers that lack the staff or expertise to manage a complex enterprise CRM system.

The partnership is the first of many Siebel plans to ink in the BPO arena, as the company shifts its focus from license revenue to service revenue, according to Siebel officials in San Mateo, Calif.

IDC, in Framingham, Mass., values the customer care BPO market at $41 billion.

Saeed Hosseiniyar, vice president of IT in Alcatel's Enterprise Networking Group, which has about 2,000 seats of Siebel's sales, customer service and marketing applications, has little interest in outsourcing his Siebel business processes.

"It's more cost-effective for us to run Siebel ourselves," said Hosseiniyar in Calabasas, Calif. "We're a small group, we've been running [Siebel applications] for five or six years now, we've become very efficient. But if you're just looking to do CRM now and you've got an implementation ahead of you, then you're more likely to turn to outsourcing."

EDS, of Plano, Texas, will start offering Siebel applications as part of its BPO offerings within six months.

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