SAP's masters of the supply chain need to reorder their stock of CRM industry respect. Following the wait for the company's CRM offering, pressures from both established CRM players and other migrating ERP firms are squeezing in on the German enterprise software vendor's opportunities to sell the suite to its ERP customers. The industry isn't exactly brimming with confidence for SAP's prospects--in the December 2000 issue of CRM, two analysts, Michael Maoz of GartnerGroup and Liz Shahnam of META Group, named SAP as 2000's biggest loser in upper-tier CRM (see The Insider, Dec. '00 CRM). Shahnam nominated SAP, alongside Baan, one of the biggest train wrecks in enterprise software. This is not healthy territory for a company painting itself as the next and greatest answer to the demand for customer interaction software.
If there are any doubts at SAP, they don't show. Boasting of 400 enterprise CRM customers licensed in 2000, CRM communications director Jon Wurfl makes it sound as though everything were going according to plan, and he stands by the company's joint ERP/CRM initiative. "The value set that is unique for SAP is that we are able to sync all our channels of commerce," he says. "I can look at the entire value chain and understand revenue and have a much more intrinsic understanding of costs versus reported profits."
In step with many CRM software providers, SAP plans to catch the latest wave and unveil a CRM analytics suite in 2001. Other technologies under development include vendor-managed inventory, where a supplier analyzes supply chain data as well as customer demand to make stocking recommendations and decisions for its resellers, as well as enhanced collaborative forecasting.
SAP is working to expand access to its MySAP portal into mobile devices, particularly Palm PDAs following a licensing deal between the companies last year. One obvious application is to secure immediate signoff (or disapproval) from executives and management who might be part of a large customer transaction--such as instant approval of a deal-making discount. Wurfl says that this functionality will be rolled out to SAP's own sales team in the first quarter of 2001. The moral of the story: It's open season to ask your SAP rep for fast turnaround on a markdown.
SAP plans to seed its CRM technology in new ventures, as well. Subsidiary SAPMarkets will build SAP CRM components into its customers' online marketplaces, powering e-commerce transactions as well as tasks such as joint opportunity management and just-in-time restocking.
How much of these developments will be too little, too late? Analysts have long lambasted SAP for its strategy of building CRM functionality from within, claiming results in a product that is continually behind the technology curve. "The issue is that Siebel isn't standing still," says Dave Boulanger, SAP service director at AMR Research. The perception is that Siebel has balanced a strategy of internal growth and acquisition, allowing it to stay ahead of SAP despite its established success selling to top enterprise customers.
steps for SAP
Boulanger also warns against reading too much into SAP's claims of success. "In point of fact, there aren't a lot of live customers. The good news is that they have implementation teams in those 400 clients and hundreds of people dedicated to implementation," he says. Even those that are fully installed may not be fully satisfied. "If you want a full mature product in all senses, you probably have to wait six to twelve months. Is it viable, integrated, does it do the things a good CRM application should do? Yes. Does it top the chart in terms of functionality? No, it doesn't."
Laurie Orlov, research director at Forrester Research, is past the wait-and-see stage, condemning SAP's reliance on internal development and claiming that their announced partnership with Clarify has been hamstrung by a lack of commitment to the relationship. "I don't think their core competence will be a CRM product. Others have evolved it further than they will be able to pull off," she says. "I don't think SAP will be able to create a really relevant CRM offering without an acquisition. It's too bad they never bought Clarify before Nortel bought them--partnering loosely with Clarify and writing their own [CRM] is ineffective."
She nominates companies such as Quintus, Pivotal and Onyx as attractive targets. "Any of the midmarket [firms] would be a good thing for SAP, with the potential to beef up those packages to make them high-end."
Technology is only half of the success equation, however--forming a compelling business case is the other, and SAP is finally pushing its CRM solution as a path to prosperity. "Up until now, their go-to-market strategy has been technology [emphasis], but if you talk to someone in sales and marketing--the economic decision makers who buy the software--Siebel has gotten to them much more quickly and effectively," says Boulanger.
The shift may help, but Boulanger questions whether top management will allow it to take root. "My worst fear for SAP is that if things don't come together, CEO Hasso Plattner is going to take a look and say 'You've had your chance, let's go back to the original [message.]' If that happens, they will have lost the battle."