As expected, SAP announced a renewed focus on CRM at SapphireNow in Orlando – what it terms “fourth- generation”, not least to allow for brand rhyming with its S/4HANA ERP product it has been maturing for years now.
The reaction here has been somewhat muted. Reaction from couple of customers – “5 years too late” “CEO McDermott arrived at SAP from Siebel 15 years ago – what took him so long?” Several analysts reacted to my “Salesforce is Vulnerable” note Monday by adding “Yes, but not by SAP”. One snarkily wondered if SAP’s branding team had vetted the fact that C4 is a plastic explosive.
I am a bit more optimistic.
SAP can broaden definition of CRM
For the longest time, the definition of CRM has been frozen around the SFA, service and marketing pillars. SAP already has an edge with its hybris commerce engine, and at least in legacy world order entry engines which factor complex pricing/promotions for Consumer Products, configurators for High-tech, claims processing for Insurance etc. SAP can make the definition of CRM much more transaction-intensive and much more vertical.
It is a new world of customer data
The money quote during the Tuesday keynote came from Alex Atzberger, SAP’s President of Customer Experience - ‘Don’t be creepy’ in relation to how you collect and use customer data. The prominent security breaches at Equifax and other data custodians, recent scrutiny on how Facebook, Google and other social platforms along with the need for GDPR compliance have brought a new focus on quality of consumer data that gives SAP another reason to reopen the CRM conversation with customers and prospects.
SAP continues to have a hammer
In a press conference, CEO Bill McDermott used one of his favorite quips – customers who buy everything from SAP show better market performance. He shared that one customer told him 50% of their market cap can be attributed to their SAP relationship. It was his carrot to the continuing SAP stick of invoking its “indirect access” clause. Non-SAP CRM surround applications have been the trigger for many of those audit claims.
Couple of my concerns
It was surreal during the press conference to hear so many old names – Siebel, PeopleSoft etc. It’s almost as if SAP is chasing old ghosts. As I wrote last week, I want SAP to dream bigger. It has missed out on so many trillion dollar markets in the last couple of decades.
The blurb for SAP Nation 2.0 said “In February 2015, SAP announced its next-generation ERP product, S/4HANA. Since then, SAP and its partners have relentlessly marketed the tag word "Simple." When you factor in SAP's growing product portfolio (much acquired, but not integrated), the customizations and satellite applications at its 300,000 customers, and its ecosystem of 13,000 partners, a different word comes to mind: “Sprawl.”
A concern to me is branding risk. S/4HANA has been slow to mature and even slower to be adopted. A twin brand may face similar sluggishness. Then there is the risk of further fragmentation. Will the HR-centric solutions like SuccessFactors and Fieldglass want to be clustered into an E/4HANA? Will the supplier-centric group want something starting with V? Will the sprawl spread?
At least for now, C/4 gives SAP another talking point. You can never go wrong when you talk to executives about revenue-centric topics.
