During CRM Evolution 2017 I had the chance of talking with Volker Hildebrand and Anthony Leaper from SAP. Volker is SAP’s Global Vice President SAP Hybris and Anthony is Senior Vice President and Sales GM - Enterprise Social Software at SAP.
Topics that we covered were things CRM and collaboration, how and where SAP’s solutions are moving and, of course, the impact that the recent reshuffling in the executive board has.
Starting with the latter, there is common agreement, that if at all it is positive as likely to streamline reporting lines and hence decision processes.
First things first – after all I am a CRM guy.
Having the distinct impression that the SAP Hybris set of solutions is going a good way I was most interested in learning from Volker about how there is going to be a CRM for S4/HANA. SAP’s new generation ERP system is growing at a good clip, and according to the Q1/2017 earnings call, now has 5,800 customers with 400 new customers in the last quarter alone. Many of these customers are net new customers.
The challenge is that S4/HANA doesn’t have a CRM (yet). I have earlier already suggested two ways how this could change – marrying up the SAP Hybris family of modern CRM solutions or modernizing SAP CRM and integrating it into S4/HANA based upon HANA technology and therefore avoiding the costly CRM Middleware and data duplication. Both approaches have their merits: The cloud based SAP Hybris set of solutions is far more modern and already bases on the new SAP standard Fiori user interface. SAP CRM, on the other hand and despite only minor investments into it in the past years, is still far more powerful in many areas, and has a good installed base.
It turns out that SAP decided to merge SAP CRM into S4/HANA. This is not really a surprise for me, rather a confirmation of what I earlier heard through the grapevine. SAP is working on it for a while now as this is no minor piece of work. It includes replacing the CRM Web UI with a Fiori-based UI, adapting the main business objects, especially the customer and the business transaction, on both sides, removing CRM Middleware and replacing it with a combination of merged data models and HANA views. The latter means that there still is a kind of middleware, albeit a much simplified one, which hopefully over time can vanish altogether, following the 15 year old vision of Hasso Plattner to be able to create business applications by recombining business objects. I do expect the first release of a (renamed?) S4/HANA that includes CRM capabilities in early 2018. There is no real rush for it, if SAP provides a migration path. It is more important to get it right in order to not antagonize already nervous customers. On the other hand I do not expect a full CRM being migrated in the first instance. For example marketing: With Hybris Marketing (formerly known as Customer Engagement Intelligence) SAP In the past years has built a fairly strong solution and continues to invest into it. Hybris Marketing, furthermore, is capable of running on-premise and in the cloud. It can be used in combination with both, an S4-based CRM and SAP Hybris.
The main advantages of merging SAP CRM into S4/HANA are that this approach
a) Opens a future roadmap for current SAP CRM customers that stretches beyond 2025. These customers else are at risk of defecting.
b) Provides the continued chance for customers to run their SAP instance on-premise. According to Volker there are still a good number of customers that do not want to run their instance in the cloud. The key word here is choice.
Now What About SAP Jam?
SAP Jam has been a success story for SAP. Guided by Sameer Patel, SAP early on discovered that collaboration is key to successful business and to being able to engage customers in a way that results in good experiences. In order to achieve this, Jam is deeply integrated into both, SAP CRM, and the SAP Hybris set of solutions (and others, which I do not look at here). It, for example, drives the review- and community-functionalities in Hybris e-commerce. And it is exactly here, where we can expect further exciting things. Think about combining this with a bit of AI, a bot, and a knowledge base. This way a customer’s search query can first hit the KB and present a relevant result to the customer. Or, failing that, it can route the request to an agent for further processing, who is already informed about the failed search and can initiate an ad-hoc collaboration with potential experts who helps answering the customer’s inquiry. Human-machine collaboration is certainly a topic that is high on SAP’s priority list.
The CRM Part of the Equation
I think that it is a wise decision to merge SAP CRM into S4/HANA. SAP CRM has an installed base and customers that are at risk of defecting, lacking a roadmap. It also has a lot of very valuable industry-specific functionality that simply does not exist in SAP Hybris – and probably will never be there.
Modernizing SAP CRM, putting it on HANA, merging it into S4, while making it ‘cloud-ready’ therefore seems to be a very good way.
However there are some cautions that need to get considered!
For SAP this means that there will be two different code lines – “S4CRM” and the SAP Hybris set of CRM solutions – that need to get maintained. This is a pretty costly adventure. In order to minimize the redundant efforts as much functionality as possible needs to get modularized in a way that it can get used with both core solutions, S4/HANA, and SAP Hybris. This does not only affect Hybris Marketing but also solutions like Retail Execution or Trade Promotion Management, to count only two.
Proper positioning is also an issue. Having two different solutions always has the inherent risk of confusing customers; and SAP does not have a real good track record in properly positioning solutions in a way that minimizes this confusion. And here we have the added layer of on-premise versus cloud.
Jam and Collaboration
Human-Machine collaboration is a ‘thing’, especially in times like these where structured knowledge, unstructured data sets come together in very huge amounts that can no more be handled by humans. SAP seems to have understood this and bases further improvements on the groundwork that has been done in the past years.
SAP probably just needs to spread the word of what they are doing a bit more actively. I certainly would love to hear more.
Looking into customer facing functionalities SAP is back on a good road for a while now. On-demand CRM seems to be competitive sine around the second half of 2016 and the strategy becomes more clear as well. Giving on-premise customers an outlook beyond 2025 was the thing to do.
Next items on my wish list for SAP to do are getting more into detail on how the CRM road goes. While the target sector is clear now there are bunches of open questions, as mentioned above. Secondly – and although it is somewhat refreshing that SAP does not jump onto the “I am so AI” bandwagon – SAP needs to do something here to not appear as a laggard, which the company certainly is not. I am sure that SAP can manage to make their mastership of AI and machine learning more clear than they are doing now while continuing to make clear that both are means to an end: More intelligent business applications that help businesses optimizing and automating their processes, while personalizing employee and customer interaction and engagement. A good first step into this direction could be getting rid of CLEA as a name. ‘Einstein’ and ‘Leonardo’ paved the way – how about Marvin?