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.
My Take
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.
Overall
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?
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