What Happened – So Far
As you are well aware SAP is working on
integrating a simplified version of SAP CRM into S4. The original roadmap
offered a first customer release of an integrated product in early 2018, based
on the September 2017 release of S4. The integration was planned as an add-on
to S4. The initial scope of this CRM add on for S/4 was supposed to cover what
is referred to as ‘core service’ functionality. This initial release shall be
followed by ‘core sales’ functionality later in 2018. 2019 then is supposed to
be dedicated to another round-off release covering further sales and service
functionality, including loyalty management and migration tools.
Roadmap and statements also so far have
been fairly fuzzy about the strategic distinction between CRM as a part of S4
and the SAP Hybris line of CRM- and CEM systems.
What does the Future have in its Basket?
As it seems now, the release is not going
to happen as fast as planned, nor in the originally planned way.
Instead, in a webinar recently held for
partners, SAP ‘announced’ two very interesting changes, with the second one
likely also being a consequence of the first one.
SAP CRM will no more be referred to as an
add-on to S/4 but, at least for the service functionality, as ‘SAP S/4HANA for
Customer Management’. Given this, first the Service portion of SAP CRM, then
its Sales portion, will formally become a part of S/4. CRM Marketing will be
phased out and be replaced by SAP Hybris Marketing. This is nothing new,
though.
Regarding the first release, SAP now talks
about H2, 2018. It appears that the difficulties of integrating two complex
(and different) pieces of software into something consistent are higher than originally
anticipated. Merging them, instead of merely delivering an add-on, surely has
added to this complexity.
The ‘Sales Core’ that is to follow the
Service Core is still scheduled for 2018.
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Customer Management for S/4, Service
simplification; source SAP
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This
sequence still makes a lot of sense, as S4 is very light on customer service
functionality. This can also be seen in the sources of the business object models
that make up the joint solution. Also, the addition of the CRM Interaction
Center is a good choice, although this will have other implications when
thinking of the SAP Hybris Engagement Center. More about this a little later.
SAP essentially chose to use the transactional
objects out of CRM and to ‘marry’ them with the S4 varieties of the master type
of objects – with the prominent exception of the business partner, which will
have its origins in CRM. This exception is hardly surprising as the CRM Business
Partner is far superior to the original ERP Business Partner. This is referred
to as ‘using the best of two worlds’, something I would not contradict to.
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Customer Management for S/4, Sales
simplification; source SAP
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This
theme continues in the sales world, where also the ERP based S4 functionality
is stronger than in the service portion. Additionally, it can be argued that
order fulfillment is a core ERP job. There, in any case, is no need for having
two different object models in the same system. The two interesting aspects
here are the choice of a CRM based org model and the addition of a loyalty
component into S/4, especially since Loyalty Management is a classic candidate
for an engine and as there is a competing, though with lower capabilities,
loyalty management engine in YaaS.
The majority of other CRM engines and
frameworks, like pricing, configuration, extensibility, reporting, etc. will be
replaced by their respective S/4 / ERP counterparts or be made part of external
engines.
All in all the CRM for S/4 picture is
rounding off.
However, there are a number of remaining
questions that SAP needs to be able to answer in order to give customers
further confidence. These questions include:
- How reliable is the roadmap? This is an eternal and difficult question. However, the quiet shift of the release of S/4 for Customer Management from ‘based on 1709’ to H2, 2018 raises some additional doubts. On the other hand the timeline is not yet critical, as there is ongoing support for CRM 7 until the end of 2025.
- How to deal with multiple ERP or S/4 backend systems? There is a good number of customers that for legal and other reasons do run different ERP systems in different countries or for different subsidiaries. The original plan for a CRM add-on did not cover this common scenario. There still is no statement about it other than CRM Middleware still being part of the system.
- How are engines and industry solutions dealt with? The most prominent example right now would be CPQ and the upcoming SAP Revenue Cloud.
- How is the differentiation between S/4 for Customer Management and the different SAP Hybris solutions?
S/4 Customer Service vs. SAP Hybris
The last question is actually the 800-pound
gorilla of questions. And the answer to it is only emerging, based upon the
idea that there are three tiers of systems: Systems of record, operational
systems, and systems of engagement, with the system of record does the ‘heavy
transactional lifting’. The cloud based operational system and system of
engagement offers the flexibility and nimbleness required by fast-changing
customer engagement requirements. Consequently the transactional system is S/4
based while the operational- and engagement systems are based upon the SAP
Cloud Platform, which basically means that everything can be in the cloud but
the transactional system can also stay on premise.
This seems reasonably straightforward and
consistent especially on the S/4 vs. SAP Hybris side, but still is very high
level.
A Customer Service Example
In the case of Customer Service SAP’s
conceptual implementation of this vision looks like the diagram below.
Personally, I think that this distinction
of three tiers is unnecessary as both, omni-channel service engagement and
field service have customer engagement and operations facets, but let’s go for
it for time being.
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3-tiered framework for SAP & SAP Hybris Customer Service; source SAP
This differentiation seems to make quite
some sense on the outset and is a refinement of an older diagram. However, the
devil is in the details.
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Conact Center remodeling with SAP Hybris; source SAP
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An important part of this devil is that
this vision falsely suggests that the system of engagement is actually on top
of the operational system, therefore mixing high volume low-touch service and
low volume high-touch service. It also suggests that service tickets require a
Cloud for Service implementation in addition to the (omni-channel) Customer
Engagement Center.
Which is plain wrong.
For example, both systems offer a service
ticket, albeit the service ticket in Cloud for Customer needs – and offers – more
functionality.
Instead the Cloud for Service will concentrate
on being a “market-leading field service
management solution including superior mobile experience & advanced
scheduling (w/ ClickService)”, while the engagement center will focus on
automated and agent based customer service.
Both solutions are supported by SAP
Leonardo-based machine learning.
And here comes the catch again.
SAP offers a Service
Ticket Intelligence solution to “automatically
categorize incoming service tickets and to provide resolution recommendations
for the agents. This allows contact centers to expedite problem resolution and
scale with the increase of digital service requests”.
This leads to faster ticket resolution by
routing the tickets to the right agents and additionally, by providing solution
suggestions, reduces the resolution times. On top of this it frees up the
agents to spend more time with customers instead of doing admin or system management
tasks.
The net effect of this should be better
customer service and increased customer satisfaction as business outcomes.
However, SAP Service Ticket Intelligence comes
pre-integrated into SAP Service Cloud, the alleged reason being the number of
tickets required for the learning process.
I don’t buy this argument, actually don’t even
get it.
Running the ticket intelligence against
Cloud for Customer with the agents working in the Service Engagement Center –
or the S/4-based Interaction Center – the ticket intelligence does not connect
to the system that serves for ticket creation and therefore does not really
help the agents. It also does not effectively work with self-service systems.
This is at best inconsistent and should be
changed fast as it also forces SAP Customers to implement an additional and
potentially unnecessary system.
All in All
The picture is getting clearer.
The differentiation between the old world transactional
systems and the systems of engagement is more and more being sorted out. Looking
at how SAP proceeds what was CRM becomes part of ERP (S/4) and CEM becomes the
new world – Customer Engagement and Commerce and driven by SAP Hybris.
Current questions are more and more on
detail level and increasingly on how to combine cloud platform products (SAP
Leonardo) and different SAP Hybris solutions efficiently to come to a
consistent and customer specific solution. The current problem for customers
with this is the functional overlap of the different ‘clouds’ combined with
insufficient modularization.
This is where the rework of YaaS could come
into the picture. Modularization of the various clouds into ‘Micro’-Services would
allow for a seamless recombination of systems that allow for the definition of
functional scope according to customer needs as opposed to only offering
pre-packaged systems.
In between revisiting the integration
strategy of the various components with the goal of minimizing the number of
required systems should be of additional help for customers.
SAP-internal one item that the new
SAP Hybris chief Alex Atzberger
needs to look at is an avoidance of an us vs. them situation between SAP and
SAP Hybris. Both parts of the company need to work as seamlessly as the
solutions they build. Departmental rivalry will be on customers cost and
ultimately harm SAP.
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