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In the world of customer relationship management (CRM), it’s fair to say that the two heavyweights are Oracle and SAP. Both companies have suites of applications designed to work with one another. Both these companies can handle your financial needs, hosted software needs and just about everything in between.
With Oracle (quote - news - alert) getting the lion’s share of the headlines lately, with acquisition after acquisition, I thought it made sense to offer a balanced perspective of the CRM market from SAP. Following is a recent interview I conducted with Bob Stutz, SVP and General Manager, mySAP CRM.
RT: Can you give me an overview of what SAP has been up to in CRM in the last year or so?
Bob: In the last year or so, we have done quite a bit. In February of this year, we introduced our on-demand product, which has a very nice, intuitive user interface. I think, from an overall strategy perspective, our UI is probably one of the best in the industry. We’re not interested in competing with salesforce.com. We’re strictly geared at the upper midmarket. At our price base, from an ondemand perspective, we’re basically targeting our own customer base.
Since then, we’ve also released the first version of our SAP CRM 2006s, which also has a very similar interface to the on-demand product. We basically have the same UI, and it’s very easy for customers to migrate from off-premise to on-premise. Actually, it’s a seamless transition more than a migration, because it is the same base for both products.
The hybrid model is a really nice one, because it allows customers to do CRM without any compromises. They can choose whether they want to be off-premise, on-premise or a combination of both. They can even take an on-premise with an older version and run it that way, so there are a lot of possibilities for customers.
CRM has really become the number one focus of SAP. It offers what I would consider to be a renewed investment. We are continuously looking to improve; we’re out there constantly talking to customers and prospects, trying to understand. I have been in the CRM business a long time and I have seen the good, the bad and the ugly. I think too many vendors got too much into technology and away from what CRM was about, which is the customer, and being able to meet the needs of the customer at the same time as helping you grow your business. There was too much emphasis on technology, and I think that was a mistake. What we’re trying to do is bring it back to the basics of CRM, which is about acquiring customers, keeping customers and growing your customers.
RT: What would you say is the biggest competitive threat to your offering?
Bob: I don’t see one out there.
RT: OK, I believe that makes me obligated to ask you your feelings about the following company, as you made a comment about Salesforce.com in the lower end of the market. They’ve recently been pushing up-market. What do you think about that, and where do they intersect with your offerings?
Bob: To look at it from a depth of functionality, we do everything from fullblown FSA, full-blown marketing, and things like trade funds and promotion management. It’s very deep, complex functionality with seamless integration into our ERP. I think for what we do, there are not many other companies out there. Actually, I don’t think there are any companies out there that have the depth of functionality we have.
RT: Can you elaborate a little bit on that, please?
Bob: Yes. Let’s take Siebel at Oracle. In having spent eight years at Siebel and having built most of those products, I know there’s a lot of breadth but not a lot of depth in functionality. In SAP, we have very rich functionality, coupled with a new user interface. In the SAP CRM 2006s product, it’s fully serviceenabled; all the objects are serviceenabled, so it allows companies to write services in and out, and for the most part, it’s pretty much an open book. I don’t know many CRM products in the marketplace today that have that.
RT: What are some of your most recent customers saying about the deployment of your latest products?
Bob: They love it. They love the usability. They love the fact that we have a new user interface that is intuitive. We have streamlined our business processes. Out-of-the-box, the product is easy to deploy. We’ve made it so that the business processes can be used right out of the box. There’s an excellent flow across all the different modules of Sierra, and customers really like it.
RT: What do you see as some of the next steps for your products?
Bob: I think the next steps are to focus on building more and more services up. We want to go deeper into some areas, especially into some other verticals. For the most part, we’ll continue to improve usability, performance and scalability. I don’t think you can ever stop working on usability. It’s not something you do once and say, “Now I’ve got a usable product.”
RT: How do you see CRM integrating with other applications in the enterprise in the next few years?
Bob: Well, I think it’s all going to be done by services. I think at some juncture, the SOA architecture will really become true reality. Services will be the way that everything integrates.
RT: I am hoping you have some guidance for my readers. What is the correct amount of money, as a percentage of sales, to be spending on CRM implementations? Is there such a thing?
Bob: I don’t think there is such a thing. I don’t think there is such a number that you can just pin down. If you are a large enterprise and you do full-blown multichannel service across all the touch points of your customers, I don’t think there is a price you can put on it. You have to look at what the return on investment is for the money you spend and make sure it’s a worthwhile investment. I think that comes naturally if you do CRM right, and you do an implementation right — the ROI will be there.
RT: What is your integration strategy with call centers or contact centers?
Bob: We have a call center product of our own, but we can integrate with other call centers through services.
RT: From SOA and XML — that sort of thing?
Bob: Right.
RT: What do you think about the acquisitions that Oracle has been making in the CRM/call center space lately? It seems like they do most of the acquiring and SAP doesn’t do much.
Bob: I think you have to look at what they are really trying to achieve. Are you talking about the MetaSolv acquisition?
RT: There are so many of them that it’s tough for me to keep track of them all, but Siebel and Telephony@Work are two that stand out in my mind, plus JD Edwards. If you go back far enough, there are so many of them.
Bob: Yes, but you know, Telephony@Work was already integrated into Siebel, so that was no big thing. It really wasn’t a surprise acquisition, because it was a cornerstone of Siebel’s whole on-demand contact center piece. Actually, I think they were all filling a gap that they [Oracle] had around order decomposition. I think everybody is just trying to fill the holes. But it’s really hard to integrate all that stuff together at the end of the day.
RT: In making a CRM purchase decision, please tell me the things that a decision maker should keep in mind before buying.
Bob: I think the key thing is that you really need to look at what your business requirements are. You need to have a vision about what you want to do with CRM, a strategy to implement it and an execution plan to get it done. Even before you decide to buy, you need to have those things clearly defined. Most implementations sell because people get excited about technology, they buy a product, and then they realize that the technology doesn’t fulfill their needs. It’s very important, when buying CRM, to make sure it fulfills your business needs, and not just for the short term, but the mid term and long term, as well, because once you start down the road and you implement, it’s costly and painful if you have to rip it out and start again.
RT: Thank you, Bob.
In the end, when choosing between CRM providers that can also give your company virtually all other server-based software, Oracle and SAP own the market. The question becomes: Which strategy do you feel is best: the homegrown one or one that combines bestof- breed software into one company? 2007 will certainly be the year of the CRM titans, with Oracle and SAP fighting it out and Salesforce.com vying to become a billion-dollar software company. From my perspective, customers continue to reap the rewards of intense competition, but I have to wonder if some innovation isn’t being squeezed out the market as larger and large vendors take all the market share.
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