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What is the future of SAP CRM, and should I be part of it?

I am an SAP SD/MM consultant later who turned into a Siebel consultant. I would like to get into SAP CRM. What...

is the future of SAP CRM?


First of all, I agree with your objective of trying to get back into SAP from Siebel. Although Siebel is the market leader in the CRM space, you'll notice that Siebel's stock is really struggling. Obviously, these are difficult market conditions for all e-business software vendors, but even in comparison to Oracle, PeopleSoft, and SAP, Siebel is having a hard time. The downturn in corporate software sales is giving the big ERP vendors plenty of time to hone their CRM functionality and make it more competitive with what Siebel has to offer.

Considering that your previous experience is in SAP, SAP-CRM seems like an ideal area for you to pursue. But there are several things to keep in mind. The good news first: As I said, I do like SAP's market position in CRM compared to Siebel. After all, SAP can heavily discount its CRM product to its own customers, because SAP is deriving revenue from many other application areas as well. In addition to the edge SAP can use over Siebel on cost, SAP can also push "ease of integration" for customers who are running on SAP for both ERP and CRM. I don't envision SAP customers who are currently running on Seibel ripping Siebel out, but Siebel is going to have a hard time penetrating the SAP install base much further than it already has.

So SAP-CRM looks pretty good compared to the current CRM market leader. What doesn't look so good is the CRM market itself. Although the entire e-business software market is taking a beating, CRM in particular is facing very tough questions about return on investment (ROI). In the last year, many prominent analyst groups, including Gartner and Aberdeen, have come out with reports citing alarming failure rates on CRM projects - up to 70 or 80%. There are many reasons for these ROI problems. One major question is whether CRM is a strategy designed to make companies more efficient (replacing call center operators with voice mail for example), or whether CRM is intended to improve and personalize the customer experience. Those of us who have contended with multi-tier voice mail systems would agree that the customer experience is not necessarily improved through "CRM" technology.

Another major problem is that many CRM systems are not adequately integrated with back-end manufacturing applications. How can you possibly improve the customer experience if you don't have a "real-time" window into the order that the customer is calling about and hopes to modify? And how many companies really track all the interactions with a particular customer, thereby allowing them to "intelligently" build on the relationship at each point of contact? Armed with a truly integrated front-end/back-end solution, SAP is in an ideal position to address this particular problem.

So I look for SAP-CRM to be a solid player in the CRM market. And since there are many different aspects to CRM installations, SAP can gradually build on its successes. For example, SAP has done very well with its Internet Pricing and Configuration (IPC) component. SAP has also done pretty well with its customer care solution for the utilities industry (CCS), which I understand will be rolled into SAP-CRM at some point. I also look for SAP to deliver on CRM analytics that will allow companies to identify and market to their most profitable customers - one of the cornerstones of a truly effective CRM strategy. But I don't see SAP-CRM as some kind of "slam dunk." Between the overall economy and the questions facing the CRM industry as a whole, look for a "slow growth" scenario, as opposed to a surge forward. It's wise of you to try to move back into SAP. If you can't move right into an SAP-CRM position, get involved in SD-MM work again, ideally on a new implementation or major upgrade. That will put you in position to go wherever the SAP market goes, whether it leads you into SAP-CRM or into another related area.


This was last published in September 2002

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