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SAP CEM requires savvy CRM pick

Integrating SAP ERP with CRM gives companies a whole view of the customer experience. But do you use SAP's own CRM product or look elsewhere?

One of the challenges SAP shops face -- especially larger companies -- is pulling together information from different sources to get a 360-degree view of their customers. The answer to that problem: Organizations need to bring customer data together wherever they need it to increase their business value.

Integrating SAP ERP with a customer relationship management (CRM) or customer experience management (CEM) system to enable increased customer engagement gives companies a whole view of a customer, allowing them to provide better customer service, operate more efficiently, cut down on errors and increase sales.

The question that arises when it comes to an effective SAP CEM strategy is whether companies should integrate SAP ERP with SAP's own CRM product or turn to another CRM system such as Salesforce.com.

What differentiates SAP systems is that they do integrate with other systems, said Paul Greenberg, president of The 56 Group LLC, a Manassas, Va.-based consulting firm focused on CRM. "The ability to integrate is easier now than before," said Greenberg, whose company advises SAP. "That said, it's in SAP's interest to get people to use its CRM system." But before any company selects a CRM system, he said, goals must be identified, as well as the outcomes needed to achieve those goals.

Identify goals before selecting your CRM system

Identifying those goals and outcomes will eventually lead a company to its choices -- Salesforce, SAP, the Oracle Sales Cloud or Adobe's Marketing Cloud, Greenberg said. "Then, based on cost or the relationship you have to the vendor, or you just like the vendor and its future roadmap, etc., you can make a decision about which CRM system to choose," he said. "If you have SAP ERP legacy systems, then all things being equal, you use SAP, which has a perfectly good CRM capability."

To make the right CRM choice, organizations also must take inventory of the systems around CRM they have already invested in, said Chris Purpura, vice president of digital enterprise strategy at San Francisco-based MuleSoft. "We find that most SAP customers have ERP in place and that it's not going anywhere. In the areas of CRM, we see very few SAP CRM modules deployed," he said. "Most enterprises are already using a portfolio of best-of-breed, CRM-related systems around their ERP. This list is long and varied, including marketing automation, social marketing feeds, marketing analytics, sales automation, configure/price/quote, customer service, case management, community management, warranty management, and so on -- all to deliver CRM."

However, no one vendor provides all of these capabilities, so a company selects SAP CRM augmented with SAP HANA (in-memory database) for a faster, cheaper database or something else; it's "orthogonal" to the application functionality and business processes one needs to put in place to deliver delightful customer experiences, Purpura said.

"If you stay with SAP, you will start using SAP HANA more," said Esteban Kolsky, founder and principal of ThinkJar, a Sacramento, Calif.-based customer strategy consulting firm. That is because, historically, SAP has not had a strong CRM product. There have been modules but they have required a lot of development -- a lot of pulling together, said Rebecca Wettemann, vice president of research at Boston-based Nucleus Research.

"SAP has never had strong-enough CRM capabilities that would lead a deal with CRM like Microsoft, Oracle or Salesforce would," she said. "SAP has had fits and starts with its cloud strategy broadly as a company, particularly with CRM. So, we see a lot of companies using Salesforce and taking advantage of the integration capabilities to integrate their ERP data into the Salesforce environment and use Salesforce for CRM. That's probably the most common integration that we see today."

SAP customers slow to implement HANA

But a lot of what HANA offers -- for example, helping customers leverage big data to provide better, more proactive customer service -- makes a lot of sense for CRM, Nucleus Research's Wettemann said. SAP, which has tied HANA to its CRM software, has been working to evolve HANA from a database to a platform that powers applications such as its enterprise application suite and its customer engagement intelligence product, she said. "The challenge that we've seen is that there aren't a lot of SAP customers on their own who wanted to take the risk of implementing HANA when they have other options out there where the CRM functionality is already pretty rock-solid and capable. So, the few customers that I've talked to that are using it have been fairly small SAP shops …. they are still doing a lot more custom work, as compared to deploying Salesforce or Dynamics CRM or something like that."

A company's core objective should be to leverage the most business-effective and cost-efficient platforms, said David Linthicum, enterprise technologist and senior vice president at Boston Mass.-based Cloud Technology Partners. Although an all-SAP solution, including CRM, was fine years ago, he said, these days, augmenting SAP with other CRM systems may prove to be a better option.

"A lot of customers integrate Salesforce.com," ThinkJar's Kolsky said. "What we're seeing -- and this is where the SAP platform becomes a lot more interesting -- is with the platform, you can do a lot better integration. So, you can integrate Salesforce, you can integrate Oracle, you can integrate anything else you want."

The approaches to integrating Salesforce with SAP are pretty well understood these days, Linthicum said. Moreover, the technology is in its fifth or sixth generation, so the integration between the systems is fairly easy to carry out.

"SAP's CRM/CEM tool is, of course, running with the SAP core, and thus the integration is going to be tighter than integrating with Salesforce," he said. "Information is less likely to be replicated; indeed, the modules should share the same data and structures."

Successful CEM platforms run in the cloud

Cloud integration provider Jitterbit sees back-office SAP solutions being connected to customer engagement platforms every day, said Andrew Leigh, vice president of alliances at the Alameda, Calif.-based company. The platforms vary, but successful customer engagement platforms have one main thing in common; they're cloud-based, he said. "So, the big gorilla is Salesforce.com."

What the cloud gives those platforms is the ability to engage customers anywhere they are, an important consideration when businesses are trying to create new relationships with customers.

"We use terms like omni-channel," Leigh said. "You really need to engage customers where they are, so customer engagement platforms that are already out in the Web are able to very easily connect to social networks like Facebook or LinkedIn or Pinterest. They're able to communicate more easily with things like Twitter for a customer to be serviced across a channel that has really opened up."

Some companies don't have a lot of customers, so they're not trying to engage millions of customers globally across every single channel. For those customers, the SAP CRM solution often is enough -- maybe augmented with HANA analytics, Leigh said.

But other SAP customers want to engage their end customers across every channel, and what they're looking for is a giant ecosystem of CRM applications. And that's what Salesforce provides, Leigh said. He noted that the Salesforce App Exchange has more than 2,000 plug-and-play applications that increase all channels of customer interaction.

Leigh added that although SAP "offers lots of different products and solutions to engage a customer, none of them live on a single platform -- all of them have to be integrated as well. What SAP does is it provides the best integration it can between its own products. But what we find is that customers are still looking for additional integration out to things like FedEx or Amazon or eBay, and you want to be able to connect to the customers where the customers live every day."

Implementing Salesforce could provide stability

SAP shops that integrate with Salesforce rather than SAP's CRM gain a CRM platform that's easier to use and deploy, and that provides many more add-ons, such as analytics, Cloud Technology Partners' Linthicum said. The cost should be lower as well. "However, the interfaces are different," he said. "You'll have to deal with integration issues, and these will cause some issues versus just leveraging an all-SAP approach."

Integrating anything with SAP requires a deeper analysis and assessment of what SAP modules are being used, and then determining which APIs already exist or need to be created to connect with that SAP module, Purpura said.

"There really is no consistent approach other than to build a library of reusable integration modules and patterns over time to talk with SAP," he said. "The same goes for SAP CRM and ERP, as well as their SaaS and on-premises versions." But when SAP and Salesforce are properly integrated, companies are able to streamline and fully automate their business processes MuleSoft's Purpura said.

He added that "deciding which platform to use ends up being pretty strategic. Given the need for ever-increasing customer connectivity … then the decision of which platform should come down to the functionality of each module. Equally as important is an evaluation of that module's API and how that functionality can be leveraged and connected across the customer journey with other external systems and data."

Next Steps

Why customer engagement has gained importance for SAP businesses

How is SAP handling enterprise mobility?

Understanding SAP HANA deployment options

This was last published in February 2015

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What are the tools and practices that your enterprise has used to improve your approach to SAP CEM?
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My enterprise considers the cost and the relationship it has with a vendor before looking into SAP ERP legacy systems as they affect the type of CRM system  that the company will use in the future. Carrying out due diligence on the CRM strategies the enterprise has already invested in can give a good idea on whom to go with. It is also of essence to consider a SAP CRM system augmented with SAP HANA.
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This was a great article with a lot of points made that I’ve considered myself. I’ve been using SAP for years and have to say it has been the most efficient CRM I have used to date. It has its drawbacks, mainly with speed issues and new update releases that are fairly spread out. That said, SAP CRM is extremely easy to navigate, has an abundance of customization options and overall is a work horse.
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After you have spent a boatload on SAP licenses and now spend a chunk of change on Salesforce - only to have SAP turnaround and say that all your Salesforce users are indirect SAP users also - does diversifying your ecosystem actually make any sense at all?
This effectively is the gist of the recent High Court ruling against Diageo in the UK.
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