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To explain the SAP acquisition of Qualtrics, Thomas Vetter offered a kitchen cabinet installation metaphor to explain how his company, SAP, intends to show the rationale for its recent big-ticket purchase.
A kitchen cabinet installer can be proficient and prompt, said Vetter, an SAP senior vice president. The installer's productivity would appear in field service data, and if his boss skipped over customer experience (CX) and used only an ERP system, everyone would go home satisfied. The company wouldn't know customers were unhappy about the installer smoking cigarettes on the job, something a CX survey would show, Vetter said.
Vetter used the analogy to tout the future integration of his division's flagship product, SAP's relatively new CX platform, C/4HANA, and the company's latest-generation ERP platform, S/4HANA. When these products fully integrate, companies will enjoy a marriage of front- and back-office data, he said.
If the promise of the SAP acquisition of Qualtrics holds true, it will deliver the customer sentiment data that companies need to have a full view of CX.
SAP vows to merge the "O data" that its technology has long gathered and the "X data" that the Qualtrics customer experience management platform brings to the relationship. O data is operational data, information about all manner of back-office things: the supply chain, web sales insight, customer product and support history, and employee pay and performance reviews. X data is experience, or qualitative, data from customers and employees -- information such as customer satisfaction and employee survey responses.
It's an ambitious undertaking, one that several industry observers believe can happen, but they nonetheless will first wait and see if SAP can pull it off.
Fighting skepticism, misconceptions about Qualtrics' role
"If SAP can change people's mindsets, if they can show CIOs that this does more than just the back office, then [companies] can bring in their CEO and show it is an end-to-end platform and worth investing in," said Isaac Sacolick, president and CIO of consultancy StarCIO.
Others are skeptical of SAP's ability to deliver on the CX front.
"They have all the operations components; what they don't have is an end-to-end 'X,'" said Kate Leggett, vice president and principal analyst at Forrester Research. "They've taken Qualtrics and are saying, 'That is our experience platform,' but it's basically a measurement platform."
Paul GreenbergManaging principal, The 56 Group
"You need to know where the customer is on their journey, and that's not something Qualtrics does," she said.
Indeed, some in the CX and ERP industries believe Qualtrics is simply a tool to measure customer sentiment. On the other hand, some see Qualtrics as going beyond basic measurement and offering the analysis that organizations need to make targeted outreach.
"People thought it was a survey tool, but that's a misconception," said Paul Greenberg, founder and managing principal of consultancy The 56 Group, which focuses on CRM strategies. "They have surveys and customer analytics. It's a good acquisition that will really add value to SAP."
SAP unveiled C/4HANA last year and is now integrating its five specialized cloud components for marketing, commerce, service, customer data and sales. The company is also combining the CX components of C/4HANA with the ERP of S/4HANA. SAP acquired Qualtrics last November for $8 billion, so Qualtrics technology can work with both.
Qualtrics will help get to the root of why customers behave a certain way and let organizations react, Vetter said. For example, it will combine the technical facts of O data, like the cart abandonment rate on an e-commerce website, with the X data from customers that reveals they find shipping too costly and is the reason they're abandoning purchases. With this insight, a company can pointedly respond and lower the cost of shipping, Vetter said. Such data can also show that more customers prefer delivery speed over cost and the company can successfully raise those prices, he said.
Aside from surveys, Qualtrics will show its strengths by measuring customer sentiment through voice analysis and machine learning, Vetter said. A company will be able to "extract the reasoning" for why customers believe customer service response times are slow, he said.
Will SAP acquisition of Qualtrics bring 360-degree customer view?
Qualtrics can work for organizations in theory, but in practice, they must first break their habit of relying on duplicative tools, said Faith Adams, senior analyst at Forrester Research. Departments in a company each have their go-to customer feedback services, leading to splintered thinking on CX and a lack of overall ownership.
"The customer doesn't care about all the different parts of the organization," she said. "They don't care if the digital team isn't partnering with customer service, and they don't care if every department has its own method of reviewing feedback."
Adams added that, although the X and O data concept is not unique to Qualtrics, the platform -- if successfully tied to C/4HANA and S/4HANA -- can help.
"It's always been believed that CX measurement isn't a single measurement but that you also need to be linking things behind the scenes," Adams said.
Organizations should try to drive to a complete view of the customer journey, including perceptions of interactions, results, buying behavior and CX.
"It's all about tying those things together," Adams said.
Qualtrics' strengths, now merged with SAP's strengths, will make companies reflect on whether they want to spend less on services such as SurveyMonkey and instead make a larger investment to get a better view of customers, Sacolick said.
"There is going to be a [type of company] that goes for minimal services," he said. "But there are organizations that know they need to understand more [through] market research and the 360-degree view of the customer."