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Author's profile photo Srini Katta

How SAP can effectively mitigate the competition from

SAP CRM customers often express frustration with their sales executives who ask for a shift to Somehow, they miss  the fact that their company made a significant investment in SAP ERP and SAP CRM.  We’ve interviewed a ton of clients that faced this exact predicament.  In an effort to remedy this problem for our customers, we spoke with a multitude of sales managers and sales executives to try and identify not only what frustrated them about SAP CRM, but also what could be done to make SAP CRM their favorite SF application.  We took notes and here are the results.

Where SAP CRM scores: SAP CRM scores big when it comes to integration with other SAP products such as  SAP ERP, SAP BW, BOBJ , SRM and host of other SAP products.  You can use SAP CRM as a web store front and create a seamless flow of the order from the web into the backend SAP ERP for order execution.  In other words, SAP CRM scores big in terms of taking orders, managing both online and call center requests,   and furthering their execution.

Where SAP CRM has challenges: SAP CRM has significant challenges in areas of marketing, pre-sales and sales processes. It is easy to input data into SAP CRM, but not so easy to retrieve that data without several clicks. Let’s admit it.  Sometimes it takes a lot of work to pull up some very simple information.

What should SAP do to make SAP CRM better than Salesforce.con? effectively markets their CRM as simple and easy to use.  With so much technology at our disposal and the ability to do what was unimaginable just five years ago, “ease of use” is the great equalizer.  Simply put, with so many user friendly devices and applications in the market, an application that is difficult to use will be thrown by the wayside.  Why is it so difficult for SAP, who has been an undisputed leader in providing seamlessly integrated modules such as Materials Management, Inventory Management and Order Management, to provide an easy to use interface with SAP CRM? My theory is that  SAP’s perception of business needs in the last 40 years has not evolved at the same pace as the reality of business needs. The speed of sales has increased exponentially. Deals are lost if your competitors get a better handle on who the prospect is and how to engage the contact persons!

Now this blog is not meant to knock SAP.  SAP is still innovative, but just falls short in a few key areas of CRM which seems to keep it behind Salesforce in the race for usability.   For example, SAP was the first to come up with Streamwork as a collaboration tool. However, is the one who popularized the Chatter tool among CRM users.  Despite having a ton of development partners throughout the globe, SAP didn’t focus on App exchange like did.  As a result of their success with App exchange, always has an easy answer to customer questions about a feature and function.  Any customer question can typically be answered with,,  “there is an app for that.” Though the TCO of is much higher when compared with SAP CRM, Salesforce continues to win because there is nothing like instant gratification and user satisfaction when compared to costs. 

Despite Salesforce’s momentum, if SAP incorporates an effective apps strategy, they can not only keep their existing SAP CRM customer base, but can also significantly win new customers.

SAP needs to create more excitement around SAP apps and at the same time incentive more companies to develop these apps for SAP applications.  For instance, our company developed 6 major apps inspired by functions that simplify and automate the process around accounts and contact management, lead management, and opportunity management. These apps also add new functionality including a Salestips app and suspects app(  Despite  releasing these easy to install apps which directly addressed many SAP CRM client’s frustrations with SAP, it was a slow go to market with the apps with the absence of an APP Exchange like platform.  There was no streamlined forum or market to get these apps in front of SAP customers.  Sure, we can publish our apps on the Ecohub, however, SAP customers are still not that familiar or comfortable with it.  Another bottleneck to innovation is that Ecohub is only open to SAP partners. That means a developer who built a smart app can’t have it published in the SAP eco system until he has partnered with SAP.  The partnership fee is prohibitive for many small companies.  The result? SAP customers miss out because some very innovative apps either never see the light of day or never get developed for SAP applications. SAP can take a page from Apple’s App Store and  provide its customers access to a large pool of talent by building an effective App Exchange.  If SAP were to simply charge vendors a commission on app sales, rather than a large upfront partnership fee, more innovation and creative apps would be built for SAP applications.

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      Author's profile photo Stephen Johannes
      Stephen Johannes

      Great points, however I think your reasons are the symptoms and not the root cause of SAP's problems with SAP CRM.  The real reason why SAP is failing is because of making a few technical/business design decisions that have caused SAP to stop innovating with SAP CRM and only focus on HANA/Mobile/Business Objects.  I honestly feel that in the core Business Suite products SAP is providing their competitors a complete opening to steal business including ERP.

      For SAP CRM the key blunders are the following:

      1) The failure to release to release EHP1 on-time as promised.  In other words turn innovations 2010 into something that may be implemented by SAP Customers in 2012.

      2) The stupid decision to put SAP CRM development on the same schedule as the rest of the business suite to make it easier for SAP to manage development instead of allowing SAP CRM to carry its momentum.

      3) A lack of any real innovations in core SAP CRM EHP2 that would even entice any organization to apply the enhancement pack.  Why wasn't facebook/twitter/social media management tools delivered as part of the standard.

      4) Use mobile as a way to gain revenue instead of market share.  Sales Force Automation needs to be a "native mobile app" and not an application with a mobile interface.  However when you need to make money off of a large investment quickly, doing the right long-term strategy is ignored.

      5) A lack of focus on building a next generation core business applications and instead a focus on HANA, Mobile, Business Objects, Carbon Impact Management, <insert buzz application instead>.  I hate to say this but the empire has grown so large that focus on defending Rome is lost and the barbarians are close in the north.

      Yes my comments are harsh, but I work with the solution on a daily basis and can see the growing gulf between business needs and delivered functionality. The usability issues are minor and could be fixed if SAP had continued to rapidly evolve the SAP Web Client user interface based on feedback.  The framework and tools are there, but the focus to continue to innovate is not.  Just to clarify for anyone reading my comments and thinking I work for the other team,  I am probably one of the biggest cheerleaders of the SAP CRM solution but many of us in favor the solution are feeling that SAP has left the solution behind in favor of the shiny new edge applications.

      Take care,