Meeting the unmet promise

Julian Johnson, SAP's VP of CRM Solutions for EMEA looks at the way forward, and how new approaches combining component-based CRM with new delivery models can maximise the customer experience, and help companies to quickly realize the benefits of CRM.

CXO. You’ve recently transformed your CRM offerings. What were the drivers behind this shift?

JJ. SAP have been in the CRM market now for around five years, and the reality behind our CRM products to date has been that, as per good-quality German engineering, they’re extremely functionally-rich, extremely well-designed and extremely well-integrated into our existing market-leading capabilities in ERP and the back-office – but traditionally they have not necessarily been the most usable or ‘prettiest’ applications that can be bought on the market in the core CRM space. As a result, we’ve done very well in mission-critical CRM (deep industry processes that are related front-to-back across an organisation) but historically we hadn’t necessarily done quite so well at what we call ‘core CRM’ – where ease-of-use and intuitive adoption is important to business leaders and decision-makers.

In the last 18 months, we’ve completely transformed our product offerings to address these specific requirements, and have effectively introduced two waves of technology. The first has been delivered in the on-demand market space – software-as-a-service, as a subscription-based offering – and has introduced our new enterprise user interface, which is entirely aimed at making CRM a highly intuitive, very straightforward process that integrates well with your other desktop offerings. You can personalise it, synchronise it with calendaring and e-mail functions – it’s designed for a classic front-office sales, marketing, service or call centre user.

The second set of offerings is our enterprise or on-premise version of that exact same software. Obviously it’s very functionally rich and integrated to the back-office, but also has the added advantage of this user interface that is extremely easy-to-use and that structures traditional CRM processes very well.

Our unique selling point is that we now have this capability that allows customers to commence projects straight away and get immediate benefits by starting with our on-demand solution, but that allows them to then seamlessly transition to the on-premise solution as their needs increase – for instance, if they need to expand their capabilities, get richer functionality, richer customisation and benefit from richer integration into the back-office. This ability to seamlessly evolve from an on-demand to an on-premise solution is absolutely unique to SAP.

This leaves customers with a lot of options. Many customers like to own their own software, and this is still a valid starting point with many solid business reasons behind it; others may only ever want to use the on-demand model, which might prove more than sufficient for their needs. Still others might prefer to use the hybrid capability I’ve been describing. And whichever model they choose, we can help – it’s an exciting time.

CXO. And what challenges do companies face in terms of implementing and getting the most out of a CRM system? What do they need to know to help them decide whether an on-demand or an on-premise model is best for them?

JJ. The first thing to do is to set out an enterprise CRM strategy in order to understand, fundamentally, where a company is trying to get to with CRM – understanding which channels, business communities and partners they need to serve, as well as which members of their staff need to be served by CRM. They also need to understand the processes and data that would be involved in an enterprise CRM capability.

Now it’s quite often the case that, having formulated a wide-reaching concept of what enterprise CRM can do for the business, many companies decide that it’s too big for them to take on immediately. In this case, it’s important to understand which components or processes of that enterprise CRM strategy can be solved incrementally, in order to address these first and build upon the proven success of that CRM model. This allows companies to then take further steps to address additional processes and capabilities.

There are many factors that customers need to consider before deciding whether to go with an on-premise or on-demand model. If they’re looking at an integrated enterprise CRM strategy then it’s quite likely they would get the most flexibility from an enterprise CRM capability from the start, with the higher stability it offers to customise the solution and integrate it with their existing systems. An enterprise CRM strategy offers the opportunity to transform the business and become a customer-centric organisation

But there may be constraints on the business. It may be that the IT project portfolio is already full – not just for this year, but for years going forward too. It may be that the budgets and business case cannot be approved in the context of the softer benefits that can be realised through CRM. It may be that only the basics are required. In all these cases, going on-demand may be the better answer. With on-demand you have the ability to act immediately against low budget to gain returns and put in place a business process you currently don’t have.

Finally, going on-demand also allows companies to have a proving ground for business processes that can inform the way in which enterprise CRM is delivered. It provides a means to ensure that the business users are able to use the system easily and intuitively, and a means to de-risk the delivery of a full, on-premise enterprise CRM solution. Using an on-demand model allows businesses the ability to seamlessly transition from a low-risk, smaller-scale rollout focusing on certain processes that have been proven to work and that users are familiar with, to a larger enterprise-scale CRM solution.

CXO. Let’s talk about the convergence of ERP and CRM in end-to-end business processes. What impact is this having on the industry and on organisations in general?

JJ. There’s an increasing understanding in the marketplace that, whilst there are some CRM processes that can be delivered in a standalone manner, the greatest customer experience is gained from the rich integration of CRM capabilities with specific ERP functions – things like customer management and billing in utilities and energy; or financial collections, complaints and call centres that need to be richly integrated into financial business processes in the telecommunications market. This has been SAP’s fundamental vision of CRM since we started delivering these capabilities over five years ago – having blended capabilities between CRM and ERP. These aren’t two application silos; it’s all about becoming a customer-centric enterprise, and allowing data, services or resources to be brought to a customer interaction in any channel, through any means, at the appropriate point in the context of that customer interaction.

CXO. How can IT professionals best communicate the value of CRM to C-level executives and senior management?

JJ. Clearly there are a number of stages within a CRM lifecycle. But at the heart of any CRM implementation are some very specific business requirements that need to be realised, and it’s through an understanding of those that C-level executives really start to visualise what a CRM solution can do for their organisation. This might be the impact of losing sales leads between channels; it may be the inability to profile and position existing customers against the data that they already have; it may be the inability of an organisation to respond to contract renewal dates to make sure that the customer is always given the best offer before looking elsewhere for a better deal.

It’s in the understanding of customer satisfaction, revenue opportunities and the ability to expand and enter new markets that C-level executives come to understand the fundamental business case behind a CRM strategy.

CXO. What trends are you currently getting excited about? And what developments do you think will define the growth of the market over the next 18 months?

JJ. We’re in a phase where customers are asking for ‘CRM done right’ – CRM that can fulfil the unmet promise. In the past, where CRM was delivered as a best-of-breed capability, it was poorly integrated into the enterprise systems of a company. As a result, companies did not gain the benefits of a single customer view across the enterprise and were unable to achieve associated benefits like improving customer satisfaction, better positioning products or managing leads more effectively. The original benefits of CRM were not realised. Now, however, companies are increasingly starting to understand how ERP convergence, component-based CRM and new delivery models like on-demand are allowing them to quickly realise the benefits from CRM.

Underneath those trends, there is a desire to leverage corporate data and bring analytics and real-time decision-making to CRM processes – to involve the existing customer interaction strategies with marketing capabilities, service capabilities and with alerts that really inform the customer interactions against fixed and measurable business cases and business models. We are now entering a time where CRM strategies are able to meet the ‘unmet promise’, and that’s really what we’re seeing the market getting excited about. I think we’re about to see a second wave of ‘CRM done right’.

For more information on SAP CRM solutions, visit http://www8.sap.com/mk/get/UK_CRMC_T1?URL_ID=11