For quite some time the SAP CX community asks itself where SAP is going, or more precisely, which direction its Customer Experience portfolio is taking. This is a worrisome question, particularly as the larger CRM market is estimated to be the biggest segment of the enterprise software market since 2018; and since SAP is positioned with a number of strong solutions, partly home-grown and partly acquired. Hybris, Gigya, CallidusCloud, Qualtrics are only the shiniest catches of the acquisition spree that SAP took under Bill McDermott’s leadership. In September 2015 SAP announced that it set out to build an integrated suite of front office solutions, which the company declared delivered during SAPPHIRE 2018, which also marked the birth of the ‘intelligent enterprise’. These two announcements can basically be summed up as take the CRM market from its strength on the ERP and supply chain side. In between, SAP imported important parts of its CRM 7 solution into its new S/4HANA solution At that time, SAP has essentially turned into a serious player on the CRM market. Which is an impression that got fortified by Bob Stutz joining SAP to lead the Customer Experience team in October 2019. I mean, there is no software exec who is more successful in shaping and driving CRM – with the possible exception of Mark Benioff. Bob, in turn, with Esteban Kolsky, convinced one of the smartest CRM analysts around to become his head of strategy. What could go wrong?

Fast forward to June 2020

Bob Stutz holds his position for about 8 months. Jennifer Morgan, so far Co-CEO with Christian Klein, left SAP. The executive board was restructured and is now younger than ever before – and more Walldorf and product centric than it has been in a long time. Published Customer Experience suite roadmaps have been far in between and/or are hard to find. A webinar on SAP Customer Experience solutions, their strategy and roadmap, that was planned for May 8, 2020, got cancelled. The most important event of the SAP calendar is the annual SAPPHIRE conference. As a consequence of the Covid pandemic, this conference was quickly turned into an online event. If you are interested in how it was perceived, you can read a great post by Paul Greenberg and another one by Sven Esser.

Things “ERP” – lacking a better word

In the keynotes SAP executives formulated a very clear picture of the path that SAP will be following in the next years. It revolves around three keywords:

• Sustainability
• Profitability
• Resilience

and builds upon the great story of the intelligent enterprise. Business resilience is, of course, something that needs to be achieved. This becomes even more obvious in the light of a pandemic that shattered supply chains and made working collaboration tools crucial. But more about this in a minute. Let me first touch the other two terms. They appear totally unrelated. But they are not. Let me explain this using a little detour. For years now we are living with a growing world population, consumption that exceeds production capacity in many countries, lots of waste, and, worst of all, use of energy that largely bases on fossil resources. The most visible consequence is a contribution to the global warming effect that gets questioned by some people, but that nevertheless exists. This is unsustainable, is addressed in several climate agreements and created widely visible movements like Fridays for Future. The goal is sustainability. On the other hand we have business leaders crying murder that investing in sustainable production processes would cull their profitability – and in conclusion being unsustainable for their businesses. SAP’s placing these two words, sustainability and profitability, in one single sentence (and what is more: twice) is a bold contradiction to these leaders’ statements. It is possible and, in extension, SAP has the solutions to help achieving this goal. Resilience and SAP is a far easier combination. With its suite of back end and process modelling solutions, plus advanced analytics and Ariba, the company is uniquely able to help companies building an ecosystem that is resilient against this type of events. And this is where the evolved story of the intelligent enterprise becomes really interesting. Because it is no more a story about single enterprises but whole value chains, ultimately whole economies becoming intelligent. This is also where sustainability comes into the picture again. A few years ago, Microsoft spoke of becoming the fabric of the enterprise. The enabler that connects its parts and powers efficient processing. SAP takes this two dimensions further by envisioning its software driving intelligent economies, making them sustainable and resilient. This is a bold and powerful vision.

Things Customer Experience

But where does SAP’s Customer Experience unit fit into this vision? Sure, one company’s supply side is the demand side of the other, but that is somewhat short, given that the CRM market is huge. People like me, who expected Customer Experience announcements being made during SAPPHIRENOW, got disappointed. There was nary a word about Customer Experience. On the contrary, there even have been two streams: Customer Experience and Experience Management, the latter seemingly revolving around user experience and Qualtrics. So, for the outside world, the strong focus on customer experience that got announced in 2018 seems to be a thing of the past. Bob Stutz knows what he wants to achieve and surely does have a strategy. Him not having announced a strategy yet, seems to indicate some disagreement about the right way in the (extended) board. The fact that an announcement via the DSAG (German SAP User Group) about a roadmap and strategy got cancelled on short notice probably has a reason in board changes that happened shortly before. Which in turn would hint at some disagreements about how to position the Customer Experience unit in the context of S/4HANA and the Customer Experience Suite (fka C/4HANA) being part of Jennifer Morgan’s demise. So, there is not much official news – which is bad news. On the other hand, and that is increasing my (already high) confidence in SAP, I hear a lot about how incredibly busy the development teams are. And this from different sides. It is also obvious how much effort it takes to integrate the acquired software into some harmonic one.

My take

SAP customers that are looking for a replacement of their old but still well functional CRM 7 solution, are confused to worried, although the maintenance window of the business suite has been expanded through 2027. They are looking for more guidance and, if they do not get it, are at risk of choosing another vendor, although this regularly is not beneficial as, with all its challenges, an SAP-to-SAP integration is the simplest possible one, pricing is usually not worse than the competition’s, and as the SAP CX suite is competitive. And with the inclusion of the core sales and service functionality of the old CRM 7 solution into S/4HANA, SAP has quite an asset that could help fending off the competition, if used more actively.

Some suggestions

The single most important helper for its customer base is a formulated strategy that the customers can subscribe to. While the roadmap explorer lists a number of improvements that will come in the next quarters, this needs to be brought into more of a context, especially into the context of the intelligent enterprise. This is likely going to happen with a series of web events that are planned to start on July 7. SAP usually is very strong in formulating what will be important in 2 years and beyond. Adding an increased delivery to short term needs to this strength would even increase the strength of SAPs position by increasing its attractiveness in the short term. The integration of the various acquisitions of the past years into the SAP-developed parts has already been taken up as a priority. The importance of a seamless integration of data and process cannot be overstated. This includes the integration of the CX suite into the back end, which is already on a pretty good state, although integration is and stays one of the cost drivers of projects. The cost of this integration can be greatly reduced when using one common (logical) data model across applications, like the SAP One Domain model. Especially for new customers, a core CRM as an integral part of an ERP solution is a strong asset. This is especially true for the sales automation parts of CRM, as most companies tend to start with the sales side of their processes. Having a good enough support for these processes as part of their ERP solution would greatly reduce their need to implement another CRM system. With core parts of CRM 7 being part of S/4HANA SAP has a this asset. Although investments rightly need to stay limited to not interfere with the CX suite, it would be a strong move to use it. Will we see this implemented? Maybe partly. Still, I am excited to see where SAP is heading with its strong narrative of the intelligent enterprise, and how the CX suite fits into it to make it even stronger. Interesting times ahead.