CRM

Does SAP have to give away CRM?

I’ve covered SAP as a reporter and editor for over four years, and the CRM market in particular for six

So I took more than a little interest in recent reports that SAP is giving away CRM licenses. Of course, as several have noted, there’s FreeCRM and there’s free CRM and this is neither. Don’t forget to read the fine print, Thomas Walgium wrote. Free software isn’t really free, Ray Wang chimed in.

First and foremost, customers are still paying maintenance on the licenses, a not inconsiderable cost. Continued »

Solving IDoc problems

IDoc is the SAP format in which data pertaining to business transactions gets exchanged.  SAP end users and consultants specializing in supplier relationship management (SRM), procurement, and even application development are frequently exposed to IDocs, which can pose all kinds of technical problems for end users.Recently, we’ve received a lot of expert tips that can help you solve IDoc problems.

For example, here’s a way to send advanced vendor details using IDoc that can help you when you need to go beyond sending address details to a trading partner. If that tip isn’t enough, ask our resident SRM expert, Sachin Sethi, follow-up questions.

Some of you have been wondering how to generate an IDoc after you delete a purchase order. There is a way to do this, but it may well be illegal because of regulatory and compliance laws, so proceed with caution. By the way, this tip illustrates why business managers should carefully train SAP end users on the risk management implications of altering business documents.

Another common query is how to find user exits in idoc_input_orders. Resident SAP NetWeaver expert Axel Angeli explains how to do this, and also addresses the issue of user exits in IDoc with a detailed code sample.

Finally, the issue of data error tables is foundational for IDoc users. Axel explains how to populate error tables automatically from IDoc.

Demir Barlas, Site Editor

SAP CRM trounces Oracle, Salesforce.com

AMR Research has just released its CRM market analysis of 2007. There are plenty of interesting facts in the report, starting with the growth of the market. CRM revenue grew by a gaudy 12 percent in 2007, which AMR points out is “the strongest year-over-year growth for the segment since 2000.”

Here are the leading CRM vendors, with their 2007 total revenue and revenue growth rate:

1. SAP $2.7 billion (20%)

2. Oracle $1.9 billion (39%)

3. Salesforce.com $749 million (51%)

4. Cegidim Dendrite $602 million (82%)

5. Amdocs $522 million (14%)

6. Aspect $480 million (-2%)

7. Verint Witness Actionable Solutions $395 million (78%)

8. Microsoft $360 million (39%)

9. SAS $323 million (34%)

10. Avaya $267 million (2%)

The most impressive organic growth rate was posted by perennial SAP heckler Salesforce.com, but SAP’s much larger revenue numbers give it the last laugh. Given how late SAP entered the CRM market, it is no mean achievement. Siebel (later acquired by Oracle) had a head start of several years whereas Salesforce.com cornered the market on buzz, but SAP has demonstrated that it can dominate any segment of enterprise applications seemingly at will.

Something else to consider is that, of the top three CRM vendors, SAP has a possible edge in terms of global reach. Given SAP’s recent growth numbers in India and strong sales and development and footholds across Asia, for example, it seems likely that SAP CRM can crack the huge Indian and Chinese markets in advance of the other majors. If so, this would give SAP a continuing lead in CRM.

It bears repeating that, although these numbers might draw a ho-hum from people who are accustomed to thinking of SAP as a leader in various enterprise applications segments, they are all the more remarkable given the state of the marketplace in the early part of this decade. I still remember watching Tom Siebel in Los Angeles about five years ago arguing that Siebel’s CRM revenue would eclipse SAP’s total revenue by the 2010s, and a lot of audience members bought it. How much has changed since then!

Demir Barlas, Site Editor

Microsoft targets SAP

The inherent tension in the Microsoft-SAP alliance was spelled out by Microsoft CEO Steve Ballmer during his keynote at yesterday’s Convergence 2008 event: “SAP is sometimes a collaborator, sometimes competition.”

Competition is the aspect of the relationship that is coming to the forefront right now, as Microsoft’s ongoing interest pits Redmond against Walldorf for high stakes: The small and medium-sized business market. Convergence 2008, for example, has highlighted Microsoft’s ERP and CRM products, both of which play to the mid-market.

Cooperation between the two companies is largely in the form of Duet, the technology partnership that allows Microsoft products to serve as a front end for SAP applications. Duet has several hundred thousand customers and is generating revenue for both companies.

With both Microsoft’s business applications and Microsoft-SAP Duet going strong, the question is when the existing ‘co-opetition’ between the two companies will tip over into full-fledged rivalry. The mid-market is a hugely lucrative space for e-business software providers and may yet break up the Duet.

Finally, it’s interesting to see how Microsoft’s messaging geniuses managed to pull one over on SAP on Microsoft’s SAP partnership page. Here, Microsoft defines itself as making SAP “People-Ready,” as if SAP on its own is not people-ready. It’s a subtle point, but it illustrates the scope of Microsoft’s ambition and calls into question Redmond’s ability to sustain a long-term partnership with a ‘co-opetitor’ such as SAP.

Demir Barlas, Site Editor

Process manufacturers: A guide to ERP functionality

A new report from Aberdeen Research discovered that best-in-class process manufacturers tend to take specific approaches to their ERP strategy by deploying:

• ERP that provides integrated order entry, procurement, planning and production, and financial management.
• CRM, logistics, and delivery management systems integrated with manufacturing operations [themselves owned by ERP].
• Forward and backward traceability.
• Attribute-based rules and routing.
• Supplier compliance and collaboration.
• Enterprise Asset Management (EAM).

Being a good process manufacturer isn’t as simple as your ERP strategy, but the best process manufacturers do indeed have a recognizable approach to ERP characterized by the action points above.

Aberdeen adds that sound business process discipline, knowledge management, performance management, and reporting (e.g. for regulatory reasons) also characterize best-in-class process manufacturers.

SAP was one of the Aberdeen report’s sponsors.

Demir Barlas, Site Editor

The skinny on SAP SRM 2007

There has been something of a slow burn recently on a couple good blogs about SAP SRM 6.0. The word around is that the product, also referred to as SRM 2007, won’t be released beyond those customers currently in the ramp-up phase. Obviously, this isn’t great news for SAP, but how bad is it?

To clear some things up, we talked to Andrew Bartels, an SRM (supplier relationship management) analyst with Forrester Research.

SAP says between 10 and 50 companies are in the ramp-up phase for SAP SRM 6.0 (Bartels puts that number closer to 10 or 20). Bartels said these companies will be able to continue implementing the product, but SAP will not be taking any new customers. Rather, the idea is that SAP will focus on getting SRM, SCM (supply chain management) and all its “alphabet soup” products on SOA (service-oriented architecture) by the fourth quarter of 2008.

So, is this a disaster for SAP? Not according to Bartels.

On the plus side, the SRM 2007 product itself doesn’t have a lot of new features and functionality, according to Bartels. Rather, most of the improvements were in usability, and SAP may have some service packs in the offing to help in that area.

SAP will also continue developing the areas that have needed the most attention — spend analysis, CLM (contract lifecycle management) and e-sourcing — all of which will be available for sale separately.

However, with the next SRM product now likely debuting in the fourth quarter of 2008, that puts a large two and a half year gap between major SAP SRM releases. Also, some customers were counting on the usability improvements and will be disappointed. But we shouldn’t expect a mass customer exodus for SAP, Bartels said.

The bottom line?

“This is not good for SAP,” Bartels said. “But it is not, by any means, too bad for them — they still have competitive products out there.”

Jon Franke
News Editor

SAP CRM second to Oracle?

Research firm Datamonitor’s recent report on the CRM market pegs Oracle as number one, followed by SAP. Microsoft? Not so much. From Stuart Lauchlan’s analysis:

Datamonitor concludes that Oracle is a clear market leader with an impressively versatile and highly competitive CRM portfolio while SAP is also recommended as an automatic shortlist choice due to the excellence of its CRM modules and dominant impact on the market [...] There are possible alternatives in the form of Chordiant, Infor and  Salesforce.com, but these have to remain competitive if they are to continue to be considered as market leadership challengers. Other possible contenders include Consona, Microsoft and RightNow Technologies if they enhance their profile among end-users or deliver on the considerable promise of their forthcoming releases.

It is true that Oracle has made substantial acquisitions over the past couple years. Indeed, the time for decrying the Siebel- and PeopleSoft-mess as more bluster than actual business benefits has come and gone. But does that translate to automatic CRM dominance, especially in light of SAP’s admittedly excellent offerings? What about the pesky little deal that SAP is actually leading in market share? We asked Lauren Hoyt, site editor of our sister site SearchCRM.com, for her take on the issue:

It’s hard to deny that Oracle has a clear lead in CRM deployments, thanks in large part to their acquisition of Siebel Systems. Siebel has 4.6 million users, and Oracle and Siebel combined can claim 5.6 million. Meanwhile, SAP leads in market share. Still, don’t count out Salesforce.com or Microsoft. Analysts predict significant spending on CRM in the next few years, which should be telling from a market share perspective. My sense is that the vendors that can do a few things — design a friendly user interface (UI), help customers design a real strategy for managing customer relationships, capitalize on the now ever-prevalent on-demand market and finally, blend its product with social media opportunities — will be the winner in the long run.

Will that winner be Oracle, SAP, Microsoft or any of the other CRM players? Submit your comments for a chance to win a free copy of “mySAP CRM Interaction Center” by Thorsten Wewers & Tim Bolte, courtesy of SAP Press.

Matt Danielsson
Editor

SAP trends 2007, part two

We recently asked veteran SAP guru Axel Angeli for his predictions of the major SAP trends in 2007. Now it's time to turn our attention to Mark Smith, CEO at Ventana Research, for his take on the matter.

SearchSAP: What's the biggest SAP trend for 2007?

Smith: The biggest trend is that SAP is moving to advance its use of Analytics and will evolve into offering its Customer Performance Management functionality across finance and operations management. These new advancements in applications and capabilities will become essential for SAP to maintain relevance with senior executives but to also help customers derive more value from existing investments. With a foundation year of new applications in Analytics and now an investment and focus in Performance Management, SAP is recognizing the importance of supporting not just the business processes but the management processes that can deliver improved results and effectiveness of organizations.

SearchSAP: Do you see any additional developments to keep an eye on?

Smith: SAP is moving to drive more value in its applications through significant advancements in the process and event drive architecture of SAP NetWeaver. The movement from transaction-centric architecture and systems to event-driven can help organizations move toward more automated and intelligent applications that improve the value and supply chains of industries. Integrated inter-enterprise processes are part of the next decade of innovations in ERP and CRM application suites and are essential to fulfilling the vision and promise of enterprise services architecture from SAP.

SearchSAP: What do you expect from SAP's ERP competitors?

Smith: SAP's key competition in ERP is Oracle, Infor and Microsoft at one level of mega application providers and then down to Epicor and Lawson. Each of these providers is working to maintain its existing customer base through new versions of its applications and new underlying application platform and capabilities. The places of significant new growth are in analytics and Business Intelligence and the underlying integration of these applications with information management needs of organizations. These application companies are continuing to build, buy and partner to expand these capabilities to stay competitive with SAP. In addition, the focus on Performance Management and new classes of applications for finance and operations is now advancing from many of SAP's large and small ERP competitors providing engines of growth and value for existing and new customers.

Stay tuned for more expert insights of what 2007 has in store for the SAP world! Also, be sure to take Ventana's latest survey on how to get the best metrics from SAP — there's a Starbucks gift certificate in it for you, plus a chance to win an iPod nano.

Matt Danielsson
Editor

CRM, the savior of jobless SAP pros?

Gartner recently released a report on how they predict the SAP CRM situation will play out in the year ahead. From news editor Jon Franke's article:

"Through the end of 2008, 25% of CRM projects will be postponed or cancelled, according to Gartner. This rate of postponement and cancellation is largely a result of a CRM skill shortage — of consultants and systems integrators in particular — the Stamford, Conn.-based research firm says in a recent report."

Interesting stuff, especially in light of the lean times that seem to be more rule than exception in many areas of the SAP world today. There are plenty of ABAPers, Basis admins and consultants feeling the outsourcing pinch on one hand and the downward monetary pressure on the other. This probably won't change in the immediate future, so the question is should you consider a strategic move into the CRM space? And if so, what would that entail? 

Certification is not necessarily the only route to go, according to SAP career guru Jon Reed. It's more a matter of whether your current job can be mapped to the necessary CRM skills. For the Basis folks out there, you may be interested in this post about the options for a Basis guy looking to get into CRM. Do you need knowledge of the SD module to make it in CRM? Nope, says Reed; it helps, just like certification does, but the right background is infinitely more important. 

While the CRM route is by no means a universal path to SAP bliss, it may be worth a closer look. Check out Jon Reed's SAP career section to get a handle on how your current skillset may mesh with a CRM role, then visit the CRM topic section for the latest stories, tips and expert advice on SAP CRM.  

Matt Danielsson
Editor

What SAP should improve — part 2

As promised, here's part 2 of "What SAP should improve." Feel free to shoot us an email or comment below with your own experiences. If we get enough good ones, maybe we'll run this feature again.

Jolene Jonas, SAP data architect, Intel (customer)

From a data architect's perspective (via email):

"One example: SAP R/3 has a Customer design and a Vendor design. They require the creation of a new Customer or Vendor for each different address. This results in many Customer and Vendor records for essentially the same company simply because they have different addresses for different purposes (ship to, sold to, pay to, order from….).

In CRM and SRM, they have introduced a design called ‘Business Partner.' In it you create the Customer (in CRM) and the Vendor (in SRM) once and attach many addresses for many purposes. In this way you can manage the Company just once. The new Business Partner design is more flexible, it would be great if SAP redesigned R/3 to use this new design.

One more example:

Customer and Vendor name fields in R/3 are 35 characters long. Business Partner expanded to 40. Reality is business and individual names can extend beyond 100 characters. R/3 and the new Business Suites need longer name fields."

Have a great weekend,