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SAP's CRM development plods on

As SAP methodically builds out its CRM offering, users are starting to turn away from competitors like Siebel.

BOSTON -- Two months ago, Thomson Information Services elected to remove its Siebel CRM implementation and replace it with SAP CRM.

"We're predominantly an SAP shop," said Jeffery Ton, director of enterprise solutions and an attendee at this week's SAP's annual user conference Sapphire. "It just made sense."

SAP today released the latest version of CRM as it strives to make more companies like France-based Thomson turn to SAP for their CRM needs. The 2005 release of mySAP CRM adds enhanced marketing features like marketing resource management and an e-mail response management system that increases the accuracy and efficiency of outbound e-mail.

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Enhanced sales capabilities include mobile functionality that updates handheld devices with SAP CRM in real time and a channel management tool to integrate campaigns with partners. On the customer service side, SAP has added contract and entitlement management, warranty, complaints and returns processing.

"It continues to be a sign of SAP's methodical march forward," said Scott Nelson, a vice president and distinguished analyst with Stamford, Conn.-based Gartner Inc. "They continue to close the functional gap between themselves and Siebel by shoring up weak areas. The marketing side, as is usually the case with CRM systems, is the last to come around."

It's the sort of functionality customers seem prepared to wait for.

"SAP takes a little while, but they get there if you stick around," said Mark Frumento, manager of customer engagement at Philadelphia-based Day & Zimmermann Group.

A managed services company, Day & Zimmermann realized its salesforce required more CRM functionality as the company grew. The company had been through smaller scale projects in the past, including running GoldMine from Pleasanton, Calif.-based FrontRange Solutions USA Inc. With SAP running the back office, it just became time to turn to SAP for CRM, Frumento said.

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"Now we have the foundation," he said. "It really does work and integrate. The main issue is getting customers all in one place."

While SAP declares market leadership in CRM, citing 2,900 customers and significant revenue advantages, San Mateo, Calif.-based Siebel Systems Inc. claims SAP is counting unused CRM -- purchased by customers who buy SAP suites and don't utilize the feature -- toward revenue. Siebel points to its 3.2 million live users. Companies like Day & Zimmermann could help to end that argument.

Bill McDermott, president and CEO SAP America, put it more bluntly at a press conference at Sapphire.

"Best-of-breed CRM is gone; it's irrelevant," he said. "The clients we talk to today have clearly made their choice. If they're looking for fully integrated CRM and ERP, they choose SAP. If they're just looking for a standalone CRM system and already have ERP, they choose SAP CRM. Either way we win."

With Siebel's recent announcement of a new CEO and acquisition rumors swirling -- and with Oracle preoccupied with its integration of the PeopleSoft technology stack -- SAP has a chance to make gains in CRM, according to analysts.

"Traditionally, SAP just extended CRM to their ERP base," Nelson said. "They are now going out and selling CRM first. The biggest thing [the market shakeups] do is allows SAP to sell themselves as the safe choice."

SAP also unveiled industry-specific CRM offerings in the public sector, telecommunications and financial services today. The new CRM release will include embedded analytics capabilities and improved usability with intuitive interfaces that leverage NetWeaver and SAP's business intelligence.

Customers are now testing modular elements of mySAP CRM 2005 and the new version will be globally available in October.

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