News Stay informed about the latest enterprise technology news and product updates.

SAP poised to challenge Siebel

This promises to be a busy few months for SAP on the CRM front. The company has a new CRM sales chief who will soon be charged with selling a new product release.

Analysts will tell you that SAP is one of the hardest vendors to gauge in today's CRM market. Since the company largely sells into its vast ERP installed base and packages CRM software in its mySAP Business Suite, it's tough to get a handle on how many CRM customers the Walldorf, Germany-based SAP has.

Most estimates, however, place SAP as the top challenger to CRM market leader Siebel Systems Inc. The goal of SAP's new vice president of North American sales operations is to steal away Siebel's crown.

Chris Rooney is no stranger to the market. After a five-year tenure in the CRM practice of New York-based consultant McKinsey & Co., Rooney takes charge of a business that SAP is pushing hard to expand. His boss, SAP America CEO Bill McDermott, also has strong CRM roots, having arrived at SAP in September 2002 after a stint as Siebel's executive vice president of worldwide sales.

"My role is bringing this 800-pound gorilla of a solution we have in line with the needs of key line of business owners, heads of sales or business units," Rooney said. "These are the people who, in many cases, have given up on the broad, sweeping capabilities of CRM software they've already implemented, and we need to help show them the real value."

According to Rooney, there remain "huge business issues in sales, marketing and service," and SAP is working to address these. He admits that, during the last two to three years, customers have put technology in place but, for the most part, CRM tools haven't performed as expected.

"People have cut some expenses, built process efficiencies, cut call center talk times, or improved transparency for sales reps," Rooney said. "But if you ask senior executives what they've gotten out of CRM, some say they've actually gotten dumber, and haven't been able to change the way they go to market."

One major issue, as Rooney sees it, is end-user adoption. He feels that a major catalyst for adoption lies in better understanding vertical industries and tailoring CRM software to meet individual markets' needs. SAP currently has software tailored for 23 vertical markets, and driving adoption through vertical orientation will be a major element of the company's mySAP CRM 4.0, due out in June. SAP is attempting to figure out which pieces of CRM are most important to any given customer and help users choose the right modules, Rooney said.

Some competitors have criticized SAP for not selling its CRM products outside of its massive ERP customer base, which includes 19,000 companies worldwide. However, according to Rooney, building SAP's CRM-user following must begin with its current customers.

"We're embarrassed if our customers go someplace else for their CRM solution," he said. "Siebel has done a great job positioning themselves in the market, but we think we'll own the CRM space because we have the engineering and architecture to make it work, from [the] back office through to customers."

In that sense, SAP will continue to push its message of integrated front-office and back-office software, rather than using San Mateo, Calif.-based market leader Siebel's best-of-breed approach. Yet, in the long run, Rooney believes SAP needs to build better awareness that its CRM software can stand on its own. Rooney said SAP doesn't plan to lose its integrated approach, but he would like more people to recognize SAP for the individual CRM applications it has developed, not just that the software is "plugged together."

Industry analysts agree that there is little need for SAP to look beyond its own customer base for CRM wins. According to Erin Kinikin, vice president and research leader at Giga Information Group in Cambridge, Mass., SAP's ownership of the back-office applications market, especially within manufacturing and other product-driven industries, represents a huge opportunity for CRM.

"SAP is nearly as dominant in its installed base as Microsoft is with its users," said Kinikin, referring to Microsoft's established platform business.

"While Siebel might offer better [CRM] ease of use, the advantage of tying CRM to back-office systems outweighs other benefits to many SAP users," she said. "This is a great example that CRM is not a one-size-fits-all situation."

Kinikin said between one-third and one-half of SAP's ERP customers have looked to other CRM vendors in the past, but she feels it has become harder for companies to overlook the upside of having integrated front- and back-office systems, especially as mySAP CRM functionality has improved. Kinikin estimates that mySAP CRM has only penetrated 10% of its ERP installed base. However, she said, if the company were able to pull a majority of its users into CRM, SAP would stand beside Siebel as a clear front runner.

According to Kinikin, the biggest challenge for mySAP CRM lies in whether it can be successful in services industries, where there is more emphasis on integration with legacy systems, and not such close ties to manufacturing.

Now, SAP has a new sales executive to help meet challenges like that.

FOR MORE INFORMATION:

The Best Web Links on SAP CRM

Share your thoughts on SAP's CRM technology

Dig Deeper on SAP CRM

Start the conversation

Send me notifications when other members comment.

Please create a username to comment.

-ADS BY GOOGLE

SearchContentManagement

SearchUnifiedCommunications

SearchDataManagement

SearchEnterpriseAI

SearchERP

Close