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SAP's customer engagement strategy could trump CRM

SAP is trying to broaden the boundaries of CRM in service of a customer engagement strategy.

One of the most hotly debated topics in the business world today is the difference between CRM and customer experience (or engagement) management. SAP is attempting to circumvent this dispute and outflank its competition by coining its own software category, called Customer Engagement and Commerce (CEC), with the hope that customers prefer acquiring their solutions primarily from a single, strategic source.

The debate over the meaning and scope of CRM is being fueled by two disruptive forces. The first is the fundamental change in the way in which customers -- corporate and consumer -- make purchase decisions and the role of CRM in charting the customer journey. The changing customer behavior has forced businesses to rethink how they sell and support their products and services on the Web and in physical stores -- that is, their omnichannel strategy.

The second disruptive force is how the meteoric rise of Salesforce, the provider of cloud-based CRM, has redefined the way software is developed, sold, delivered and used as a service. Salesforce's unprecedented success has forced independent software vendors to re-architect their applications and revamp their go-to-market strategies so their applications can be used on a pay-as-you-go basis. Salesforce has not only gained the lion's share of the CRM market and dominant position as the industry thought-leader, it has commandeered the CRM acronym as its stock-ticker label.

Rather than try to dislodge Salesforce, SAP is suggesting that businesses need more than a CRM application alone to succeed.

Rather than try to dislodge Salesforce as a standalone CRM vendor, SAP is suggesting that businesses need more than a CRM application alone to succeed. The idea behind SAP's CEC campaign is that CRM is nothing more than a customer record management system unless it enables businesses to better engage with their customers. SAP believes that a successful customer engagement strategy entails a broader set of functional capabilities, spanning from the upfront sales and marketing activity through the back-end fulfillment and support processes.

Like others in the software market, SAP's story hinges on delivering a positive customer experience across all of the phases of this continuum. But, as the term CEC suggests, SAP is putting a lot of its emphasis on the importance of the transaction experience (i.e., commerce), which is at the center of the customer engagement strategy process.

At the heart of SAP's CEC strategy and "Going Beyond CRM" promotional campaign is hybris, which SAP acquired in 2013 for a rumored $1 billion. Hybris is a portfolio of commerce, marketing, fulfillment and data management solutions for an increasingly hybrid world of on-premises systems and cloud-based services.

At the hybris Customer Days conference in Ft. Worth, Texas, this week, there were several case study examples of hybris, from the Girl Scouts adding an e-commerce website to its annual cookie drive, to Mohawk Industries developing an omnichannel marketing program, and Canada-based food and pharmacy store operator Loblaw Companies Limited offering on-demand shopping services. The Girl Scout story demonstrated how hybris' technology is user-friendly enough to enable scouts (and parents) to create their own e-commerce websites.

SAP is betting that a growing set of similar customer engagement strategy success stories will enable its CEC strategy to outflank its CRM competition. It is also hoping that enterprises will prefer suite, which promises greater interoperability between front- and back-end applications than the best-of-breed approach Salesforce advocates.

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