IT Trends Lead SAP to More Precise Customer Experience Offering

Many enterprise software events that I have recently attended have discussed the intersection of the following forces and IT trends:

  • cloud computing, the benefits and caveats of which have been talked about ad nauseam, but the major premise is remote access for users via a mere Internet connection

  • the so-called big data explosion in terms of volume, variety, and velocity (thus sometimes even referred to as “fast data”) and the advent of related high-performance data discovery, data crunching, and data analysis tools for mitigation

  • social collaboration for both individuals and businesses, whereby companies should listen closely to their customers’ needs and opinions, and analyze these for deciding on the best possible course of action

  • mobile computing, which allows access to data from virtually anywhere and on virtually any device

To illustrate the last bullet point, mobile devices are no longer discretionary spending items for families, even (or perhaps especially) in underdeveloped countries where other resources are still scarce. I just spent several weeks this past summer in rural Serbia in my parents’ birth village that still has no running water or sewer system, yet almost every peasant has a mobile phone in his/her pocket (and quite a few dilapidated houses are adorned with satellite dishes on their leaking roofs as well). It is indeed astonishing that the Internet (cloud) and mobility have penetrated many underdeveloped regions much faster than access to basic amenities such as running water.

All four of these forces together converge and overlap in the “consumerization of IT” trend which is reshaping enterprise IT strategies. A key corporate change driven by these trends is customer experience management, i.e., becoming the brand that customers think of first when a particular product or service class is mentioned, and turning casual customers into fans (if not even fanatics) that subsequently promote the brand not only by word of mouth, but also by the click of a mouse.

So-called digital marketing is all about creating a fan from an impressed customer by connecting all of the aspects of the person. It is very likely that consumers are already leveraging the aforementioned IT trends to conduct their own due diligence and research on brands and retailers. Digital marketing, if properly done, can turn a business into an efficient social network, while turning customer management into fan management.

What is SAP doing in that regard?

At the recently held SAP Retail Forum North America, SAP announced the availability of the SAP Precision Retailing solution, which empowers companies to influence consumer behavior at the moment of decision. In other words, the SAP Precision Retailing solution helps merchants deliver real-time personalized offers to consumers everywhere (inside and outside of the store).

This is a concrete example of how merging the aforementioned cloud, mobility, and big data trends can work in practice. A plain English explanation of what technology can do for particular groups of customers is always much more powerful than rattling off mere whizbang buzzwords such as “in-memory database” or “multi-tenant cloud.” To that end, the SAP Precision Retailing solution delivers personalized offers and suggestions in real time to consumers across multiple channels, including mobile devices, in-store kiosks, and websites. These personalized offers are created instantly by combining the consumer’s shopping context and location with the company’s knowledge of the consumer’s profile, preferences, and purchase history along with in-store product availability.

Now that the product purpose is explained, here comes the inevitable technical background: SAP Precision Retailing is built on SAP NetWeaver Cloud (formerly code-named Project River), which is part of the SAP HANA Cloud platform announced at SAP TechEd 2012 in mid-October (see SAP HANA to the Cloud). SAP NetWeaver Cloud is a cloud-based environment for developing applications that complement and extend backend applications – such as enterprise resource planning (ERP). Data resides in a high performance, in-memory SAP HANA database, which is a unified data platform for delivering real-time operational, predictive, and text analytics on big data, as well as for running both transactional and analytical processes on the same foundation.

The giant also announced the SAP Retail Store Ops Manager mobile app to further enhance in-store productivity. Mobile tools, in combination with SAP HANA, big data and the cloud, offer a new way to interact directly with consumers, creating intimacy that helps increase consumer satisfaction and loyalty. At the same time, the solution captures real-time data about consumer behavior and can help companies optimize marketing spending. With this astute solution, companies can maximize the return on their marketing investment.

At the same time, retailers can create an enhanced shopping experience by collecting and acting on massive amounts of data about consumer behavior in real time and delivering relevant offers while the customer is standing right in the aisle. Customer experience management is all about anticipating customer need and creating offers in context via recommendation engines. Beyond the retail sector, SAP Precision Retailing can be applicable to companies in other industries—such as consumer products, transportation, banking, and oil and gas—that want to get closer to customers and engage in personalized marketing.

For example, a casino/resort’s vision is to track everything about guests, from their gambling history of wins and losses to their preferences in restaurants and entertainment, and use that to build personalized experiences on the fly. By capturing the flow of data and responding to events in real time, the technology can provide a resort’s marketing team with the ability to provide a compelling offer to each customer individually before they even know that they want something. Offering reduced entertainment tickets to a VIP guest after a big losing streak at the blackjack tables would be one example of a personal touch. An MGM Resorts executive recently bragged at a keynote presentation about the company’s ability to, by establishing an individual’s persona as revealed through his or her social profile, know what a person will do in Las Vegas well before he or she arrives there!

Related blog posts and articles:

SAP HANA to the Cloud (Oct 2012)

SAP HANA: A Fast Developing “Toddler” – Part 1 (July 2012)

SAP as a Retail Market Force: More Fact Than Fiction (Jan 2012)
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