SAP Gives in to CRM (Part Time) Matrimony
Written By: Predrag Jakovljevic
Published On: May 31 2000
SAP Gives in to CRM (Part Time) Matrimony
On May 2, SAP AG, the leading provider of enterprise software applications,
announced a strategic alliance with Nortel Networks to develop and integrate
industry-specific customer interaction solutions that could extend the
scope of collaborative customer relationship management (CRM). As part
of the agreement, SAP has embedded within mySAP.com customer interaction
applications from Nortel Networks' Clarify eBusiness Applications unit
to provide extended customer-service functionality and new levels of information
access and use to businesses.
SAP and Nortel Networks will further extend their alliance by creating
Internet-based service solutions that enable virtual communities where
vendors, partners and suppliers can present themselves to their joint
corporate customers as one unit.
alliance with Nortel Networks is a manifestation of our commitment to
providing businesses with flexible, open solutions for a collaborative
work environment, freeing users from technological limitations," said
Peter Zencke, member of the executive board of SAP AG. "Enabling collaborative
virtual communities of companies to present one face to their joint customers,
SAP and Nortel Networks will deliver a new quality in customer relationship
the embedded Clarify eFrontOffice applications from Clarify eBusiness
Applications accessible through personalized workplaces, mySAP.com will
allegedly provide a robust contact center that delivers a comprehensive
and seamless customer experience. The unique SAP integration technology
allows customer information from all available sources - including Web,
phone, fax, person-to-person interaction and handheld devices - to be
leveraged by all employees with a customer-facing role. Tailored initially
to the unique business needs of the banking, insurance, high-tech, and
communications industries, the combined solution will provide a single
view into a broad, rich set of company and market information, processes,
relationships and interactions among companies, suppliers, partners, and
"Nortel Networks and SAP will provide businesses with the ease and flexibility
required to build mutually loyal relationships beyond the walls of a single
organization," said Tony Zingale, president, Clarify eBusiness Applications,
Nortel Networks. "With the combined industry and Internet expertise of
both companies, businesses will be able to collaborate in new ways and
achieve greater levels of return on relationship."
agreement is aligned with the previously demonstrated open strategy for
complementing mySAP.com solutions with tightly integrated applications
from SAP partners for marketing planning and campaign management, catalogs,
push technology and Internet connectivity solutions. The mySAP.com Workplaces
are role-based personalized portals for employees, partners, and customers.
Seamless access is provided to internal and external applications, hosted
services, and business content via a single, easy-to-use Web-based environment,
as alleged by SAP. The mySAP.com Workplace portals supposedly tie together
data from an array of sources and applications, regardless of whether
the information resides in systems from SAP, providing a flexibility to
utilize previous technology investments and a start-to-finish solution
for end users.
combined SAP and Nortel Networks offering will be available in May and
is currently being deployed for use within both Nortel Networks and SAP.
Current companies that have integrated SAP with Clarify eFrontOffice include
BP Amoco, GTECH and Scientific Atlanta.
Behind the flashy marketing pitch lies SAP's tacit acknowledgement that
it cannot manage everything on its own at this stage. SAP has traditionally
been stubborn with its build-it-ourselves approach. While this backing
down may be somewhat embarrassing, it also exhibits some pragmatism and
wising up to the circumstances.
SAP has to be willing to be more flexible and humble in its strategy if
it is going to succeed in the new economy. With the excess of integration
products on the market and improved interconnectivity, users are becoming
much less wary of piecing together best-of-breed solutions. Ground up
development of a complete end-to-end e-business solution spanning all
functions of the front and back office is undisputedly a major mission.
While SAP can effectively manage large human and financial resources functions,
it may not suffice; coordination and time constraints play a major role
move may, however, change the balance of power among major CRM players
(or aspirants). Vendors like J.D. Edwards, Lawson, and Great Plains, who
bundle other vendors' products as a part of their overall solution, may
get some vindication for their strategy. They have been lambasted so far
from purist "one-stop-shop" suppliers like SAP and Oracle as well as from
analysts. J.D. Edwards may still struggle to justify its need for almost
a double-digit number of third party software alliances. The proverbial
argument has been that integration of products from different vendors
is difficult and expensive, therefore buying a completely integrated end-to-end
solution is a better bet.
This move leaves Oracle as the only noisy one-stop-shop supplier in the
e-business applications space (PeopleSoft, Infinium, and Epicor may be
able to tout similar capabilities in the near future). Oracle had a much
different approach in building its CRM solution; it bought a slew of third
party products to use as the foundation for its CRM suite. While this
has presented its own set of problems, it seems as though Oracle may actually
deliver the "total solution" promise with release 11i of its applications.
Where complete system replacement is possible, this may give Oracle a
significant head start in future selection bids. We also believe that
the ubiquitous Siebel may also benefit tremendously from this move. The
SAP installed base has been one of its fertile grounds and so far SAP's
ousting strategy for Siebel has largely revolved around the integration
argument. Now this becomes obsolete and creates a free-for-all situation
within the CRM market place.
In addition, some caveats remain about the partnership. On the surface,
it looks as if the deal is only for the mySAP.com product release. This
may leave the vast majority of SAP R\3 customers in the lurch, since few
have made plans to upgrade to mySAP.com in the near future. And because
it is limited only to the call center functionality within a certain number
of industries, the two companies may compete for other front-office applications
such as marketing, sales force automation, and field service. Moreover,
SAP has always been a reluctant partner, usually only teaming up with
another vendor temporarily until it could buy the time to build the functionality
itself (the partnership with i2 is a perfect example). With this in mind
we wouldn't be terribly surprised to see SAP buying Aurum, Baan's CRM
business, for a bargain in the near future.
SAP customers should certainly consider Clarify call center, but avoid
selecting it without looking at what the other vendors have to offer.
Notwithstanding, SAP should be included on almost any initial long list
for global extended-ERP selections. However, existing and potential users
currently evaluating SAP products, particularly its extended-ERP product
components, may benefit from considering already available and fully functional
components from other vendors on the merits of individual components,
instead of blindly following their brand loyalty. Each component should
be put through its paces using a well-documented set of requirements,
scripted scenario demonstrations, and rigorous reference checking.
Future clients are also advised to request the Company's written commitment
to promised functionality, general availability date, price, length of
implementation, and seamless future upgrades, particularly for recently
announced partnered offerings. SAP has traditionally been honest and forthright
in addressing these questions. Therefore, it should not be difficult to
make SAP grant a single contract and help desk for all the disparate components
of its product offerings.