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Stick or twist? The dilemma facing the SAP CRM installed base

Ben Robinson | 12th June, 2015

There is a cloud looming on the horizon for SAP’s CRM installed base: Cloud for Customer.

SAP launched Cloud for Customer (C4C) in 2013, a key milestone on its’ journey from on-premise (on-prem) to cloud software business.  The new solution addresses a number of criticisms levelled at SAP software in the past (time-consuming to implement, poor user experience, only available on-premise and unable to exploit new digital technologies).  Those who had previously discounted SAP are realigning their expectations of what the vendor has to offer.  So everyone is happy?  Well almost.

Since 1999, when the first version of its’ CRM solution was launched, SAP has been steadily growing a loyal following, almost exclusively made-up of its’ ERP installed base.  Customers selected SAP CRM because it offered pre-delivered integration with other SAP applications, principally ran on the core SAP technology stack and helped minimise the number of software vendors IT Managers had to deal with.

With the arrival of SalesForce, the market changed and customers challenged other CRM vendors to step up on user experience, subscription-based licensing, zero infrastructure footprints and shorter projects.  SAP responded with C4C, an entirely new CRM application, offered exclusively as a cloud application.

I don’t intend to cover an overview of C4C here, you can find that in our other blogs, but I do want to focus upon the implications of C4C for those organisations who have invested heavily in SAP’s on-prem CRM solution.

For the SAP CRM installed base, C4C has posed some difficult questions about how to deliver future projects, on which platform, the investment already made in on-prem CRM and others.  So where to start if you’re a CRM installed based customer?

The first point to bear in mind is on-prem CRM is not about to disappear.  SAP standard support and maintenance for CRM is already scheduled to run until 2020 and customers can pay to extend beyond that point.  Secondly, SAP CRM is an integral part of other solutions, such as SAP Trade Promotion Management and currently there is no C4C based version of TPM, (although I’m sure that will arrive eventually).  Finally, on-prem CRM was developed over a 15 year period, so it will take SAP some time to offer the same depth of capability in C4C.

So what choices are available to on-prem CRM customers?  It would be wrong to suggest there is one right answer.  I am currently working with several companies who have invested in SAP CRM to help them determine the best route forwards, taking into account the unique characteristics of the business, their existing commercial system landscape and their business priorities and objectives.

Today, there are three basic strategies to consider for the CRM on-prem customer…

1. Stick:

The wait-and-see option which means no immediate decision is required. This might sound the obvious and indeed the easiest option if it weren’t for the fact most businesses do not stand still. In today’s connected world, customers are behaving differently, consumers are using social, employees expect their business tools available on the move. Factors like these create cases for change, some of which will impact upon processes, information and solutions run on the on-prem CRM platform. The decision then is not quite so straightforward as now it has become about whether it is right to continue to invest in new capability, ‘sweating the asset’, but on an older platform with limited shelf-life. The decisions are made tougher because C4C is built upon a platform where social, mobile, user centricity and collaboration are integral components available out-of-the-box eliminating the need for costly development or integration.

2. Twist:

If you’ve not invested extensively in on-prem, or the cost of delivering future business change projects on SAP CRM is too great, then this might be the best option. At AgilityWorks, we chose the Twist option. We had deployed SAP CRM to our Sales, Marketing and Leadership teams, but had faced user adoption challenges created through the limited usability of the product. For us, Twist was the pragmatic approach because we wanted to build a rich user experience and take advantage of social collaboration tools to streamline internal processes. We could have built these elements out in on-prem CRM but it would have added time and cost. So consider Twist in the context of where you want to go next with Sales, Service and Marketing processes in the digital era.

3. Hybrid:

A number of our customers running C4C have chosen to retain their on-prem CRM system. This is less disruptive to established user communities who might have been working with on-prem for several years. A further advantage is the option of a gradual migration, implementing new solutions on C4C without being forced to rip-and-replace everything in one go. The practicalities of running with this model are helped since SAP offer standard integration between C4C and on-prem CRM (as well as C4C to SAP ERP), so they have clearly recognised this is a likely state for many businesses.

 

So don’t assume that C4C spells the end of your SAP CRM solution but do be prepared to consider your options in the wider context of your business objectives, commercial strategy and technology roadmap…. and don’t forget about the implications for your customers and the employees that serve them.