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November 15, 1999

SAP Bets On Customer-Relationship Management
Though late to enter the market, ERP vendor leverages its back-office strengths

By Jeff Sweat

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AP, the quintessential enterprise resource planning vendor, says its identity is beginning to change as it pushes into customer-relationship management. "CRM will become our major driver for business revenue," SAP chairman Hasso Plattner said last week in a SAP front-office briefing in Waltham, Mass.

That's a heady statement from a company whose forays into CRM during the past year have been troubled at best, with significant delays in application delivery. Yet SAP says it will be rolling out what it deems to be crucial front-office components next month, and will round out its basic CRM suite by early next year.

On Dec. 15, the company will ship a telesales application and Internet portals for E-commerce customers, sales partners, and front-office employees such as salespeople and marketing analysts. The applications will pull customer information from multiple sources, including SAP's R/3 systems and third-party applications.

SAP will also offer a number of CRM "scenarios," including ones for Internet sales, Internet customer self-service, service-interaction centers, field sales, field service, and business-partner collaboration. A marketing campaign-management application, also expected this year, will not ship until the second quarter of 2000.

Plattner, while hesitating to put an official number on the company's growth target in the front office, said he believed, conservatively, that SAP would get $200 million in revenue from CRM and related projects, and that revenue will continue to grow.

Some analysts say that SAP, with tight integration between customer-facing Internet applications and back-office data, is delivering on capabilities that other front-office vendors are not. "It's tying the front end to the back end so that you can actually commit to deliver what you sell," says Alice Greene, president of IT consulting firm Industry Directions. SAP will also offer traditional front-office applications such as mobile sales.

But other analysts say SAP still has a way to go, noting that the technology SAP is touting may be a viable part of CRM, but it's only a subset. "They're reshaping CRM into what SAP thinks CRM is," says Steve Bonadio, an analyst at the Meta Group. "But other than mobile sales, it's not CRM in any traditional sense of the word."

A centerpiece of the SAP briefing was the number of companies that have committed to SAP CRM. None of those users, however, have deployed any SAP CRM products yet. Manufacturing company Dow Corning Corp. chose SAP because it could provide integration between the front office and Dow Corning's existing SAP ERP applications, which will make it easier for the company to deal with its major customers around the world.

"Customers are going to limit the number of suppliers to those who can meet their needs globally," says Dow CIO Harry Ludgate. "We have to show one face to the customer."

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