SAP's on-demand strategy signposts new directions

Summary:SAP Sales on-demand points to a new direction for both SAP and its customers. While the obvious comparisons to Salesforce continue to be made, those comparisons are misguided. Here is why.

SAP's Sales OnDemand has been largely welcomed as a positive contribution to both the on-demand and socialised CRM worlds. Our own Paul Greenberg recently said:

...I saw their Sales OnDemand product, and FINALLY, I can say SAP seems to have really gotten it right.  There are holes, there are caveats, of which I’ll opine on in just a few, but this new product built on the Business By Design platform (but it isn’t a Business By Design app, which apparently is a different thing), does what it has to do for sales.

I don't have much to add to Paul's analysis per se but I do want to explore where SAP is going with this style of solution. John Wookey, who heads up SAP's large enterprise on-demand effort and who for so long was almost invisible to the outside world, spent a good amount of time carefully explaining how SAP developed and then ditched its work on Frictionless before moving development to the ByDesign platform.

John's discussion caught my attention for a number of reasons:

  • Frictionless lives on in e-sourcing but nowhere else - ByDesign is the platform upon which SAP will develop future on-demand apps.
  • SAP was prepared to dump years of dev time to get a better result.
  • SAP went back to first principles to figure out what a socialised SFA product might look like. Very few vendors have the resources that make such a decision conceivable let alone executable.
  • Future OnDemand apps may inherit some of the technology delivered by other on-demand apps but the design principle takes precedence.

These are brave and costly decisions for which SAP deserves credit but it is in the detail that you discover whether SAP is making the right bets. Plenty has been written about the way SAP set up 'games' to demonstrate Sales OnDemand to eager beaver analysts looking to be entertained. My view is that this was not a hands on product demo but a usability test for next generation line of business solutions.

Sales OnDemand might be classified as a relatively lightweight SFA solution with social features but anyone with a passing understanding of social tools like Twitter, Facebook or Yammer will immediately understand what SAP SalesOD is about. Anyone else might take 20-30 minutes to 'get it.'

That might sound trivial to those who live on the bleeding edge of technology but for SAP customers, this is an order of magnitude step change in what SAP delivers. In SAP user terms it is the difference between night and day. My understanding is that die hard SAP bag carrying sales people can't wait to get their paws on SalesOD. They recognise that embedding social aspects into SalesOD rather than have them as an add-on is the real game changer.

Some have made the obvious comparison to Salesforce and Chatter. That would be misguided at anything other than a superficial level. Chatter sits outside Salesforce and has no direct bearing on what a sales person might do. In many senses, Chatter is a general purpose tool. SAP SalesOD starts with the notion of information that sales people might need. You can argue this design aspect in many ways but for SAP, it is not about creating differentiation through social 'stuff' but building applications that reflect what people do in their everyday lives.

By far the most telling aspect is that SalesOD is aimed at the installed SAP customer base that has likely not invested in Salesforce or similar applications but already owns SAP Sales and Distribution. On the one hand people will say that is a tacit acknowledgment that SalesOD cannot compete. On the other hand it should be a very easy sale and especially so if SAP sales people are eager to eulogise its benefits.

Is SAP SalesOD perfect? Not by some stretch:

  • Navigation is irritating. Repeatedly clicking arrows left and right on a horizontal toolbar is annoying where a drop down works much better.
  • There is no conversation threading in the manner that Disqus offers but a stream of consciousness that will be confusing in collaborative scenarios.
  • Analysis draws heavily upon Xcelsius and does so successfully but does not have predictive capability which surely is a must in this day and age.
  • There is no tie in to financial records so Sales OD cannot be viewed as a process based tool or truly collaborative in the broader business context.
  • I'm not a fan of the color scheme which I thought was more camouflage than arresting.

Overall there is a feeling that while SAP has done its level best to understand how people work, they have not broadened their horizons to include the consumer world as much as they could. Whether this crimps take up remains to be seen but I believe SAP missed a few tricks along the way.

Despite my reservations, you cannot get away from the fact SalesOD signposts a direction that is both surprising and refreshing. The surprise comes in the fact SAP has not engineered SalesOD for every use case possible and created something that looks hideous but does everything. The refreshing aspect comes in SAP finally acknowledging that process automation can be usefully augmented with human behaviour that is expressed in software.

Where does this go? John Wookey talked at length about how the next set of apps: Career OnDemand for example, will put people at the center of what we today call talent management. Having listened to John over several sessions I am sure he will insist that CareerOD delivers an experience that engages employees rather than has them proscriptively dealing with HR driven processes. Another six months will tell whether his teams deliver.

Colleagues like to see products classified as disruptive. In SAP, SalesOD meets that standard. But there is one more aspect that should not be understated. SalesOD will deliver a sharp shock to SAP's implementers and consultants. As delivered there is no room for customisation but only integration to SAP SD. Many of SAP's target customers have heavily customised SD so weaving in the database tables to surface SD related information to sales people will be a challenge albeit short term. In the alternative, SalesOD will bypass SD in early implementations leaving almost nothing on the table other than some training. In other words, rather than the one to many implementation cost banquet, implementers will be looking for crumbs. On this occasion, customers will be the winners.

Endnote: I recorded a near 20 minute conversation with John Wookey in which I asked him to explain the rationale behind SalesOD and the other on-demand apps. Once I have edited the content I will add it here as both video and audio.

UPDATE: Here is the video and podcast article link

Topics: SAP

About

Dennis Howlett has been providing comment and analysis on enterprise software since 1991 in a variety of European trade and professional journals including CFO Magazine, The Economist and Information Week. Today, apart from being a full time blogger on innovation for professional services organisations, he is a founding member of Enterpri... Full Bio

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