We covered salesforce.com and Microsoft in CRM Watchlist 2012 Winners Part 1A.
Now we move on to SAP and Oracle. Hah. Lets roll.
SAP certainly deserves to be a winner in the CRM 2012 Watchlist. It has been in the past and probably will be in the future. I'm sure that several of you are thinking "why? What do they do, aside from being big, that puts them there." The answer - plenty - and there's the rub. What they do and what you think they do are often two different things.
SAP is arguably the most innovative company of the Big 4 - yes, even including salesforce.com. I didn't say the most visionary. I said innovative. They stay on top of trends, they make decisions on which of those trends have some enterprise legs, they make economic decisions on which of those will be a cost effective benefit to produce and for their clients and they proceed to test the hypothesis in their labs or with a proof of concept. They are also willing to take some risks. For example, they have a group, run by Mario Herger, that is devoted to working on gamification - which they (and I and others like Ray Wang and Michael Wu) feel has real possibilities in the enterprise. That group has been working on a number of projects around gamification, including one that captured my attention because of its not exactly obvious choice - accounts payable. Check here for the details of their excellent results.
They have been leaders in the technology world, in what has been called by many "value-based co-creation." In particular, they work with their what is often their larger customers to co-develop products that have clearly delineated "purposeful outcomes" for each of the participants. Siemens is a good example of that with their collaboration with SAP on the eCar.
But they aren't only looking to innovate with their largest customers either.
Recently, to no fanfare whatever (a reflection of their problem) they launched a program for any of their customers around their on demand products called SAP Co-Innovation. While not a particularly clever name, this is a smart program. It brings their customers into their value chain - and gets important customer input around the SAP on Demand products, which both helps them improve the products and perhaps, even develop new ones, or add-ins. It also shows support for their recent commitment to the cloud. And it typifies the SAP dilemma. I have no doubt of their ability to run the program - they are excellent at putting the right processes in place and on the follow through. But they have been almost nonchalant about their announcement and their ongoing marketing of this. I found out about the program via a blog post by Sven Denecken, VP of On Demand at SAP. In passing. Accidentally. In the post. Nowhere else.
More on this later.
All that said, there are a number of other things that they do know how to do very, very well. They are among the few companies that understand how to run multi-million member communities like SDN - the Software Developers Community, which is a vibrant well organized content driven, knowledge refreshed community of active members who in a singular way are helping to evolve SAP products.
They have been among the smartest companies in the world in how they deal with influencer relations with the unique Business Influencers Group run on the ground by Malcolm Kimberlin, which not only reaches out to influencers on a consistent, frequent basis, but provides unprecedentedly easy access to the company's senior management. Refreshingly, SAP's senior management seem eager to actually speak with influencers, unlike many companies whose senior leadership sees the interactions as at best doing their duty.
Additionally, and this is both brand new to them and welcome to me, they FINALLY have something close to a unified vision, mission and message. They are claiming a deep commitment to the cloud, something that, a year ago, I would have thought was unimaginable for SAP, given their customer base with its commitment to legacy on premises systems. At their recent Business Influencers Summit (December 2011), SAP unveiled this new messaging and the products that are becoming the backbone of the company, and it was all cloud. For SAP, this is a big, bold move. It was punctuated by the $3.4 billion acquisition of SuccessFactors in early December, 2011.
With this strong public commitment comes a necessary follow through. As Dennis Howlett puts it in an exceptionally well done, absolutely must read post on "What Might SAP Learn From Apple."
Note that I make no mention of SaaS/cloud as a separate class of asset. That is because for this argument, I am assuming that long term, most assets SAP possesses will move to a platform that SAP delivers as services.
I couldn't agree more. I'm not sure what platform - I'd have to presume their Business by Design platform which seems to be their platform of choice.
Their narrative as they move to this aligned vision involves a number of components, including the lightning speed in memory HANA appliance , a strong mobile offering that is driven by the Sybase Unwired mobile platform, and cloud based enterprise applications at the front and back ends. I expect this will take a couple of years to realize fully.
But they are moving and have to move more quickly than that. When it comes to some more immediate actions on a slightly smaller scale, they are focusing on two other areas of interest: customer experience and collaboration.
Social CRM a.k.a. CRM and Collaboration
SAP spent a considerable part of 2011 attempting to repurpose who they are and what they do. When it came to CRM,they made an attempt to refocus their message around customer experience, rather than the more process-driven automated and operational aspects of traditional CRM. They went to the extent of producing a genuinely interesting vendor-agnostic but technology focused book, "="" by="" vinay="" iyer,="" reza="" soudegar="" and="" volker="" hildebrand"="">, senior CRM stalwarts at SAP.
Their CRM strategy is a little surprising but straightforward - the huge future opportunity lies with B2C, not B2B. I'd say it was atypical of the traditional strategy of a large vendor of enterprise software but it is becoming increasingly the norm. I've heard the exact same thing from the CRM practices at Microsoft and Oracle.
They have a good CRM related product portfolio that is increasingly geared toward the cloud. Their CRM 7.0 suite moving toward a hybrid model at the moment, is relatively complete and improving. It suffers from some of the problems that big CRM suites all suffer from. It's not that easy to use or configure, among other things. But it is a functionally rich suite and looks damned good for something of its scope.
More important for their future and their mission, they have SAP Sales on Demand, perhaps the best CRM product they've released and certainly competitive at least in quality with any SFA SaaS product in the market. Their release of SAP Sales on Demand has a very good implementation of an activity stream, though not quite as robust (filters, etc.) as Chatter at this point. But more than adequate for most companies. Plus it is genuinely easy to navigate and use. The user experience is something that other companies out there might want to emulate. They are currently preparing other CRM products/services of a similar sort that I've seen some previews of and have to say are equally as good. The only puzzling part is that their target market is only their existing customer base. While I say this without enough thought to make it a firm certainty, I would at least consider taking this outside existing customers only. Its good enough for that.
The other area that SAP is focusing some real attention on is their collaboration products. Internal collaboration means Streamworks. This is in obvious response to the increasing ubiquity of Chatter as an internal activity product/service for enterprises and even smaller businesses. Investment into Streamworks seems to be a focus. While I admire their willingness to invest in what could become a good product, my personal experience with Streamworks last year was that there was still a long way to go to make it user friendly, though the potential is there so a deep investment will mean some significant overhauls to the minimally the user navigation (Cough. Document Management) and flow.
So we see a lot here. SAP has a solid coherent message. They are innovative. They have a product portfolio with some glitches and a few holes, that is transitioning to the cloud. They have the promise of HANA - their warp speed platform for in memory computing that provides particularly dramatic results when it comes to analytics - BI, customer intelligence and even predictive analytics. You have a competitive agnostic mobile platform with their Sybase capabilities.
But they have a problem. Its a problem that I've harped on for probably four years. They've done little to solve it. If they continue this approach, it will become deadly to their efforts to compete in their markets with the other companies - especially the remaining three of the big 4.
They still don't market well. Their messaging is not the issue any longer. Kudos to them for that. They've found their voice. But they need to use microphones for that voice, not just yell as loud as they can in a crowded room.
First, they treat a lot of their market leading innovation as a nonchalant almost academic effort that they'll get around to publicizing or at least making the market aware to some extent...someday. This nonchalant approach is not very smart. They have competitors who will use the best possible amplification to get out what they are doing. SAP needs to do the same.
Additionally, a very significant portion of SAP's marketing is still the kind of traditional product marketing that doesn't resonate as much with the lines of business leaders that are beginning to take command of technology budgets or at least have significant input into those budgetary decisions. Gartner is estimating that by 2015 more than 35 percent of enterprise IT expenditures for most organizations will be managed outside the IT department's budget. Traditional IT"ish" messaging is increasingly the wrong way to go.
So what does all this CRM Watchlist 2012 award winning goodness need this year?
What SAP Needs to Do in 2012
For SAP, there are only a few things that are necessary really. Not that many particular things but what those things are need to be done in spades.
- They need to stop treating their innovations as just another thing they do. Nonchalance is no longer acceptable or cool. I found out about the gamification through Gamification.com and a post there. I found out about their SAP OnDemand Co-Innovation buried in a blog post by Sven Denecken. They need to be aggressive about what they are doing to engage their customers at all levels - with a coherent story around that multi-channel innovative interaction that they take to the market in multiple ways. They need to establish some level of thought leadership built around their innovation. Thought leadership. Not just product creation.
- They need to stop product marketing 1990s and early 2000 style. The world is listening to stories and to jobs-based thinking now. How does what SAP provides help those SAP provides their products/services to, do their jobs better?
- They need to be more aggressive in their presentation of their CRM Suite 7.0 out in the marketplace and situate it much more effectively than they do for its ability to deliver a superior customer experience when the tools are used right.
- They are finally getting their message right and have a seamless story. Tell the damned story everywhere they can.
This is an excellent company and is a far cry from what it was in the 90s and even 4 or 5 years ago. They've made enormous progress in their efforts to be a contemporary company meeting the actual technology needs of their potential and existing customers. Time for them to be proud of it.
Oracle is a lock to be a winner of the CRM Watchlist pretty much every year. For all kinds of reasons:
- They have 380,000 relatively satisfied customers - with a lot of caveats of course that go with a statement of this kind with a customer base of that size. Meaning, unavoidably some will always be dissatisfied but on the whole, their customers seem to like what Oracle provides.
- They are the owners of what I think are, far as I've seen, excellent enterprise applications - Fusion Apps - whose power is masked by an elegant interface that is eminently navigable. They do an excellent job of embedding internal collaboration into the Fusion Apps so that it is seamlessly woven into all the apps rather than layered separately. (the one jarring note is that they decided to publicly productize it as "Oracle Enterprise Social Network" clearly just for some obscure marketing purpose). This effort is led by the outstanding Steve Miranda, which bodes well for its future.
- Their CRM team, which, for the purposes of this award, under the leadership of SVP of Oracle Global CRM, Anthony Lye, is one of the finest CRM teams in the industry. Anthony himself remains one of the few vendor CRM leaders who has some independent street cred as a thought leader in the space - something that is hard to do - even more so when the practice that you run is massive - and the operational requirements you have to meet continuous. But he's succeeded at that.
They also have begun - and I emphasize the word "begun" - to understand that the largest infotech players can no longer think in traditional terms when it comes to alliances and acquisitions, but, instead, need to think about ecosystems. That means that your portfolio partners or acquisitions are strategic and complementary. The value of the ecosystem is that it supports a value chain, not disparate groups that happen to provide a service or product type. To that end, Oracle, who had a huge hole in their knowledge management offerings bought the #1 player in that world - InQuira and a significant player in the world of data management (the unstructured kind) - Endeca, in 2011.
Additionally, Oracle at Open World 2011 announced that Fusion Apps were now all in general release. They led with (among a very few others) Fusion CRM as a standard bearer.
But, after all this is a CRM Award and I have some real concerns broadly about the corporate commitment to CRM, not because I think Oracle treats CRM as an afterthought but because Oracle has such a HUGE portfolio of software and hardware assets that they force each of the sectors to fight for real estate within the company. Unfortunately, how much time, energy and budget they get, depends on multiple factors ranging from the ebb and flow (much of which seems to be only occasionally strategic) of the market, Larry Ellison's dicta; a greater or weaker emphasis on hardware v. software; and of course the revenues that the practice is bringing. CRM either gets a. short shrift or b. the eyeballs and budget it needs. It seems that in 2011, a. was the answer.
In 2011, Oracle CRM spent a lot less time being proactive about their presence in the market and the thought leadership they could have provided - and that's after a regression in 2010 too. Aside from the above, they are also directly impacted by Oracle's engineering culture. This kind of culture has two tenets that seem to stand out.
The first is the "build it and they will come" fallacy. This means that if you engineer products, people will effectively find them and buy them. Its a bit arrogant because it presumes that your products are so superior that others will gravitate to them out of need. But that's just not the case. And that you can build them on their own. Especially now, when many small and large companies have products that are as good as Oracle's (or anyone else's), the business outcome is what you have to sell - the products and services merely enable that. That means proactive engagement with the customers in the field, at the places that they communicate and a strong culture geared toward minimally customer (and prospect) feedback about what kinds of things they need from Oracle to do their jobs well.
The second tenet is that Oracle's culture is one of fast follower. That means that they will see what others develop and implement and then go and do it one better, so to speak. That's not a bad cultural imprint but it doesn't encourage innovation and yet, the markets are demanding that companies of the scope of Oracle show that they minimally encourage it and optimally are being innovative. Oracle's CRM products are not innovative particularly, but what they are, frankly, is good. They have their issues, but that is FAR beyond the scope of this award discussion. On the whole, for example, they have an extraordinary loyalty marketing applications with powerful analytics, probably the best offering in the marketplace. But, with mobile social marketing even though they were on a roll in 2009, they have been lagging ever since. Fast following doesn't mean lagging. They need to step it up again. Mobile social marketing products are not long tail when it comes to their likely acceptance in the market. They soon enough will be table stakes. Oracle can't rest on only Fusion CRM and Oracle CRM on Demand. Time marches on.
There are other problems. They, like many other vendors, have fallen into salesforce.com's brilliant trap. Salesforce's obvious strategy (to me at least) is to create the dominant framework that forces all the competition to react to them. The reaction to salesforce at Oracle Open World 2011 was a perfect example of a trap snapping shut on Oracle's foot. Kudos to salesforce.com here. Shame on Oracle for this one.
So what is it that Oracle needs to do in 2012 to re-emerge and show why they are an obvious winner of the CRM Watchlist - which, to me, they are?
What Oracle Needs to Do in 2012
- CRM needs to re-emerge from its cocoon. The CRM products are strong and Fusion CRM is particularly good, but it isn't enough. Oracle needs to finish what they started in 2009 when they were showing that they were market leader. Hell, back in 2004, they were the ones who broke through and showed the CRM world that their customers weren't only the sales management who would buy the products, but the sales person who would use the products. They understood then, what jobs the salespeople had to do and thus did things like add systems that allowed the salespeople to build quotes for their customers - a first in the industry that was actually progressive thinking because it identified for the first time, that the products were there to enable jobs and the outcomes of those jobs. They need to get back to that kind of thinking. They can fast follow themselves.
- They need to become less an engineering "build it and they will come" culture and more a "what is it that Oracle can help you do effectively" culture. Meaning seek (make obvious to everyone that they are seeking) customer input on how to build out what it is that the customers are looking for - and the prospects. CRM has always done that there to some extent but it has tailed off (at least on the surface of it) significantly since 2009. Despite the popular perception that they are becoming a hardware centric company and the limitations that creates for a CRM practice, it still is no excuse not to create an institutionalized effort for customer's engagement with the practice in the determination of its future. If they have one, why doesn't anyone know that?
- They need to reassert a thought leadership role in the CRM marketplace. After all, given the expenditure on CRM is only going up over the next few years and its already a big market, the stakes should be high enough here for Oracle to be interested in grabbing not just market share but mind share. They have stepped severely back on this one. They have a thought leader in Anthony Lye and an excellent CRM development team. The CRM group also has a great influencer relations program run by Susie Penner, who has the trust of the industry. They have a decent blogging presence that is vastly underutilized - especially by comparison to other companies. Time for Oracle to invest in these assets in ways that expands their visible presence at events, online, in print etc.
From 2007-2009, Oracle surprised the enterprise software world by providing the kind of visible leadership that gives customers and others confidence in Oracle's offering and in the company. The last two years have been regressive but not to the point of no return. So, Oracle, this year, as a winner of the CRM Watchlist 2012, I challenge to do what you did in 2004 and in 2007-2009. Up for it?