Previously on CRM Watchlist 2013....
The reviews keep rolling in. We now move on to SAP and Oracle, which will be followed by the final group of suite providers – SugarCRM, Infor and NetSuite. And that’s only the first category. Oi. There are going to be ten posts all in all.
So, in order for me to have some sort of life before the year is out and I’m on to the 2014 Watchlist, let’s get on with it and head to our next CRM Watchlist 2013 Winner:
If this were about 9 or 10 months ago, I don’t think I would be writing this. SAP, a company, I like a great deal and have always had fair and brutally honest dealings with, had, as far as I could see lost their way. There had been some dramatic changes in their CRM strategy – seemingly for the worst; they had some management losses there and with the exception of three people – Volker Hildebrand, Reza Soudegar and Jamie Anderson, were decimated when it came to innovative, creative leaders in CRM; their overall cloud strategy was not just big but, at least from the perception many had – including me, overwrought and they didn’t seem to be truly adopting what were strong extended social or even collaborative capabilities, which are mainstream enough to be table stakes for companies in the enterprise technology world. Meaning all in all, they seemed to be in a decline and heading to what could have been a free fall.
What made it even more difficult to deal with was that even with all the dramatic changes going on at SAP around their conversion to the cloud and the transformation of their technology model, they still adhered to the same old things that had damaged them in the past. For example, their product marketing continued to be poor even when, as one of the bright spots, all other facets of marketing was showing signs of improvement. They finally had (have)a dynamic Chief Marketing Officer (CMO) in Jonathan Becher who is not only an excellent strategic marketing guy but a great spokesperson for the company. Some of the larger non-product focused marketing efforts, like putting on Sapphire were brilliantly conceived. The experience at the 2012 event, for example, was superb from the way accessibility of the floor space was handled to the quality of customer videos on the main stage. In other words, the overall experience excelled. But when it came to marketing SAP technology in public arenas – it was just plain out of touch with contemporary reality. It was consistently “feature function” focused rather than what gets customers to respond – the business outcomes the products support.
There is much more than that to say about 21st century marketing, but this is a minimum contemporary criterion for marketing to customers that SAP was not even nearly fulfilling. I couldn’t reconcile the difference between the product marketing and the marketing efforts represented by Sapphire until I found that that all marketing, except product marketing reports to Jonathan Becher. That of course explains how there would be that disparity, but doesn’t solve the problem. However, I am encouraged with the ascension of Denise Broady to run the Line of Business Product Marketing. I had the opportunity to meet her at an SAP event in January 2013 in NYC and I was beyond happy. She has her head straight and then some.
Don’t get me wrong. This is not a failing company. They are a successful company with strong year over year revenue growth. Gartner gives them 19.3% share of the CRM market, which makes them the #1 in market share according to Gartner numbers in 2011 at least.
There were signs in many places as 2012 progressed of what became their hopeful reinvention. They were in the forefront of the re-emergence of the idea of customer experience as it applied to the world of CRM and SCRM with a book. The Customer Experience Edge written by the aforementioned Volker Hildebrand, Reza Soudegar and the now departed Vinay Iyar. They predated by about a year, any of the major companies that are now trumpeting customer experience as 2013 advances. (Note: this is NOT to say that many smaller companies, e.g. Responsetek, haven’t been talking about customer experience for years; they have.) Their messaging was appropriate and, thus, resonated. That alone gave them some real juice in the changing CRM world. Though at the time, they didn’t quite yet have the products or the organization to support it beyond the messaging.
Additionally, they continued to have a powerful presence and significant influence with a sophisticated and industry leading approach to communities that can serve an ecosystem; from the huge and active 3 million strong SAP Community Network (SCN), to their brilliant Customer Value Network (CVN), run by Jim Goldfinger, a paradigm for how to partner with customers at the most important and fundamentally personal levels, even in an enterprise environment that can be less than personal sometimes.
But even all this wasn’t a substitute for the momentum necessary to keep up with a rapidly expanding and evolving market. At first, through the end of 2011, the demands of the market pushed vendors into publicly acknowledging trends. These trends had a noticeable “right-brained” tinge; among them:
- Social – business, channels, media, CRM
- Customer experience
- Customer engagement; systems of engagement; gamification
- Predictive analytics leading to customer insight
- Big data
In other words, how do you not only identify customer behavior; figure out the next actions that individual customers are going to take but then create the business proposition that provides both the customer and the company with the value they are seeking. That meant a very different approach to those who thought of business systems, programs, and technologies, as strictly transactional and operational.
To respond to this required (and still does) thought leadership – which SAP kind of did that with the book et. Al. But, the demand changed at the end of 2011 when business value from the formerly trendy social experiments became a requirement. As Dion Hinchcliffe, über social business influencer/analyst/consultant in his always wonderful way, expresses it in a recent ZDNet post on his 2013 Forecast:
“A closely related issue is that the discipline still represents a very different way of working than many organizations are used to. But whatever the issues, and there are good many, the organizations I've spoken with in the last year now seem to realize the social world isn't going away any time soon. Many of them are now making plans accordingly.
This perspective dovetails with the work that eConsultancy did on the state of Social at the end of 2011 where they found that 64% of the companies responding considered social as past the experimental stage. Social and the other right brained aspects of customer behavior as a strategic consideration was going mainstream (for a much bigger discussion on this, see this post I wrote at the end of 2011, back when I was young. J)
As 2012 progressed, it was no longer was it enough to be up with a trend – there had to be clear value that was either measurable - or at least identifiable – that could be derived from the necessary social and customer experience programs. The ability of traditional CRM was far too limited to provide for the needs of contemporary business, though it still had a good deal of benefit. Thus not only did technology vendors have to provide the extended systems and technologies to meet the increasing customer demand but they had to be able to prove their value to the marketplace in general.
SAP had to make some serious moves – and for a while, it didn’t look like it was going to.
But, thankfully a series of actions starting about 8-9 months ago – two big ones that I’ll mention here, though there were others – gave me some real hope that SAP figured this out. In fact, the actions were significant enough that if they are realized without major derailment over 2013, they could not only put SAP back on track but will make them a genuinely competitive leader with some momentum in the market. In other words, the kind of impact I expect in 2013. So, rather than keep you in suspense any longer, here are the two encouraging moves.
- The November 2012 announcement of SAP Customer 360 Powered by HANA – This is a complete revamp of their CRM suite to not only take advantage of in memory computing but will also extend the components of the suite broadly. Where in the past they had a series of separate products e.g. SAP CRM, SAP Sales on Demand etc., now they have a single suite that is organized around a solution portfolio. Thanks to their overall social “product strategy” SAP’s social collaboration layer, Jam, runs through all the applications in Customer 360. This is a considerably more organized, less piecemeal approach, which, while still something short of an overall ecosystem, is far better than the scattershot set of products that they had in the past to service different aspects of CRM. The next phase is discussed below.
- The game plan for social and collaboration in the cloud developed by SAP’s Global VP and GM of Enterprise Social and Collaborative Software, (and great friend of mine) Sameer Patel - who’s hiring by SAP from the thought leader ranks might have been the hire of 2012 for them – a genuine lifesaver. His presentation of the vision for collaboration coupled with the road maps for the development of the technology, if allowed to proceed by SAP without an all too common political interruption, could put SAP in the forefront of “the social cloud” applications providers – certainly contesting and even possibly bettering IBM and its Connection products and services among many others.
What they have to do
But there are things that SAP must do – and I mean must do to varying degrees – in 2013 in order to have the deeper level of impact that I expect that they can – and will in 2013.
- Expand Customer 360 from a series of products to a platform with an ecosystem. HANA is already part of the product suite. SAP’s Jam, as mentioned earlier is being integrated, giving it a social layer. What is left to do is to transform a fairly robust partner channel into an ecosystem that is rewarded not just for sales but for innovation. Take a page out of the book of salesforce, Microsoft and the countless other vendors who are creating application exchanges for partners. Work with partners like BridgeX and Next Principles who provide some advanced capabilities by highlighting their work and engaging them to extend what they provide. There is a tiny bit of this evident in the relationship of Netbase to SAP but that is more of SAP operating as a strategic reseller of Netbase rather than seeing them as a part of an ecosystem.
- Make sure that what Sameer Patel’s social cloud group is envisioning gets off the drawing boards and into production. It is not just a vision, nor can it be seen as successful because Jam is integrated into CRM, financials, HR and talent management as a collaboration layer. The full roadmap needs to come to fruition. If it does, SAP becomes a real competitor in 2013.
- End the artificial and wrongheaded separation that keeps product marketing as a separate organization. Product marketing moved under CMO Jonathan Becher. They have to once and for all change the way that they do product marketing because it does nothing more than make people think that they don’t understand the changes in the world. Feature/function approaches to marketing might appeal to the SAP historic customer – the CIO – and only to the more traditional ones but it doesn’t appeal to the line of business leader or the CMO or the persons who are actually going to use the systems and who are getting increasing budgetary authority. Many of SAP’s competitors get this (not all) already and are adjusting. It makes simple sense to have the CMO own all aspects of marketing. Let’s see it happen this year.
- Make sure that the CRM and social collaboration leadership are working in sync and are staffed by creative, progressive thinkers. The recent elevation of Jamie Anderson to Head of Global Solutions Marketing, Customer Line of Business Solutions (CRM), while the longest title on the planet, provides SAP with an innovator and a person willing to lay it out there – who is also an effective public spokesperson and thought leader himself. This is mission critical for SAP who, when solid leadership emerges or the collaborations get serious, has a history of shooting its own messengers so often, the body count is too high to measure. If the indications are that SAP will leave this newer leadership layer in place to do what they are capable of – delivering on a contemporary vision with solid technologies, providing the collaboration internall at the company.
SAP is in line to have a major impact in 2013 if their plans for social in the cloud their CRM apps and HANA are all coherent to the market – when it comes to marketing/messaging and portfolios. But the work they need to do is intense – but they can do it. They did it with CRM 2007 several years ago and while the stakes are now higher, their resources, their intelligence and their effort to move forward is both laudable and daunting. They share the enigmatic gene that several other winners do – a company that can be great and yet could step on its own feet. I’m betting on them dancing really well.
Oracle is the industry’s most peculiar duck as 2013 unfolds. When it comes to impact in the customer-facing space, it has the most to prove and probably the least to do – though what it has to do is daunting.
If you look back at 2012, Oracle began to distance itself somewhat from CRM and began to increasingly focus its customer-facing applications business around what it called a customer experience suite.
To that end (at least by coincidence) they spent an incredible amount of time in 2012 acquiring companies and repositioning themselves as a public/private cloud/hybrid/on premise focused enterprise technology company with end to end hardware and software. They began developing the messaging to build out this end to end solutions posture. They aligned themselves in the course of this with their repositioning away from CRM to a more customer experience focused public face and unlike any other vendor making the claim, built a portfolio of software applications that justified the statement, at least as far as product arrays go.
Even though their acquisitions didn’t get the publicity that salesforce.com’s acquisitions did, they were probably more significant to the turn that Oracle was making. Some of them were hard core CRM related acquisitions like Market2Lead in 2010, some were focused around knowledge creation, distribution and consumption like InQuira and Endeca; some were put in place to enhance engagement and insight like Vitrue and Collective Intellect. All were geared to customers continuing to purchase stuff due to a great customer experience built around customer-controlled engagement in multiple channels. Here’s a list with dates of those acquisitions (in date order):
- Market2Lead – May 2010 – incorporated into Oracle CRM On Demand as the marketing module
- ATG – November 2010 – ecommerce platform
- InQuira – July 2011
- RightNow – October 2011
- Endeca – October 2011
- Vitrue – May 2012
- Collective Intellect – June 2012
- Involver – July 2012
- Eloqua (still pending) – December 2012
But these acquisitions are only a reflection of Oracle’s commitment to building out a complete enterprise ready suite that will support customer experience. Their customer experience product portfolio encompasses what appears to be 27 separate products ranging from ATG and Endeca to Fusion CRM to Oracle Real Time Decisions to Oracle Social Relationship Management to various industry verticals to their Big Data Appliance. Here’s the complete list.
But their commitment to customer experience goes much further than that. In a recent analyst call with David Vap, Group VP of Oracle Applications, he discussed Oracle teams that worked with customers on customer journey mapping for a two to three day period identifying the customer experience from a strategic perspective – identifying in the detail necessary the key places that a company needed to invest in – or not – to enhance and improve their customers’ experience with them. It’s almost services above and beyond technology – though of course in the long term as David rightly pointed out – it could well mean more software sales.
However, with all this realignment comes my real concerns.
When repositioning significantly, especially in an area that is trending, either legitimately or not, there has to be something that establishes the company touting the new position as differentiable in that domain.
In the case of Oracle, since customer experience is the trend du jour of vendors, they have to move very quickly to grab some thought leadership high ground.
But they have a problem.
For those of you who don’t know it, Anthony Lye, the leader of the CRM practice at Oracle for over 6 years, left Oracle at the end of the year and now is working at LBi as the President of their Digital Platforms and Channels. Anthony was not only highly respected as a business leader, but had a highly visible thought leadership footprint in both the customer community and the industry as a whole. Oracle, as of this writing, has no one who has replaced him; especially at the level that he was operating. This departure couldn’t come at a worse time – precisely while the market is trying to make sense of Oracle’s transformation to an organization that focuses their customer facing portfolio around the customer experience.
I’m not going to discuss Fusion CRM, or their current CRM product portfolio because that’s for another day. The CRM Watchlist is an impact award and it is clear that Oracle is betting a lot on their repositioning around customer experience and their impact in 2013 is going to be determined by how successful they are in this particular area. The other stuff will be germane but not mission-critical to their impact. Again, their impact, not their sales. We are concerned with mindshare as much as market share in these here pages, buckos.
What they have to do
As I said earlier, Oracle has a daunting task in front of it but it’s not complicated. There are two things they have to do quickly.
- Hire a leader that can effect the transformation of the customer-facing applications business from top to bottom. That means focus the messaging; align the products; provide the thought leadership and the public face; deal with the analysts, press and influencers and provide the vision for the work and those in the practice. A tall but necessary order. The succession should be a quick and smooth one. No procrastination on this allowed.
- Seize thought leadership in and around customer experience. This is a fertile area at the moment with no clear leaders in mindshare. What hasn’t emerged via the vendors is any kind of thought leadership at all. Oracle has some market research; SAP did their book but these are all one offs that are fine but there doesn’t seem to be a conscious, well thought out, organized effort to get the mindshare. For example, one thing they can do is make the intellectual and business case for their 27 products in the portfolio. At the moment, it’s laudable they have a customer experience product portfolio, but there is no real explanation as to how it as a whole and individually aligns with the thinking around customer experience. At least I can’t find it.
While I can think of a number of other initiatives that would be valuable for Oracle in 2013, and a number of discussions to be had (e.g. the acquisition of Eloqua), I think that these two are mission critical to the kind of impact they need to have this year, as opposed to the impact they will have just because they are Oracle. I am assuming they will act on these things with the focus and urgency it deserves which is why they became a Watchlist 2013 winner.