How SAP plans to win the CX game

Thomas Wieberneit
5 min readNov 6, 2023

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A lot is going on in the SAPverse during October and the early days of November 2023. First, SAP conducted its CXLive event with CX-related announcements, then the company reported good Q3/2023 figures, a new version of its CX software that includes new generative AI capabilities got released and lastly, it executed its SAP TechEd event with a good number of AI-, BTP-, and ERP related announcements.

As this is quite a lot, let me focus on SAP CX in this post. I will cover the TechEd related parts in another post soon.

During his keynote to SAP CX Live CEO Christian Klein named CX “ a very critical part of SAP’s portfolio. There is no intelligent enterprise without CX”. This got later reaffirmed by Chief Marketing Officer for SAP’s industry and CX solutions, Sven Denecken, who said “ SAP is very serious about customer experience. If you heard otherwise, that’s not true “. Why is this important? You’ll find out in the next section.

Like every other company, too, SAP has jumped on the generative AI train. For some time now, we are hearing of a lot of announcements and available functionality. This includes an own co-pilot as well as an own foundation model that focuses on business data and business decisions. Focusing on CX, SAP announced the availability of a number of AI driven assistants that cover the whole chain from marketing through service but also lead into fulfillment.

With all these, SAP is in tough competition. The company is not perceived as a CX leader, some people even doubt it being serious about CX at all and also question the company’s ability to innovate. Re being serious about CX my favorite story is then just-not-yet board member Bernd Leukert telling the audience of the Wispubs SAP CRM conference in April 2014 that “ SAP is a supply chain company “ during his keynote. One could hear the proverbial needle drop on the (carpeted) floor. We could hardly have been more silent.

On the other hand, SAP hired CRM industry icon Bob Stutz, not only once, but twice. This does not speak of lacking commitment.

SAP is one of the very few — if not the only — companies that has the ability to cover the complete enterprise value chain with its software. It, indeed, looks at covering the value chain of complete industries. And SAP CX, with marketing, sales, commerce, service is covering some of the core components of the corporate value chain. On top of this, the holy grail of the customer record is part of SAP CX with SAP’s customer data solutions.

In the field of CRM/CX it is hard to compete against Salesforce, especially when doing so head-on. On the other hand, SAP has an unbelievable amount of industry knowledge and the ecosystem to bolster this. This is one of the core reasons for SAP to pivot towards industry specific CRM. This pivot also jibes very well with the very credible industry story that SAP generally tells. Putting CX under one roof with industries and under the leadership of CX president Ritu Bhargava — as opposed to placing CX under industries — surely shows commitment to CX and the board’s trust in Ritu’s leadership abilities. This is especially interesting when considering that one of the main customer challenges cited that prevents them from moving into the cloud is lacking industry functionality (in the cloud).

One of the biggest weaknesses of SAP CX was and is not lacking functionality. SAP is surely well positioned in this respect. Instead, it is a lacking share of mind and a kind of what I’d call Cinderella relationship to CX. As in Cinderella, the unloved stepsister. Customers, partners, and analysts questioning an SAP commitment to CX certainly sometimes could perceive a lack of consistent strategy, as evidenced by Bernd Leukert’s statement and only rare mentions of CX by the board, a bumpy road from the on-premise product to a cloud product, interspersed with high profile hirings and acquisitions like Hybris, CallidusCloud, Emarsys or Qualtrics, to name but four. And this covers only the past decade or so.

SAP CEO Christian Klein publicly stating the importance of CX for SAP at the CXLive event after the board was silent about CX for quite a while is another steppingstone to regaining the trust into SAP’s commitment to CX; as is the positioning’s piggy packing on the intelligent enterprise slogan with “ intelligent CX “. This needs to continue consistently. As needs the freshly energized analyst engagement.

On another note, I am not happy with naming any application intelligent. They essentially aren’t. Yes, they can be adapted to different or changing business needs — but the key is that they need to be adapted. In my opinion, the moment the applications adapt themselves to changing needs, we can talk about them being intelligent.

This notion of “intelligent” seems to be shared by Ritu Bhargava when she said that she would build a CRM that is automated and intelligent during her interview with Nitin Badjatia during the CXLive event.

Still, this moment is not yet there. Till then, I guess that modern or flexible are probably better and more adequate terms with less hyperbole.

The second challenge that I see is remembering that the enterprise market is only so big. And it is quite saturated. SAP is not a name that comes to mind immediately when mid-sized companies are looking for a CRM system. This bears the risk of being disrupted from below by hungry vendors that move upmarket. Moving upmarket is admittedly easier than moving down-market. Still, there needs to be a strategy that helps not being pushed upwards out of the market. And this strategy needs to be linked to SAP’s flagship product S/4HANA.

What I mean with this is that SAP is not utilizing one of the core opportunities that its ERP reach gives the company. S/4HANA already offers a significant transactional part of CRM, with a focus on sales and service. Surely, it has some challenges — notably being somewhat clunky. Still, this is an underutilized asset that may very well help fending other vendors off in the core CRM market, if used actively.

All in all, I see that SAP has come on a good way when it comes to CX. SAP CX doesn’t have a severe product problem anymore, perhaps didn’t have for years. It has a perception problem. Having said that, the product can always be improved, too.

The company’s main problems in the CX field have been communication and a visible focus. The CX division has a viable strategy for quite a while now. It is just not enough that the CX leadership team or the CX sales teams talk about SAP CX. SAP CX needs to be talked about by the board and by analysts. This needs more analyst engagement — which has just been restarted — community and ecosystem outreach and, in general, continued, and consistent evangelism. This seems to be addressed.

The “rest” is about listening, and acting upon what was heard.

A later step then could be a truly intelligent application that is more likely to be sold inside and outside the SAP installed base and there also into the mid-market. SAP has all the ingredients to pull this off, including the long breath.

Originally published at https://aheadcrm.blogspot.com on November 6, 2023.

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Thomas Wieberneit
Thomas Wieberneit

Written by Thomas Wieberneit

Helping businesses to improve in Digital Transformation, Customer Engagement, Customer Experience, CRM, Innovation