SAP CRM Into S/4HANA — Did SAP Hit Bulls Eye?

After having talked with Volker Hildebrand about the future of SAP CRM and whether or not there will be a CRM component in S/4HANA at CRM evolution 2017 I now had the chance to follow up with some folks back at SAP in Walldorf.

A little Recap

  1. Opens a future roadmap for current SAP CRM customers that stretches beyond 2025. These customers else are at risk of defecting.
  2. Provides the continued chance for customers to run their SAP instance on-premise. According to Volker there are still a good number of customers that do not want to run their instance in the cloud. The key word here is choice.
  3. It simplifies the system landscape and its operation

And this approach works, in spite of SAP seemingly having numerous studies that lay out in detail that SAP CRM could never work as part of an ERP.

Now What is Going On?

This in itself is an interesting move, because this way it is not possible to continue using an existing SAP CRM in a standalone fashion. And there are some customers running SAP CRM without an ERP integration. I am still curious about the licensing impacts of this move. Some customers might not even have an SAP ERP, others might be too conservative to move on from SAP ERP to S/4HANA.

2017 — The Year of Service Functionality

There is some reluctance to commit to a precise scope at this time, just that it will be core service functionality mainly targeting shared services and utilities industries. As it seems there will not be major migration tools with this first release.

2018 will be the Year of Sales Functionality

Order, configuration, pricing, and billing will be delivered by the S/4HANA core in a move that, at the outset, makes sense.

This year will also see the development of migration tools.

Is 2019 the Year of Marketing?

And with SAP Hybris Marketing SAP already has a marketing solution that can be used on premise and on demand.

How is SAP Doing It?

Especially the highly normalized one-order model will get denormalized, using the existing index tables that got introduced to get some performance into the CRM Order model. This will also benefit the HANA DB which strongly prefers wide tables over joins. I am not fully clear about what that means when putting the S/4HANA order into the mix, though.

But What about the UI?

My Take

And companies that are contemplating to move to S/4HANA need to complete this migration first, anyways. Harmonizing the data models obviously means that a migration from SAP CRM to ‘S/4CRM’ is a migration project, for which a stable S/4HANA is a precondition.

What stays a concern for me is the positioning of ‘S/4CRM’ versus the SAP Hybris set of cloud solutions. There is a significant overlap in functionality. The messaging of when SAP recommends which solution really needs to be worked upon in order to avoid confusion. Grey zones must become minimal.

The answer seems to be there for Marketing, where there is only one solution going forward. But how about loyalty management (exists in CRM and as a cloud version), trade promotion management (exists only in CRM), retail execution (is mainly a cloud solution), or configuration and pricing? S/4HANA has the latter two and with the SAP Hybris Revenue Cloud there is another entry (although belated) into the CPQ (Configure, Price, Quote) market.

An approach for solving this lies in distinguishing between systems of record and systems of engagement where slow-changing, mature functionality is concentrated in the S/4 world and faster moving engagement functionality is encapsulated in engines that could get deployed on site and on premise — or only be used on demand. Coupling systems of record and systems of engagement then could happen via micro services, but should happen on a platform- rather than application level to accommodate for machine learning abilities.

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