It has been an intense 2 weeks. The CX or CRM or however you want to call it market got a serious makeover. After a long time without a tangible strategy, SAP announced a lot of things, starting with the intended acquisition of Emarsys, followed by an announcement about the release of a customer data platform as part of its SAPCXLIVE event, and then it also conducted its SAPCXLIVE online event in an impressive manner. I wouldn’t proclaim it ‘cineastic’, which is the current mot du jour, but still, it felt very much like a trade show, just virtual.
And the week before, SAP president of CX Bob Stutz shook the players during an executive roundtable (very good discussion, intense 2:40 hrs) with representatives of the big 5 held by the CRMPlayaz Brent Leary and Paul Greenberg. He openly questioned the enterprise software vendors pricing policies by asking why the industry does not go for a utility bases billing approach — or should I say utilization based billing approach.
Maybe it was just a challenge, as SAP applies usage based pricing with the indirect pricing model for its ERP software and intends to offer it for (at least parts of) its CX software.
What can be said is that any allegations of SAP withdrawing from the CX market, succumbing to the 800-pound gorilla that Salesforce is, should have been wiped out latest after the first few words of SAP CEO Christian Klein’s keynote of SAPCXLIVE.
The opening video to the keynote directly sets the scene by stating “you don’t own your customers’ decisions — you enable them” (around 10:50).
Klein makes things pretty clear by saying that “SAP CX customers are growing twenty percent faster than their competition” and that this is no different for SAP, as “CX is the fastest growing category in our portfolio”.
This is followed by the commitment that CX is “an integral part of the Intelligent Enterprise”, which is even stronger as it is combined with his face, and later naming CX a “key element of SAP’s holistic strategy”.
Figure 1: SAP commits to CX; source SAPCXLIVE
Klein supported this by quoting many conversations and with an example of a retailer who needed to react to the Covid-19 crisis, and didn’t ask for technology but for end-to-end solutions that revamped the whole customer journey while accelerating the digital transformation of the company. “A fancy online store is worth nothing, if you are running out of stock, have long delivery times or cannot offer flexible payment terms”.
Net, net, he says, only a harmonized data model and a connected customer journey can deliver the seamless experience that is expected by today’s customers.
Because of this, one “cannot think of CX as a separate entity; it needs to be considered as an integral part of an intelligent enterprise”.
Combining this with the already published information about the four core enterprise processes that SAP sees — one of which is lead to cash — this means that they are pretty much all in to the CX battle, albeit likely with some focus.
In a subsequent tweet that is not less clear he said that SAP regards customer experience as a cornerstone of digital transformation and as an integral part of an intelligent enterprise across every industry.
During an executives’ Q and A, Thomas Saueressig also emphasized that “customer experience is super strategic for SAP, as it is center of stage for the end-to-end intelligent enterprise”.
Boom. Broadside delivered. The glove has been thrown, and the sound of it hitting the floor resounded.
One thing is for sure, the void about the CX strategy has been filled.
This was a statement that was long waited for, but one that at least for me did not come totally unexpected. After all, industry leaders like Bob Stutz or Esteban Kolsky would not have stayed without knowing that SAP is serious about this market.
Klein combined this commitment to CX with the narration of SAP helping to make businesses sustainable, profitable, and resilient at the same time; a story line that we already heard in his keynote of the annual SAPPHIRE event in June this year.
Which begs the question: What is SAP CX?
The answer to which is: Personalized, seamless, everywhere.
Well, these are the three words that SAP uses to describe how it distinguishes itself from the competition.
Figure 2: SAP CX according to SAP; source SAPCXLIVE
According to SAP “truly meaningful customer experiences have three key characteristics: They are hyper personalized, they are seamless, and they are delivered across all channels your customers opt for […]at the center of these experiences is one key ingredient: data. ”.
SAP CX, with the existing solutions, plus the newly announced SAP Customer Data Platform, plus the planned acquisition of Emarsys, is supposed to be exactly what delivers to this “truly meaningful customer experience”, with the CDP at its core — and Emarsys providing the ability to engage a person using the right channel and the right messaging.
A reality check
Now, the question is, in how far all this changes the view that my glass ball provided me with.
Another, perhaps more interesting one is, in how far do the news about SAP CDP and the Emarsys acquisition set SAP apart from Adobe, Microsoft, and Oracle, which have a similar market share — and bring the company closer to Salesforce.
As I already said and wrote before, the intended Emarsys acquisition came unexpected for me. My assumption was that SAP rather partnered, therefore strengthening the ecosystem, than purchased. According to Bob Stutz Emarsys delivered the missing piece, namely the omni channel engagement platform.
Still, it makes sense and I will certainly observe what is going on.
The CDP makes even more sense. For one, this is a market segment that currently cannot be ignored, and secondly especially not if there are a bunch of solutions in the portfolio that can assume this role, given a little TLC (tender, love, and care for the inaugurated amongst us).
SAP decided to implement its new CDP on the Gigya platform, which I think is a very good move. This gets proven by the claim that it took only a bit more than half a year to implement it far enough to be releasable.
Which makes the question why it took SAP that long to realize what they had at their hand interesting. Bob Stutz’s reply to that question, when I asked him in a recent CRMKonvo, was “[missing] focus and execution”. But then I, myself, was admittedly a bit short in my initial analysis of the Gigya acquisition; still, both Gigya and the then emerging SAP Marketing have been great candidates for morphing into a CDP. Just that only the Gigya platform had the elements identity and consent management that are crucial for a CDP. This is something that I only discussed about 9 months later… well, in part; sometimes I am really slow. Given that I find some time I will write an analysis of SAP’s CDP approach in the next few weeks.
So, in summary I (luckily) was wrong about marketing and at least partially right about the customer data platform, CDP. The good news about CDP is that SAP even took it considerably further than its original definition by the CDP Institute, which claimed ownership of a CDP for marketing (which is a notion that it luckily changed). SAP still goes further than the current definition of a CDP by making it actionable, and by explicitly opening it up for supporting customer service.
The CX strategy in a nutshell
Which brings me to the strategy behind SAP CX that supports the intelligent enterprise, which consists of 6 elements that build upon and extend each other.
Figure 3: Elements of SAP CX strategy; source SAP
It is clearly visible that this is already being executed upon, e.g. by pushing Spartacus or the CDP and by making Esteban Kolsky responsible for both, Sales and Service capabilities of SAP’s CX stack. Although Qualtrics will have its IPO it gets ingrained into the stack deeper and deeper.
Marketing we already covered.
In Germany we have a word that, literally translates to “What takes long, finally gets good.”
During our CRMKonvo on October 20, Bob told us, when he was asked about why it took so long to vocalize a strategy to the market that there was “no hurry to rush it out”. He wanted to be absolutely sure that he and the team were able to execute on the commitment and be able to deliver. And with the introduction of the CDP and the Emarsys acquisition, the timing turned out to be perfect.
I cannot but agree.
I think that, with the story that SAP told as part of the SAPCXLIVE event, the company has shown that it is serious about the market. It puts a holistic view on businesses that makes CX part of a bigger whole by emphasizing CX being part of the complete value chain of a business. SAP is deliberately blurring the lines between front- and back-office. This is in contrast to Salesforce, who by design focuses on the front-office.
If SAP manages to get rid of visible middleware between its solutions, if enhancements to business objects in one subsystem are transparently carried over to other subsystems and if the new CDP becomes the golden customer record not only for front-office solutions, SAP has a very strong and compelling story line.
The remaining topics then are creating the trust and rectifying the image that SAP is hard to work with, which is an effort that has already started.
My prediction is that with this integrated CX strategy SAP has a good chance to set itself apart from the immediate competition and can start to close the gap to Salesforce.
May the games continue.