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What SAP C/4 Hana means for the APAC enterprises

The cloud-based CRM suite could find takers, but it may not be enticing enough for Salesforce.com CRM customers that also run SAP’s ERP software to make the switch

German software giant SAP’s latest salvo in the customer relationship management (CRM) software market is a “long-awaited” move that will be welcomed by enterprises in the Asia-Pacific (APAC) region.

That is according to Olive Huang, research vice-president at Gartner in APAC, who noted that SAP has been trying to build and communicate its product strategy on CRM for over two years.

“Since it acquired Hybris, there has always been confusion in the market on how it wants to bring the commerce piece together with the Cloud for Customer (C4C) side of the solution, in terms of architecture, platform, data models and customer journey orchestration,” she told Computer Weekly in an interview.

“SAP C/4 Hana shows a strong wish that it now wants to solve this challenge through the common layers around the four clouds that provide one data and development platform,” she added.

Earlier this week, SAP signalled its intention to disrupt the CRM market with the C/4 Hana suite of cloud-based sales, customer service, commerce and marketing applications, underpinned by the common SAP Cloud Platform and Hana Data Management Suite.

Huang said SAP’s focus on data management was a positive move that would address privacy and trust issues.

“With the GDPR [General Data Protection Regulation] compliance requirement, organisations, particularly large ones, need to know where their customer data is stored and how it is used, and a number of processes need to be established such as consent, reporting of breach, right-to-forget, data portability and data requests.

“SAP’s acquisition of Gigya, and the establishment of the SAP customer data cloud, shows the ambition from SAP to use privacy and trust to its competitive advantage,” she said.

Huang called for SAP to build on this announcement and communicate its detailed product roadmap to customers, as well as datacentres where C/4 Hana will be available – particularly to those in APAC which generally would not prefer to use the service out of Europe or the US.

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It would also need to train partners and developers in APAC and release core industry functionality roadmaps, particularly for manufacturing, retail, utility and travel, along with pricing and licensing models, she added.

SAP said its C/4 Hana suite would integrate with its enterprise resource planning (ERP) portfolio, led by SAP S/4 Hana, giving enterprises a single view of customers.

“The promise of full integration with S/4 Hana would be very attractive,” said Nigel Lim, a regional IT manager based in Singapore. “That means less money spent on integration, freeing it up for other things that deliver more value. For the parts of the business that need CRM, we will be happy to consider C/4 Hana since we are already existing customers of SAP.”

Gartner’s Huang, however, does not think C/4 Hana has what it takes for Salesforce.com CRM customers that also run SAP’s ERP software to make the switch.

“Organisations have very different buying centres for CRM and ERP software,” she said. “Furthermore, the decision-makers comprise a list of marketing, sales and customer service departments that are all buying software. ERP is less of a concern for this group – enabling an integrated experience across marketing, sales, service and commerce is more of a concern,” she said.

But for industries such as utilities where ERP plays a bigger role, Huang said typical customer questions would be: How long do I need to wait for SAP’s new CRM system? Should I move to other vendors now?

“The bottom line is this: SAP needs to compete against Salesforce.com on product functionalities within CRM, not product functionalities around CRM,” she said.

“To succeed, it not only needs to give customers the ‘integrated customer experience suite’ story; it would also need to be prepared to break its solutions into pieces and sell to departmental buying centres, and co-exist with many other CRM solutions within one company.”

According to Gartner, CRM has become the largest software segment globally with sales hitting $40.7bn in 2017. This market is expected to grow at a compound annual growth rate of 13.5% to reach around $80bn by end of 2022.

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