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It's time for CX to change - can SAP deliver on that?

Jon Reed Profile picture for user jreed January 24, 2022
Can SAP shake up the market with "enterprise grade CX"? And how would we define it? One thing is certain: CX, as we know it, has fallen short of its promise. That's fertile ground for a spirited catchup with SAP's Sameer Patel.

Sameer Patel SAP
(Sameer Patel, talking SAP CX strategy)

Since I last reviewed SAP's CX strategy, via ASUGForward 2021, much has changed. CRM industry stalwart Bob Stutz, who returned to SAP in October 2019 to head up the SAP customer experience team, has since retired.

In October 2021, Ritu Bhargava joined SAP, after almost a decade in software engineering leadership with Salesforce (SAP Hires Ritu Bhargava as Chief Product Officer for SAP Customer Experience).

Bhargava joined Joanna Milliken, who moved from Head of SAP CX Marketing to the new CEO of Emarsys, as of September 2021. But the leadership changes won't matter, unless SAP can answer this burning question: at this late date, can SAP have a substantive impact on the CX market?

Fortunately for SAP, enterprises are not exactly lightning fast at adopting new software stacks. Also, SAP believes the fundamentals of the CX market are changing.

  • Put highly-connected, omni-savvy consumers and problematic supply chains in a global mashup. Who has sorted that?
  • The so-called "customer experience" will remain elusive until employees feel like they matter - no matter how automated the world around their jobs becomes.

Do these converging issues create vulnerabilities for the CRM vendor stalwarts - and new market openings for SAP? If so, how will SAP execute on them? Then there is this notorious B2B versus B2C thing I've been making a ruckus about.

One thing even I'll admit: most B2B companies need a consumer-facing commerce play - many had to scrounge that up in pandemic times. Can SAP be a factor in B2B2C, if you will?

Why does the market need another CX approach?

Soon, I'll delve into those questions with SAP's new CX leaders. But first, I started with a familiar sparring partner from past roles, Sameer Patel, who is now Group CMO, SAP CX / CRM (as of four months ago).

Patel is no stranger to my virtual hot seat. Before I could rattle off my questions, he pre-empted me:

Why does the market need another vendor to give them CX?

Patel says three factors came to a head: first, traditional CRM was internally focused:

CRM was very organization-focused, around efficiencies of how to manage leads, and how to report up to my manager. It took a lot of paper-based processes, and turned those into technology-based processes.

That didn't go far enough - not for today's consumer. Patel:

What it didn't deliver on really was putting the customer at the center of the process, right, and saying that, you know, the customer, the central experience is about making the customer the consumers life better.

Which provokes the fundamental question for SAP:

How would we rearrange the stack to do that?

But Patel thinks we may have gotten about carried away with CX hyperbole - that squishy marketing land where we brag about delighting customers, but don't necessarily deliver sales:

We've tilted so far into a set of nebulous programmatic metrics, around engagement and experience and delight. While these are all absolutely foundational to making the move from CRM to CX, as an industry, we didn't really find a balance between those kinds of metrics, and the hardcore metrics that also drive business.

If I walk down the halls of Walldorf, and run into Christian Klein in the hallway, Christian most certainly wants to know if our customers are happy, if they're engaged, right? But he's also going to be like, 'Dude, where's my leads? Where's my growth? And why are you spending so much money?'

Meanwhile, consumers expect an omni-channel dexterity we don't have:

One out of every five organizations can actually measure and track the value of CX. Customers have not been able to get to know their consumers as well as they would have wanted. You look at the omni-channel, one of my favorite words to go after. The omni-channel never really showed up.

Smart use of data leads to real personalization, not the faux 'Hello Jon' personalization I frequently lambaste.

The more you personalize, the better you personalize, not only are your customers happy, but your cost and your operating infrastructure also start to get a lot more light. It's almost like the left-brain discussion around CXOs never showed up.

Then there is the digital pressure of pandemic consumers. Patel aptly summed that as:

Why did it take a pandemic for me to realize that buying toilet paper on a subscription model is a great idea?

Bring on the B2C commerce imperative

Patel believes these digitally-charged consumer habits will stick. With, I would add, a new level of expectation around the merging of stores and digital - and the ability to change those preferences from day to day. Think that exposes CRM data silos? Bring on the B2C imperative:

From a retailer standpoint, or a vendor standpoint, this notion of having flexibility around certain business models. Certain products in the areas that I sell need to graduate from catalog to subscription. Companies that have done B2B for 200 years are starting to look at B2C models and say, 'Certain parts of my value chain actually be B2C... I've got to start pushing on those models.'

Add in supply chain volatility:

100% of the reason why e-commerce fell to its knees during the pandemic: not a single one of those had to do with the shopping cart failed, or the catalog. Every single one of them was supply chain. The CX portfolio that [most vendors] have is all limited to the edge of their organization... But customer experience, as you know, can break just as well as the shopping cart broke. Or, your returns process sucks.

Patel brought up a recent FedEx delivery misadventure, the kind we've all had with one vendor or another in the last year: "That had nothing to do with a shopping cart. That was logistics."

What happens when you pull relevant customer data from all of their touch points, not just the edge? Well, then you have "grown-up CX." And what, Mr. Patel, is that?

I call it enterprise-grade CX. If I look at SAP's portfolio, from the demand chain to the supply chain, as this set of Lego blocks that I can play with, when I think about CX, how do we start to put a data foundation in place that can pull out data across this entire value chain, not just the easy stuff that sits at the edge, to drive experience?

How do I turn every single touch point for a customer, be that service, be that B2B sales, be that commerce, be that marketing, into a profitable or revenue-generating opportunity for the company?

What would it look like if SAP could deliver on this? Patel cited examples such as quick business model shifts, moving into new markets, rolling out commerce platforms quickly, using analytics to test multiple go-to-market scenarios. Patel brought up that dreaded CDP phrase (Customer Data Platform), but to make an important point. He believes SAP has a reputation for handling customer data with privacy-adherence. Patel argues that's a crucial part of "grown-up CX":

The SAP CDP has 3.1 billion identity profiles that come with the platform. We have over 10 billion consent preferences that come with the platform. So when you do business with us, and you're trying to enter a highly regulated market, you don't need to worry about respecting a customer's preferences, or respecting the local laws that need to be built in. That's grown-up, enterprise-grade CX.

ASUG CEO - "We haven't done enough to talk about CX"

Druing a recent catchup with ASUG CEO Geoff Scott, I asked him: what does he want from the new CX leadership? What do ASUG members need from SAP here? As Scott told me:

I do happen to fundamentally believe that CX is an incredibly important part of the SAP portfolio. I don't believe that we, as customers, or SAP, as an important vendor, have done enough to talk about it and really understand that the features, the benefits and the potential of that portfolio. And I'd love to see there be more conversation about it.

Scott would like to see the SAP CX team ratchet up the customer dialogue:

I've been yearning for deeper conversations about how we can put this portfolio of customer solutions together. I think that can't be any more important... I'm looking forward to hearing more about where SAP wants to go, how customers can take advantage of it and how we help the entire customer base learn and succeed with it.

My take

How will SAP make their customers - and their customers' customers lives better?

That's the crux of the issue. And how will that be productized? Via a slew of CX acquisitions, SAP does have product assets, though unfortunately, their own prior CX in-house developments didn't ultimately materialize into much. But a nice collection of apps isn't a platform per se. From that vantage point, the progress on SAP's CDP is encouraging. But we'll need to hear from leadership on roadmap before we can fully assess this.

Modern CX isn't going to be some type of tightly-integrated, CRM-style suite. It will have to play nice with others. If customers want to plug in components, or home-grown systems they need to pull in, SAP needs to be ready.

Reading between the lines of our conversation, I think we can expect a continuation of the priorities Stutz started, but also some directional shifts. Patel revealed this bit on external integration:

I think you absolutely will see us get a lot more holistic about how we think about CX. Not just from a customer experience standpoint. We're going to feel just as good about improving that experience by integration versus building native features. There's no religion about that.

Of all the things Patel mentioned, I believe helping B2B companies with B2C plays is the most compelling. From the Gigya, Hybris and Emarsys acquisitions, SAP has the resources to do it. But: just because you have a boatload of data on customers doesn't mean you can necessarily make their experiences better. It's not just data; it's real-time visibility.

In terms of real-time supply chain visibility, with integrated, outside-in demand forecasting, including weather, demographic, and transportation data - show me a single ERP vendor doing that now. It's not just ERP vendors either. Recent customer service experiences with the supposed leaders in customer logistics, Walmart and Amazon, showed me that customer-facing reps have a shocking lack of visibility on where their own products precisely are - and what their drivers are up to.

Somehow, all of that data isn't adding up to the kind of visibility you need for "great experiences" - especially when you are the consumer in troubleshooting mode - and your order is languishing in an unknown location.

One thing I will challenge Patel on for our next conversation: I think SAP should have a roadmap answer to the employee experience - CX connection. While I'm not wild about everything SuccessFactors has done the last few years (way too much dragging on next-gen payroll comes to mind), I am impressed with the current leadership team - and their focus on themes of well-being and employee empowerment.

I believe they are sincere on these matters, and in the work stress we all live, they are absolutely right to pursue them. I don't care if "well being" sounds too warm and fuzzy; it matters. If the SAP CX leadership isn't talking to SuccessFactors about this yet, they are missing, in my opinion, a big aspect of SAP's "grown up CX" opportunity. Keep in mind, they may be farther along than I am aware. I'll find out.

I'll look forward to seeing where these CX conversations go from here.

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