We Blog CRM

Genesys Telecommunications Laboratories, Inc. today announced the new Genesys Gplus Adapter for use with the analytics capabilities of the SAP Customer Relationship Management application. Genesys now lays claim to status as “the first SAP Software Partner to tightly integrate its customer service software with the SAP NetWeaver Business Intelligence component of the SAP NetWeaver platform.”

The Genesys Gplus Adapter seeks to enable the Genesys 7.5 suite to work seamlessly with complementary applications.

The product is the latest fruit borne from the long-standing partnership between the two firms. In 2006, Genesys became an “SAP Enterprise Services Community” member and one of the first customer interaction management software suites to reach all three levels of SAP certification, including Powered by NetWeaver/Netweaver Certification, SAP Integrated Communications Interface, and SAP R3.

The Genesys Gplus Adapter for use with the analytics capabilities of SAP CRM is available now and is being formally introduced at the annual Genesys G-Force conference in beautiful San Diego this week.

SAP India yesterday announced a fat sale for the company, with India’s leading tyre manufacturing company MRF Limited selecting the software with the no-nonsense moniker of “SAP for Automotive.” SAP representatives gleefully reported that “MRF opted to replace existing applications from Oracle in favour of SAP’s leading SAP ERP and SAP CRM solutions, based on the SAP NetWeaver platform.”

Siemens Information Systems will act as partner in implementation, servers will be HP Integrity, and the database to be used the IBM DB2.

MRF will implement SAP solutions at its six global manufacturing plants and 100 sales offices including company headquarters in Bangalore.

Implementation has begun, and the system is expected to go live in the fourth quarter of 2007.

MRF will also establish an automotive user group within the company in order to “better user reception and ensure better ROI.”

At first, on-demand CRM software looks like a can’t-miss opportunity in terms of rapidly upgrading lots of customer service really quickly under one base price of, say, $75 per user for marketing, sales force or service automation modules or $125 for all three suites.

At first.

Just as surely as time is money, however, hidden costs may be tucked away, despite promises of “this low price” or that.

Need proof? Check out the cautionary tale provided by appliance and automotive equipment provider Sterling PCU. Salesforce.com met all the company’s needs until a second database back-up. “That’s when,” a Sterling spokesperson said, “salesforce.com started to charge us an arm and leg for backing up our own data. It’s just not acceptable.” Today, Sterling claims their new CRM system saves them $18,000 annually.

A few tips, then, to help you ensnare some of those revenue-eating traps follow. We can’t guarantee savings of $18,000, but consider the following and you may well get what you pay for (and vice versa).

• Beware complexity. There is little that can be done, it seems, about the headaches certain to appear when faced with integrating data between on-premise and hosted software. Work stoppage may happen, shutdowns of some or all parts of your network may be necessary: All represent drains on resources and thus revenue.

• Think about consultants. Because of certain complexity in implementation, you will be hiring a consultant. iServiceGlobe SAP consultant Srini Katta, a specialist in e-business and CRM implementation was quoted at CRMblogger and SearchSAP.com as estimating that, “at a minimum, a company may need to bring in a business analyst to determine what data is needed and should go beyond a company firewall.”

Choose your consulting partner carefully; understanding exactly what’s in the consulting contract will help keep potential hidden costs within the potential hidden costs to a minimum.

• Consider storage space (but probably not too much). Much is made of “bloatware,” much of it colorful. One CRM world blogger writes of “the notoriously contagious ‘bloatware’ malaise that often affects ageing software – adding features for the sake of it,” describing the phenomenon as “like mutton dressed as lamb – full of superfluous features the developers have decided you need.”

This can mean having to buy further storage space either in that hardware the would-be CRM buyer was hoping to avoid or from the hosting service. Companies like SAP and Salesforce.com offer additional space as well, should you need it, but at an extra cost, naturally.

For an opposing viewpoint set to debunk all the myths about the ever-discussable bloatware, check out this entry by blogging software developer Joel Spolsky entitled Strategy Letter IV: Bloatware and the 80/20 Myth.

By the “80/20 Myth,” Spolsky is referring to a common rule of thought employed by software developers that goes as so: “80 percent of the people use 20 percent of the features. So you convince yourself that you only need to implement 20 percent of the features, and you can still sell 80 percent as many copies.”

But, Spolsky argues, that 20 percent of features is different from user to user; one of the beauties of web-based CRM is the pick-and-choose options most offer. The 20 percent your business needs can be yours at minimal cost. If you choose correctly.

As for the cost of hardware, Spolsky presents an eye-opening statistic: In 1993, Microsoft Excel 5.0 took up about $36 worth of hard drive space; in 2000, Microsoft Excel 2000 took up about $1.03 in hard drive space. That price you’re paying for extra space? Accept it; it could be much worse.

• And then there’s shelfware. Just because you’re not buying anything that can go on the shelf doesn’t mean you’re not paying for something that is utterly useless.

Shelfware is an already classic 21st-century phobia, programs that simply sit on the shelves after purchase due to one problem or another. In a Network World piece by Denise Dubie entitled “Net execs struggle to rid their shops of shelfware,” Dubie presents five cases of business had by (typically) CRM product that was too much, not enough, or just plain didn’t work.

Though the piece is focused on traditional hardware for IT companies, the lessons learned are the same, and the moral is simple: Do not buy that which you do not need.

• Know what you need to know. A guideline for costs in a CRM system deployment has been nicely summarized at CRM Lowdown. It looks like this: needs analysis and site preparation; software purchases and license support; implementation and deployment costs; ongoing operational support; and strategic development costs. Happy calculating!

• Finally, there’s the apocalypse. Back in early 2006, Salesforce.com suffered from a couple of power outages that took them – and subsequently their customers – off-line for hours. In light of the development, TMCNet posted a decent pros-and-cons list of hosted vs. in-house CRM software.

Reacting to the near-catastrophic power failure, contributing editor David Sims opined then that hosted CRM was still too immature to meet long-term business needs.

To be fair, nothing like the large-scale event Salesforcers suffered almost a year-and-a-half ago has occurred again. However, certain suppositions of early 2006 still hold: Hosted CRMs can be limited in custom features, carry untold hidden costs in the medium term, and cost companies extra when waiting for the subcontracted service.

Ultimately, Sims gives a warning of “caveat emptor” in recommending the avoidance of long-term contracts.

Some may attempt to convince the prospective CRM system purchaser that he/she is buying basically foolproof stuff with a no-nonsense billing structure. Just recall what they say about that which sounds too good to be true. And caveat emptor.

“Today,” as the expression goes, “is the first day in the rest of your life.”

The old saw works for the corporate life and even companies. Monday, April 2, marks the first day in the rest of SAP’s life, but it’s a life they’ll be starting anew today without Shai Agassi.

In a software-side headline-making retirement on a level with say, Andre Agassi, Shai Agassi was reportedly miffed over the extension of CEO Henning Kagermann’s tenure as head of SAP. (Indeed, an official statement from SAP board chairman/co-founder Hasso Plattner stated that “With the extension of Henning’s contract to 2009, it became apparent that Shai was not comfortable committing to a 10- to 15- year period, which was not in keeping with his personal career time line.”)

Agassi tendered his resignation on Wednesday, and before you could say, “You can’t quit; you’re fired,” SAP had, in businesspeak, “realigned executive board responsibilities.” Agassi and SAP quickly came to a “mutual agreement” which involved the former executive board member leaving “to more quickly commit himself to his personal agenda of environmental policy and alternative energy sources, and other issues.”

That “more quickly” specifically meant today.

Perhaps as a sop to those many who recognize the Shai Agassi name, SAP PR wackily stated that “In making this announcement, SAP confirms its commitment to the company’s current product and platform strategy, and its dedication to the success of SAP customers and partners.”

“While we regret Shai’s decision to leave, we congratulate him on his record of achievement at SAP,” said Hasso Plattner, Chairman of the SAP Supervisory Board and company founder. “Shai drove the company’s successful platform strategy, led innovation that helped SAP grow and continue market leadership, as well as set the stage for the future of business software. I had shared with Shai my plan that he should become successor to Henning Kagermann as a co-CEO for SAP…”

“We have a strong development and product leadership team in place, we’ve made remarkable progress along the roadmap to enterprise SOA, and have a clear vision about new opportunities for volume business in the midmarket,” said Kagermann.

Said Agassi, “I will remember my time at SAP as one of the most satisfying periods of my career, and it has been my great pleasure to work with such outstanding and passionate people at SAP. I look forward to new opportunities, and working on issues that are important to me, including alternative energy and environmental policy issues, as well as the future of Israel.”

A more personal message from Agassi can be read on his blog.

Shai will be stay on the SAP bubble as a special consultant to the office of the chairman of the supervisory board on technology, innovation and competitive trends. Agassi founded a number of firms before joining SAP, including TopTier Software and TopManage, software development companies both bought out by SAP.

CRMchump wishes Agassi all the best of luck – especially if the man is serious about applying some of that business head and creative thinking to environmental issues – and good luck to his former company after the loss.

Optimistic thoughts, SAPpers!

Al Osais International Holding Company, one of Saudi Arabia’s larger diversified businesses, has announced the selection of SAP for its ERP solution. First implementation will be in the construction firm Al Osais Contracting Company.

SAP’s Engineering, Construction and Operations Solutions will be introduced to Al Osais Contracting, a firm involved in various sorts of commercial and residential building construction projects. Al Osais services include site development, provision of infrastructure and utilities, structural steel works, marine works, plant civil works, surveying and drafting.

SAP released some statistics to go with the announcement, namely that SAP Arabia increased its market share from 30 percent in 2004 to 33 percent in 2005, outpacing the nearest competitor by some 10 percent. Total spending on software solutions in the “MENA region” reached $187 million in 2005, an increase of 16 percent year-on-year and is expected to be worth approximately $371 million in 2010.

SAP’s come out in 2007 with guns a-blazin’…

Today company representatives announced the firm’s 1,000th customer going live on enterprise service-oriented architecture mySAP ERP 2005. mySAP now lays claim to the record for “fastest adoption rate of an ERP release in the history of the company.”

With the announcement, SAP PR took the time to profile a few of their customers truly spanning the globe, including Higher Education Press, the largest publisher of educational books in that big country known as China; The State of California Department of Water Resources; Technische Werke Ludwigshafen AG, a provider of electricity, natural gas, drinking water and heat to private and commercial customers in Germany; and Palfinger AG, an Austrian manufacturer of hydraulic lifting, loading and handling systems.

SAP AG announced a nice client win today, with document processing and postal specialist Böwe Bell & Howell will replace its extant CRM system with mySAP Customer Relationship Management. BBH will roll out mySAP CRM initially within its North American service organization and later extend implementation throughout parent company operations worldwide.

BBH plans to link the mySAP CRM application to its existing GPS system, seeking to enable selection and dispatch of the most appropriate service technician at the closest customer location.

While SAP HQ was detailing its “new game changing approach to the mid-market” (i.e. the development of a hosted suite of business applications for the midmarket) ‘Stateside, SAP Arabia outlined details of its upcoming participation at Cairo ICT 2007. The annual show is Egypt’s largest IT exhibition.

SAP Arabia will be taking the opportunity presented by the show to hard-sell the latest solutions and products from the open-sourcers including mySAP ERP, mySAP CRM, mySAP supply chain management and mySAP supplier relationship management. I

n the announcement, SAP Arabia president Essam Enany saw the show as key to his branch’s interests: “SAP’s presence at Cairo ICT [event] represents our ongoing commitment to the region” and promised his company’s product would help area firms to “out-think, out-execute and out-perform their competitors.” (Sounds like a true SAP guy, eh?)

In the Egyptian market, SAP Arabia’s foci in 2007 will be public affairs, financial services, mid-market and real estate markets.

Enterprise software provider Infor has announced that Folksam, a leading Swedish insurance company, has chosen Infor CRM Epiphany to “implement its five-year CRM vision.” Said vision actually began in 2003 and, in the master plan, Infor CRM Epiphany enables Folksam to implement the user interface for the CRM strategy.

The project’s initial phase focused on data warehousing, analysis and process development. The deployment of Infor CRM Epiphany sales, service and inbound marketing will be fully supported by one system with one comprehensive customer view, in theory enabling Folksam to completely implement all defined CRM processes.

Infor also got some attention for itself on Wednesday. After SAP CEO Henning Kagermann unveiled his firm’s “new game changing approach to the mid-market,” which involves SAP developing a hosted suite of business applications for the midmarket, in hopes of “attract[ing] an untapped segment of customers with the promise of faster implementation and lower ownership costs,” Infor CEO Jim Schaper quickly shot back.

“One has to wonder if SAP truly understands the mid-market or whether this strategy is solely an effort to detract attention from the slowing growth of their Fortune 500 base,” said Schaper. “Medium-sized customers do not want all-in-one products that need massive customization efforts to address their line of business. That approach is a relic of the past, when ERP implementations were akin to corporate open heart surgery. … The bottom line is that customers want more functionality, less complexity and the lowest total cost of ownership. That is not the plan we see from SAP.”

Ouch.

Swedish insurance company Folksam was founded in 1908 and today handles more than 18 million insurance contracts in over 100 offices. The company has approximately 3,700 employees and settles 600,000 claims annually. Folksam numbers show that the company now insures half of all family homes, half of all citizens, and one-quarter of all automobiles in Sweden.

With its annual conference to report full-year fiscal results, SAP AG unveiled its “new game changing approach to the mid-market.” First and foremost has SAP developing a hosted suite of business applications for the midmarket, in hopes of “attract[ing] an untapped segment of customers with the promise of faster implementation and lower ownership costs.”

Seeking to complement SAP’s extant portfolio for midsize companies, the solution will leverage a new “enterprise service-oriented architecture (enterprise SOA) by design” platform.

At the conference, SAP CEO Henning Kagermann sketched some plans to introduce the new midmarket solution with offers of “breakthrough innovations in faster, lower-risk implementation, continuous adaptability and easier user adoption.”

The solution is beginning initial market validation, and SAP plans to introduce more details about the product road map and its associated components at an event later in the current quarter, though speculation doesn’t have the product released until 2008.

Earlier this month, SAP introduced the enterprise SOA-based version of its SAP All-in-One solutions to appeal to its established base of midsize companies, which company numbers state make up almost two-thirds of SAP customers.

According to Kagermann, SAP will invest in an additional business model to support the introduction of the web-based product to reach the untapped market.

SAP formed a global SME unit in November 2006, headed by Hans-Peter Klaey. SAP Global SME is an organizational unit overseeing sales, marketing, operations and alignment of resources dedicated to serving the SME folks.

At the time of the unit’s formation, SAP stated that the formulation “reflects the evolution of SAP’s go-to-market model to serve customers in increasing numbers through a multi-channel approach” and that the company “is aggressively expanding its footprint in the segment by building its delivery channels and the world’s largest portfolio of business management software designed specifically to meet the market, industry and resource requirements of small and midsize businesses.”

Kagermann was quoted on the subject in Computer World thusly: "There is no such thing on the market now, and SAP is going to write a bit of software history.”

What’s that? “Show me the money,” you say? Sure thing!

Figures from SAP’s accounting folks included:

• Product revenues for the fourth quarter of 2006 were €2.2 billion (approximately $2.86 billion), an increase of 8 percent compared to the same period in 2005.

• Software revenues for the quarter were €1.3 billion (approximately $1.69 billion), an increase of 7 percent.

• Total revenues were €3.0 billion for the fourth quarter of 2006 (approximately $3.89 billion), an increase of 7 percent.

• Operating income for the fourth quarter of 2006 was €1.1 billion (approximately $1.4 billion), an increase of 10 percent compared to the fourth quarter of 2005.

• The operating margin for the quarter was 36.6 percent, an increase of 1.0 percent. The adjusted operating margin for the quarter was 37.7 percent, an increase of 0.9 percentage points.

• Net income for the 2006 fourth quarter was €799 million (approximately $1.037 billion), or €0.66 (approximately $0.86) per share, an increase of 29 percent. Fourth quarter 2006 adjusted net income was €822 million (approximately $1.067 billion), or adjusted €0.67 (approximately $0.88) earnings per share, an increase of 28 percent.

• Product revenues increased to €6.6 billion (approximately $8.5 billion) for the year ending December 31, 2006, an increase of 11 percent.

• Software revenues increased 10 percent to €3.1 billion (approximately $4.0 billion) in 2006.

• Total revenues were €9.4 billion (approximately $12.2 billion) for the year, an increase of 10 percent compared to the same period last year.

A full replay of SAP’s earnings conference is available at www.sap.com/investor.

SAP currently claims more than 38,000 customers in 26 industries (including high tech, retail, financial services, healthcare and the public sector) in more than 120 countries.