In the last 18 months or so, growing adoption of cloud-based CRM and declining

adoption of on-premise CRM have made people involved with SAP CRM bit concerned.

Though SAP has moved many of its on-premise CRM functionalities to cloud for

customer. Still many of the SAP customers use on-premise SAP CRM. CRM

Consultants, CRM users and partners are still not clear, what is in store? Consultants

are concerned because they don't know if their on-premise skills will remain relevant in

the future. CRM users are concerned because, if their management decides to move

everything from on-premise to cloud, they will have to learn and apply new skills,

Partners are concerned because they don't know in which of the areas they will have to

train their people. I thought of writing this post for all the people who are involved in

CRM to have some clarity.

The interesting trend continuing into 2015 is deployment of Cloud based CRM. We are

certainly seeing CRM deployment moving away from on-premise to cloud-based

platform. Gartner predicts that the percentage of companies with cloud CRM

deployments will rise above 50% in 2015. Gartner also says that CRM leads all

enterprise software categories in terms of projected growth, showing a 15.1% CAGR

from 2012 to 2017. In the latest IT spending outlook for 2015, Gartner predicts “In the

enterprise software market, spending is on pace to total $335 billion, a 5.5 percent

increase from 2014. More price erosion and vendor consolidation are expected in 2015

because of fierce competition between cloud and on-premises software providers. In

particular, in the customer relationship management (CRM) market, a key cloud

battleground, seat prices for segments such as sales force automation (SFA) are

expected to decline by 25 percent through 2018. This will be caused by incumbent on-

premises vendors discounting their cloud offerings heavily to try and maintain their

customer base”. So how does it affect people who are involved in CRM – consultants,

users of SAP CRM, implementation partners and so on?

If we deep dive into the reports published by Gartner, Forrester, Hfs Research etc., we

see that each one in its report has mentioned SAP CRM either in its Leaders quadrant

or in its winners circle. Interestingly, all of them have mentioned both of the CRM

offerings by SAP – on-premise and Cloud for Customer. SAP CRM has also made it into

2015 CRM Watchlist winner’s circle published by Paul Greenberg. Paul Greenberg

writes “one of the big reasons that they are in the 2015 CRM Watchlist winner's circle, is

that they are, after years of tumult, starting to get a real handle on the market and where

 

it’s going and are focusing the company's work at least around their customer-facing

technology, in alignment with that market”. All these predictions by the research and

advisory firms do show that SAP CRM is not going away anytime soon, it’s still there

evolving. SAP is rebuilding its CRM software to counter its competitors head on.

A warning for people involved with CRM is that the moving away of SAP CRM from an

on-premise platform to a cloud-based platform will indeed need re-skilling. What

consultants should do to stay relevant? Consultants familiar with SAP know that

everyone who works in SAP is either a functional consultant, who understands & maps

business requirements in CRM, or a technical or techno-functional consultant

responsible for designing user interface, integration, enhancing the solution etc. In my

view, the role of a functional consultant will not go away. They will keep on doing what

they were doing except that they will have to play a dual role in cloud-based projects.

The dual role of an architect or a manager along with the usual customizing of the

software. Technical consultants will have to re-skill themselves in Fiori, Cloud

application studio, Hybris in addition to their ABAP skills. The usual timeline of CRM

projects that the consultants have to think of now. Gone are the days when a CRM

project used to go on for more than several months. The need of the hour is to

implement a cloud-based solution in quick time in weeks.

What will happen to the modules available in on-premise SAP CRM? How people skilled

in those modules will get affected?

Let’s analyze three basic pillars of CRM – Sales, Marketing & Service first.

For Sales - People, who still think their on-premise sales CRM skills are good enough,

will have to reconsider. I don’t think customers are more interested in using CRM on-

premise anymore for sales functionality excluding quote and ordering. Customers will

prefer using cloud for customer or rather cloud for sales for their core SFA – accounts &

contacts, activities, leads and opportunities. Solutions such as deal finder, lead scoring,

infinite insight, 360 degree view, social selling are the added CRM capabilities that CRM

sales consultants should get re skilled along with cloud for sales. For quote and ordering

on premise will still be used for some time.

For Marketing - I don’t think consultants who are banking on their SAP CRM on-premise

marketing skills will be relevant anymore. Certainly, they will have to re-skill themselves

with Hybris Marketing and / or cloud for marketing. We are certainly seeing customers

 

moving away from on-premise to cloud. We are also seeing many of the customers

adopting marketing automation tools such as Marketo, Eloqua and Adobe. All these

marketing automation tools need to be coupled with a CRM for an end to end cycle. So

the other areas that marketing consultants should focus on is this integration between

automation tools and CRM. Funds management is another area, in which SAP has a

very strong presence. I believe that it will still be favoured by customers. For TPM

consultants, I think customers will continue using on-premise for next few years before

TPM is available on cloud full-fledged.

For Service - Field Service is arguably SAP’s best product and best-kept secret. On-

premise CRM provides depth and breadth of the solution in customer service. I don’t

think any of the vendors can compete with SAP in this area. At this moment, all the

functionalities are available on-premise and slowly SAP is moving functionalities to

cloud. We are still seeing many customers buying on-premise CRM, to use customer

service functionality including SAP’s call center application. So consultants skilled in this

area will be in demand. But I must say that they will have to re-skill on cloud for service

in the due course. Till the time SAP moves every functionality of customer service to

cloud , on-premise CRM service skills will be relevant.

Now it’s your turn - to re skill yourselves on cloud, Hybris,

Marketing automation, Fiori, social selling, Customer Engagement

Intelligence etc. to stay relevant