SAPs McDermott, Stutz Dish On CRM On Demand

Q&A: SAP execs Bill McDermott and Bob Stutz discuss the company's CRM on demand game plan and how IBM may fit in despite its friendly relationship with Oracle.

Earlier this month SAP launched its long-awaited CRM on demand offering to both fanfare and speculation that the offering is too little, too late. Bill McDermott, CEO of SAP America Inc., the Americas arm of SAP AG, and Bob Stutz, senior vice president of the Product and Technology Group at SAP, sat down with Senior Writer Renee Boucher Ferguson to discuss CRM on demand.

It should be noted that Stutz, who will lead strategic application development at SAP, was formerly head of application development at CRM software developer Siebel Systems, a company that was acquired by SAP rival Oracle Corp. on Jan. 31.

There have been some numbers thrown around that only about 19 percent of SAPs CRM users actually use the software. What percentage of CRM customers do you have now? And any sense of how many customers actually use the application?

McDermott: Well, sure. First, I wouldnt view a company that has $6.5 million in profit as the authority on anything. So lets not give them too much credit. The other thing is that statistic is obviously flawed. CRM is the fastest growing business we have. In the Americas its growing nearly 50 percent year-over-year, 20 percent worldwide. Why would somebody invest in an application if they werent going to use it?

You mentioned that youre compensating sales "accordingly." How will that work out if youve got someone with a $75 per month sale for on demand, versus a $7,500 a month sale for on premises. Whats the comp plan difference there?

McDermott: First of all, this is a net new incremental sale for the sales department, because if they can sell the CRM business process, they will. Theyre not looking at this as a comp issue; theyre looking at this as an opportunity to make more money.

/zimages/4/28571.gifClick here to read how SAP is blending ERP and on-demand CRM.

What Ive basically said is that we will be comp agnostic, in that the reps dont need to be concerned whether its process or on demand because we want them to do whats right for the customer, so thats what weve done.

How have you innovated with SAP on demand?

Stutz: The UI is totally different than anything SAP has done to date. Its a very simplistic, but at the same time its capable of doing complex things. That will be the standard for our on demand and also for our on premises products as well. From a development standpoint, what weve done is weve gone to very small pieces of it, very controlled processes. And we control our development cycle very closely, so we can release on a quarterly basis.

What are some of the integration scenarios youve mentioned?

Stutz: Its really sort of the basic ones that you need for simple sales force automation, so business partner—which is really the key thing—and opportunities. Thats really the two key ones. Because with simple SFA, thats all youre really talking about.

Can you drill down on what an integration scenario looks like?

Stutz: You have to pull your list of business partners, so if youre an existing ERP customer, you will have all your customer data in your system. So you want to load that in your on-demand system, so you have a list of all your customers.

You set up your sales force, and make sure all the assignments are done properly, and thats really the start of it. And then your opportunities. If you store your opportunities in an on premise system—and we do have some customers that have on premise CRM today—well bring up the hybrid and have the on premise system, and move [the data] to on demand, and thats covered as well.

IBM is working on an on-demand platform where third-party application providers can put a component up there—ERP or CRM—and users can aggregate those components. Do you have any intent to be part of that aggregation community?

Stutz. I really couldnt answer that right now. I think we need to look at the whole scope of what IBM offers, and figure out where we can best benefit and marry capabilities.

McDermott: The one thing I would say, in building on Bobs comment, is that we too have a point of view on the platform, so NetWeaver is our platform. It is a services-enabled platform, and we have our own Enterprise Services Architecture vision. We believe our platform is a standard for business software. I would not miss the fact that we are the platform standard.

Thats a really good point. Theres a couple of questions that come off of that. As SAP goes through its ESA exercise, are all those application components going to be available as on-demand services?

Stutz: The CRM ones will be. I cant comment on the ERP ones.

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