Enterprise Applications Product of the Year — SAP CRM 3.0

The selection of SAP’s CRM 3.0 as the enterprise application product of the year is a testament both to changing times and to how far SAP has brought the product in a relatively short time.

“We looked at SAP’s CRM when it first was coming out (about four years ago) and we could tell it wasn’t ready for prime time,” said Trish Conley, director of applications information systems for Avid Technology Inc., a vendor of media production tools. “But we knew a lot of development was going into that product and it would get there eventually.”

Last May, Avid started deploying SAP CRM 3. It fully launched the application to its users earlier this year.

“Our strategy (to wait) proved out for us,” Conley said. Apparently, others are satisfied, too, since SAP CRM topped a field that included Lotus Sametime 3, an enterprise collaboration application, anti-spam system Spamnet from Cloudmark, XML toolkit XMetal 3 from Corel, pricing software Bidmaker 2002 from Bidmaker and Computer Associates’ Advantage Plex, a developmental tool for designing e-business applications.

A Difficult Road

The lack of enthusiasm that greeted SAP’s initial CRM offering was, perhaps, the least of the vendor’s problems. Some analysts considered it a late entry into a mature market already dominated by a well-established vendor, Siebel Systems.

SAP had some leverage, however, since its enterprise software already was in place in many large companies. It gambled that, for the sake of simplicity, existing SAP customers would prefer to plug CRM-related modules into their existing infrastructure. By contrast, Siebel was primarily a vendor of CRM and call center software and offered no enterprise infrastructure products, which created problems for that company.

“Siebel had to sell hard into marketing organizations,” said David Daniels, an analyst at JupiterMedia. “But when you talk about enterprise software and it gets into an IT discussion, (Siebel’s approach) is harder since SAP already had (IT executive) champions within organizations.”

That’s how the decision-making process played out at Avid Technology, which previously had used the Onyx CRM product but had first deployed SAP products in 1996.

“We used to deploy best-of-breed applications but none of them talked with each other,” Conley said. “So we decided on a strategy to consolidate them. We never really looked at Siebel seriously since we already were invested in SAP.”

After the initial introduction, SAP steadily added capabilities to its CRM product, including the ability to access data via both inward and outward-facing portals. Avid Technology eventually deployed SAP CRM’s lead management, campaign management and literature fulfillment modules.

Changing Times

While SAP leveraged its strengths and added features to its CRM product, it also struggled against tight IT budgets that resulted from the economic downturn. That downturn led enterprises to think more critically about CRM deployments, according to Rebecca Wettemann, vice president of research for Nucleus Research.

“People bought CRM for different reasons two years ago than they do today,” Wettemann said. “Before, CRM was marketed as a way to have a great deal of knowledge about customers but that wasn’t translated into the value of CRM to enterprises. Now, enterprises are holding (CRM) vendors far more accountable.”

Specifically, companies now are more likely to demand a solid return-on-investment for CRM software than was previously the case. That’s particularly true because of the large cost of deploying enterprise applications such as CRM, Wettemann said.

Conley said it’s too early for a formal ROI study on Avid’s SAP CRM deployment, but noted that her company considered it a success, in general.

“We had some issues that took a while to sort through,” she said. “We’re an Informix shop and that presented (an integration) challenge but now I’m quite pleased. It’s very stable and we’ve had no issues since we went live. And the users are very satisfied.”