What On Earth Is SAP Trying to Achieve In Customer Experience?

SAP is not retreating from the CX space; instead it’s playing the long game

What On Earth Is SAP Trying to Achieve In Customer Experience?

Published: October 4, 2023

Charlie Mitchell

SAP has a reputation for understanding, managing, and organizing operational data better than almost any other tech vendor.

Yet, its customer experience exploits have seemed – at best – bumpy. That trend has continued in recent months.

The lack of media furor stirred up by announcements surrounding its CX portfolio – which includes service, sales, marketing, and commerce platforms – exemplifies this.

As does its June sale of Qualtrics, which contributed to the narrative of its retreat from the customer experience space.

After all, in 2018, when it first purchased Qualtrics, SAP promised to pull together experience and operational data to enable the next generation of customer journeys.

Yet, that mission failed. There are many potential reasons why. Perhaps the most significant is how it could never pull the VoC provider’s tech into its CRM environment, as too many of Qualtrics’ customers were tied to Salesforce.

Indeed, SAP could not force customers to break these bonds. If it had, Qualtrics’ valuation would have plummeted.

So, SAP kept Qualtrics as a side hustle – and even made a healthy profit by doing so. However, that disappointment cast a shadow over SAP’s customer experience business.

As Nitin Badjatia, SVP of Solution Management at SAP, admitted in a recent interview with Constellation Research:

Arriving two years ago, I had a bit of a sense that SAP’s CRM to CX journey was uneven.

However, Badjatia also noted that he felt like “a kid in a candy store” – as he and his team began piecing together the future of SAP in CX.

That journey likely started by asking: what on earth is SAP trying to achieve in customer experience?

SAP Is Sticking to What It Does Best

Instead of shifting away from the CX market, SAP took a momentary backstep to rearchitect its experience sausage factory.

That involved thinking about how service, sales, and marketing work extends beyond their individual silos and into back-end systems.

Then, SAP considered how to bridge these functions with its broader portfolio, uncover new opportunities, and develop new-fangled solutions to simplify workflows and improve CX processes.

That strategy is evident in how SAP has begun pulling its CRM solutions closer to its ERP and Data Cloud platforms, finding opportunities to develop industry-specific innovations.

Consider its industry-tailored accelerators, announced at SAP Saphire 2023. These connect back-end processes with customer engagement touchpoints to “deliver powerful analytics and intelligence that help businesses build consistent, meaningful customer experiences.”

Also, think about its work in the automotive sector. There, it connects sales data with forecasting and production planning systems to bolster logistics optimization.

These two examples highlight how SAP can leverage its business application expertise to deliver an ecosystem that marries front-end CX and back-end operational processes for business-wide gains.

Such a strategy may drive significant value for customer-facing functions. Badjatia uses customer service to underline this point. He stated:

Sitting in the broad SAP portfolio is the potential for more contextual interactions, because more often than not – whenever a customer issue or exception arises – we have the source data.

“As such, we can provide greater context at any point of the experience than just about anybody else.”

Yet, this seems a little familiar. Think back to the Qualtrics acquisition; wasn’t the premise of that to pull operational and experience data together?

Yes. But, now, it’s not only about data but building an ecosystem – one that rival CRM and CX vendors must offer tight integrations and establish elaborate cross-platform workflows to compete against.

Changing the “CX Retreat Narrative”

While SAP’s vision for customer experience may seem promising, it hasn’t yet resonated with enough to put its CX retreat narrative to the sword.

A blog released by its CX top team earlier this year is an example of this, challenging this narrative head-on. It read:

Some voices across the market are recasting SAP’s commitment to an industry-first strategy to suggest that SAP is no longer committed to key needs of our customers, starting with our CX portfolio. Let us be clear: SAP will continue to deliver customer experience (CX/CRM) solutions.

The statement again highlights how SAP recognizes the need to better communicate its CX journey.

Organizing its SAP Customer Experience (CX) LIVE Virtual Experience on October 25 is a step in the right direction.

Yet, hopefully, the business will push forward to engaging more with media, analysts, and thought leaders from the customer experience world.

If not, it’s encouraging CX vision, and often ingenious innovations will continue to go under the radar.



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