SAP's Clarify Strategy Leaves Cloudy Picture

SAN MATEO (05/08/2000) - Although SAP AG put an end to the speculation about its much-anticipated call center's CRM (customer relationship management) direction with the news last week that the company will resell the Clarify eFrontOffice software with, many questions about the wider impact of this move remain unanswered.

The consensus among industry analysts is that SAP has taken a step in the right direction. But SAP has been quiet about how this move advances its transformation from a strictly ERP player into one that can compete effectively in e-business.

Part of the problem may be SAP's back-office-first view of the enterprise, analysts said. That combined with an ERP (enterprise resource planning) market in rapid transition has left SAP in catch-up mode. This will become particularly acute when ERP evolves from an internal backbone to a conduit that extends the business value and business processes of the enterprise to other organizations, analysts said.

It's good news for customers, but "what about that huge R3 base?" asked Peggy Menconi, an analyst at AMR Research, in Boston. "If the two companies tried to lock out Siebel Systems, they missed the boat," she said.

SAP promises that users will get one-stop shopping for "a holistic view" of their customers, suppliers, and partners, said George D'Auteuil, vice president of CRM at SAP America. Approximately one-third of the SAP-installed base of 12,000 customers are on the verge of acquiring a CRM platform, SAP officials said.

"I think the big news is that CRM has arrived in the mainstream," said Erin Kinikin, an analyst at Giga Information Group Inc., in Cambridge, Massachusetts. But SAP is just reselling the call-center offering, Kinikin said. Users need additional, tightly integrated offerings on the front end.

"SAP is joining the 20th century just as we're entering the 21st century," she said.

How the Clarify call center fits in with the rest of the SAP front-office initiatives such as the Advanced Planner and Optimizer, B2B Procurement, and older CRM offerings has been left a mystery by SAP officials, analysts said.

Calls for comment from SAP officials on this matter were not returned by press time.

Although SAP is compelled to move ahead on many fronts because of the Internet, the vendor is lacking well-drawn strategies, said Lew Hollerbach, an analyst at Aberdeen Group, in Boston. "They're being defensive, reactionary, and not necessarily coherent," he said.

The SAP-installed base of R3 users is not going to jump ship anytime soon, because they have invested far too many resources in their SAP installations, analysts said. But the clock is ticking.

"I think they [SAP] have nine to 12 months," said Dave Boulanger, an analyst at AMR. The restless customer base has embraced other CRM and procurement offerings because SAP was unable to offer products. "I think [users'] patience is going to run out in 12 months," Boulanger said.

In that time, the ERP players, including SAP, will be moving away from monolithic sets of applications and toward components and hosting arrangements, Boulanger said. The goal will be "an ERP system that is more plug and play" on the front end, he said.

Separately, SAP last week extended's reach with support for the Wireless Application Protocol (WAP) via a global technology agreement with Nokia Corp., allowing handheld device access via the Mobile Workplace.

SAP AG, in Walldorf, Germany, is at

SAP catching up

SAP faces many challenges.

* E-business spawns more competitors

* Late, undifferentiated products

* No clear business-to-business message

* Sales force can't sell front-office storySource: Industry analysts

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