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Inside SAP C/4HANA and how it's changing the customer experience

SAP has officially entered the CX game with C/4HANA, but what is it exactly? Here's a breakdown of the platform and its components to ensure buyers and users have a firm understanding.

With the SAP C/4HANA last year, you could argue SAP gave notice to companies around the world that it now has what it takes to play in the bigger, spotlight-driven game with CRM vendors such as Salesforce, Oracle and Microsoft.

Until the unveiling last year of C/4HANA, it was easy to overlook the company's increasing influence on customer experience (CX) technology. After all, it is best known for its prowess in ERP. Still, over the past few years, SAP has acquired a variety of companies that, when combined with its own services, create the C/4HANA umbrella and dangle the promise of a full and detailed view of customers through the marriage of front office and back office.

Industry observers say it will take time to see if SAP can pull it off, but for now, the company has at least entered the CX conversation.

"SAP has always been a powerhouse in the back office," said Kate Leggett, an analyst at Forrester Research. "They've had their own CRM assets, but they haven't been able to quite position them right. But now they've made a lot of acquisitions, and they have the potential to really deliver on this promise."

Paul Greenberg, a longtime CRM analyst, agreed that the potential of SAP C/4HANA working hand-in-hand with the proven S/4HANA, SAP's newest ERP product, could give the company a firm place among more established CRM giants.

Even then, many organizations still might mix and match elements of C/4HANA with other CRM vendor offerings and tie them all together with S/4HANA -- and that approach, he said, would still be a big victory for SAP in the CX game.

"Does the [C/4HANA] portfolio truly deliver on full CX?" No," Greenberg said, "but no one does. Microsoft doesn't, Oracle doesn't and Salesforce doesn't. They're all valuable in their own way, but they're all missing pieces. But to SAP's credit, they are thinking about integrating platforms and ecosystems to marry ERP and customer experience."

And that's what we're trying to do with the C/4 suite: put the customer in the center. We're designing everything around the customer's expectations.
Thomas VetterSenior vice president and head of C/4HANA, SAP

SAP went all-in on CX to help companies pass the Amazon test, according to Thomas Vetter, an SAP senior vice president and the head of C/4HANA. "I grew up in a time when you ordered something in a catalog, like a Sears catalog, and it arrived three weeks later. Today, you're talking about next-day or same-day delivery," he said.

B2B and B2C businesses face increasing pressure to respond to customers' heightened expectations of not just quick delivery, he said, but also tailored inventories and seamless transactions. Many companies, though, lack the technological elements to tie together the many parts of CX.

"A lot of customers face the silo approach," Vetter said. "If you go to any webpage, any company, ... you pretty much can see the internal org structure on their back page. You see which parts are created by marketing, the sales organization, the service organization. They look different, and they have many different authorizations, maybe require different passwords. They're not coming from a customer perspective. You have to put the customer in the center. And that's what we're trying to do with the C/4 suite: put the customer in the center. We're designing everything around the customer's expectations."

SAP C/4HANA leaves siloed applications behind

C/4HANA consists of five separate but soon-to-be connected SAP cloud products: Marketing Cloud, Commerce Cloud, Service Cloud, Customer Data Cloud and Sales Cloud.

Sales Cloud includes pieces of two companies acquired by SAP: CallidusCloud, a sales performance management service, and Hybris, a customer sales and revenue offering that SAP initially tucked into other cloud packages. (Until last year, Commerce Cloud was known as SAP Hybris Commerce.)

Customer Data Cloud includes elements from the company's acquisition of the identity management company Gigya. Each of the five cloud products can be integrated with the technology of another SAP purchase, Qualtrics, an analytics tool that measures customer and employee sentiment.

Ilona Hansen, an analyst at Gartner, said some critics of C/4HANA believe it is nothing more than a repackaging of the company's CRM approach. However, she said that outlook isn't valid because the strengths of the native SAP tools and the technologies of the acquired companies that support each of the five C/4HANA clouds demonstrate that SAP has learned lessons from how it offered S/4HANA and other platforms.

"Everybody was blaming SAP for what they saw as siloed thinking and making it harder for customers to pick and choose in a seamless manner," she said of previous offerings. With C/4HANA, "they're finally meeting customer expectations and trying to change."

Each cloud can operate on its own, while several of them have attributes that should appeal to organizations, including the CallidusCloud components of Sales Cloud and the "game-changing" identity management and data privacy features that Gigya brings to Customer Data Cloud.

Vetter acknowledged that times have changed. SAP and other companies would have "in the old days repackaged all this into one," he said of the components of SAP C/4HANA. "But in today's world, we have become more open. The approach we're taking is you can start with any of the clouds you like, and then you can expand."

SAP is in the process of integrating the five cloud products, with the goal of having them share master data, intelligence and analytics, technical capabilities and other attributes that make what Vetter called a federated cloud. But he believes SAP has already achieved a key step in harmonizing the five by giving them a universal UI. "To achieve the UI harmony, we looked across the five and applied the same styles, colors and fonts, to have each one be part of the homogeneous cloud."

A second step of integration -- perhaps the most crucial for SAP in setting it apart from competitors -- is combining the CX components of C/4HANA with the ERP of S/4HANA. That process has already started for component manufacturing users. Next up are utilities, consumer packaged goods and retail, Vetter said.

Aside from integration, the company has another big task, according to several analysts. After years of thriving with ERP and other business applications, SAP needs to convince organizations that it is ready for primetime in CX. Unlike Salesforce and others, SAP hasn't mastered marketing, they said.

"Having a great customer experience definitely depends on the back office," said Liz Herbert, an analyst at Forrester. With S/4HANA, SAP "has something very differentiated in the market, ... but the downside is SAP has a hard time capturing hearts and minds, and that holds people back."

Featuring Qualtrics in SAP C/4HANA could be one of the selling points that turns heads, she said. But acceptance of SAP as a go-to CX platform will take time, not just because of the effectiveness of the company's marketing efforts, but also because it is a major undertaking assimilating products, including those from acquired companies.

"Giants like Salesforce are moving faster, but consider that this is a dramatic change across an organization," Hansen added. She is "optimistic" SAP will soon get there.

SAP could reach a bigger audience if it dropped the "terrible" names C/4HANA and S/4HANA, Greenberg said. "I think of explosives when I hear 'C/4.'" But the names of the individual cloud products are exactly what potential buyers think of when they type their CX needs into a web search bar, he said. "When you're looking for enterprise solutions on Google, you're going to type 'sales cloud or marketing cloud.' So they did well there."

Still, while SAP's marketing outreach to customers and analysts might not be as fast as it needs to be, the company's pivot to CX will eventually pay dividends, Greenberg said. "They're doing the right thing."

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