Volker Hildebrand: Firms are "damaging" relationships with their interactions

24th May 2012

Emphasising SAP’s shift from CRM to CEM, the vendor's VP of CRM solutions explains that "customer experience of the interaction with a vendor is the game changer".

The 'R' in CRM is in the process of change, almost to the point of becoming 'E' as in CEM. We all know that the 'R' stands for relationship but, as SAP’s VP of CRM solutions, Dr Volker Hildebrand, pointed out at the company’s recent SAPPHIRE:NOW conference in Orlando, that has been something of a one-way street.

“The tradition role of CRM has been to support customer sales organisations, to help make the business more customer-facing, but this is only a tactical solution,” he observed.

SAP’s approach, he suggested, has become much broader, with the aim of making the `relationship’ two-way by finding ways of fostering the customers’ relationships with a vendor, turning the 'R' into an 'E' of the Experience the customer has in the process of doing business.
“We are aiming at building ways to change the game and to get a tactical advantage with the customers,” he said. “Customer experience of the interaction with a vendor is the game changer – in a way it is the proactive half of reputation management. For example, if a vendor can get customers thinking is it easy to do business with that vendor then it has an obvious advantage. So the objective is to work at and highlight issues such as service reliability, customer convenience, and the relevance of any interaction to the customers’ needs. It has to be said that much of what companies do on websites or in their customer interactions is not relevant and can even be damaging to the relationship.”
According to Anthony Leaper, VP and general manager of LoB customer for SAP, the company’s objective in the CRM market is to provide a `360 degree customer experience’.
“As you get closer to a company they want to see you as more important. Vendors now have to think about what they really want. Yes, its volume of leads and the rest, but not if there is no quality control, or no assessment of the value,” said. “Now companies are looking at transformational engagement and precision one to one marketing.”
This involves not only capturing more information about customers but also being more precise about the details that are required. These days, the mobile phone is becoming the important tool, not just for the customer but also businesses. The information it is now possible gather is based not just on what the customers bought but which store were they in, and where in the store they were.
“So there is a need to learn that mobile is not about the device. It is about the ability the device gives to undertake transactions at any time and any place,” he said.
SAP has scheduled a June release for its new offering in this area, CRM on Demand. The company plans to open up the APIs with this so it can interoperate with other applications, as well as make it open to access from other APIs. It will also come with a customisation tool kit so that it can be customised in the look and feel of the screen, with vendors able to add or hide fields as required.
Following on from SAP’s acquisition of Successfactors earlier this year Cloud-based delivery of CRM is becoming a much more prominent factor in its overall approach to the CRM business, but it is not forgetting its existing position in the world of on-premise systems. CRM on Premise Integration is, therefore, one of its more important developments.
“The demand is there for the hybrid model,” Leaper said. “and we are well aware that users want to move at their own pace in any transition to cloud-based services.” 
SAP is focusing on some specific `excellences’ such as Operational Excellence, which Hildebrand defined as being able to do things like deliver on the promises made on websites; Interaction Excellence, where the objective is to make each interaction with a customer count; and Decision Excellence, which is about identifying ways of gaining proprietary insight into the needs and desires of customers.
The aim is to break down the siloes of technology, so the company is working to integrate traditional CRM with new technologies such as HANA. This high performance, in-memory database processing technology offers some specific new capabilities for the CRM world. For example, it is ideally suited to analysing the high volumes of data records produced in the B2C sector.
Many of those records are small, but if they can be analysed in sufficient quantity and at high speed they can collectively reveal important trends about customer preferences. What is more they can reveal that information in almost real time.
Jewel in the crown
HANA is increasingly being seen by SAP as the new jewel in its crown. It is an in-memory database system which offers significant increases in performance – IBM has built a 16-Node system with 8 Terabytes of memory, which has been shown to be capable of analysing 100 billion records in some 100 Terabytes of data in around half a second. This is because all the data to be processed is held in main memory, and is processed in memory, rather than being swapped in an out of disk storage as happens with traditional database systems. It also uses a different approach to data, storing and processing it in both rows and columns, whereas traditional systems use rows only.
Several major server manufacturers are now selling systems running HANA, and as it integrates with the open-source Hadoop framework for running applications on large clustered systems, it has the potential to become a non-proprietary analytical tool for a wide range of CRM applications as well as any other application where near real-time analytics can be exploited. 
So it is well-suited to analyse the vast volumes of data now being generated by the unstructured information of social media services such as Facebook and Twitter. More and more of that data is being generated by mobile devices such as smartphones.
“We are working to make that a two-way communication with the introduction of an application that creates a digital version of the retail discount coupon,” Hildebrand said. “This short cuts the traditional model of putting coupons in Sunday newspapers, where serious mismatches between potential customers and stock levels in local stores can often occur. This way, stores will be able to send coupons to the mobile phones of customers near the location of a store with stock of the selected product.”
This application is expected to be available during the third quarter of this year. The company is also putting loyalty management tools into the cloud during the second quarter of this year.
The company is also studying the potential for cloud-based social media monitoring tools that go beyond the quantitative analysis of factors such as the number of product mentions there have been in a given period. The aim is to develop customer sentiment monitoring and analysis tools that can be used with the HANA system to identify trends in what customers feel about products.
This can not only help vendors identify problem products at early stages, but also help point to ways of helping to improve the customers’ experience of doing business with the vendor. After all, one of the best ways of improving a customer’s experience is what happens when something does go wrong.
“I also see HANA being a tool that can also help smaller organisations gain more leverage with major customers,” he said. This is because the analytical capabilities of HANA will start to become available as Cloud-based services, and not just from SAP. Some of the company’s major partners are already talking about the possibilities.

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