Perhaps you have decided to invest in a new CRM system to help grow your business or refine certain internal processes, but you are undecided on what solution is right for your business? The fact is, there is an incredible volume of CRM solutions out there. These range from high-end solutions from leading technology names such as SAP, Microsoft, Netsuite, and SalesForce, to an ever-growing list of smaller vendors such as SugarCRM, Nimble, Hubspot, Zoho, and hundreds more.
In this article, we look at two of the market leaders in SAP and Salesforce. They may not be the obvious choice for smaller organisations, but they certainly pack a punch when it comes to functionality and integration.
What exactly is a CRM anyway?
CRM stands for Customer Relationship Management. It is software used by companies to manage prospects and customers, with the ultimate aim of increasing sales, knowing your customers/prospects better, and optimising internal operations to reduce costs.
At its core, a CRM is a central database where all interactions with customers are stored and shared across an organisation. Added to this are digital workflows, analytics, and AI. A CRM is not a marketing, lead generation, or customer support strategy in itself. It is a tool that helps implement these strategies.
If you have never used a CRM, you are probably using a range of software to manage your customers like email, spreadsheets, and several databases. CRM aims to bring all those features together in one place.
The CRM market
The global CRM market was valued at 40.2 bn USD in 2019.
91 percent of US firms with more than 10 employees use a CRM while 65 percent of sales professionals use a CRM.
There are over 600 CRMs out there but the top five comprised 36 percent of total sales in 2019.
The two leaders are Salesforce (18.4 percent) and SAP (5.3 percent).
Salesforce
Company Background
Salesforce was founded in 1999 in San Francisco. It was a pioneer in providing a cloud-based CRM with a SaaS business model (Subscription As A Service). It is currently worth over $200bn.
Salesforce’s CRM
Salesforce’s CRM product is called Customer 360. It includes a range of specialty apps that can be added to the main platform.
Over the years Salesforce has acquired and built many applications to sit alongside its main CRM product. For example, in 2019 it bought data analytics firm Tableau for $15.7bn, and on December 1, 2020, it announced the purchase of business messaging service Slack for $27.7bn.
Main Features of its CRM
Customer 360 has 14 apps:
- Sales – account and lead management, automation and workflows, analytics, and sales forecasts.
- Service – customer support and management of field service.
- Marketing – personalized marketing and campaign management. Data analytics to pinpoint customers and to track campaign results.
- Commerce – scalable eCommerce solution including content and order management.
- Analytics (Tableau) – graphical data analytics.
- Integration – API and integrations with external software.
- Platform – create apps and tools to customize the CRM experience.
- Industries – 15 apps designed for specific industries e.g. manufacturing, automotive, and financial services.
- Learning – create a customized learning platform and curriculum for your company.
- Employees (Salesforce Anywhere) – tools to help manage and increase the productivity of remote teams.
- Partners – A 3rd party app marketplace.
- Success – Salesforce’s support service to its customers.
- EinsteinAI – data analytics, smart bots, and an AI personal assistant.
- Truth – customer identification and access management.
SAP
Company Background
SAP was founded in 1972 in Weinheim Germany. It was started by five former IBM employees. Its first product was data processing software. Today it is a world leader in ERP (Enterprise Resource Planning) software and other enterprise software, including CRMs. It is worth over €124bn ($152bn USD).
SAP stands for Systemanalyse und Programmentwicklung (“System Analysis and Program Development”).
SAP began moving its services to the cloud in 2012 with the acquisitions of SuccessFactors and Ariba.
SAP’s CRM
SAP’s original CRM was launched in 2004 with a focus on call centers.
SAP has built up the capabilities of its CRM over the years with internal development and key acquisitions. This includes Hybris in 2013 (eCommerce solutions), Gigya in 2017 (customer identity management), Coresystems in 2018 (field service management), and CallidusCloud in 2018 (sales performance management).
In 2018, SAP united its different CRM applications into a single cloud-based service called the SAP Customer Experience (SAP CX), also known as C/4HANA. The “4” stands for “fourth generation”. It is made up of a central application and five cloud-based products.
SAP CX integrates with SAP’s Cloud Platform and ERP software (S/4HANA). S/4HANA also has a basic CRM add-on (S/4HANA CM).
SAP currently continues to support SAP CRM and its older on-premise CRM products.
Main Features of its CRM
The five cloud-based products that make up SAP CX are:
- Customer Data Cloud – identifies customers and manages their access. It enables personalized content and the handling of consent and data privacy.
- Marketing Cloud – plan and manage marketing campaigns. Data analytics to pinpoint specific customers and analyze campaign results.
- Commerce Cloud – manage an eCommerce website including catalogs, promotions, and orders.
- Sales Cloud – manage sales teams. It includes analytics, automation and dynamic quoting.
- Service Cloud – Omnichannel customer support and management of field service.
Qualtrics is not one of the SAP CX products but it is a key offering by SAP. It provides software for market research and customer surveys. It was acquired by SAP in 2018. SAP has announced that it is spinning Qualtrics off with its own IPO, but SAP plans to retain majority control.
In October 2020, SAP announced that it was acquiring Emarsys. Emarsys is an omnichannel customer engagement platform that will add to the capabilities of SAP CX.
SAP CX is also connected to SAP’s Cloud Platform. This provides access to SAP’s platform integration, machine learning, AI, IoT, and blockchain capabilities. The integration suite allows SAP CX to be integrated with SAP and non-SAP apps including ERP systems.
SAP users also have access to 3rd party apps through the SAP App Center.
Comparing Salesforce and SAP
The history of both companies has shaped their CRM offering.
Salesforce was born in the cloud and was originally focused on sales. But over time it has expanded its functionality into marketing, customer service, and analytics.
SAP has a much longer history and has evolved as computers and the internet has evolved. It quickly expanded from data processing to a range of enterprise solutions culminating in ERP software. It has dominated the ERP market over three decades and is the current market leader (7.7% in 2019). CRMs are a more recent focus and a cloud-based CRM more recent still.
Salesforce cannot compete with SAP in terms of its broad offering for large enterprises. Large enterprises already using SAP ERP software are a natural customer base for SAP’s CRM. This also gives SAP an advantage with companies that scale and reach a critical size.
But Salesforce’s role in pioneering a cloud-based CRM solution has helped propel it to the position of the market leader. It has also built a strong following among smaller firms looking for a simple but flexible solution.
This has forced SAP to play catch-up in many respects, but in its fourth generation CRM, built upon key acquisitions, SAP has built a worthy rival platform. There are no glaring differences between the two in terms of key CRM features.
There is no room for complacency though, with Oracle, Microsoft, and Adobe all trying hard to increase market share.
