SAP C/4HANA! Explosive? Some Questions and some Answers

SAP C/4HANA! Explosive? Some Questions and some Answers

During SAPPhire 2018 SAP announced C/4HANA with quite a fanfare. I covered and analysed this announcement in my post SAPPHIRE 2018 – The Return of the Suite.

Sure, C/4HANA marks the return of SAP to the suite, just in another shape than previously known. Instead of combining the pillars of CRM: Marketing, Sales, and Service in one monolithic application it integrates the corresponding clouds into a suite by means of an infrastructure-, service-, and integration layer called SAP Cloud Platform. The SAP Cloud Platform also provides services like IoT and Blockchain, besides numerous additional and less sexy, but necessary ones.

C/4HANA; source: SAP

C/4HANA; source: SAP

The SAP Cloud Platform also enables extensibility of the clouds, be it in-app (‘in cloud’) or as external extensions via the Extension Framework and the (upcoming) Microservices Ecosystem.

The SAP Cloud Platform, as well as a number of in-cloud features enable AI and machine learning, exposed as intelligence that is embedded into the various clouds.

Plus, the SAP Analytics Cloud – which is not explicitly mentioned as a part of C/4HANA, provides analytics abilities.

Fiori as a user interface metaphor enables a consistent user experience. A chat bot infrastructure and the ability to run on all relevant screen sizes with one UI architecture pave the way towards keeping the user experience consistent.

The addition of the SAP Customer Data Cloud hints into the direction of providing a customer data hub as a single version of the truth of things customer.

As such, the SAP Cloud Platform is a modern reincarnation of SAP Netweaver. Reincarnation, not repetition, as it is ways closer to Hasso Plattner’s ideal of recombining business processes by just building them by drag and drop and connecting business objects declaratively.

As an additional element we get the SAP Commerce Cloud, formerly known as Hybris Commerce.

One now can argue whether e-commerce, even multi-channel e-commerce is a part of CRM, but this is not the right place nor time. SAP has taken the bold step of abandoning the Hybris brand in favor of brand harmonization and industry-known names. This is more than just laudable – and did I mention that this is bold?

And the CRM industry, as well as the CRM community went beyond pure transactional CRM towards an entity that covers all aspects of engagement to deliver an experience. This mandatorily includes omni-channel e-commerce.

I would even go a step further saying that it actually requires channel independent, or channel agnostic commerce.

For a business, commerce is simply the objective of CRM.

SAP has seen this early and positioned itself with the message ‘Beyond CRM’. Beyond CRM, because it is

  • Not only transactional but also covers engagement
  • Includes all channels
  • Transparently connects front- and back office
  • And has an outside-in view of the process

C/4HANA is a big step into the direction of this, even if the requisite microservices architecture is far from being in place.

If nothing more, this rebranding from SAP Hybris plus acquisitions to C/4HANA streamlines extends the September 2015 SAP announcement of delivering “integrated digital enterprise technologies that are intended to transform the relationships companies have with their customers”.

Additionally, it enhances the message of the digital core that powers the business. It also harmonizes and therefore clarifies communications by integrating the acquisitions of the past years.

SAP Customer Experience; source: SAP

SAP Customer Experience; source: SAP

Lastly, it shows that customer experience is close to the heart of SAP; close to, not at its core, as this is where S/4HANA is and needs to be. This closeness, as well as the ambition to take on the competition, is also shown by SAP breaking out C/4HANA numbers. I cannot remember SAP showing numbers of the SAP Hybris portfolio in the past years.

But there are a number of open questions.

Don’t get me wrong. I like this rebranding, in spite of – and perhaps, because of – the likeness of C/4 to C-4, which is a (infamous) plastic explosive. The similarity may or may not be intentional.

Still, these questions, and probably more, need to be – and are – asked.

But what are some of these questions?

Along with some possible answers and recommendations.

Analytics Cloud

One I have already asked above: Where did the Analytics Cloud go? After all there is no CRM – let alone something that is ‘beyond CRM’ – that does not cater for analytics, or rather driven by it. In my eyes the ‘SAP Customer Experience Cloud’, which is the aggregate name of the above-mentioned clouds, needs to mandatorily include analytics, hence the original need for an SAP Analytics Cloud. On the other hand, analytics is both, platform functionality as well as embedded into the applications. So it makes sense to make analytics part of the SAP Cloud Platform and to have it embedded into and made part of the applications themselves.

Sales Cloud

How will the integration between the various CallidusCloud solutions especially with the Sales Cloud, the Service Cloud and the Commerce Cloud work. The statement is that CPQ and CLM will become modules within the SalesCloud. Since last year there is a first version of an integration, which however does not show up as integration content in the SCP. CLM does not yet have an own integration into the SalesCloud. I know from conversations with CallidusCloud as well as SAP that there is a focus on integration. But there is no detail yet on what the envisioned and prioritized scenarios are. Knowing that roadmap statements are difficult to make, I think that these would be extremely helpful here. Also for Sales Performance Management Commissions Management and the Sales Enablement solutions. Until then we need to rely on common sense. However, I suspect that the competition will use this still existing uncertainty to create some FUD.

And in Particular: CPQ

Talking of CPQ, SAP had a CPQ solution before acquiring CallidusCloud. What can customers expect on this frontier? I have covered the CallidusCloud acquisition mainly from a CPQ angle in three articles, here, here, and here. The challenge is that the existing (old) SAP CPQ is compatible with the SAP Variant Configurator as well as ERP- and S/4HANA pricing. And the Variant Configurator has around 1,500 customers; it is an important asset in SAP’s kit.

The statements I have heard and seen so far say that the (old) SAP product configuration engine will be integrated into the CallidusCloud-based SAP CPQ. Doing this SAP makes the CallidusCloud CPQ compatible to the SAP Variant Configurator.

To achieve this, the (old) SAP Product Configurator will be made available as a Micro Service via the SAP API Hub. It essentially becomes an add-on to the CallidusCloud-based. CPQ. This way, the CallidusCloud-based CPQ can be used including variant configuration in front-end scenarios, e.g. exposed by Commerce Cloud or Sales Cloud, while SAP can continue to use the Variant Configurator. It seems like this shall be available to the Sales Cloud by November, 2018.

What this means is that the two main functionalities of the (old) SAP CPQ, Product Configuration and Solution Configuration, will be split and wrapped individually and gradually, but essentially stay alive. Happy to get corrected here, though.

Marketing Cloud

On the Marketing Cloud frontier we do see the steadily maturing Marketing Cloud itself and LeadRocket from CallidusCloud. Obviously the SAP Marketing Cloud is the more enterprise-ready tool. Still, there is a significant overlap although Leadrocket offers a productized integration into web sites and visitor tracking as well as seemingly easier social media integration than the SAP Marketing Cloud (anybody ever missed a group of ‘Share to …’ buttons)? I also had word that Leadrocket’s e-mail and landing page editors are far superior to the ones offered by the SAP Marketing Cloud.

SAP could benefit from a threefold strategy here: Merge the LeadRocket’s functionality that is not in the Marketing Cloud yet into it, and fast. There should be a special focus on web site tracking and the conversion of anonymous profiles to known individuals.

If above statements about the editors are true, leverage the superior editors, as they are a very common complaint of customers.

Plus, offer a ‘Marketing Cloud light’ to gain better access into the SMB market. This ‘Marketing Cloud light’ needs to have a transparent migration path into the SAP Marketing Cloud for growing customers.

Additionally one could consider, which parts of LeadRocket could be merged into the SalesCloud with its rather simple campaign module.

Overall, there is quite some opportunity here.

Service Cloud

The SAP Service Cloud got redefined. During SAPPHIRE 2018 SAP announced the acquisition of a small company called Coresystems.

Coresystems is the kernel of the new SAP Service Cloud.

And this is a big deal as all of the sudden SAP has an edge over Salesforce Service Cloud because of the abilities of Coresystems. This is because of the marketplace functionality for service technicians that Coresystems offers.

Friend Paul Greenberg said that with Gigya and CallidusCloud SAP made two of the best acquisitions in the industry. I’d make it three now (or four, adding Ariba; but then Ariba is not part of C/4HANA).

The old SAP Hybris Cloud for Service, the SAP Customer Engagement Center and some more modules and bits and pieces have become part of the SAP Service Cloud. This also includes the interesting MindTouch solution.

As all these solutions are quite different it would be interesting to see a migration path into the new Service Cloud as well as an integration roadmap. Great as the individual pieces are, there need to be precise statements on how things will merge – and this before the SAP Customer Experience LIVE event in Barcelona.

Commerce Cloud

SAP Commerce Cloud is dead! Long live SAP Commerce Cloud. With not too much fanfare, SAP added Commerce Cloud v2 to its solution set. Commerce Cloud v2 is in a nutshell SAP Commerce Cloud running on Azure along with some cloud deployment and management tools. As such, and to benefit from various certifications, it is now important to inform about which Azure instances will be used (i.e. where the data lies) and whether SAP is talking public- or private cloud. After all Azure can be used for both. Also, the integration strategy needs to be clarified, as Commerce v2, as a Cloud system, by definition relies on the SAP Cloud Platform (SCP) for integration whereas the ‘old’ Commerce relies on the Data Hub. Now it seems that the SCP is not yet evolved enough to support all necessary integration scenarios.

If this is true then early adopters need a clear migration path.

Having said this, SAP e-commerce in the cloud is a big thing in general and might potentially become bad news for players like Corevist in the future, if SAP starts to seriously embrace the SMB market (which the company should).

Customer Data Cloud

Last but not least one of the most interesting pieces. The positioning of the SAP Customer Data Cloud suggests that it is intended to be a kind of Customer Data Hub. Already now this solution, formerly known as Gigya, has the ability to merge and build a profile from customer records. And it is very good at its three key capabilities: Customer Identity and Access Management, consent management, and profiling.

Just that we are talking about consumers so far and exclusively about their digital footprint. The question here is how this interferes with Marketing Cloud functionality. Marketing Cloud offers the possibility to build a golden record from an unlimited number of connected systems, using a mechanism for prioritizing these data sources. These data sources include order systems, PoS data, etc., which makes the golden record far more exhaustive than the one delivered by ‘Gigya’ (and again, this solution is very powerful!). SAP Marketing Cloud maintains the source data as facets of this golden record. This builds a very powerful record. It also has data steward functionality.

What it does not have is a built-in ability to push back data changes to the source systems. Being a marketing system it is a consumer of master data. But why the ability to change data, then?

The main question now is whether SAP intends to build up Customer Data Cloud as the holder of the golden record and then as a Customer Data Hub that is also capable of pushing data changes that are done by data stewards back to the connected systems. And if so, how? How will that relate to Marketing Cloud functionality?

In a Micro Services world it should be possible to build this Customer Data Hub out of services offered by both systems. I think, this is the way SAP is going, but am not sure – yet.