ImageOne the most important differences between the SAP Influencer Summit and Dreamforce’s “dreamy spiritual event” as it has been called, is that SAP’s On Demand suite will provide seamless integration with all SAP systems and its open architecture will enable easily integration with other heterogeneous systems. In the case of sales automation and CRM this will enable companies and organizations to have 360 view of the customer. This is extremely important in a world where customer experience management (CEM) is a competitive advantage. Salesforce.com has addressed a key pain point in many businesses and was one of the first companies to harness the power of the cloud, but its current offering is essentially a silo in the cloud. Perhaps this is why Gartner Group, the largest IT advisory firm in the world, moved off of the Salesforce.com platform this year.

When I think of silo’s I often refer Ranjay Gulati’s great HBR spotlight article, Silo Busting: How to Execute on the Promise of Customer Focus. During the course of his research Dr. Gulati found that few companies are actually structured to deliver products and services in a synchronized way that is attractive to customers.

Dr. Gulati’s Four Cs of Customer Focused Solutions

  • Coordination: Establishing structural mechanisms and processes that allow employee to improve their focus on the customer by harmonizing information and activities across units.
  • Cooperation: Encouraging people in all parts of the company through cultural means incentives, and the allocation of power to work together in the interest of customer needs.
  • Capability: Ensuring that enough people in the organization have the skills to deliver customer-focused solutions and defining a clear career path for employees with those skills.
  • Connection: Developing relationships with external partners to increase the value of solutions cost effectively.

In the course of this research Dr. Gulati studied GE Healthcare Systems, Cisco, Target, Disney, JLL and Starbucks. Published in 2007, I think this research was overlooked by academia and business alike and in the wake of the global economic restructuring and the emergence of the “new customer” it is more important than ever. Customers are now demanding more from organizations now than just a good relationship with a sales person, they are mobile social customers and they want instant gratification. Siloed organizations that are not customer focused will be wondering where their customers went.

Back to the Future

Some would argue that SaaS computing is a return to the era of mainframe computing, but is it is strikingly different from a user perspective and most products have human machine interfaces that are much more intuitive and easy to use. According to Jeff Kaplan’s research at THINKstrategies there are now more than 1300 software as a service products available on the market. SAP announced during the summit that it will add to this significantly over the next several years with a rich suite of products that address the pain points of large and small business.

SAP On Demand Suite

  • Business By Design (ERP Suite)
  • Carbon Impact (sustainability analytics)
  • Sales On Demand
  • Sourcing On Demand
  • Business Intelligence On Demand
  • Streamworks (collaborative decision making)

According to Kamesh Pemmaraju of Sand Hill.com CRM, HR, and integrated ERP suites are the fastest growing SaaS products, with each company in these areas averaging around 35% growth even in a down economy. Kamesh is also predicting that the next area for SaaS growth will be in the business intelligence area, SAP’s Business Objects BI On Demand product recently won an award from THINKstratagies for excellence http://www.thinkstrategies.com/blog/2010/11/sap-businessobjects-bi-ondemand-solution-wins-best-of-saas-showplace-award.html.

The Future of SaaS

The inevitability of consolidation in the SaaS market should be a major concern for any company considering this computing model. When consolidation occurs in the technology industry it is often swift and brutal, startup company’s burn bright like a meteorite upon creation, but many vaporize upon entry into the earth’s atmosphere. Now that some of the mega vendors have entered the SaaS market there is even more reason to carefully select a viable company that can deliver a sustainable solution that will easily integrate into today’s heterogeneous computing landscape. 

SAP’s On Demand solutions don’t build silos, they deliver robust solutions that meet the needs of business and organizations that are interested in building sustainable business process platforms that drive growth and enable the customer focused enterprise. Until next time I wish you great selling and marketing in the millennium.