SAP Gets to the Core of CRM

By Dan Muse | Posted November 18, 2003
Customer relationship management (CRM) software has been around for years and has become a staple of many large businesses. Yet small and midsize businesses (SMBs) have not been quick to adopt CRM. SAP AG , a Newtown Square, Penn.-based software giant, thinks it knows why.

CRM has been been sold to SMBs primarily as a separate application. To help make CRM just part of the process — the way, say, accounting software is — SAP yesterday announced enhanced CRM features for its Business One software suite.

The goal is combine CRM capabilities with other business management tools in a single, integrated package tailored for companies with between 10 and 250 employees. That is, front-office information collected from customers, the sales force, vendors and managers is connected with accounting, inventory and other back-office functions. Rather than being a discreet function, CRM is part of software-driven gestalt.

With the enhancements, SAP Business One now makes CRM a core business function, according to Gadi Shamia, vice president, SAP Business One. Shamia attributes the slow growth of CRM among SMBs to the fact that it has largely lived at the edge of the business process. "CRM applications have existed for 10 years, but the penetration has always been limited to 10-15 percent, whereas financial applications are about 100 percent."

Could the lack of success of CRM be because SMBs simply don't need it? SAP doesn't buy that line of thinking. "The need for CRM is much higher than the penetration figures show. Standalone CRM applications haven't filled the gap. CRM has to be core to the process."

"Every company does CRM in some way, shape or form," Shamia said. However, rather than using CRM software, businesses have met the demand by using Excel, Outlook or some other combination of applications, he said. "They may have even bought CRM and never implemented it."

SAP Business One at a Glance

  • Administration: Designed to allow you to customize and backup data, define currency exchange rates, configure permissions and alerts, and access information from non-SAP software.
  • Financial Accounting: Offers general ledger, account setup and maintenance, journal entries, foreign currency adjustments, and budgets.
  • Sales and Distribution: price quotes, customer orders, deliveries, stock balances, invoices and accounts receivables.
  • Purchasing: vendor contracts and transactions including issuing purchase orders, in-stock numbers, imported items, returns and credits, and payments.
  • Business Partners: customers, resellers and vendors including profiles, contact summary, account balances, and sales pipeline analysis.
  • Bank Transactions: cash receipts, check writing, deposits, advance payments, credit card payments, and bank reconciliation features.
  • Warehouse Management: inventory levels, item management, price lists, special price agreements, transfers between warehouses, and stock transactions.
  • Final Assembly: multilevel bill-of-materials, work orders, product and material availability.
  • Controlling: profit centers and overhead absorption factors as well as generate profit and loss reports for each center.
  • Reporting: customer and supplier debt, sales, cash flow, customer-contact summaries, bookkeeping, warehouse stock, financial statements, pricing, and customer activity.
  • SAP Business One is built to allow business managers to run their entire business from their desktop, viewing customer, partner, sales and inventory information as they relate to other business activities and not merely as a freestanding CRM application, Shamia said.

    While the previous version of Business One did feature some CRM capabilities, the new version expands the offerings to include service contract management, planning, and tracking as well as management of service sales opportunities. Tying service to sales and accounting is an important aspect of Business One, according to Shamia. He cites this example: A customer calls for support, but the CRM software shows that he owes money. The service dispatcher can see how much the customer owes and decide whether or not to escalate it and send a manager an alert (via e-mail or SMS). That manager can then decide whether or not to offer support.

    SAP also adds employee relationship management capabilities, which are designed to track information about employees, their roles and activities. SAP reports that the employee relations capabilities will allow companies to organize information on service technicians, such as their labor rates, in order to support field service management activities.

    SAP also adds contract management capabilities that track customer equipment, service contract agreements and customer use. SAP Business One is designed to automatically update customers' equipment records upon purchase so that users can track whether products are under warranty or have special service contracts. SAP reports that these enhancements build on Business One's sales force automation capabilities, which enable business managers to track sales opportunities, view pipeline opportunities and follow customer activity.

    While SAP says that small businesses can now address all their business needs in one out-of-the-box software, its partners are also working on customized versions for vertical markets. "It's big with wholesalers and others in the buy-sell businesses," Shamia said. SAP also announced a Software Development Kit (SDK) designed to allow partners to create custom solutions. The SDK supports both the Java and Microsoft .Net development platforms.

    SAP Business One is available for $3,750 per user, which includes "all the pieces," Shamia said.

    Dan Muse is executive editor of internet.com's Small Business Channel and EarthWeb's Networking & Communications Channel.

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