ISG Software Research Analyst Perspectives

At the SAPPHIRE NOW conference this week, SAP released the production version of the cloud-based Sales OnDemand software that it unveiled earlier in the year. There has been a lot of the esoteric commentary of SAP Sales OnDemand from those that exclusively cover the IT industry. Unfortunately the majority of them have never worked in sales or held a quota that prevents a provide a deeper perspective on the relevance to the sales organization and what it can provide to existing SAP customers or those evaluating it for the first time. I covered some critical perspectives in my research agenda on sales as a background to my analysis of this new offering.

The Sales OnDemand offering is now available and brings together what I call the five business technologies that can innovate sales including: cloud computing, social media, business collaboration, business analytics and business mobility. SAP has embraced these five areas as part of their first release to help sales reps access the application in the cloud through renting it in software as a service (SaaS) method. Also SAP has integrated mobility and analytics in the applications, along with blending collaboration and social media methods to help sales work together in a team and organizational based approach.

Looking at Sales OnDemand application in more detail it focused on the sales rep and  automating sales activities like found in traditional SFA including that in SAP CRM. With a new interface design and a social sales approach with capabilities like Facebook’s or Twitter’s to monitor and engage in conversations, Sales OnDemand offers a new approach to integrating social networking within an application – in contrast to salesforce.com’s Chatter, which supports it externally. Sales OnDemand provides the basic sales automation tasks – accounts, contacts, leads, opportunities, products, activities, documents and competitors ­– all easily accessed from any area in the application. It also provides quick ways to adjust the application view of each area, along with simple drill-down capabilities for more details for reviewing and updating information. The new software makes it easy to access sales information like accounts and contacts from within Microsoft Outlook. Just as important are the integration of sales information into the Outlook calendar and the ability to utilize it within email.

SAP has integrated analytics into the sales application to provide analysis on a range of areas from accounts, opportunities, pipeline and needed perspective for sales rep, including the ability to quickly examine the data in Microsoft Excel. For example, you can quickly analyze sales activities in the pipeline to see how progress to quota is going and then setup activities that need to be accomplished to improve. Sales OnDemand has an advanced analysis capability to review sales opportunities based on priorities. Our benchmark research on sales analytics found that using analytics to improve the efficiency of sales processes was businesses’ second-most important investment priority, behind increasing revenue.

The application provides nice multitasking capabilities; for instance, a salesperson can review a customer and competitors while still maintaining focus on the sales pipeline. The interface is simple and usable, which our sales research finds as number one priority by sales organizations. However, sales reps who want to do what-if role-playing with deals to see how they align to reaching quotas and target commissions are left to the spreadsheet or must rent or purchase separate applications for those tasks.

SAP also provides direct integration with ERP and SAP BusinessByDesign to provide access to back-office information related to customers, products, prices and even quotes. Information can shared from within Sales OnDemand. This social-media-like collaboration lets a salesperson access information and reference what SAP calls the Feed – an area where users can broadcast to all relevant others or send direct messages to individuals for specific needs. You can also follow people and customers who are relevant to your role and responsibility. A simple way to post and keep track of tasks in what SAP calls the Shelf can improve both personal productivity and team selling.

SAP has moved quickly to provide Sales OnDemand on the Apple iPad and iPhone and RIM BlackBerry. In addition to having all the normal functions found in desktop software, users can leverage location information from the iPad to map customers for analysis and activity review. Providing a full set of capabilities on smartphones and tablets is part of SAP’s overall strategy to expand further into mobile applications. This level of mobile support and usability is a competitive edge for SAP compared to its current SAP CRM and others in the SFA market.

Can SAP Sales OnDemand fend off cloud- and rental-based competitors I have assessed, particularly salesforce.com, Oracle CRM OnDemand[JB1]  and Oracle’s new Fusion for Sales? It depends on the competency and maturity of the sales organization. The application is designed for sales reps but does not have as robust workflow and lead-development features as salesforce for example. It lacks Oracle Fusion’s focus on managers’ needs, with forecasts, territories, compensation plans and quotas. In addition, suppliers such as Merced, Varicent, Synygy and Xactly Systems have been expanding from the focus on management and operations of sales to help directly with sales managers and reps.

SAP should look beyond just the sales rep to the sales manager, sales operations and to the management and executive team to determine how to help the entire sales organization. Look at the peripheral tasks that sales people spend so much time in using spreadsheets, presentations and email to address to further address sales needs. I will spend more time looking at Sales OnDemand as part of this year’s vendor and product RFP assessment of sales applications for the entire sales organization, including operations, management, managers and reps. This sales application suite was not released in time for our 2011 Sales Performance Management Value Index at the end of 2010, where our evaluation rated SAP CRM a Warm vendor (the best is Hot) as it needed to improve usability and manageability and was lacking other capabilities but was very good at adaptability.

At the SAPPHIRE NOW conference I got to hear from a couple of Sales OnDemand customers, Phillips and PGi, though only IT representatives were present who spoke about how they are moving to SAP Sales OnDemand from spreadsheets, existing SAP CRM and a variety of salesforce and NetSuite applications. Both users said  the software is simple to configure and set up and are working through integration with non-SAP systems; it does not appear that SAP has spent enough time on cloud-to-cloud or cloud-to-enterprise application and data integration that will be needed to scale its customer adoption but neither has the other SFA providers. The scope of a migration to a new system should not be underestimated, and could be improved with more dedicated tools to automate the migration process and continuous synchronization tasks.

The existing SAP CRM is a heavy-duty system deployed on-premises (though it is evolving from my analysis). But many organizations lack IT resources and time for a traditional purchase, install, customize and deploy cycle like needed for SAP CRM. The new SAP Sales OnDemand does not address all the needs of managers and sales operations teams, but SAP is committed to advancing its presence in sales and the cloud computing and on-demand area. This new offering does address the top two SPM impediments we found in our sales performance management benchmark: unifying scattered information and inconsistent execution. Now SAP must get its first hundred customers and sales organizations using it and persuade the market that it can grow the applications for everyone in sales. If you want to see it for yourself, SAP has a free trial for you to explore.

Regards,

Mark Smith – CEO & Chief Research Officer