The Hindu Business Line : SAP to focus more on CRM solutions

FOR SAP, the growing focus on customer relationship management (CRM) solutions is slowly replacing its mainstay business of being an ERP (enterprise resource planning) vendor. Last year of the $1.2-billion ploughed into R&D, a significant amount was routed to the company's CRM development efforts. More investment is likely to be put in given that SAP expects its CRM product platform to contribute upwards of 20 per cent to its growth.

Quoting industry analysts, Mr Peter Kirschbauer, Member of the Extended Management Board of SAP AG, told Business Line that over the last three to four years, companies worldwide have allocated 7-9 per cent of the IT budget for CRM solutions. While the trend on CRM spending has been US-oriented so far, analysts predict that going ahead enterprises in the Asia-Pacific (APAC) region will increase their CRM spends with a reduction in spending by their US counterparts.

What this means for SAP is an increased focus on the APAC region and the company has already geared up for this by increasing its CRM-related product development activities in the Indian development arm of SAP.

"The SAP Labs facility in Bangalore is playing a huge role in product development for CRM applications. We have 150 people working on the CRM side and by end 2006, SAP Labs India will grow to a 3,000 people strong establishment," informed Mr Martin Prinz, Joint Managing Director, SAP Labs India.

The latest version of SAP's CRM product, Release 4.0 from MySAP CRM,

launched late last year already has 500 customers. Even though Microsoft is also keenly eyeing the CRM space with its MS CRM package, SAP officials say the target segment for both companies are different.

"We are not competing with them (MS) since their offerings are aimed at the small enterprise. Our CRM solution is primarily for large enterprises and we have an advantage because of our micro-vertical focus," remarked Mr Kirschbauer.

While SAP may not be worried about competition, it is certainly looking to enhance its competitive edge by developing mobile CRM solutions and integrating this across various mobile devices.

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