Steve Rogers, SAP managing director for UK and Ireland, owned up to some of his company’s failings at this week’s SAP UK and Ireland User Group’s annual conference in Birmingham, UK.
In a candid keynote to 600 delegates, Rogers spoke of SAP UK’s lack of customer intimacy and its short-term outlook. As a relative newcomer to SAP (he joined the company just over a year ago), he said one of his aims is to drive the necessary change within a company that is still considered to be closed and resistant to change.
When I joined, I was surprised at how remote SAP felt from its customers. It didn’t have the customer at the center of its universe. What had happened was that there was a little complacency in the way it managed its relationships with its customers, he said. That is absolutely out of order so we have focused hard on [addressing that] over the last year. We have not arrived at the place we need to be, but we are making progress. Customers are seeing more of SAP and SAP is trying to be more proactive in how we support customers and helping leverage the assets you have. We have seen customer satisfaction scores trending in the right direction. They are nowhere near best in class [but] we have set the objective in the UK of [getting up to] best in class, against other SAP subsidiaries and other comparable organizations.
He also acknowledged problems with the way the company handled its partners. I was also surprised by the relationship [we had] with our business partners. I felt we had not done a good job of nurturing good, strong, trusting relationships he said. We had become arrogant. We expected partners to do stuff just because we were SAP. But there is not the market [to allow that] anymore.
Partners form an important part of SAP’s growth strategy because they hold the key to the thousands of SME businesses it needs to attract in order for it to achieve its objective of doubling the value of the company by 2010. Anecdotal reports from the general partner community indicate that some SAP partners have struggled to generate sufficient revenue from their SAP SME operations. Rogers said SAP also needs to cosset its partners in order to counteract concerns that its emerging no-customization, SaaS Business ByDesign offering will syphon revenue away from the partner community.
He also raised the issue of short-termism in terms of execution and sales, in part due to the requirements of having to take part in stock market-based quarterly reporting cycles. I was also shocked by short-termism of the organization, especially in the UK. A year ago we had a planning horizon of 12 weeks and falling. There is not an IT operation in this room that has a planning horizon of 12 weeks and falling. We are one of your strategic suppliers… but we were trying to convince you to spend money that was not necessarily linked to business benefits, with 12 or six weeks notice, or less.
The I confess approach was a soft route into Roger’s core message, which was to urge customers to stick with SAP technology, to make more use of their existing SAP assets rather than buy duplicate functionality from other vendors, and to upgrade to its enterprise SOA platform. Sweat the assets, he urged, pointing out that because so much is included in the core application and licensing costs, most customers have functionality they have paid for but not used and can be switched on to add value to the business.
However, there is the question of why the functionality is unused in the first place. SAP is only now adding sophisticated BI and analytics, for example, through the proposed Business Objects acquisition. User group president Glynn Lowth said that lack of use is always a factor and no organization has a full view of the technology, something which he believes is neither the fault of SAP nor the user.
Rogers added: If you are not leveraging the Business Process Platform or NetWeaver as a starting point I feel you are missing something. It is essential to leverage it. He suggested that many users are using NetWeaver and enterprise SOA without realizing it because of NetWeaver’s role in linking SAP components.
User group president Glynn Lowth, who has held the position for six years but is due to hand over to incoming president Alan Bowling today, said SAP users will be able to benefit significantly from enterprise SOA even though there is a learning curve in understanding the technology and how to apply it. The key thing are the business benefits, using the technology for business benefits. You need [people to] comprehend the technology benefits and people to comprehend the business benefits. There are two communities: technical people with the vision, and business people who need to understand the business benefit, not just the cost but the integration, reuse, even how it can used to drive revenue.