SAP can claim to change its culture, but can it convince customers?

Brit user group presses for info and tools amid licensing fudge

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SAP has used its annual British user shindig to big up reforms to internal structures and licensing – but customers wary over indirect access won't be won over easily.

The German ERP giant is trying to shrug off concerns about licensing that reached fever pitch last year after a set of high-profile, high-cost legal battles over indirect access.

The knock-on effect was a deterioration in customer trust and widespread concerns about who else would be caught in the trap.

After months of talk about "trust", SAP in April overhauled its licensing model and promised separation of audit and sales, promising a "customer first" approach.

Executive board member Adaire Fox-Martin this week painted a positive picture of the change, telling the UK and Ireland SAP User Group conference in Birmingham that adoption of the new model was "above expectations" – although SAP declined to put a figure on this claim.

But as execs alluded throughout the event, trust is lost by the bucket load and won back in much smaller volumes.

In an interview with El Reg, Paul Cooper, chairman of the user group, said that there were still practical things that needed addressing.

For a start, SAP has promised users tools to help them understand the different models and measure their consumption numbers – but not all are available yet, despite the new pricing model having been launched more than six months ago.

"That's a difficulty from a customer's perspective," he said, as long-standing SAP customers want to simulate their current situation and see if they're better off sticking or switching models.

Similarly, the group would like to see recognition from the firm that customers might end up paying more if they change models – and that some will have spent millions implementing a system they might not have chosen if they had known about the impending changes.

"You'd have hoped they'd have a conversation with people with long-standing contracts and say, 'By the way, we didn't use to charge for this, but going forward we will.'

"It would give you an option – maybe that doesn't stack up as a way of working [anymore]... Anecdotally, we've heard of a few people typing in numbers, rather than using interfaces."

Fundamental to the new model, and to SAP's efforts to rebuild trust, will be education. But Cooper said that the user group's hands are often tied: they'd like to put customers in front of SAP but this is made difficult by lingering concerns about engaging with the vendor and commercial interests.

"When [licence issues] get resolved, it tends to get surrounded by NDAs and commercial contracts," Cooper said. "SAP have said, 'Put someone in front of us who has a problem and we'll talk it through' – but we can't get people to speak at sessions like that, so SAP can do the 'Well it can' be a problem then.'"

Some measures are already in place – last year, SAP launched a licensing transparency centre, which Cooper said went some way to tackling the problem – but the user group is also pushing for case studies of the most common licensing scenarios.

"If you think you've got a problem, as a user, you want to prepare yourself before you go see SAP," he said.

A further concern the user group has with the licensing model is that, as it stands, the pricing can only go up and not down.

"If we're talking about it being a consumption-based model, then it shouldn't just flex in one direction," Cooper said. Companies can become more efficient, they can de-merge or shutter parts of the business – in these cases, the users want to be able to reduce their bills."

Pointing out that SAP's licensing model is branded as "modern", Cooper said it should fit the modern age of computing exemplified by cloud.

"Understanding how the cloud works – and one of the reasons vendors have pushed cloud over the last few years is the elasticity – and we'd like to see SAP talking about that."

Separation, separation, separation

At the other end of the equation is audits. SAP, along with pretty much every vendor out there, has developed a reputation for viewing audits as a sales opportunity. But if the German giant is to be believed, this will no longer be the case.

"The structure of the organisation is really strict now," said Matthias Medert, global license audits. "My team are all accountants."

According to Medert, all the local teams running audits have been moved under his division, which reports to the COO, and sales now have no role in defining audits and the outcomes aren't linked to a sales cycle.

"No salesperson has any say which audit we should start, which we cancel, and there's no way for sales to hire a third party to run an audit with a customer," he said. "There's a clear definition and policy that everything that runs around audit and compliance is the central team."

Meanwhile, Fox-Martin said that no salesperson in SAP will be paid on an audit-based transaction, with the KPIs for sales manager now based on "customer success, not on transactions" – although she didn't say how SAP would define customer success.

Next year it will also be the measure for account managers – a group that the user group has, historically, had its own concerns about. Last year, Cooper told The Register that high turnover in the teams led to confusion and mixed messaging, including on licensing.

In March, the user group said 65 per cent of members had an account manager change in 2017 – but Cooper said SAP had "gone away to look at that" and was making some progress.

When asked about this, Medert acknowledged that it had been an issue for user groups in the past but was "not a major concern" in recent months.

Overall, the message from SAP is about creating what it hopes is "global consistency" across all of its divisions.

But these sorts of internal changes take time, as it requires unpicking ingrained habits and approaches. As Cooper said: "Cultural change takes a while to embed in the organisation; they're on a journey to do this." ®




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