Thursday, February 14, 2013

SAP's 'Timesless' Future

By Dan Woods

Why the software giant should stick to its knitting.


Much of the analysis of the CEO transition at SAP has focused on the need for the software giant to regain a sense of excitement for its customers. In a sense, analysts are suggesting that SAP find a way to become the "New New Thing."
But SAP ( SAP - news people ) will not succeed in becoming the New New Thing, and it shouldn't try. Customers do not go to SAP to find excitement; they go to automate business processes and provide a foundation for innovation in a stable, reliable manner over a span of decades.

What SAP should do is find a way to explain the strength of its functional footprint, adapt its sales and delivery model, and focus on fixing the problems of delivering a consistent, pleasing customer experience through its network of partners.
SAP became huge based on the strength of SAP R/3, and it was amplified by three forces: frustration with mainframes (SAP could run on Unix), exploitation of the PC as a user interface (SAP supported the client-server model) and reliance on a network of systems integrators to sell and implement its software (SAP had an aggressive willingness to share a substantial chunk of the revenue pie with an extended partner network).
SAP is now the focus of frustration. A loud and significant group of customers say SAP's software costs too much and is not flexible. SAP must acknowledge that it understands why customers are upset.
Much of my recent career has been spent writing books, some sponsored by SAP, that explain the value of technology. Here's my unsolicited advice for SAP:
Reconfigure the customer experience. One of the major advantages SaaS (software as a service) providers have is complete control over the customer experience. On-premise vendors like SAP have systems integrators, IT departments, consultants and outsourcers, each with their own agenda. SAP must simplify installation, expand the pool of certified expertise and rein in its sales team and partners on setting expectations about functionality and costs. The seeds of much of the current dissatisfaction were sown during the sales process.
If a modern SaaS product allows for 1,000 points of configuration on 100 processes, SAP may allow for 10,000 points of configuration on 1,000 processes. The key question: Can you make configuring 10,000 variables simpler and less of a black art? SAP has put forth many attempts at this in the past with templates and preconfigured settings. The company must find a way to win this battle, which may be the key to winning the war.
Change the sales and delivery model. Claims about the demise of on-premise software have been exaggerated, but customers clearly don't want to be burdened with managing complex software. Using SAP software should start to feel more like using SaaS software. 
Read more on Forbes