Video review: ASUG CEO Geoff Scott airs out on digital, S/4HANA and DSAG
- Summary:
- At SAP TechEd 2015, we taped a provocative interview with ASUG CEO Geoff Scott. Here's my video review and analysis.
A big reason I love video is the chance to air out views that have not been discussed openly in the past. Such was the case at SAP TechEd, when ASUG CEO Geoff Scott joined us for a candid discussion on the role of ASUG as an advocate for customers amidst digital and product change.
For the first time I'm aware of, Scott spoke openly about ASUG's relationship with DSAG, the potent German SAP user group that is well-known for its ability to grab headlines with outspoken views. (Video link: Geoff Scott talks turkey about progress with SAP).
Scott weighed in on DSAG's recent S/4HANA survey, which raised some serious questions for SAP to grapple with. ASUG is also in the process of rolling out their second annual HANA customer survey, so we dove into that also. Finally, I raised the issue of whether SAP customers should receive formal maintenance credits for new products like Cloud for Analytics and S/4HANA, both of which have arguably been funded by maintenance revenues from prior releases.
Here's a few quotables from our fifteen-minute video, followed by a quick take of my own.
ASUG on SAP's digital transformation message
Digital transformation was the central theme of the TechEd Vegas keynotes, with S/4HANA as the "digital core". (I'm told S/4HANA will be more front and center at TechEd Barcelona). Scott's talks with ASUG Board Members validates SAP's view that digital change is an imperative, though the urgency of that change varies by industry:
About two/three weeks ago, we had members of the ASUG Board in Waldorf talking about digital transformation. We spent a day with Bjorn Goerke and his digital transformation group. But, we did something interesting the day before. We took the ASUB board members, people like Under Armour and Eastman Chemical, and we just talked amongst ourselves about digital transformation... Everyone is approaching the problem in a different way, but everyone sees it as a tremendous opportunity - as something that is real, and something that is happening.
How do these customers see SAP fitting into their digital reality? Scott:
All of them see SAP and the SAP ecosystem as core to that transformation. For their organizations to transform and think about themselves in these digital worlds, they have to think about how does that core SAP asset transition with them. The conversations about S4/HANA. The conversations about HANA as a platform. The conversations about Fiori as a new user experience... That happens to be how you start that digital transformation.
In other words, Scott doesn't simply see "digital" as SAP's way of pushing new products. The digital term has traction in business reality. Scott sees their collaboration with DSAG as crucial on this topic:
I think the conversation is real. It's one that you're going to see both us and the German user group DSAG - we're going to talk about this a lot in the next couple months and into next year. We're actually in the process of thinking about how we want to present this to our joint audiences. We're doing some collaborative work together to think through what does digital transformation mean to members of both user communities.
Digital means "simple," but not necessarily how SAP uses it
During our chat, redefined SAP's "simplicity" message, pushing SAP to support their customers with speed to market:
The rest of the business is moving at a very different pace than it used to. There's finally a realization that technology matters. Technology is playing on everyone's door step. Our SAP teams cannot be the last one to the table who go, "I've got this great idea. I want to go in this new direction in the business. That would be great, but it's going to take us six months and millions of dollars to make that change in SAP." That can't be the answer.
We have to figure out simplicity, for me and for the ASUG user community. Get us these tools that help us to go at this speed. Help us be able to manage our SAP ecosystems. Which, by definition are very complex. We like to talk about simplicity, but people don't buy SAP software because it's simple. They buy it because they have complex business problems they're trying to solve. How do we get that factory moving faster?
On DSAG's S/4HANA survey and ASUG's upcoming HANA survey
I asked Scott to comment on DSAG's potent S/4HANA survey:
We're working closer DSAG than we ever have in the past. There's a great collaborative spirit between both user communities. I read those results, and I thought they were very similar to the results we talked about last year when we released our HANA survey. People are worrying about adoption. They are worrying about business cases. People are asking those questions. How do I get my other key business stake holders to believe along with me? How do I make that case to the CFO? How do I make that case to the CEO?
There's a lot of competition and contention going inside most organizations about how to spend those dollars CIOs and technology professionals need all the help they can to make those cases.
As for ASUG's upcoming HANA survey, Scott adds:
We're going to replay the HANA survey. We're in the process of collecting feedback now. We have something in the neighborhood of about 700 to 800 respondents, which is more than we had last year. Have some of the challenges that we talked about last year, the lack of business cases, have those been resolved? Are people happy with what they're seeing? We should know that answer before year end.
ASUG and DSAG - contrasting styles
Historically, DSAG has been known as probably the most vocal SAP user group. ASUG changed that perception a bit with their HANA survey last year, but there is still a general view that DSAG has a more militant public voice with SAP. Scott commented directly on that perception:
ASUG is growing. We've had stronger revenues and stronger membership participation this year than we've had in years past. I think that we're absolutely doing the right thing. One of the criticisms of ASUG, and I take this criticism and I think about it a lot, is that we are not the user group that's going to go out into the public media and say, "SAP your doing this wrong. You should do this or that." We tend to have a lot of those conversations between us and SAP. We don't do them in the press. We get criticized for that.
I think my job, at the end of the day, is to influence SAP in the right direction. Not to necessarily to put everything out in the public display. I spend a tremendous amount of time talking with our member companies. Understanding their needs. Then, we take that back to SAP. And, we say, "How are you doing this? How are you doing that? How do you make that better?" To me, the voices of ASUG DSAG are incredibly important.
Should SAP customers receive maintenance credits to apply towards new releases?
During the video, we got into a nuanced discussion of the role of user groups advocating around pricing. I made the point that during the Enterprise Support controversy, user groups working together achieved a pricing result with SAP. But since then, that collective unity between global user groups seems to have dissipated.
I expressed my belief that SAP should provide customers with maintenance credits in some form as an incentive and fair exchange for helping to fund new products like S/4 HANA and Cloud Analytics. I won't detail all of Scott's views here, but he points out that the current issues are not as cut and dried and easy to rally around - as compared to the Enterprise Support price hikes. He also finds, amongst his constituents, that pricing isn't often the top priority:
I think you make a really good point. I think we could do better in that regard. And, you know for a fact that SAP will not help with that. There's no incentive to say, "You know what, ASUG and DSAG, we're going to help you figure this out."
Here's my litmus test. When I get together with the thirteen board members of ASUG. I listen to them very closely. These are all leading organizations. Huge adopters of SAP technology. The pricing issues are not top of their mind. They don't talk about that as their number one concern. Their number one concerns are, "Where is all this technology going? Should I be implementing HANA? How do I implement HANA? How do I implement S4? What is digital transformation mean to me?"
They're all running complex IT portfolios. Yes, SAP is a part. And, depending on the size of the organization, SAP is a part of that portfolio. It may be 50%, 60%. It may be 30%. So, how do they figure all of that into their long term strategy and planning?
My take
I tip my cap to Geoff Scott for speaking frankly on subjects that are not easy to talk about. I should also note that ASUG does outstanding user education, and ASUGnews.com has upped the ante this past year documenting customer stories, use cases and member surveys. I'm encouraged by the increased collaboration with ASUG and DSAG. If more user groups can align, that's great for customers.
Scott makes the case that ASUG does its strongest advocacy behind closed doors directly with SAP. There is merit to that tactic, as it can build trust. But I believe we are living in an era of open conversations. From time to time, these conversations need to enter the public domain. It's good for customers and it's good for the vendor. It might drive their marketing team a bit nuts, but thorny public conversations spark change. There is incentive to fix things that you don't get in private. As Den Howlett says now and again, sunlight is the best disinfectant.
As for maintenance credits, it's unfair if I give the impression SAP doesn't offer any credits to existing customers. Many customers have received such discounts during sales negotiations, and some formal programs to incent ramp-up do exist. Scott thinks SAP pricing is too complex to work off a public price sheet and negotiate set discounts for existing customers.
He knows more about the intricacies of that than I do. But I'd urge user groups like ASUG, who by and large have endorsed SAP's HANA and S/4HANA direction, to remain vocal about the role they have played funding innovations, and hammer out fair arrangements that span beyond a single customer deal. Yes, this might not be easy given there is no public price list, but it's not inconceivable that some types of customer groupings could be made for the purposes of broader upgrade discounts. Ultimately this would be terrific PR/goodwill for SAP also. You can call me a dreamer, or taking potshots from outside. Both are true. But advocacy matters. Let's continue the conversation.
End note: We're still filming and posting shoots, but there's a good collection of SAP TechEd videos in our SAP TechEd 2015 video playlist.
Disclosure: SAP funded the bulk of my travel expenses to SAP TechEd Las Vegas. They also funded the costs of shipping video equipment, and some filming expenses. We produce this TechEd video series on our own time with editorial control. SAP is a diginomica premier partner.