My purpose in attending SAP UK & Ireland SAP User Group this year was to test the barometer of interest in making the switch to S/4HANA in the context of other large scale techology provider events I've attended and feedback from those in the SAP ecosystem with whom I am connected. To put that in context I have around 1,000 engaged SAP related connections across a variety of channels. In landscape terms, it's not a pretty picture.
Even the most advanced customers are largely unimpressed with SAP's broad scale X-O messaging, despite what I saw as a compelling presentation around a car breakdown scenario demonstrated during the UK & Ireland SUG keynote session. It worried me that no customer I met referenced the demo as something worthy of further review.
For example, Jazz Pharmaceuticals, a stand out showcase for an S4/HANA greenfield implementation (more later) cannot find a compelling X-O scenario within their business model. Instead, and in common with other customers, Jazz insist that SAP focus on keeping their businesses going at an operational level, at scale, and across international borders - skills for which SAP remains unmatched and uniquely equipped.
More worrying, I found myself consistently fielding questions around the viabillity of SAP as a competitive solutions provider over the coming years in environments where the top of mind topics are not the integration mantra to which Christian Klein, co-CEO has nailed his management mast. More mundane matters like indirect access, business use cases for an S/4 switch and the post 2025 EOL ECC issue loom large and for which there are precious few solid answers.
The problem for both customers and SAP can be summed up in the words of a retiring executive with close on 30 years SAP experience. He said that his greatest disappointment is that SAP has not really delivered what it promised in terms of end to end integrated business processes and that the addition of many new acquired technologies only makes the ability to create a seamlessly integrated landscape nigh on impossible. The R/3 days when integration was a reality are long gone. It should therefore be no surprise that even showcase customers like Jazz describe a business technology landscape that includes SAP, Workday and Salesforce.
Equally worrying for me was the degree of frustration across the SAP ecosystem at what one partner described as 'appalling communication' around what SAP is doing to help customers get across the S/4 line. Hillary Blinds, an early Suite for HANA customer for example shrugged at the prospect of moving to S/4, despite its commitment to SAP across departments other vendors could own.
At the partner level, I heard that SAP tooling for S/4 transitions is mediocre, with partners having to develop their own tooling in order to get anywhere near close to automated testing and data conversions. Then there was the issue of SAP's near radio silence on topics like 'move' an initiative that provides SAP partners with access to rich tools and accelerators about which customers seem oblivious but which add value to the conversion process.
Above all, partners are frustrated that in pitches, SAP demurs to the tried and trusted technical sales pitch at a time when customers care about business outcomes. In that context, I am little short of appalled that Juergen Mueller considers it necessary to pen a long screed on LinkedIn extolling the business first message when it is clear that's not articulated in the field. Again, as one international partner said to me - SAP gets into the ring and then craps on itself with a technical spin.
These are not good times for SAP. In both personal interactions and emails with myself and colleagues, co-CEOs Klein and Jennifer Morgan have been at pains to emphasize the 'customer first' message. What's missing is a crisp, time-stamped action plan. I cannot believe that after close on a year of careful grooming by former CEO McDermott that they don't have an X-point plan to which customers can sign up.Yet that's missing in the SAP customer zeitgeist.
For example, I received unanimous acknowledgment that SAP needs to put a public stake in the ground for my pitch for greenfield, brownfield and bluefield scenarios. Instead, partners are having to make it up as they go along. In a world where customers are resistant to what they see as a poor business model case, that set of clear statements would go a long way towards helping both partners and customers.
Looking further ahead, SAP needs to revitalize its community ecosystem. Many of its best advocates have walked away, seeing programs like the SAP Mentors as little more than a tightly controlled marketing exercise that delivers almost zero value back to those same people beyond an ego boost. In that context, I heard direct comparisons with the Salesforce Trailblazer program, with experienced players saying that SAP has abandoned what was a passionate group of advocates for a bunch of suck up lackies. That is a an extremely harsh critique and one to which I don't subscribe. But I get how that perception has evolved.
The good news is that despite these macro problems, customers continue to value the core of what SAP delivers. They want SAP to remain successful, they want innovation, they want more of what has made them and SAP world-class. But today, those same customers demand respect for what they pay and an acknowledgment there is a wider world that SAP does not own but with which it should play much more nicely than it does today. S/4HANA may be SAP's technical north star but customers are not getting the love nor are they seeing the value of that message.
International readers will perhaps posit that British writers like myself are dour at best, and quick to find the downside. The truth is that what I am seeing is reflected globally. The sadness is that customers want SAP to remain successful, and, under the right circumstances, are willing to pay for the pleasure. Others may gloss over with different words but there is no doubt in my mind that SAP is on the proverbial rack. 2020 will be a pivotal year as co-CEO's Klein and Morgan face unpleasant but solvable choices.