SAP user groups to SAP's new CEOs - let's partner on integration, S/4HANA adoption, and cloud harmonization

We've covered the bases on SAP's leadership transition, starting with Den's SAP - Klein and Morgan come in as co-CEOs as McDermott steps down. I added on with SAP hits its leadership crossroads - breaking down my interview with McDermott, Morgan, and Klein.

We included user group reaction, but I see a more interesting question: what are the common themes across the user groups?

In flight from Walldorf (where else?), Geoff Scott, CEO of ASUG, Americas' SAP user group, hit on the need for a true partnership between SAP and the user groups. ASUG doesn't see the co-CEO arrangement as an issue. But Scott cited the S/4HANA business case as a core challenge. When I asked what ASUG would say to the new CEOs, Scott wrote, in part:

Remember that the SAP customer base is loyal and invested in the success of SAP. We need SAP to not only create but now operate world-class software that supports a new frontier of customer experience and expectations.

Show us that together you can bring an even better SAP product set to market that customers can understand, implement and get value from. Be the software partner that your customers so desperately need in these complex and fast-changing times.

The UK & Ireland SAP User Group weighs in

Den shared the view of Paul Cooper, chairman of the UK & Ireland SAP User Group:

We wish Bill well.  He took over as co-CEO (alongside Jim Hagemann Snabe) at a very difficult time for SAP, dealing with the contentious issue of Enterprise Support and both worked very closely to regain customer confidence.  We welcome a return to the co-CEO model that has served SAP and its customers well in the past.

Cooper cites Christian Klein's rolling up sleeves approach with the user groups:

Christian has been a key exec sponsor of SUGEN's 'Ease of doing business' and 'Licensing' charters, and he has always made time to listen to product feedback and understand how SAP could work better with customers. 

Cooper reminds us that the 2025 ECC maintenance deadline looms large:

We look forward to hearing Christian and Jennifer’s vision for SAP as the 2025 maintenance deadline for ECC6 fast approaches.

DSAG cites prior user group dialogue as a key

DSAG, the German-speaking SAP User Group, is never shy about issuing their opinions on all things SAP. This time, DSAG CEP Marco Lenck did the honors:

Bill McDermott's resignation came as a surprise for us. We wish him all the best in his future endeavors and thank him for the common path. At the same time, we congratulate Christian Klein on his new role as co-CEO of SAP SE. With his appointment, we see a clear sign of the importance of SAP's home market.

Lenck also noted Klein's user group track record:

We have experienced Christian Klein as a dialogue-ready, customer-oriented interlocutor in previous encounters. Therefore we are looking forward to further the cooperation for SAP users in the German-speaking countries.

He welcomed the leadership shift Jennifer Morgan brings:

The SAP team around Jennifer Morgan shows a modern leadership culture. This sets the course for the future and offers a renewed leadership at SAP.

ASUG lays out the challenges - S/4HANA adoption and cloud harmonization

As for the challenges ahead for the new co-CEOs, Scott sees some big ones, starting with the S/4HANA business case:

A significant percentage of customers continue to struggle to define a business case for migrating to SAP S/4HANA that captures the attention of their CEO, CFO, board and business peers.

The silver lining for SAP: customers aren't resisting the S/4HANA vision. It's the nitty gritty of getting there. Scott:

We see little to no debate among the customer base that moving to SAP S/4HANA isn't the absolute right thing to do. How to do it in an cost-effective way is the challenge that most are facing.

Time to up the ante:

ASUG is urging SAP to do more to automate the upgrade process in order to drive down the adoption cost. We stand ready to help advise SAP on what would have the most impact for customers.

The second big challenge? From ASUG's view, it's the cloud applications, and the operational disconnects between them:

Every customer that ASUG speaks with, combined with insights from our extensive research, demonstrate that cloud-based applications are what customers are looking to ultimately implement. However, SAP's ability to deliver an end-to-end cloud solution is not there yet.

Further, SAP needs to demonstrate that it can as skillfully operate this cloud stack as it has demonstrated in creating world-class software over the past decades. The customer base has learned how to operate SAP environments, and our members expect that SAP should do it just as well as they can. Unfortunately many report that's not the case—yet.

If SAP wants to change the cloud experience for their customers, their apps must be greater than the sum of their parts:

The product portfolio needs to be harmonized and synergized for customers that want to adopt multiple SAP solutions, which is the vast majority of the customer base. ASUG believes that to truly unlock the benefit of all of the recent acquisitions, the products have to be woven into a common data model and harmonized in some fashion.

Scott doubled down on DSAG's top priority at Sapphire Now: integration.

Portfolio-wide integration is key. No doubt this is a significant undertaking, and one that will take years to accomplish as Oracle has demonstrated with Fusion. However, SAP needs to begin to take tangible and transparent steps forward to make this customer dream a reality.

My take

The biggest contrast between these views and the backchannel reactions I've heard? The expressed confidence in Morgan, Stein, and the co-CEO model. No doubt that's because the user groups have seen these individuals - and this leadership model - up close.

These user group comments emphasize the past work with Klein, but there is also respect cited for Morgan and her impact on SAP's workplace culture. Given the disjointed cloud portfolio, Morgan's prior, albeit brief role as leader of SAP's cloud business group will be crucial here - especially when it comes to the deeper integration needed to realize the value of Qualtrics.

But while S/4HANA adoption, integration, and the cloud portfolio seem to be top of mind, there's really a different issue at the forefront: collaboration. Every SAP user group I've spoken told me that the close work with SAP on indirect access, while arduous at times, was critical, not just for progressing on this issue, but for building a greater trust. That's clearly the type of collaboration the user groups are looking for now.

SAP has done its best collaborations with user groups in times of crisis (enterprise support, indirect access). But that should be the norm at all times. If the new CEOs take that same approach now, I like their chances a lot better.

Scott's last comment captured that challenges-and-optimism contrast:

Many doubt that a co-CEO model works, but SAP has demonstrated that it can work very effectively based on past history. ASUG thinks the challenges ahead for SAP are significant enough that it will require the full attention, collaboration and energy of both of these capable leaders. Individually, they bring wonderful qualities to this role, and we are optimistic that their combined efforts will create a significant multiplier.