When SAP makes a big announcement, we're not used to asking, "what does SUGEN think?" But that's starting to change.
SUGEN, the global user group network representing more than 21 user groups globally, played an important role in brokering a compromise for the Enterprise Support fiasco in 2010.
Since then, SUGEN kept a low profile and was widely perceived as faded. With the peak of SAP's indirect access controversies, SUGEN has reasserted itself. But this time around, they sound determined to remain a key voice in SAP customer advocacy.
SUGEN struck a candid tone on licensing at Sapphire Now a year ago, when I first interviewed SUGEN chairman Gianmaria Perancin. Unsatisfied with SAP's inadequate indirect access clarification paper last June, SUGEN, along with DSAG (the German speaking user group) and ASUG (the North American SAP User Group), SUGEN sent a letter to SAP in the fall of 2017 requesting dialogue and resolution of indirect access customer concerns.
That dialogue led to SAP's rollout of a new document-based pricing option in April that has been pretty well received by user groups - not as the final solution, but as a productive step in the right direction (I analyzed the role of user groups in my indirect access April review).
SUGEN isn't done with this. They have continued to push SAP on what needs to happen next with licensing and indirect access (IA), something my colleague Den Howlett included in a couple of pieces leading up to Sapphire Now, including SAP Indirect Access new policies aid transparency, users remain uncertain.
So when I had the chance to meet with the SUGEN leadership team in Orlando, I seized it. However, I didn't begin the conversation with licensing, for two reasons:
- I wanted to hear from SUGEN what the hottest issues were - and let them tell me how, and if, licensing issues fit in.
- With C/4HANA and the "intelligent enterprise" receiving a good deal of keynote attention, SUGEN's take on SAP's direction is a question worth asking.
The SUGEN leadership team members joining me were:
- Gianmaria Perancin, SUGEN chairman – SAP French speaking user group (USF)
- Rob van der Marck – SAP Dutch speaking user group (VNSG)
- Philip Adams – UK & Ireland SAP User Group (UKISUG)
- Grahame Reynolds – SAP Australian user group (SAUG)
- (pictured from right to left above)
The most important issue is... S/4HANA adoption
SUGEN doesn't compel its members into one consensus voice, aside from the occasional public stance after a big SAP announcement. So, what's the top issue of these SUGEN members? Is it the intelligent enterprise? Nope. As van der Marck told me:
Actually for us, what is the most important is S/4HANA adoption.
That led us into a debate about how many of the 8,700 S/4HANA customers are live, and how many are "net new." Perancin added:
How many of the [live S/4HANA customers] are net new customers? How many of them have migrated? I think that that is a huge problem now. When we speak to our user groups, our users say to us, "I need to understand what is the experience in our country in order to move." This means that still we are not moving to S/4HANA at the quick pace.
The success of SAP's "intelligent enterprise" is directly tied to S/4HANA adoption. You can't have one without the other. The intelligent enterprise is about raising the automation and analytical smarts of core S/4HANA (and C/4HANA) SAP applications via embedded algorithms and the consumption of AI services from Leonardo via the SAP cloud platform.
My colleague Phil Wainewright wrote in Only the cloud can deliver the intelligent enterprise that SAP has committed to the cloud as integral to the intelligent enterprise. Agreed, though I'd argue SAP has not yet excluded an on-premise S/4HANA environment from this vision.
However, older releases of SAP are not viable platforms to achieve this "intelligent" state. Yes, you could consume some external Leonardo apps, but the intelligent enterprise SAP envisions requires a real-time HANA nervous system.
Little wonder, then, that the SUGEN board is concerned about customers getting left behind. Van der Marck:
It's not the case that we can say, "We've had S/4HANA, now we can continue with other stuff." S/4HANA is not completed yet.
There is another twist for customers: ECC functionality had a pretty consistent scope from release to release, with gradual enhancements. But S/4HANA makes heavy use of SAP's cloud acquisitions. Perancin:
Sometimes I have the impression that the scope of S/4HANA is less than ECC because we have deported many of the processes of ECC into the [cloud] satellites.
So what does the migration process look like?
Am I writing to the same scope? Or should I have other solutions to consider in order to cover the same thing that I covered in the past with ECC? This is something that we would love to work out.
And, bingo - the first mention of licensing: "And what does this mean from a licensing perspective as well?" The view from Australia is similar. Reynolds:
The point I'm making is that even though S/4HANA is a fast adopter, a product that's being adopted quickly in our marketplace, et cetera, one of the concerns of the members in Australia is making sure that people on older versions aren't left behind.
Customers still need help with the S/4HANA business case
There are a few kinds of SAP customers on older releases. Some have no intention of upgrading. Others are just focused on operating their business. There's a third group that buys into SAP's roadmap, but they still need help formulating and financially justifying an upgrade plan. So are we back to "SAP needs to help us build a business case, not just an IT modernization case"?
In a word, yes. Reynolds:
I agree. The initial HANA story was about speed. In the very early days, the business plan was all about speed... The 100 club, the 1000 club. It's hard to build a business case on speed.
Van der Marck added:
Not being able to build a business case - we see that as the reason why the S/4HANA adoptions lag behind.
We have been speaking about this problem with the business case at least for three years now. We still miss a solution. Otherwise we would see I think a much better adoption of S/4HANA.
Continuing the dialogue on licensing and ease of use
SUGEN has a full plate of topics for SAP beyond S/4. The other top priorities? Restoring customer trust and improving the ease of doing business with SAP. Obviously, the indirect access issue is tied to earning trust. There, SUGEN welcomes SAP's April document pricing announcement as a significant positive step, but only a step.
There is much more to be done, both in communicating the plans to customers and resolving important questions on how the new model will work. SUGEN believes SAP won't truly restore trust without following through on those conversations. Perancin says it's hard to get customers to even think about new solutions like C/4HANA until they are more comfortable with licensing.
SUGEN is taking that dialogue forward with a related "trust project" pertaining to ease of use. They polled their members and came out with three priorities:
- Addressing lack of consistency at the account manager level, especially as account executives move on and relationships must begin from scratch.
- The ability to move to the new products in a more piecemeal fashion, buying only a few licenses and building up from there.
- Streamlining and aligning contracts across various SAP products, which is tougher as more acquired products enter the fold.
As Adams said:
Especially for the products that SAP has bought over time. So if you were a Concur customer a number of years ago now, it's now SAP Concur There's a misalignment around the contracts now. It's a headache for customers to manage - how do they work with SAP to streamline that?
Perancin believes if SAP can progress on these issues, it will support the goal of restoring trust. "It's all connected," he says.
My concern heading into Sapphire Now was that SAP would take the foot off the accelerator of fixing their licensing issues now that a good step has been taken. The user groups I met with, including SUGEN, are confident - for now - that SAP realizes this isn't finished.
SUGEN is using the dialogue built by these relationships to push ahead on other fronts. Ironically, the IA crisis put SAP in the position of needing to truly listen to customer concerns and build them into a creative solution. SAP could use more of that in plenty of other areas.
Yes, SAP does listen. As SUGEN pointed out, they listen harder than most enterprise vendors. But: there is a deeper kind of listening that comes out when all parties have the will to push and push until a better solution is reached.
I saw signs of it myself at Sapphire Now, especially at the top executive levels and deep in the community. But I also found plenty of SAP's-tech-will-solve-this infatuation amongst SAP employees. And nifty tech won't solve this problem. Nor is SAP the only vendor with nifty tech to offer.
Once you start talking business process, and working side by side to solve a customer problem - that's the dialogue which factored heavily into how SAP was originally built. And it's that dialogue that is urgent for SAP now. It's pretty frustrating to hear the same refrains about the need for S/4HANA business cases, something we've been writing about incessantly at diginomica for years as well. But perhaps this heightened level of discussion will spur business case progress.
Perancin also sees this dialogue as the silver lining of the IA issues:
At least through the crisis you can learn. As soon as you sit around the table and you discuss with people that are competent on the other side of the table, you can progress. SAP must have the humility to open the door and say, "Okay, we have a problem, we want to discuss if this solution can go through."
End note: I also interviewed DSAG and ASUG at Sapphire Now. The DSAG interview focused on licensing; that article is forthcoming. The ASUG interview focused on overall customer views and concerns and will be released as a podcast shortly.