Posted by Duncan Jones on March 19, 2010
Dear SAP Customer,
Hopefully you’ve all read SAP’s co-CEO’s open letter to you (http://ceos.blogs-sap.com), and also some of the great responses such as this one: http://bit.ly/b5foPD . With all these open letters flying around, I thought I’d write a slightly different one. Unlike most of my fellow commentators, I’m not going to tell SAP how to run its business. Instead, I’m going to give you, its customers, a suggestion on how you can cut the cost of your SAP environment. You ready? The answer is “buy less stuff from them”.
Actually, it is not as facile as it sounds. Many companies that I speak with automatically favour their incumbent vendors for new projects, while their IT vendor managers complain to me about their negotiation impotence. You won’t be able to get the contractual protection you need, such as limits on CPI maintenance increases, unless you make them a condition of future purchases. Large software companies such as IBM, Oracle and SAP focus predominantly on license sales. It wasn’t customers’ unhappiness, resulting from the Enterprise Support blunder, that caused SAP to fire its CEO and rethink its approach. It was the fact that you showed that unhappiness by voting with your purchase orders, delaying projects, going to competing vendors, and causing SAP’s license revenue to plummet. When Jim and Bill promise to “accelerate the pace of the innovation we deliver to you”, the d word is a euphemism for ‘sell’.
So if you want your account team to honour Jim & Bill’s commitments to put “Customers are the very center of our strategy” then make any new business from you conditional on evidence of that centricity. Here’s one suggestion - ask SAP to give you an account manager without a sales quota. You’ve just signed a big deal for all the SAP software you’re going to need for the next few years, and they give you a new rep whose only goal is to find other stuff to sell you. That’s not customer-centric. Insist on a real account manager, with a comp plan based on deployment of, and satisfaction with, what you’ve already bought.