SAP Services Will Make Or Break SAP's Platform Strategy

Over the past few months, SAP Services has embarked on a major software-enabled services transformation of its offerings and operating models. The strategic intent is to increasingly rely on IP-based solutions (including SAP’s Rapid Deployment Solutions portfolio and assemble-to-order methodology) to deliver outcomes faster, with lower risks for clients and, eventually, support value-based pricing. Next on SAP Services’ transformation road map? I believe that the organization needs to quickly change the perception of the rest of the SAP ecosystem, which still views SAP Services as a competitor.

SAP Services’ business model used to merely rely on staffing “rock star” consultants on client projects in order to facilitate the implementation of complex solutions. The new strategy aims at positioning the 15,000 service professionals on SAP’s newer solutions (e.g., cloud, mobile, HANA . . .) in order to ensure that early projects generate the promised outcomes. In order to achieve this goal, the delivery teams need to be much more focused on collaborating internally (with the R&D team, for instance) as well as externally (with clients). SAP Services will also need to increasingly work collaboratively with its partners in order to ensure the success of the overall SAP-as-a-Platform strategy.

SAP Services needs to:

  • Provide more clarity into its go-to-market and partnership strategies. SAP Services needs to be more transparent with partners on its strategy as well as be open to partners’ feedback. This will require a clear communication channel between the two. Clarity of SAP’s go-to-market strategy is also necessary in terms of who owns the client and who owns the delivery. Cisco’s Services Partner Program would provide a good model here.
  • Accelerate knowledge transfer to the partner ecosystem. Partners highly value their relationship with SAP as a high-margin service driver. Now, with the global ERP services market decreasing, they are in dire need of new solutions — and fast! An SAP Services lead recently explained to me that they expect a nine- to 12-month lag time between the launch of a new solution and the start of the knowledge transfer process to the service ecosystem. This is far too long, in my opinion, and the risk for SAP is that partners end up embracing solutions from smaller, nimbler, and more innovative solution providers.
  • Leverage SAP Services as a key enabler of the partner ecosystem. SAP Services should be perceived here as a key facilitator of new service revenue streams for partners. The former rock stars now need to share best practices with partners and formalize knowledge transfer, such as organizing workshops and training sessions. The focus should extend beyond marketing, selling, and delivering SAP solutions to customers to include building successful IP on top of the SAP platform — the ultimate goal for a company that now positions itself as a platform company.

For SAP’s platform strategy to succeed, the ecosystem must quickly and broadly embrace the platform to develop assets and IP and deliver new services to their clients. While SAP Services is taking some of the right steps to enable this strategy, a massive cultural change still needs to take place for SAP Services to be truly seen as a partner in the shift toward a platform-centric approach.