In bed with SAP – the future for enterprise software?

Enterprise software companies are not traditionally open to negotiation with user groups, but SAP is beginning to forge new links with its end-users.


Enterprise software companies are not traditionally open to negotiation with user groups, but SAP is beginning to forge new links with its end-users.

SAP caused an outcry last year when it announced plans to increase its charges for enterprise support. The move horrified SAP's user community, prompting user groups to rally together to form an international lobbying group.

The Sap User Group Executive Network (Sugen) brings together a network of 12 user groups around the world. The group scored its first victory in November last year.

After intensive negotiations, SAP took the unprecedented step of agreeing that it would only raise prices if it could show it had delivered business benefits to its customers by meeting an set of key performance indicators (KPIs) agreed with the user groups

SAP has appointed analyst firm Gartner as an independent assessor to decide whether it has met the KPIs at the end of the year. The "frank and detailed discussions" are yielding results, says Alan Bowling, chairman of the SAP UK and Ireland User Group.

"We have made great progress in the way we work with SAP," he says.

Last week, SAP UK vowed to work more closely with user groups to improve its understanding of the needs of businesses.

Tim Noble, managing director for SAP UK and Ireland, says he is visiting as many user organisations as possible to learn at first-hand what these businesses need.

"We want to be transparent and responsive to end-users. Listen to their needs and find the best routes to meeting them," he told the 2009 SAP UK and Ireland User Group conference.

SAP UK, for example, has re-organised some of its internal processes to help it manage contracts with users in a more consistent way, he says.

Users should capitalise on SAP's willingness to be open, by demanding a greater say in product development, says Ray Wang, partner, enterprise strategy at consultancy Altimeter Group.

SAP invested €1.6bn in research and development in 2008, says Wang, but so far, users have had little say in how that money is spent. They should work through user groups to gain more influence, he says.

Although tight-lipped about the likely outcome of Gartner's first value assessment of SAP's maintenance programme, Bowling says both sides are learning to work together effectively.

Sugen has made great progress in discussions with SAP, he says, with greater and easier access to senior executives than ever before.

"In years gone by we didn't seem to be on the radar of the senior people there, but things are starting to change and we are seeing more resources from SAP," says Bowling.

There is still room for improvement, however. The user group would like to see more continuity and consistency in the people it deals with at SAP - a challenge for IT departments in the past.

SAP also still needs to get more involved in discussions with users about getting greater value out of their investments, says Bowling.

"SAP is sitting on a wealth of information about user organisations and how they use the software, and I want to share that with members of the user group."

Bowling says greater collaboration with users will help make SAP a sustainable supplier that provides the systems that businesses really need.

The move could be an important business driver for SAP, which like many other IT companies is turning to strategic partnerships in the industry to create opportunities for growth.

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