Sapphire 2019: McDermott dubs Qualtrics ‘elixir for cultural change’

At SapphireNow 2019 in Orlando, Florida, CEO Bill McDermott said the gap between what consumers expect and get makes up a $1.6tn economic problem addressed by SAP’s Qualtrics acquisition

At SapphireNow 2019, SAP chief executive Bill McDermott claimed that the supplier’s $8bn Qualtrics acquisition addresses a $1.6tn global economic problem – an “experience gap” between what customers want and what they get.

He said Qualtrics’ focus on so-called “X data” – experience data – and SAP’s traditional focus on operational data – “O data” – conjoins what it calls “intelligent enterprise with experience management”.

At a press and analyst question and answer session following his opening conference keynote, he described Qualtrics’ survey software as an “elixir for cultural change”.

In a press statement, the company said it had released 10 services made possible by the Qualtrics acquisition that combine experience with operational data over four areas – customer, employee, product and brand.

The offerings – four for customer experience, three for employee experience and three in market research – are said to embed data into applications, such as its customer relationship management (CRM), enterprise resource planning (ERP) or human capital management (HCM) systems, “to drive continuous action and improvement”.

“We want everyone to remember their Xs and Os. Experience management is the new frontier for the world’s best-run businesses,” said McDermott.

Ryan Smith, co-founder and CEO of Qualtrics, said: “We live in the experience economy where organisations are either intentionally racing to the top or unknowingly racing to the bottom.

“The difference between the companies that will win is they understand how X-data and O-data work together to tell the story of what is happening in an organisation, why it’s happening and how to act in real time to deliver breakthrough business results.”

Indirect licensing kerfuffle laid to rest?

Meanwhile, in relation to the experience of SAP’s own customers with respect to the thorny matter of indirect licensing – where user organisations are charged for using SAP software in tandem with software from other suppliers – the company has made a muted announcement that could indicate some progress.

SAP has announced a digital access adoption programme [DAAP], which has emerged from discussions between the supplier and its user groups.

In a blog post, Robert Manhertz, senior vice-president and head of global portfolio planning and commercialisation at SAP, said: “With the new programme, customers can make the decision to move to the digital access licensing model with transparency and total confidence based on the assurance that there will be no hidden revenue around licensing fees.

“The days are over in which customers believed, fairly or not, that any discussion of indirect access could lead to a confrontation with SAP and the assessment of financial penalties for inadequate licensing.”

Philip Adams, director of the UK and Ireland SAP user group, said, in respect of the programme: “When SAP announced its new digital access licensing model last April, we –  alongside other user groups – globally asked SAP to publicly reiterate the promise it made to Sugen [SAP User Group Executive Network] in November 2017, when it said customers would be able to adopt the new digital access licensing model without incurring further costs if the business value/scope of their usage of SAP stays the same.

“Over the past year, we’ve continued to ask SAP for these reassurances and highlighted members’ concerns about the financial impact of the new model. As part of Sugen, alongside ASUG [Americas’ SAP User Group] and DSAG [the German SAP User Group], we have continued to hold discussions and workshops with SAP, providing feedback on the concerns of customers in relation to the concept of indirect licensing and associated costs. Key areas of focus have been predictability, transparency, consistency and fairness.

“During this time, there have been delays in SAP rolling out measurement and auditing tools that enable customers to analyse the financial impact of the new licensing model. As such, our members have continued to be concerned about their license positions.

“With the announcement of the digital access adoption programme, SAP is giving customers a way to measure the financial impact of adopting the digital access licensing model, and seems to be providing a level of financial predictability.

“While this is not the solution our members want, we are glad we’ve been able to influence SAP and improve the situation for customers who have had no real idea of what the cost implications of the digital access model might be. Many elements of the programme still need to be clarified, not least the need for the financial options to be described in a much clearer way, with realistic and concrete examples of how each would play out in the real world.

“We also need clarity on whether we really are talking about two license scenarios – the legacy and the new document-based model, as from discussions and feedback, it seems there will be scenarios where customers will have a mix of document and user-based licensing. For customers, this creates concerns around double charging.

“Ultimately, we’ll continue to push SAP for further clarity, transparency and fairness to longstanding customers who have always believed they have been adequately licensed.”

At Sapphire, McDermott said, regarding the issue of indirect licensing: “We are proud that we have made progress, and we thank the user groups for acknowledging that. But we also accept that customer satisfaction and user group satisfaction is a race without a finish line. Trust is the ultimate currency. I want to thank the media and analyst community for your feedback. You have all been fantastic.”

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