Danke! It's a brave new SAP

Right or wrong, the customer is always right.

Statistics suggest that when customers complain, business owners and managers ought to get excited about it. The complaining customer represents a huge opportunity for more business.

There's a battle between what the cook thinks is high art and what the customer just wants to eat.

When you stop talking, you've lost your customer. When you turn your back, you've lost her.

Now, why this sudden torrent of wisdom-bytes about customer-satisfaction?

Well, for one, the very essence of ‘listening to customers’ no matter at what cost, seems to be finally getting the enterprise-software czar SAP in a new gear. Even though some would call it quite late of a wake-up moment; even as some argue as a check-mate between the golden ‘maintenance’ goose and customer’s smile; the so-called correction mode can just not be ignored.

It’s one thing to make mistakes; but quite a notable gesture to accept brickbats gracefully and rectify all that may have gone wrong. That’s the candor that appears to be trickling down from global chieftains of SAP; and a conversation with Alok Goyal, COO, SAP India sub-continent makes you sure that ‘being a good listener, being forthright and being dignified about all the flak’ are not some of the rare-and-rarefied qualities he wields. May be it’s also the new avatar the-SAP-adoring-league was waiting for. And may be, this turning of pages will evoke a loud ‘gut durchgebraten’ soon.

So here’s a refreshing, no-words-minced, graceful COO who looks all set to trigger those cheers.

Hi Alok. You have taken over a very significant place at the helm of SAP India. How much of a key strategy-shift is happening? Specially to the broader direction that your global CEOs shared at SAPPHIRE NOW recently?

There is no big, fundamental shift when it comes to our quintessential facets like customer-focus, leading-edge, market-maturity, unmatched support etc. All that will not change. But as to things that will change, I can tell you how in the last two years SAP has insisted on solutions that enterprises have started looking at specially around devices and cloud computing. There would be customers who would want on-premise or someone who wants something else.

Yes, one size does not fit all. Some need on-premise, some want mixed models, while some need on-demand options. We have been charting our own course according to the change. India has been the one of the fastest growing geography, so lots of best practices, increased penetration, more maturity in best products, generation and technology shift etc would be paramount. One more part, which is internal but worth sharing here is that if we look at the market last two years, it has been quite tough. We all feared attrition would be an issue, but are proud to say we haven’t faced the issue at all. It’s been a talk about hiring at SAP than anything else. So, all looks bright.

Since we have touched on-premise, on-demand words here, let’s get that question out of the way first. I know it may sound a done-to-death question to you already but can't help it - Does on-demand really fit into the traditional SAP model? Is it not more a disruptive or cannibalizing force than complementary? And in that context, how would you respond to the pace of Business ByDesign which has been tagged limping in its progress so far?

Yes, we do get that question a lot. But honestly, as I said — no one size fits all. There are large manufacturers who still have a traditional mindset and want to keep in-house systems, may be because of data-integrity or security etc, therefore, we will continue to provide that menu. But we see two more segments in the market. They say that — my core transaction would be on-premise so that other areas won’t intrude my enterprise, though I can keep some pieces outside my firewall and those peripheral areas can be structured on-demand. Another segment says — I won’t go on-demand because security, scale etc concern me.

At SAP, we are the ones though who have the entire suite. Business ByDesign is a grounds-up design by SAP. It is lighter but it contains all pieces. It’s fundamentally complex than just one solution and is a very robust product and a complete suite that way. We believe that no body in the market has that kind of capability. SAP is investing a lot in on-demand models. We are already there in CRM, procurement etc and are launching in other areas soon. I wouldn’t actually agree that it’s cannibalization. It’s just about structuring the financials. Rental or upfront, the numbers add up the same way.

The recent past has been quite eventful for SAP. Specially when you see the customer side on high-decibels all across issues like license-structures, high maintenance fees , unreasonable hikes, heavy support lock-ins etc. Between the high-end Enterprise Support plan (at 22 per cent) and the Standard Support structure at 18 per cent, how much has this customer gripe, outcry and analyst angst changed SAP, specially as we now see a new SAP's plan to restructure software maintenance and support along with a new tiered-model?

Yes, we have faced a lot of buzz about maintenance models last year. But we remember that we are a customer-focused company. The enhancements were in line with elements like no-downtime-for-mission-critical s/w, and according to SLAs. But I am not going to rewind the past and justify anything. The main thing is that we don’t force our customers and listen to them. We gave them a choice and we were transparent about the two options. The interesting bit is that a vast majority of our customers, and India being the highest here, is choosing Enterprise Support plan despite the higher costs. Last year, we had a lot of discussion with our user-groups. We looked at customer feedback very deeply and guess what, customers are coming back!

Even on a general note, customers always nurse this grouse when it comes to enterprise software — high license costs or maintenance bills. What would you say to that?

Everybody dislikes paying money. But at the same time, every customer values support. If anything does down, you need support, at the right time, and in the right way. As a vast organisation to provide ERP and support, I would say, maintenance is a necessary evil and it is critical to ensure that.

Another complain that most customers seem to have is unclear product roadmaps. How are you addressing that part?

That’s a very good point you have brought in. Across US and Germany, this part is on our spotlight and we say that in context to about 92,000 customers globally. In India, we have a major development engine. Unlike the past, and to an entirely larger extent, we are not only sharing our roadmap but also engaging customers in the whole process. Collaboration via regular forums, a good localization program, and strong user groups in India are a strong direction we are moving into.

{#PageBreak#}

Talking of one more argument — implementation complexity of enterprise software, would you say it’s a problem that has its source inside a CIO’s IT environment or something inside SAP’s suites?

There’s no easy answer to that question. Why do you implement an enterprise solution? You want process transformation. And to drive it all makes things complex. Switches are easy to operate in a lab. But when people are around, things can change. Complexity is a word that is not just about technology but it also depends a lot on processes and organization change. Different companies have different DNAs and changing people behaviour takes time.

As of today, what’s SAP’s stance on organic to inorganic ratio of growth? Specially after Sybase’s acquisition news, when you get prognosis bytes saying that SAP will change its quintessential organic lineage and is towing rival Oracle’s acquisition appetite henceforth? Is there really a shift in the gear?

We have never said anything to connote that. We can be highly organic or inorganic, but it won’t be just for market share, as we have always maintained. It will be to fill up gaps in our portfolio. Sybase would bring great synergies in areas like analytics. We are always open for complementary capabilities, so there’s no shift in the gears.

Now that we have mentioned Oracle, which is touted to be SAP’s arch sword-clashing rival, can you share your thoughts on competition? Also, how much do opponents worry you, since we are also seeing how others like Microsoft (with Dynamics) is gaining strength as an enterprise player?

All I can say is that they are competition, but also great partners. Oracle-SAP also maintains noteworthy technology partnerships. We collaborate. And SAP will be there in the technology stack for customer’s choice in every way. Both are great companies though. And to be honest, we worry about them all the time (smiles). Being paranoid is our job. But the trick is how we serve our customers best, be it the best installed base in India, or our products. The gap between rivals continues to increase. But our job still is not to worry about competition but to worry about our customers and their satisfaction.

So, any words for your customers and CIOs in India?

We are very excited about India as a market and that’s not just because of its high-growth but about the best-practices that one sees happening here. We continuously improve as we have always done. Our solution or market understanding may not be perfect, but what matters is that our relationships with our customers are not transactional. We are always about long-term relationships. We love feedback and are taking it. There’s always a room for improvement. And we will not shy away from it.