During SAP’s Q4 FY19 earnings call, Co-CEO Christian Klein stated that 70% of their ERP customers have not yet moved to the cloud. In an effort to accelerate cloud adoption, SAP stated that they will focus on developing vertical cloud services to sit atop SAP’s cloud platform. Specifically, Klein stated that its partnership with Accenture would focus on Cloud for Utilities to drive further opportunities into what SAP believes to be 150B Euros worth of Cloud Platform revenue by 2023. As a part of this strategy, Accenture announced its status as the first partner to obtain certification by SAP to integrate its myConcerto platform with SAP’s Model Company services.
Both SAP and Accenture believe this to be the first of many instances of Accenture’s progression in developing and certifying additional solutions for SAP’s Model Company services. This coopetition strategy between SAP and Accenture is not unprecedented. Given their plan to deliver together in an integrated and single engagement, customers considering this model will need to keep the following three points in mind:
Aside from securing an appropriate SAP S/4 HANA software deal construct, the journey to get to the finish line (and beyond) for your S/4HANA migration is not a short one. Beyond having a solid commercial construct for any SAP services, Accenture will be leveraging their myConcerto platform, in conjunction with SAP’s Model Company, to facilitate the move to S/4HANA. Customers will need to understand how myConcerto not only enables their migration but what dependencies myConcerto creates for their ability to make future choices for upgrades and modifications to S/4 as well as support or maintainability of the S/4HANA platform.
2. Cost to Value
It will come as no surprise that both SAP and Accenture’s intent is to maximize services revenue, but there is some variability as to timing. SAP will be focused on booking a services deal with a short/known time horizon with an emphasis on front-loading the payments as much as possible. Accenture, while also desirous of revenue in the short-term, will also be positioning for the long game with a focus on upgrades as well as the AMS annuity opportunity. Customers who recognize this dynamic, align remuneration to functionality, and maintain options for future services (such as AMS), will be in a better position to certify the integrity of the business case and value to the organization.
Regardless of the happy talk about partnerships, both SAP and Accenture are separate companies with their own agendas, sales targets, and business practices. As such, it will be critical to clearly understand who is delivering what and when for your migration to S/4HANA. Customers who are able to eliminate the “white space” between themselves, SAP, and Accenture as a means of managing the risk (both commercially and from a scope perspective) will set a sharper edge to drive performance with their implementation partners.
In order for SAP and Accenture customers to take a proactive role in addressing this partnership and opportunity, it will be important to take the following steps prior to engaging with SAP and/or Accenture regarding a migration to S/4HANA:
- Understand your current commercial terms and conditions for both SAP and Accenture. Knowing where you have gaps and opportunities to improve the foundational terms of your relationships will be key to establishing a framework for a migration services negotiation and ensuring that payment is tied to value.
- When considering a joint engagement with SAP and Accenture, the variances between their respective business practices, agreement constructs, financial models, and motivations will have an important impact on how you define and appropriately allocate risk (financial and otherwise) and accountability between yourselves, SAP, and Accenture.
- Finally, perform the necessary diligence on what opportunities or limitations myConcerto brings to your migration.
Customers who leverage a third-party advisor to support them through these three elements will not only accelerate the analysis but also will gain valuable market intelligence and commercial insights for SAP and Accenture. This will empower them to drive a more successful negotiation and agreement construct as well as a more predictable outcome beyond just the migration.
If you’re considering an integration between SAP and Accenture, being aware of how their coopetition will influence the relationship and agreement will go a long way.
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