Is SAP More Flexible Than You Think?


arms bending and shaking hands over a wall

While some customers may have constructive criticism for SAP related to Indirect or Digital Access, it is often important to take a step back and look at SAP holistically. Often unknown to many SAP customers is the product-related flexibility it allows during strategic negotiations like S/4HANA to get the deal done.  In some situations, SAP has been willing to provide product-related flexibility in areas including product metrics, definitions, and requirements.

Product Metric Flexibility

As many customers are aware, SAP has a proprietary price list which has been drafted by some of the most intelligent people in the industry to ensure SAP is continuously benefiting from capabilities that customers are realizing from their software.  Each SAP product’s metrics, pricing, and tiering are carefully thought through from customer’s initial investments through their continued investments in a software product.

What is unknown to some customers is that SAP has been willing to bend when it comes to their metrics in order to appropriately tie software products to the benefits customers are realizing. For example, if you are a chemicals manufacturer with revenue that is anticipated to go up over the next 3-years due to your acquisition strategy and the S/4HANA product you are licensing is based on a revenue metric, this may not be the most appropriate measurement of the benefit you are realizing.  It may be more appropriate to tie the S/4HANA product to another metric that is more in line with your benefits, and in our experience, SAP has been receptive to this train of thought.

Product and Metric Definition Flexibility

When SAP customers are gathering their requirements, they often view the products and metrics in the light of their own situation. They do so without consideration of how SAP defines products and metrics, even though SAP’s relevant products and definitions are accessible on its website.  When it comes to the contracting phase, many SAP customers find themselves surprised that the rights they thought a product had and how a metric was actually defined were different than they anticipated.

In our experience, SAP has been willing to listen to its customers on how they intend to leverage products and how definitions should be defined for their specific use case. Therefore, while it is certainly appropriate to have discussions on definitions when it comes to the contracting phase, you would be forward-thinking to include product and metric definition discussions as part of the commercial negotiation.  This means that if having those definitions modified is important to your business case, you would be having those discussions at a time of peak leverage.

Product Requirement Flexibility

For those customers allowing SAP to help lead the requirement gathering process, it will typically come as no surprise when SAP positions an aggressive point of view for anticipated product requirements for your roadmap. While they may be in fact helping you meet your SAP roadmap, at the end of the day SAP is in the business of selling software and they will typically position a higher level of requirements than necessary to meet their own goals and objectives as well.

When it comes to gathering requirements, it is important to set their expectations appropriately at the outset.  This means that if you only have an amount in your budget to buy what you need in Q4 of 2018, tell SAP that your budget only allows you to buy what you need and not those items on your wish list. Beyond your immediate requirements in Q4 of 2018, you may anticipate growth over an extended period of time but do not intend to buy forward.  Let SAP know that you are prepared to buy what you need now but expect them to provide discounting reflective of your long-term growth on a particular product, as well as discount protections to allow for growth over an extended period of time.

At the end of the day, SAP is more flexible than many companies think when it comes to product definitions, metrics, and requirements.  You will typically have more leverage and see a higher level of flexibility during strategic negotiations like S/4HANA, when coupled with the correct stage-crafting.

Comment below, follow me on Twitter @MikeTucc, find my other UpperEdge blogs and follow UpperEdge on Twitter and LinkedIn.

Related Posts

About the Author

Leave a Comment

*