Back in 2014, Professor Hasso Plattner was joined on stage at SAP SAPPHIRE by Dr. Clayton Christensen, then Dean of the Harvard Business School who was world renowned not only in academia but more so in the business world for his research and life’s work on disruptive innovation.
Hasso and Clay spent two hours in front of the audience debating and discussing ways organizations disrupt their industries, markets, and products. By the end of the discussion, Dr. Christensen had masterfully woven in insights and principles of the “Future of Work” in how many organizations can lose focus on “the job to be done” and make a “leap” forward with SAP in innovation on their journey…
Fast forward to 2021, much of what was discussed on stage that day related to HANA and education…we now have OpenSAP, portions of free education on SAP PartnerEdge and SAP LearningHub for Partners. Has the full vision been accomplished from that day? That is hard to say…however it is safe to say that SAP education has become more broadly available, and easily accessible for a larger segment of the population…and the “future of work” within the SAP ecosystem has dramatically shifted focus on “jobs to be done” and “accumulation and dissemination of information” which is vitally important to SAP…hmm…me thinks SAP made an acquisition around this…oh yeah…it’s called SAP Qualtrics!
I bring this up now, whereas I believe we are at a new inflection point! With all the digital innovation that is occurring, we are seeing a stratification of solutions within the broader ERP ecosystem that is not consistent or harmonized especially in the small and mid-market business segment…there are thousands upon thousands of SMB organizations that run their businesses on spreadsheets, there are additional thousands upon thousands of business who run on supercharged accounting software, and then there are some who make the “leap of faith” into ERP solutions only to find expensive entry points that often require substantial investment in resources and customization to obtain an adequate solution. Let’s pivot for a moment to SAP’s schizophrenic approach…
SMB Customer: I’d like an SAP solution for my business that is simple, standard, and efficient which doesn’t break the bank, and has future-proof built into it (meaning an upgrade path to your SAP flagship solutions).
SAP Sales Executive: Oh Yes! We can accommodate your every need and desire…we have an entry level product called SAP BusinessOne. It meets all your requirements except an upgrade path…but you’ll love the solution…Or, we have SAP ByDesign which is simple, standard/yet somewhat flexible, and fairly efficient, however it comes with a bit more premium price tag, but NO upgrade path to our SAP flagship solution…But you know what…we can get you in on our SAP flagship solution right now, SAP S/4HANA Cloud on our RISE with SAP program. It is simple, standard, and efficient but will cost you 250X of what you pay now…how would you like to pay?
SMB Customer: “You know, my $500 per year Peachtree software seems to be working just fine”….Or even worse…”you know NetSuite is sounding better by the minute…”
Bottomline…SAP needs another market disruption, and quite honestly better answers specifically for the SMB market, and in my mind, the answer is threefold;
- Path to SAP S/4HANA for All SMB Customers
- Much Lower Price Point for SMB Customers
- Harness Innovation by Granting Complimentary Licenses to SMB Partners
Path to SAP S/4HANA for ALL
The days of having different solutions for core business scenarios should now be history… taking a t-shirt size approach of XXS through XXXL should be leveraged utilizing the same code, with the ability to innovate and differentiate around those various sizes. SAP has done well with the messaging under S/4HANA. Quoting “innovating and differentiating around the digital core”, however, this has not permeated in the entire ecosystem yet.
Much Lower Price Point for SMB Customers
Whereas SMB customers range from $0 to $1B USD in revenue,…there needs to be solutions that can be consumed across all SMB customers. Remember…many of these customers, including SAP partners, are in this segment and want/desire/need an SAP solution that isn’t a substantial portion of their earnings!
Harness Innovation by Granting Complimentary Licenses to SMB Partners
It is high time that the SAP embraces the “disruptive innovation” messaging from Hasso & Clay’s 2014 Keynote SAP SAPPHIRE address. Instead of having the SAP Partner ecosystem leverage the Peachtree, and other competitor product solutions, they should grant the access to use complimentary licenses & run their businesses. Further, develop product/solution innovation specifically for the SMB segment. Let’s face it! The vast majority of SMB clients/ customers are not going to large system integrators to solve their problems…they are going to smaller yet trusted partners who can help them navigate through business challenges encountered in a human-centric enterprise. To enable a persona-based empathetic approach leveraging design thinking and innovation as a service framework.
While this messaging is not likely to be presented this year at the 2021 SAPPHIRE Conference…SAP should be taking a critical look at the challenges of the SMB customers and partners alike, and start making strategic pivots to “OWN THIS MARKET”.
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