Open Letter to SAP

Dear Mr. Klein,

To quote Albert Einstein ‘In the midst of every crisis lies great opportunity’. One could argue that the deeper the crisis, the better the opportunity. No one has experienced such a crisis of the magnitude of this ongoing pandemic; good leaders are able to acknowledge the unexpected difficulties of this situation whilst also spotting opportunities to exercise entrepreneurial and economic responsibility by making changes in response.

This willingness to change and respond applies to local and national governments and of course also to global companies. The measures that large companies such as SAP take now can make a big impact on so many enterprises that are now struggling. 

Stepping up to respond to these needs reminds me of the ‘glory days’ of SAP in its founding days almost 48 years ago with a clear goal: to improve the processes of the global economy and improve people’s lives. SAP managed to achieve this lofty goal by the end of the 1990s: at that time the group was more than a software manufacturer from which you bought its ERP software; it was a partner. This also applied to internal cohesion. Anyone who has personally experienced Hasso Plattner’s (SAP’s founding father) leadership style knows what I’m talking about.The community is therefore pleased that SAP is taking the opportunity to strengthen the bond with partners and customers in the corona crisis. With your strategy of concentrating on the integration of the purchased software products in the future, you rightly put yourself at the top of SAP, Mr. Klein. That position can now be used to make a big difference to those struggling in the pandemic.

A series of emergency measures in the crisis

The list of welcome measures that SAP has already announced taken is long and the examples given here can be continued as you wish. 

There are the quick measures to protect your employees ( SAP News from March 18, 2020 ), and the guarantee of global operation and support, with which SAP fulfilled its role model function.   

There is now support from the federal and state governments with free platforms . On March 12, 2020, SAP provided free access to SAP Ariba Discovery and TripIt for existing, – new and non-customers (“open to everyone”) so that supply chains could be maintained. There is also free access to the learning platform openSAP. All SAP training courses in the home office can be attended free of charge via the “SAP Live Class”.

With its partners EY and Qualtrics, SAP supports governments around the world so that they can “tackle the most urgent tasks in dealing with the pandemic consequences”. The tools on offer include “COVID-19 Pre- Screening and Routing”, an online questionnaire for people who fear that they may be ill.

The implementation of the new smartphone app should also be mentioned to support the return campaign for German holidaymakers. On behalf of the German government, you and Deutsche Telekom are performing another important task with the development of the “Corona app”. That creates trust and confidence.

According to some economic experts, the corona pandemic will be followed by a global recession. Short-time work and the bankruptcy of numerous companies are already the order of the day. Some SAP customers are likely to have financial difficulties as a result of this. In order not to have to file for bankruptcy, their board members and managers have to cut costs quickly. Given the current payment obligations from SAP contracts, this is not easy. In addition, SAP customers continue to rely on legal certainty in order not to make themselves liable during these times.

But has SAP gone far enough? I’m heartened by what has been done, and I believe that these actions can expanded. Below are some ideas and suggestions on how SAP can further help your customers and show the “empathy to action ” that was much quoted in May 2017 by your predecessor Bill McDermott.

Additional corona support ideas for SAP customers: 

  1. Enable partial decommissioning of licenses immediately and without restrictions

Because of the pandemic crisis, software is being less-used or no longer needed in some industries. In addition, SAP customers have put shelfware in the closet over the years, which they cannot shut down due to the current contractual practice of SAP. The upcoming SAP S / 4HANA migration enables customers to convert their investments 1: 1 into new products using the so-called “contract conversion ”. This also includes shelfware – even if it is the “wrong”, too expensive user license types that were never needed. I suggest that the “dissolving” of the legacy issues be brought forward and that customers can now immediately and partially allow partial closures. This could immediately reduce the maintenance costs for licenses that are no longer required. 

  1. Suspend audits

When IT and basic administrators return to their workplaces, they will have their hands full to ensure the operation of their SAP systems. Nobody has the time (or nerves) for an audit. Due to the lower usage, the audits will also find out exactly that. Therefore, I propose to suspend the audit cycle for all customers this year. Customers who want to start new projects or migrate to S / 4HANA will also do so without an audit. Trust your customers, Mr. Klein, then your customers will trust you too.

  1. Commit to legal security

In my opinion, SAP’s reputation has suffered a lot in the past five years. This was mainly due to the aggressive appearance of numerous account managers, who suddenly and often for many customers often did not understand why they required extensive post-licensing for usage scenarios which, according to the understanding of the customers concerned and their respective legal departments, are part of the licenses acquired. The price and conditions list (PKL) is unclear in many places and leaves room for interpretation. Guaranteeing license compliance has also become a roulette game for conscientious customers who are professionally positioned at SAM in recent years. For this reason, at least the following changes to the PKL are strongly recommended:

  1. “SAP NetWeaver Foundation For Third Party Applications” replacement underline. This factually unjustified license type (material numbers 7009523 and 7009524) is still in the current PKL. This license type will no longer exist under SAP S / 4HANA. On- premise customers should no longer be obliged to use this license type. 
  2. “SAP NetWeaver OpenHub ” (7009506) and “SAP OpenHub for S / 4HANA” (7019816) should be deleted without replacement. “With these usage rights, data from SAP BW can be exported asynchronously and not in real time to non-SAP software applications.” (Source: PKL Germany Q2 / 2020). If you have properly licensed your SAP BW, then you should also purchase an additional license for the export of data that you previously generated yourself. According to some well-known legal experts, this license obligation is not in line with copyright law. Customers who purchased this license could now shut it down and convert it later as part of the S / 4HANA migration. 
  3. Indirect use and digital access

The list prices for the so-called “digital access” must be dropped or at least significantly reduced. The topic of indirect use is known to be the main reason why the SAP community has been unsettled and upset in recent years. Here too, the legal situation is complicated. The licensing model can be questioned for both copyright and antitrust reasons. So far, judicial judgments through commercial agreements have been avoided. A complaint by the IT user association Voice before the Federal Cartel Office is still pending under antitrust law . If SAP customers put third-party applications in front of their SAP systems without any functional added value just to save on SAP license costs, it is certainly an unacceptable license evasion, which of course does not have to be accepted by SAP. Where third-party applications provide functional added value for the customer, their communication with the SAP software is a proper use of the SAP software, for which no separate license fees should be incurred. Software must not only be technically, but also economically interoperable. “Interoperability” is an important buzzword in this context. SAP software would certainly be economically successful on the market even without charging separate license fees for indirect use because it is functionally convincing and technically capable of exchanging data with other software components via standard interfaces. With PKL Q1 / 2017, SAP increased the price for “Sales & Service Order Processing” by a factor of 200. This is the counterpart (forerunner) to digital access. Now there would be an opportunity to withdraw this price increase. Simply change the block price from 1,000 to 200,000 documents (factor 200).

  1. You have already extended the “ Digital Access Adoption Program “ (DAAP) until December 31, 2021, otherwise I would have recommended this too.

Dear Mr. Klein, I was pleased that the measures mentioned at the beginning were reminiscent of SAP’s mandate at the time it was founded. With a stroke of a pen, you could now improve the processes of the global economy and the lives of many people. Imagine this headline: “SAP shows empathy in times of unprecedented crisis – and inspires its customers”. How much trust would you win back? How many customers could you use to help you out of the crisis? The financial damage to SAP would presumably remain manageable and possibly even be offset by a rising share price. And you would not only be a good crisis manager, but a real hero for the entire global SAP community. And beyond.

Yours sincerely

Guido Schneider

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