SAP partner summit: "Cloud migration still the biggest challenge and opportunity for the channel"

CRN uncovers the key takeaways from SAP's UK and Ireland Partner Summit focused on the vendor's channel strategy

As SAP helps customers transition to the cloud and adopt AI, strong channel partnerships remain essential.

This was the top line at the vendor's Partner Summit in Twickenham, an event that brought together over 400 people from its UK and Ireland partner ecosystem.

MD Ryan Poggi told partners that 2024 promises to be a crucial year, especially for SMEs, which constitute over 80 per cent of the UK&I market, impacting more than 16 million workers.

He stressed that SAP aims to help customers adopt AI in business processes, which the vendor sees as a key growth area for 2024.

This strategic focus on AI and other technologies has led SAP to offer buyouts to up to 8,000 employees, while retraining others to align with new priorities.

Poggi said the challenge for SAP's channel business moving forward would be navigating complexity effectively and providing a platform that emphasises standardisation, unification, and a superior partner ecosystem.

SAP told partners it aims to grow through a three-pronged channel strategy.

"The first pillar is building a great team, ensuring we have the right skills, mindset, and teams to support you. We're evolving our customer-facing teams, working with partners to enhance skills, and launching talent development programmes," Poggi explained.

"The second pillar is focused on developing and racing prototypes for both long-term and short-term gains. Our team is dedicated to building relationships that support the entire customer lifecycle, prioritising long-term success.

And lastly, Poggi said the vendor is "laser-focused" on creating followership and trust.

"Trust is built on doing what we say we'll do. As we step into 2024, we're using the strong foundation we built together last year as a springboard for further acceleration."

A strategy for the channel

Rhodes expressed that one of SAP's main challenges right now is changing mindsets from traditional on-prem implementations to cloud and SaaS.

"Shifting from traditional to cloud mindsets can be challenging for some partners. We emphasise education, offering sessions and coaching, focusing on change management skills.

"The goal is to help them adapt to a fit-to-standard approach and leverage automation."

On this topic, chief channel partner officer, Karl Fahrbach, sees "tremendous" growth opportunities in moving existing customers to the cloud and helping them adopt and consume cloud solutions.

"A vast opportunity lies in our 150,000+ worldwide customers seeking a move to the cloud for business transformation," he said.

"We see two major growth areas - leveraging AI and aiding customers in adopting SAP products."

Fahrbach also explained how SAP's channel strategy has shifted in recent times.

"The shift from a sales-driven model to an outcome-driven approach has been pivotal. The new competency framework emphasises partner capabilities aligned with customer success, moving away from a mere partner-to-vendor relationship.

"The focus has broadened to include metrics like customer references and project escalations, ensuring a more holistic evaluation."

SAP is launching new initiatives providing revenue-sharing models and avenues for partners to publish solutions in the SAP store.

"Extensive readiness and enablement efforts, including coaching, hackathons, and a learning hub, ensure partners are well-prepared and continually updated to meet customer needs."

Fahrbach also stressed the importance of having a diverse channel ecosystem.

"SAP maintains an open ecosystem with over 25,000 partners worldwide, recognising the importance of diversity. We value both large and small partners, understanding that niche players bring specialised expertise.

"Collaboration is fostered by identifying partner specialisations based on industries and customer needs, emphasising the orchestration of offerings that include partner solutions."

Growing and rising in the cloud

SAP currently provides two cloud ERP offerings: GROW and RISE with S/4HANA.

RISE is focused on existing ECC and on-prem customers to move them to the cloud in a multi-step journey, while GROW is targeted at net new customers who want a true SaaS solution.

Partners play a crucial role in driving adoption of these cloud solutions, Jonathan Rhodes, global VP SAP S/4HANA cloud solution management, told CRN.

"With RISE, we focus on transitioning our installed base customers to the cloud, leveraging partners to manage the relationship. For GROW, we engage traditional partners adapting to new practices or new partners already aligned with cloud mindsets.

"The key is finding partners committed to moving customers to the cloud, forming a strong, long-term relationship."

He explained that SAP's training and accreditation for partners is focused on driving positive customer outcomes, not just certifications.

Tools like simulation go-lives help partners gain hands-on experience.

"We conduct extensive enablement, including simulated experiences for partners. The aim is to ensure partners not only know the tools but apply them effectively."

He explained that SAP encourages use of its prescribed tools and methodologies for faster, more standardised implementations.

"For RISE, we provide tools and incentives, encouraging partners to use them for a clean core. For GROW, we are more prescriptive, requiring partners to use a baseline activation approach and specific tools.

"While some flexibility is allowed for larger partners, the core tools must be utilised."