SAP Partners: Six Moves to Make As The World's Economy Reopens

We live in a different world today, one that is deeply modified by multi-dimensional drivers of change. By evolving at their own pace and convergence, these changes make our world unpredictable.

One of the key catalysts in the changes taking place is technology. It is paving a path to the new world. In 2021, Cloud is now the new normal and digital giants/hyperscalers are reshaping global markets through platform-based models.

Many leading companies operate in a digital first reality, creating new norms, new tools, new behaviors, and new processes. It’s a massive change for companies and individuals. In this radically different context, we need to better understand what digital first means to vendors but, more importantly, to our partners.

In the latest SAP Partner report from IDC, one-third of all partners have not been adversely impacted by the economic slowdown, and 23% have successfully transformed to a digital first world. That’s good news for partners and for vendors working with them. But 23% are struggling due to the world being turned upside down.

The 33% of non-impacted partners are largely “born digital partners” or partners who were already transformed. A digital first economy offers a wealth of opportunities for them.

The struggling companies (23%) represent traditional partners who are either transforming too slowly or who simply can’t make the move. Unfortunately, they are at high risk. If they can eventually succeed in making the digital leap, they will be well behind the competition.

The successfully transformed partners were agile and decisive when the pandemic struck. They changed their business models, launched new offerings, hired the right people, and drew up a new plan of action. In short, they emerged stronger from this crisis.

What can SAP and its partners learn from the success of companies that were able to pivot in 2020-21? Here are six “moves” for SAP Partners to make as the world’s economy begins to reopen: 

1)    Move from a product mindset to a service mindset. Products are sold by vendors, and customers must make those products work in their business (complicated). Services are operated by vendors which customers can simply access (easy).

2)    Move from a focus on technology to focusing on the operating model. When companies decide to move to the cloud, it means big changes in how they operate. They want to know how the changes will have a positive and long-lasting impact on their operating model. 

3)    Move from transaction to subscription. This move has a significant impact on revenue recognition, from immediate booking to multi-year booking. Financing the revenue gap is the biggest hurdle.

4)    Move from one-off deals to recurring revenue. A transactional model means signing new deals each quarter. There is constant pressure to maintain a full pipeline. A subscription model builds recurring revenue over time; it’s the foundation for resiliency.

5)    Move focus from a transactional organization to a customer-centric business. This is a transition from a “done deal” organization to a customer success organization. It’s a vastly different structure which requires balanced resources and acquiring new skills.

6)    Move from transactional culture to fanatical culture. Customer centricity is nothing new, but creating a fanatical culture is a relatively new approach for most companies. In a digitally connected world, it’s never been easier to turn customers into advocates, and advocates into fanatics. A fan is often a company’s best salesperson.

The moves listed above won’t be easy; behavioral change requires commitment and discipline. But I believe the best, most qualified people always rise to the top when adversity strikes. They show the discipline and commitment that is necessary to succeed despite what has happened. A winning team with strong leadership never doubts itself; that is SAP and our category-leading partners.