Written by Atul Govil, CTO, India Glycols and INDUS Board Member
Summary of the Agenda for the Townhall:
Considering the serious fall out of the ongoing Covid pandemic, top and bottom lines of many companies, industry sectors are in distress (particularly for the period March’20 till June’20). In most companies, considering liquidity crisis faced by them, IT budgets are under pressure, priorities for IT project and expense allocation are changing, projects getting delayed. For most companies, AMC payouts to SAP ERP & payouts made to SAP for their product offerings comprise a large part of the IT budget. Reduce the AMC burden, trade off the unused licenses or cloud products is the ask by SAP customers.
Brief on the Points covered during the Townhall:
Townhall meeting conducted on 20th July, based on registrations sought from SAP customers to participate in a townhall with INDUS board and SAP India leadership.
Along with registration, specific questions participants wanted to clarify from SAP was also taken, to make the discussion inclusive. 100+ organisations were represented in the Townhall.
Started with introduction by INDUS chairman Vijay Sethi and the INDUS board members. From SAP, Krishnan Chatterjee (Chief Customer officer, Head of Marketing and Mukesh Gupta (Director – Customer Advocacy & Executive Liaison for INDUS) participated in this meeting.
INDUS has had interactions with SAP INDIA leadership and their APAC team. INDUS was not satisfied with SAP’s response that this issue will be handled on a case to case basis. Thereafter Vijay Sethiji had written to Christian Klien (SAP’s CEO), Yasmin (who heads the user group community within SAP).
As per response of SAP, Account manager is the person who can help the customers, however as per feedback received from many customers in many cases, the account manager is not user friendly – this feedback was given to SAP, without taking specific names.
In case account manager does not respond, then Krishnan can be reached out to. As per SAP, no price reduction has been given to any Customer till date, or trade off of the un-used licenses made so far. Some cases have got differed payments.
A poll was conducted to take an anonymous feedback, to get pulse from the customer (64 feedback received on the below 3 poll questions) –
- Did you reach out to account manager – 77% said yes, 8 % said no, balance are yet to initiate a communication.
- Did you get any assistance from the Account manager – 17 % said yes, 55 % said no, balance
- Are you happy with the SAP support on this topic – 6 % said yes, 69 % said no, 25 % balance.
As per SAP, a blanket waiver may not be possible, SAP will look at the request sector wise and provide some benefits. As per INDUS, it will be important that sector wise benefits, as applicable, be transparently provided to linked SAP customers. Whatever criterion is there, it should be applicable for all organisations. As regard the free add on Cloud based products, offerings by SAP, most companies are not using the same.
Krishnan committed that no Customer’s request will go unheard. Each and every customer will be given a hearing in the SAP internal task force for the task force to decide.
3 guard rails set by SAP for the constituted task force –
1st is the Industry vertical – impact on the industry,
2nd – size (turnover) of the enterprise, considering smaller sized companies are more vulnerable.
3rd – financial engagement of the enterprise with SAP.
Over 450 requests have come to the task force – 190 have been given relief based on INDUS efforts – in terms of deferment of payment and 2nd is the delayed start date of the cloud offering.
No. of new innovations related discussions have started. Request from SAP to INDUS to be able to drive these innovations to create higher value for their respective businesses.
The Townhall was opened up for all participants to share their inputs:
- Considering there is a reduction in head count in some companies, SAP needs to tradeoff for the spared licenses.
- For Concur and such SAS based products, wherein usage is almost nil, a waiver is sought.
- Customers are seeking direct benefits which can have a bearing on their cash flows, liquidity.
- Escalation matrix is required from SAP for each Customer, to get both Sales, Service support.
- SAP should show commitment and work as a partner and not as a transactional vendor. Sentiment of the impacted Customers to be addressed. Customers are getting a feel that SAP is acting unilaterally.
- In many companies, there is a significant reduction in employees salaries, headcounts also getting reduced, also Contracts are being renegotiated to lower their Operating costs. It is expected from SAP that they support it’s Customers in these desperate times.
Brief on INDUS, it’s objectives and activities to achieve these, was shared during the Townhall.
It was emphasised that we need to increase the member base across Industry verticals. Further a showcase of the new and interactive INDUS website was done, with Events gallery, details of the Special Interest Groups, faq section, Licensing linked clarifications, Blogs, link of Webinars being done by INDUS & SAP (new and recorded).
In the interface between SAP and it’s Customer, there is a need to build greater trust, it cannot be just around Contracts enforcement, being inflexible. There is a need to create a win-win situation with greater resilience. Further as per SAP, there are areas to drive co-innovation and put a mechanism around it.
A follow up meeting will be planned in due course of time. Recording of the meeting will be made available to participants.
You can view the entire recording of the INDUS Townhall here.
Outline of the earlier interactions with SAP on stated topic:
In the wake of the ongoing crisis, we had reached out and held discussions with the SAP India MD, Deb Deep Sengupta and SAP India Chief Customer Officer – Krishnan Chatterjee (on 2nd April & follow up call on 16th April) to discuss the possibility of reduction in the AMC & subscription of cloud based products like SuccessFactors, Concur etc.
We formally sent an email requesting for a 3 month waiver of AMC given the current situation, following which we had a meeting with the SAP regional lea-dership, represented by Richard McLean (SAP APJ CFO) and Paul Marriott (SAP APJ COO).
April 30th – SAP APJ CFO – Richard McLean and SAP APJ COO – Paul Marriott in this meeting
Focal Point: Seeking AMC waiver for 3 months due to the impact of the current pandemic on the businesses in India, which are already impacted by GST, De-monitization and other linked disruptions.
On 22nd June, INDUS board through it’s Chairman Vijay Sethi, reached out SAP’s CEO – Christian Klein requesting for SAP’s support in waiver of AMC – no uniform rule for all customers in a country and that SAP is willing to consider requests on an individual basis.
Each SAP user organization whose business is significantly impacted (negatively) and is keen to engage with SAP for relief options – needs to reach out to SAP through their respective account manager or in case response from account manager is not achieved, then the org can route the request with Krishnan Chatterjee.