For years, I specialized in building, running and selling outsourced SAP delivery capabilities. Mainly SAP application management services where the maintenance, support and enhancement of a customer SAP system is delivered by an outsourced – and typically offshore – delivery team.
In total, I worked for 4 separate SAP ‘Systems Integrators’ as the industry likes to label them (I’ll revisit why I think this label drives the wrong behavior another time). Then I provided independent consultancy services to another 3 or 4 on, particularly challenging bids.
I can say with conviction that outsourced SAP services are a hard thing to sell. With the advent of a wholesale shift to ‘low-cost delivery’ locations like India and Malaysia, the business of feeding, watering and nurturing your SAP investment became a commodity.
Customers tend to be happy spending $50m on an SAP implementation before holding a brutal ‘race to the bottom’ in search of the cheapest possible service to help them run it.
It’s kind of like building a Formula 1 car and hoping that a handful of apprentice scooter mechanics will tweak, tune and service it to help you compete during a race season.
And of course, you’re never presented with a finished Formula 1 car. Even if the same Systems Integrator is performing the implementation and running post-go-live services, in the hurry to deliver the ‘solution’ corners are sometimes cut.
Meaning that your Formula 1 car may have a few ‘flat spots’ or worse still, fundamental design flaws.
And if you’re taking on services a few years after go-live, you have a reputational issue to restore with the business. After all, the likely reason they’re looking to change service providers is that there’s an issue with the ‘service’ being provided.
The customers who wound up with the best deals – service, price and value – were the ones who ran interactive procurement processes or independently led ‘clean room’ exercises.
The ones who got the worst deals were those who simply issued an RFP and a rate card spreadsheet – and then made their vendor selection based on scoring responses and holding a final beauty parade.
But in my 12 years or so in this business, in either format of procurement, there were 2 often asked questions which were really hard to answer as a service provider.
The first – which is almost impossible to answer without bordering on an existential response:
“How can you ensure that despite being outsourced and separate from our organization, the people you have delivering services will behave in the same way as our employees would in all matters relating to the work they do?”
The first time I was asked this in a workshop I think I just about managed to sound credible. By the 5th time, I had my response off pat. But I wasn’t totally confident that we could deliver against what I’d said.
The second question – which is more commonly asked but harder to answer.
“How will you demonstrate true innovation as part of your ongoing service delivery?”
Hmmmm. This one is trickier. It’s hard to make innovation a process and formalize it. Sure, you can force the kind of intervention that triggers innovation and even institutionalizes it in your day-to-day culture. But how do you drive ‘true innovation’?
And how do you ‘demonstrate’ it – and show your ideas, solutions, improvements? Innovation comes from a fresh perspective. But to deliver efficient ongoing services, you need consistency of resource and people who deeply understand the customer’s solution.
Consistency and Fresh Perspective are counter-intuitive in a staffing model. Plus – you need to do all of this whilst surrounded by the ensuring complexity and chaos that running a production SAP system inherently brings.
Every Systems Integrator has a stock answer for the ‘innovation’ question. But 90% of them are just words. There’s little delivery fabric underpinning the claims. Examples range from ‘staff ballot boxes’ to ‘online innovation portals’ and ‘customer hero awards’. They’re kind of in the right spirit but they don’t really work.
In my last SAP outsourcing role, I was Global Head of Service Solutioning. With such a grand title, I thought it wise to proactively go in search of things that would enable us to build service delivery capabilities that answered the really difficult questions our prospects were asking us.
I wanted to be able to state with confidence ‘this is how we solve that problem’. And have 5,000 SAP consultants able to sing off the same hymn sheet. And sing in tune.
We spoke with analysts, independent experts and software vendors before settling on 2 or 3 things that made a tangible difference to our delivery capability – things that enabled us to confidently answer the difficult questions (including the two above).
And that’s why I’m sat here today. Having made service delivery better for a number of large clients using Basis Technologies’ software, I figured that helping Basis Technologies to make their software even better – and put it on a larger stage – would be a much more rewarding way to make an impact on the way businesses run and manage their SAP systems.
Click here to learn more about the partners that Basis Technologies work with.