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SAP’s False Start With Business By Design in Universities

The SAP University Alliance Program (UAP) has been existence for more than 15 years and has grown to include more than 1200 universities globally.  The program provides a number of benefits to universities and more information can be found in a blog by SAP Mentor, Simha Magal (here).  From SAP’s perspective the program has been very successful in injecting new SAP skills into the ecosystem. The provision of skills was one of the original goals of the program.  This was reinforced through the UAP management facilitating curriculum development in key areas to distribute universities.  Academic train the trainer workshops were conducted to support the new curriculum. This assisted universities to incorporate these technologies into their curriculum.

The member universities of the UAP access SAP solutions via University Competency Centres (UCC) throughout the world. The UCC’s charge a fee to universities to access the SAP solutions.  The fee structures vary from region to region.  The America’s UCC’s adopt a buffet approach where there is a set fee to access all SAP solutions.  In APJ and EMEA it is A La Carte approach where universities are charged for the solutions they use.

In 2010 SAP provided Business By Design (BYD) to universities free of charge.  One of the UAP management’s KPI’s was to get universities to adopt BYD. It was decided to roll out BYD to regions in a phased approach. Initially BYD was provided to universities in China, North America, United Kingdom, India, Austria, Canada, Singapore and Germany.  There are approximately 200 universities that have adopted BYD into their curriculum. The UAP developed a BYD certification including exam for academics to undertake.

The offering of BYD to universities by SAP was underpinned by a different strategy.  It was not about addressing the skills shortage as there were approximately 1,000 BYD customers (November, 2011).  It was more about introducing BYD to students so they could understand its potential and act as marketers once they had left university.  It was contribute to SAP’s positioning as an innovative company in the eyes of future corporate leaders.  I do not have a problem with this approach as universities get access to a good teaching environment and students benefit. Universities have embraced BYD as a preferred teaching environment.  The accompanying data set was rich and could be used to demonstrate various business scenarios. 

So what is the problem?

SAP have now decided to charge universities to access BYD.  Although the UAP indicated that universities would get access up to the end of 2012 and what would happened after that was unclear.  The fee is approximately $5000 per annum.  The new charge will impact on the rollout of BYD to universities in a number of ways.

Universities have invested quite a lot of time and resources to incorporate BYD into their curriculum through the encouragement of SAP and UAP management.  In the America’s the universities have not budgeted for this additional cost as there was a set fee for SAP solutions and this would be extra.  In the remainder of the world this is an additional cost to them accessing ECC.  In APJ, universities have to pay a fee to the UCC for ECC even if they don’t intend to incorporate this solution into their curriculum.   So they cannot pay for BYD instead of ECC.  Universities I have spoken to are reluctant to pay an additional fee for BYD when they can use ECC to teach many of the concepts.   They will stop using BYD and are annoyed by the decision. 

This is an embarrassment for SAP and will diminish the level of trust between academics and SAP.

So what about SAP’s strategic objectives of positioning BYD and the “innovative company”?  It would also be worth knowing if the 189 BYD universities were counted as part of the 1,000 BYD customers.  If this is the case then there will be a negative impact on customer numbers which will be hard to explain to analysts.

SAP need to re-visit the decision about charging universities for BYD and continue to look at the big picture rather than short term cost recuperation.

Paul Hawking

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  • Hi Paul, I agree with you, this seems petty (I can’t imagine the $$ make much difference to the SAP bottom line) and short sighted – a backward step for sure.

  • Paul,

    Excellent blog and I hope UAP responds.

    I attended a BYD hands-on workshop at last year’s university congress lead by Nitin Kale.  I hope SAP will take a bigger picture view and see that BYD also teaches processes, which transcend BYD and apply to ECC systems as well.  The attendees in that workshop really liked BYD and while students may not end up being marketers for BYD they may be potential marketers for other SAP Solutions.


    • Hi Tammy

      Firstly I believe that the decision to charge for BYD has not been made by the UAP.  They have agreed to the amount being charged.

      Yes there is no doubt the academics I have spoken to like BYD as a teaching tool.  But they are not willing to pay the EUR3000 on top of their existing charges to use it. Especially when they already use ECC.  The short term losers in this are the lecturers who have put the work in to understand how to best use BYD in their curriculum, the students who are unable to use this user friendly solution.  The long term loser will be SAP.  I get the feeling that the SAP Cloud management may not be aware of this decision.


  • Hi Paul,

    I fully agree with you and in my opinion ByDesign offers a great process view of a company, so it`s a good learning environment for students.

    I also hope that SAP will re-think about this topic.


  • Hi

    There has been a lot of interest and concern shown in relation to this blog from some very influential people.  Below is a snapshot of some of the Twitter traffic.  Hopefully the support of these people will bring about a review of the policy by SAP.

    FreeBalance @freebalance 

    RT @paulhawking: #SAP need to revisit their poor new strategy for #BYD in universities: blog @SAPMentors

    Tammy Powlas @tpowlas 

    SAP’s False Start With Business By Design in Universities #SCN via @SAPCommNet > by @paulhawking – just left a comment

    thomas wailgum @twailgum 

    RT @paulhawking: SAP’s False Start With Business By Design in Universities #SAP

    Jarret Pazahanick @SAP_Jarret 

    #SAP‘s False Start With Business By Design in Universities by @paulhawking ->Seems very short sighted of SAP

    Jarret Pazahanick @SAP_Jarret 

    #SAP‘s False Start With Business ByDesign in Universities by @paulhawking ->Wonder if @LarsLuv signed off on this

    Vijay Vijayasankar @vijayasankarv 

    @SAP_Jarret @paulhawking @larsluv pretty small amount for SAP to start billing $5000 to universities . I hope they reverse decision

    greg misiorek @greg_not_so 

    @vijayasankarv @SAP_Jarret @paulhawking @larsluv < you got my vote in as well

    Jon Reed @jonerpnewsfeed 

    SAP’s False Start With Business By Design in Universities – by @paulhawking (via @jonerp) #ensw

    Jon Reed @jonerp 

    Reading: “SAP’s False Start With Business ByDesign in Universities” – by @paulhawking cc: @dahowlett

    Dennis Howlett @dahowlett 

    @jonerp Dreadful cc @paulhawking


  • Hi Paul,

    We often talk about tnstaafl (there’s no such thing as a free lunch) and it seems the free lunch is coming to an end here. But the question really has to be for who? When SAP are currently pushing developer interaction, the recent push for mobile and HANA as prime examples, one is puzzled to say the least about the desire to start charging universities for access to systems used to train students.

    I have to say I’m not completely clear on the history or why the new route has been taken, but thanks for highlighting it, this really should be examined to understand if it really doesn’t make sense.

    • This blog is a bit confusing. I agree with Chris on thetnstaafl (there’s no such thing as a free lunch).”  Would Paul’s university provide free tuition to all students who want a certain type of career? And should other manufactures like auto companies give their cars to academics for free?  And perhaps food companies should give their produce and beverages for free? Maybe the utility company can turn on the lights for free?

      I’m new to this community but have followed cloud trends including the early days of, etc. and found this thread on one of my Tweets. I also teach many students so this so called blog struck a cord.

      It seem disingenuous when a professor at a university which makes money off of students (& their parents) and donors asks another business for a “fl” (“free lunch”). 

      I wonder if students whose families make a living can take this professors course(s) for free? If so where can I sign up a few of my students?

      • Hi Nancy,

        I think you raise some very good points. This debate is really important so it would be great if you could follow it through.

        Can I also ask you to fill out some more details on your personal profile so we can all better understand the context that you represent?


        Graham Robbo

      • Nancy,

        I see what you are saying but it’s more of win for SAP if students learn their software out of college – you have trained SAP employees from the beginning.  That’s my take – SAP has a lot more to win with trained students in their software, so of course it will take some investment on SAP’s side.

        It is better too for employers who are able to hire trained talent right out of college as well.

        This is simply my opinion. 


      • Hi Nancy,

        Some uni courses for free, that sounds like a great idea 🙂

        However, my thoughts around this area are more on the mismatch between SAP spending every effort in trying to engage the developer community on one hand and pushing away the university community on the other. Especially in an area that will be key to SAP’s success in the near future, this seems quite at odds and not very consistent.

        as I said, I do not know the full story here, but I would hope that SAP would respond with some clarification.

        Perhaps the research has been done and it is not viewed as cost efficient (as per your comments) to expend on education in the hope of getting future return? Or perhaps only mobile and HANA justify this return currently? Either way, a little transparency in this space would be a good thing.

        as Paul mentions, going forward there needs to be trust between those who educate on SAP solutions and SAP, or else we could end up in a situation where building an SAP training program might not be worth the effort that one might put into it.

        Thanks for your comments, I agree, this is a important thing to consider.

        • Hello Chris,

          Let’s be real… I see that you’re into consulting…I presume that your business provides free services (& “free lunch”) to it’s academic customers. Who do I refer universities to in your firm for these free services (sign me up!:-)?  You should want all companies to be healthy and make sound, thoughtful business decisions; not paint it into a corner. 

          You speak of trust. Trust is a two way street. Trust is not built by trying to force one party to do things. As a parent, I would say that there’s a right and wrong way to do things. Even if a child has some good points they may not get them by providing incomplete insights and ranting. 

          • Hi Nancy,

            Surprisingly enough there are quite a few companies here in Melbourne that have signed up to the giving students a “free lunch” idea. TdT, another SAP Mentor, runs a course for the local uni. I’m pretty sure it pays him peanuts compared to his day job. Many of the local SAP community have participated in teaching the students( free of charge ). There was even a guest appearance by Ray Wang at one session. I would be honoured to be able to present at one of his sessions on how SAP’s solutions are working, and I certainly would not charge for that!

            Many of us are actually driven by our desire to see SAP work well and have people deliver it well, and as an added bonus, have some of our local youngsters do the work, rather than the only resources that we can get being from overseas.

            I hope you can understand this. One of SCN’s strengths over the years has been it’s ability to support rants by the community and to enable this to reach the ears of key SAP execs. I welcome you to the SAP community, and I hope that you can accommodate our desire to allow free and (relatively) unmoderated comments it’s environs. As I have previously stated, I’m not sure of all the details around this issue, however, it does seem to bear further investigation.

          • Chris,

            Hi! Community volunteering (& donating time) is “very” different then this discussion.  Clearly you want to follow a friend even if the information provided is incomplete. That’s admirable but a bit misguided. 

            A free consulting service from your (or anothers) company or product/services should be reviewed with the owner(s) as you say in a “trusted” way. It’s their choice to agree, disagree, or take time to consider —that is there right.  For example if a worthy charity requests a donation is it a requirement of the business to donate on the spot or should they receive a business case and thoughtful considerations?  To assume entitlement is not the best starting point. Perhaps it takes time (a.k.a. patience).

            It seems like you have a predisposition which is clearly your right (I respect your right to have these views)!:-) I wish you and others with your sentiment the best in sharing a more balanced view which takes into consideration the welfare of all parties.

  • Thanks Paul, Nice catch, this is an important issue.

    Here is what I think is not only fair, but should be done:

    1. If an university uses ByD as a productive management system (to run the University business), it should be charged as a customer (maybe a discount would apply, but this use case classifies it as a customer);
    2. If an university creates a new REVENUE STREAM by building a ByD training course, that forms ByD professionals, it would be another case where I believe it should be charged. BUT, as you clearly pointed out, this is REALLY not the case today as the demand is still very low.
    3. If an University however, uses ByD as a subject within their current programs, this should be COMPLETELY free. While it is of interest to the university in question, it is a HUGE marketing opportunity for SAP. SaaS is not a concept completely adopted yet in the market. It takes a new way of seeing IT, a new mindset. All this is done for free while highlighting the features of BYD. How could SAP charge for that?

    In summary, in the context described in your BLOG, Paul, I not only agree this use case should remain free, but even some free suport should be provided to help structure the course and better highlight the product.

    Starting to charge for it is a very poor decision.


    • Leo,

      You have some interesting thoughts. Unfortunately the writer wrote this blog as an alarmist similiar to a headline grabber. There are processes to create change. For example, Gandhi choose a hunger strike for change but it took time. Businesses and professionals work for months and years for change. Mature people know that things can take time. Probably best to sit back and assess a thoughtful way to channel this energy in a more constructive fashion.  Hopefully a better bandwagon will emerge.

      Kind regards,


      P.S. What free services are you going to provide? I’d like to create a directory?!:-)

      • Hi Nancy,

        I know and trust Paul. I don’t think it is that “negative” his point of view. It raises questions about what most here believe is a wrong decision.

        About the discussion of “free lunch” I believe we got off track here… There was never and there will never be a true Free lunch. We all know that. There is always something we take in return. But to help you start up your “directory of free services”:

        • When I built (with help of some others) a tool called ABAP Report Wizard to help make ABAP reports faster, we put it on the web for “free”. We got recognition in return…(over 5000 donwloads)
        • When I present at SAPPHIRE/SAPTECHED or other events, it is also for “free”. Even though we put many hours preparing, rehearsing and even missing most of the actual conference content, we do it for “free”. Again, we always get something in return;
        • When I spent (with other 4 guys to form the Certification 5 there are other contributors)) a lot of time to built the Certification Recommendations to SAP, we did it for free. We really believed it in. All with the goal of improving our industry. That is what we envisioned and wanted in return (even if for that we got very little);
        • The very fact that I am not at the pool with my family right now (it is a holiday here in Canada today) and that I am here answering this Blog, shows I care. I want change in return. I contribute thus for “free”.

        Universities could choose to use Netsuite or (or even other ERP’s on demand) instead. Some chose to use ByD. That is a great opportunity for SAP to showcase its product amongst future Business leaders. Isn’t that valuable? Isn’t that worth a “free” usage of the product? In my head it is well worth the investment.

        Remember, I am talking about usage case 3 (what is the focus of this Blog)


        • Leo,

          Seems like you’re a bit off track. It’s not about your use case #3. It’s about constructive ways to work with any organization in any situation.

          Re-read the blog and then ask yourself if you would want any organization addressed this way?  Is it positive and throughtful or alarmist? As a parent I do not want children coming at me with negativism and incompete ideas, but hey that’s me. That’s why I hope you’ll see a bigger picture then the one you have latched onto. Children (& adults) should gather the facts and find a constructive way to make the change over time.  It’s easy for you and others to create a gang mentality but that’s not the best way to get things done.

          There are many of us out here who work towards change in a positive, professional way. We get things done.  First with a much greater number of facts then is in this so called blog and then with a “kind regard” (& respect) for both sides of the equation; not just your own. (i.e. see an elephant through open eyes, not by looking through a straw and exclaiming that you see the color gray; you might be surprised that there’s a bigger view out there then you think!:-)

          You are entitled to your opinions. They just do not represent everyone out here! Happy to share a balanced view with you.

          Kind regards,


          P.S. Hopefully we’re both having fun by the pool!:-) I’m enjoying my swim!

          • Nancy,

            I struggle to see any alarmism within the blog post, it seems pretty straightforward.

            • SAP have multi-region relationships with educational establishments around the world – these regions charge in different ways.
            • In the US this arrangement has changed in a way that the Universities had not budgeted for – there are now additional costs for them for using ByD instead of going straight for the backend ECC.

            These are not opinions, these are facts as presented by Paul – if you have other facts which contradict them then present them. Paul has highlighted something which he feels is wrong in Denmark, he has challenged SAP on this issue – hopefully they will come back with something that will resolve the issue or clarify their position.

            The overwhelming feeling throughout this post and comment thread is that these people love SAP and want people to use SAP as widely as possible – which is why we give up so much free time to it. Many of the contributors to this thread are SAP Mentors, if you check out this link it will give you a little more insight as to why Paul has challenged SAP in this way.

            As a new contributor, as Graham said, it would be great to understand who you are and your context within the SAP ecosystem. We have this great new social platform in SCN, lets use it properly to get to know each other better – or we might have to assume you’re a spy and put you on the naughty step where you should put naughty children/spies 😉



  • Hi Nancy

    Welcome to the SCN community and thanks for your comments.  Rather than post individual replies I will post one reply to address some of your comments.


    I apologise if you find my blog confusing. The point I was trying to make is that SAP have encouraged universities through a number of mechanisms to incorporate Business By Design into their curriculum.  One of these mechanisms was to provide the solution free of charge to universities.  After approximately 200 universities have committed to teach with BYD, SAP have decided to start charging for the solution.   BYD is a good teaching tool but universities could use ECC to teach the same content.  There is no skill shortage in relation to BYD so universities will not be attracting students because they are teaching BYD.  The provision of BYD to universities was more about supporting SAP’s strategic direction rather than satisfying a skill shortage.

    In terms of the issue of “free”.  I will provide you some background in regards to the SAP University Alliance Program (UAP) which may give you a better understanding.

    SAP provides free software to universities as part of the UAP.  This software is hosted at 5 universities (University Competency Centres (UCC)) and they charge for the provisioning of SAP solutions to universities.  Yes, the university which I work at makes money from attracting students to our courses.  However, there are many universities around the world where any monies made goes to the government and thus they do not directly benefit from increased revenue.  Universities are not allowed to gain revenue from SAP solutions unless it is indirectly through enrolments in accredited courses.  Universities are not allowed to conduct SAP training.   In regards to Business By Design very few universities would attract students by introducing this solution.

    In terms of the style of writing of the blog there has been only one other person who has suggested the blog is negative and they worked for SAP.  I noticed that you responded to Chris’s comment in regards to him being a consultant.  It would be helpful to people if you followed Graham’s suggestion and complete your SCN profile so the people can get a better understanding of your background.  Many of the universities who have been impacted by the BYD decision have contacted me and thanked me for voicing this issue.



    • As a new comer to this community I see you like attention. We have a park, Hyde Park, where there’s a Speakers Corner. I think you’re best speaking. You seem to forget that nothing in life is free; there are costs involved (in all of your examples). You have chosen an alarmist approach with your followers and that’s your right. You seem to want free things that are good for you (first and foremost); how about confirming with your university a free education to all students; that would be very worthwhile. Your followers can sort out their goods and services as well; we can stockpile them based on this new and growing generosity. When we see that you’re as generous with your resources as you wish others to be with theirs then we can talk some more. As a parent I see this symptom with children who get their way by crying instead of finding ways to work out their issues.  I wish there were ways to instantly comfort you. There/there!  It’s not that you can’t have more toys to play with it’s that you want them now and you want them your way. As adults, it’s probably to late to change but we can at least try to set a better example and have some r-e-s-p-e-c-t for others. As in Speakers Corner it’s almost time to come down from your pedestal I think we have heard quite a bit. Thank you for sharing your right to speak. I can see that you and yours will go on and on and on… I’m getting a bit fatigued from your round about going in circles. I’m going on to other parts of the park where the children and parents know how to play.  Kind regards. Nancy.

  • Paul,

    I read your post with interest and I must admit a little puzzlement. My institution was involved in the initial academic pilots of the ByD platform. We developed learning materials and methods of teaching and using the ByD platform to support and enhance the teaching we do, to bring alive the academic concepts that we wish our students to grasp. Throughout all of our use of the system we have never been given the impression that the software would remain free for our use. We have always know that the software would ultimately be included within the portfolio of software offered to institutions and an appropriate fee would be levied.

    And to be honest it’s a fee I am happy to pay. The platform has a number of advantages over and above ‘traditional’ SAP EEC6 ERP systems, even down to the mundane day to day things such as I do not need to involve my universities central IT team to provision the software on various desktops, I can use a platform which the students will explore willingly as it runs within a web environment, one which today’s generation is intimately familiar with. My understanding for the UCC support prospective is that it take work to support a BYD platform, for example ByD clients cannot be refreshed, they require a new instance and then repopulation with data so from a resource provisioning prospective it is understandable that SAP UA and the UCC’s would want to recover at least some of these costs.

    In closing I would say that your experience is not mine, in the UK we have never been given the impression that the platform would remain free to use, and we have embraced it and included it within our teaching regardless because as an educational tool we find it a valuable addition to our teaching and one which enriches our students experience and skill base.


    • Hi Stephen

      I agree with much of what you have said in regard to the value of BYD in the curriculum.  We had been working on using BYD to support a new core subject related to business processes.  Accordingly  I looked at many UAP presentations and attended training in regard to BYD in the curriculum and there was no mention of a pilot.  I have just looked at the BYD InfoDay presentations conducted in 2011 and the Global Manager of the UAP did not mention anywhere in her presentation that BYD in universities was a pilot program.

      A further more comprehensive presentation ; Session 1: Introduction to Business ByDesign for Academic Usage – Dr. Kristof Schneider, SAP  does mention anywhere about a pilot.

      In regards to costs I was informed that SAP is hosting BYD for the UAP and are charging accordingly.  Maybe somebody could provide an explanation of how the EURO3,500 was determined.

      In the APJ region if a university decides to use BYD they also have to pay the UCC  for ECC (approximately $5,500) even if they don’t intend to use it.  Maybe somebody could provide a justification for this.

      SAP wanted BYD to be marketed by graduates and also wanted product feedback from universities to enhance BYD.  The UAP even created a process to collect this feedback. So there certainly advantages of providing BYD to universities free of charge. 

      It is good that you were provided with all the information upfront but for many universities this was not the case.   A number of universities have contacted me in regards to dropping BYD.


      • Hi

        It has been clarified that universities who want to teach only BYD will only have to pay the EURO3,500 fee.  I would like to congratulate the management of the UAP for making this decision as this will reduce the cost for some universities who want to incorporate BYD into their curriculum.  It will also encourage new universities to adopt BYD.

        Well done



        • Paul,

          Thanks for sharing your views and updated comments.  We are pleased that the University Alliances program management team clarified the situation for you. We will keep our lines open with you and all the professors using ByDesign in the classroom.

          Thanks a lot and see you soon,


  • Hi Paul

    In principle it is worthwhile for both sides, SAP and the universities,
    to discuss about issues and special topics concerning the university alliance
    Regarding your blog and the answers I would like to mention something:

    You said:

    “After approximately 200 universities have committed to
    teach with BYD, SAP have decided to start charging for the solution.”

    Those, who are not engaged with the BYD program so far,
    could misunderstand your statement in the way that SAP traps participants,
    which wouldn´t be correct.

    I was engaged with BYD since FP1 and joined the BYD@university
    pilot group since the beginning and partook the UA events for BYD both Munich
    (December 2010) and Walldorf/Rot (October 2011). I do not remember any
    presentation, speech or slide with a statement about an everlasting free offer
    of BYD. In contrast, the statement was always that there will be a fee after
    the initial phase. Same statement was given by Gerd Oswald during the BYD
    Feedback sessions for pilot group members early 2011 after our dean asked him
    directly about this issue.

    In summary, there might be a cause to discuss about the amount
    of fee or the moment SAP announced that. But it is neither a trap nor a surprise
    that BYD is no freeware furthermore.

    Regards Robin

  • I can‘t understand the discussion about SW payments. Yes it’s not pleasant to pay for a solution but we, as a part of the UAG, can use so many things in this area (slides,
    presentations, links to more information and additional solutions, e-learnings
    and recordings, certifications, congresses, etc.) which is an additional
    benefit. I in our university we also pay for other different SW solutions, but
    we not get the same support as with SAP.

    We develop students for business and successful knowledge. I think this is a big benefit for companies in all of our regions. So if you have problems with payments, you can talk with SAP customers in our region for support. By doing so, you get in
    contact and you can create relationships with these companies not only for
    sponsorship but also for projects and for student internships.

    Look forward and create success
    Dietmar Kilian