Three Ways to Improve your Channel Partner Business with SAP’s Industry Cloud
Author’s note – I am responsible for the topic of SAP’s industry cloud for channel partners. This blog post is mainly targeted at SAP’s channel partners and PE sell partners, but the blog post might be interesting for any partner considering building an industry cloud solution on SAP BTP.
In this blog post I will go into detail of the benefits for channel partners to participate in SAP’s industry cloud strategy. For a high-level overview, see my previous blog post.
“Industry cloud is our strategy to extend the intelligent suite with innovative industry cloud solutions built by SAP and our partners in the cloud.” – SAP Industry Cloud White Paper, SAP.com
There are three categories of benefits for channel partners:
1) Improve yourself
2) Leverage partner networking
3) Don’t miss out!
This blog post will focus on the first category: Improve Yourself.
Businesses constantly need to improve their products and services, as well as their go-to-market and operational efficiency. The need to improve is often “forced” by technology changes, changes in customer needs and changes in the ecosystem and/or the vendors they rely on.
Here are three ways I think channel partners can leverage SAP’s industry cloud to improve themselves, given the dynamics ongoing in our industry.
Get Ready for Cloud – Sooner Rather Than Later.
Here are some questions for you:
Do you believe that your customers and prospects want cloud solutions? Do you think that your industry will continue to gravitate to the cloud, if it hasn’t done so yet? Do you believe SAP is moving to cloud in an accelerated way?
If your answer is yes to any or either of these questions and you want to have success in the SAP ecosystem, I encourage you to move to the cloud with your own IP, the sooner the better. And if you do decide to move to the cloud, why not do it the SAP way?
SAP has developed standards for what defines a cloud solution in the SAP world, based on SAP’s choices of technology, portfolio framework and GTM strategy. If you follow these standards, your IP is future proofed within the SAP world, a world moving extremely quickly to the cloud. For industry-related IP, these standards are included in SAP’s industry cloud architecture guidelines. See this blog post for more details.
Key Takeaway: Leverage SAP’s Industry Cloud Strategy as your North Star as you make your move to the Cloud.
Capitalize on Your Industry Investments
Many of SAP’s channel partners have invested a lot in industry knowledge, specializing in specific industries for the mid-market. If you already have productized this knowledge as IP you have a good starting point to get to the cloud.
However, for many other channel partners, their industry knowledge is with implementation teams or with specific developers working on customer projects. Often these people are executing configuration and service activities repeatedly. While this might be good for service revenue, it is not efficient nor competitive in the long run and it is definitely not cloud ready. Cloud is about standardization, automation, reduced implementation time and cost. If you are not able to offer this moving forward to your customers, it is a chance that others will do it instead of you. I think it is interesting that many channel partner sell digitalization and automation of business processes to their prospects as something very important for the customer to stay competitive. But in their own businesses, channel partners often relay a lot of manual work (services) to get the job done in delivering their value add to their customers. I would say: channel partners need to digitize and automate their processes as much as possible to stay competitive.
For more reflection on how important SAP thinks this is for our joined future, read this interview with SAP’s Chief Partner Officer Karl Fahrbach. Also, in the long run IP revenue gives better margins, which often is the end game for a well-run company.
I have spoken with several channel partners (and service partners) who strategically work on productize their industry knowledge based on exactly these dynamics.
Other channel partners are thinking that in a world moving to vendor hosted cloud, there is a lot of changes to be expected regarding their maintenance and infrastructure related service revenue streams. This could also be a reason to build up (new) IP related revenue streams.
There is more – building sustainable software subscription revenue compared to service, license sales and maintenance revenue will increase the financial value of your company. Cloud revenue gets higher multiplier by financial analysts than other type of revenue streams. If you are an owner of a company, you might want to maximize the value of your company. Perhaps you will sell your company one day in the future, when you retire for example, and you want to get as much financial rewards as possible for life achievements. Or, perhaps you want to raise additional financing to your company and want to get the best possible terms. These thoughts might sound a little bit “out there”, but I have spoken with many channel partners over the last years which invested in developing cloud services because of exactly these reasons.
Key take away: use SAP’s industry cloud strategy to leverage your industry knowledge to build new valuable revenue streams for yourself.
Align with SAP Messaging
SAP’s industry cloud is strategic for SAP and there is a lot of market messaging supporting this important initiative. There are big opportunities for you as channel partners to leverage this brand awareness and position yourself as being part of SAP’s industry cloud to convince prospects to choose you. It can also help differentiate you from others.
If your IP is approved as one of SAP’s industry cloud solutions, this is what I would do when speaking to a prospect/customer:
- Leverage the white paper on SAP.com to explain your prospects how strategic SAP’s industry cloud is for SAP, and how strategic it is for SAP that their partners participate in creating SAP’s industry cloud solutions..
- Go to the SAP store and show that your solution, the solution the prospect will use, is marked as “industry could”. Explain that SAP has flagged your solution as industry cloud after having reviewed and approved it as such.
- Leverage the SAP’s industry cloud visuals and branding guidelines in all you solution marketing material, sales presentation, slides, websites etc.
- Show that your solution is listed in the SAP roadmap explorer on sap.com. This is a great testament to how aligned you and SAP are in partnership and solution strategies. (For example, the Smart Factory solution from the Germany channel partner All-for-one can be found under Industries, industrial manufacturing and “show all industry cloud solutions”)
- Rise with SAP. Tell your prospects and customers that, just like with large enterprises, they will be running the SAP Intelligent Suite as a cloud solution operated by SAP, extended with your specific industry capabilities approved by SAP as an industry cloud solution, operated by SAP and yourself together in the SAP cloud.
Key take away: Just like you leverage the SAP brand for your business, start leverage the SAP’s industry cloud brand as well.
Four Ways to Leverage Partnering to Enhance Your Business
These were the three ways I think channel partners can leverage SAP industry cloud to improve themselves within their own company walls. In the next blog, I will look at the four ways I think a channel partner can leverage SAP’s industry cloud to enhance their business by collaborating with other partners on IP, something which is so much easier now with SAP industry cloud. SAP has made a huge strategic change the last years to do exactly this ourselves for increased sales success with our direct customers: we are collaborating with software partners which sometimes even were our competitors in the past. Channel partners should also consider collaborating more with other partners.
Feel free to follow my profile or the “industry cloud” tag. I post a blog post on the topic of SAP’s industry cloud and channel partners every second week. You can find Q&A and post questions in the industry cloud community.