SAP User Group appoints new chairman and challenges SAP on costs

The UK & Ireland SAP User Group has appointed its vice chair, Phillip Adams, as its new chairman, who is set to replace Alan Bowling in March of next year.


The UK & Ireland SAP User Group has appointed its vice chair, Phillip Adams, as its new chairman, who is set to replace Alan Bowling in March of next year.

Bowling, who has been in the position for more than six years and has been seen to make great strides in raising the profile of the user group, announced the change in leadership this morning at the group’s annual conference in Manchester.

“Philip has been working closely with me over the last year as well as taking a very active role with SUGEN, the global network of SAP user groups. Philip will be taking over as Chairman of the User Group when my tenure comes to an end in March next year,” said Bowling in his keynote.

“I’ve really enjoyed leading the User Group over the last few years; it’s a great organisation that gives you the privilege of working with great people.”

He added: “I’ll continue that work, but it’s now time for a new Chairperson: and I have no doubt that I’m handing over to a pair of very safe hands.”

When welcomed on stage, Adams said that Bowling would be a ‘tough act to follow’, but he was looking forward to challenging SAP on the ever-growing concern around licensing complexity and cost.

A recent User Group survey found that some 95 percent of SAP users believe that the company’s software licensing is ‘overly complicated’.

This is because SAP software packages come with multiple licences with different limits in usage rights, and 89 percent of users would like to see SAP offer software that is only limited by one licence or usage metric.

Adams said: “Over the last year much of my work has been with the SAP User Group Executive Network, SUGEN. We’ve been particularly focused on the topic of licensing. A challenging issue: both for us as customers and for SAP.

“Members also indicated that they would like SAP to be a bit more understanding of the current turbulent economic environment, that can lead to software licences sitting on the shelf as businesses downsize.”

He added: “Nobody would expect SAP to refund the cost of licences that are not being used. However, for many organisations the question is; why should they pay for support on these unused licenses? Nearly all of the respondents to our survey stated that they would like to have the ability to ‘park’ unused licenses for support periods. “

The topic of licensing has been brought up at the previous two User Group conferences and seems to be an ongoing issue for users grappling with tight budgets and sprawling portfolios.

Bowling was also keen to highlight a number of other challenges for SAP customers in his final address as Chairman.

Firstly he looked to mobility, where the User Group’s latest research indicates that only a quarter of its members currently have a mobile strategy for future use of SAP (although this is set to increase to 45 percent within 18 months).

He said: “The lack of strategy in many organisations is probably down to the time and resource constraints we are all facing. However, my advice would be don’t ignore it, as it will come back to bite you.”

Bowling also insisted that he would be asking SAP today about how well it has communicated the benefits and costs for customers about migrating from SAP BW and BI to SAP BusinessObjects.

“Many of us that have already invested in SAP BI and BW want to know if we’ll be treated like completely new SAP customers, if we move to using BusinessObjects. Or will be given discounts to account for the fact we have already invested in similar technology from SAP,” he said.

According to the User Group’s latest research, customers of SAP are also still facing challenges with the development of SAP’s cloud computing developments.

Some 58% of respondents to the User Group’s poll said that SAP was not making it attractive enough for on-premise customers to migrate to cloud solutions.

Bowling said: “We are hearing similar challenges from members in the area of cloud. The vast majority of those polled said they did not understand how to upgrade to or integrate SAP On Demand modules with their existing SAP implementations.

“Two years ago on this very stage, many of us heard Jim Snabe, SAP’s CEO, talk about the future being hybrid. To SAP I ask, why do so many of your existing customers not understand the path to hybrid environments?”

Finally, Constellation Research’s principal analyst and CEO, Ray Wang, urged SAP users to be aware of the shift from traditional systems to systems driven by engagement with users, due to ongoing adoption of cloud, social and mobile.

“We are making the shift from systems of transactions to engagement systems. The traditional silos, the traditional world of SAP – where you have finance, HR, marketing sales – each one of those departments did a great job of managing the records,” said Wang.

“What we have got is one way conversations, highly structured information that we want to pull out. The problem is that we are moving to a world of engagement very quickly.”

He added: “We want to do more with that information, it’s not enough to look at a transaction. You don’t want to throw away your transactional systems, your SAP systems are going to be there for quite some time, but the question is what layers are we going to build on top of it so we can engage? What layers do we build on top so that we can build new experiences? What layers do we build on top so that we can ultimately get to these new fulfilment systems?”

Wang urged users to assess their business models over the next three years and to make sure that they are ready for these new systems of engagement.

“We are moving to business outcomes, and the question is, are your business models ready to survive? Do you have new business models to take into 2015?” Wang asked.

“What’s your role with SAP? You are going to have to figure this out. The best thing you can do at the beginning is stabilise your investment, make sure that it’s locked down, make sure you have driven down the cost structure, then start figuring out where you can drive innovation back.”

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