Describe the profile of your typical channel partner under this setup?
It’s generally a smaller organization, with between 20 and 30 employees, of which four or five are salespeople with a very technology-oriented background. These are people who really understand how to design and implement an application ERP solution or business analytics solution. We are also looking at larger partners, with 30 sales reps and 200 employees.
So what type of products are you offering in this SME space?
Affordable ERP scaled down for the SME creates all the obvious efficiencies of ERP, such as terrific supply chain gains and fabulous returns on assets. They add a lot of value in the way of equity for entrepreneurs who are looking to develop their exit strategy. Potential buyers, whether that’s private equity or other companies, see an SAP-based system and know it’s got value.
We are also seeing a generational shift in the adoption of technology. The baby boomers are retiring or turning the business over to the next generation of management, and those people are much more comfortable with business analytics and with mobility. They don’t want to wait a day, or even 10 minutes, for a report. They want to pull out their iPad and look it up.
Our SME products allow smaller companies to level the playing field with Fortune 1,000 companies because they can do remote management, have field mobility, and have all the analytics that a Fortune 500 company has. We think SME is going to lead the way with mobility-based products.
When you are out there in the field talking to customers, what questions do you ask them?
First, we look for pain points and provide solutions. But I also think that game’s changing a little bit. We’re asking them more about their growth plans these days, and then determining how we can be involved in helping them achieve their growth strategies. That’s one reason why we’ve developed an entire slate of SME products, so that we can be solutions-oriented in that space.
So listening to customers is critical to this evolution, correct?
Listening is a core DNA requirement to be a member of our team. But one of the things that you have to be careful about in SME is that it’s much more difficult to do one-offs. In SME, you really need replicable solutions and you need to discipline yourself not to get into too many one-offs because the cost of sales and the economics start to collapse on you. That’s the mistake that many hardware companies made — they took their enterprise selling motion and moved it down to SME without making real adjustments to the product mix. For them, the economics collapsed. Instead, build some flexibility into the part that the channel partner can play with doing some of the work, themselves, but for us, we look for replicable solutions.
So beyond some customization, what other opportunities are there for channel partners?
They wouldn’t be going to SAP unless they believed it, so there’s a level of predictability with what they know they’ll be able to deliver to clients. Predictability in a lunch school menu is boring, but predictability in a channel partner program is an absolute core component because they want to wrap their business around a predictable model, not a supplier or vendor that’s saying direct one day, indirect another day, 20 percent discount one day, 30 percent discount another day. Who can build a business model around that? So we are extremely predictable and listen to our partners. That’s the only way you can grow a business segment like SME.
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