The Little Discussed Problem Finding Effective SAP Negotiation Support

ByShaun Snapp

Executive Summary

  • Finding effective SAP negotiation support is more complex than it seems.

Introduction

It is crucial to consider the problems inherent in finding SAP negotiation support because most SAP software buyers end up using problematic support and therefore give the advantage to SAP.

Negotiation

To begin let us review a definition of negotiation.

Negotiation is a dialogue between two or more people or parties, with the intention of reaching a beneficial outcome with respect to one or more issues where a conflict exists.

Negotiation is an interaction and process between entities who aspire to agree on matters of mutual interest, while optimizing their individual utilities. – Wikipedia

The Different Type of SAP Negotiation Support That is Available

Type 1: General SAP Consulting Firms

Companies that perform SAP implementations like Deloitte, Accenture, or Infosys like to present to be independent advisors. However, each of them has long-standing partnerships with SAP. They are recommended to new customers or clients through SAP, and SAP can choose which consulting company to reward and therefore has a great deal of power over its consulting partners. All SAP consulting firms value their relationship with SAP more than any one individual client.

SAP consulting companies try to “lightly advise” companies and generally stay out of the way. Less they are viewed by SAP as working against SAP’s interests.

Therefore, software buyings that rely on SAP consulting firms end up with nothing but fake negotiation support. SAP consulting firms are always aligned with SAP interests over their client’s interests.

Type 2: SAP Software Licensing and Negotiation Firms

These firms focus on negotiating software deals and sometimes do consulting work.

These companies usually focus not on the technology but on getting the best price for what is agreed upon to be purchased. Their specialty is knowing the counts of the licenses needed by the client and then optimizing them and optimizing their price. In a dispute between a customer and a vendor, they can use software to determine how many licenses are actually being used and compare them to how many licenses were paid for.

Our objective in explaining this type of company is to describe how we differ. We have subcontracted to these companies in the past, and they try to present our research as their own. However, as they don’t know our area, it is a bad value for the client. Their focus is primarily on reducing acquisition costs, and some of these companies are paid a percentage of the costs that they save the client.

Overall Options for SAP Negotiation Support

  • The options for SAP negotiation support are not good.
  • The reality is that the majority of SAP deals are sold without the SAP customer being properly appraised on SAP or how to get a reasonable deal from SAP.

Our Niche in SAP Software Licensing Analysis

We are a research firm, and we leverage this research to support SAP software licensing disputes between software buyers and software vendors/partner consulting firms. These disputes are generally related to how the software ended up being used versus how it was expected to be used and promised the software vendor and the partner consulting firm would use it.

What We Do

We analyze the licenses that were sold, and review the requirements and needs of the software buyer to determine if the software vendor supported by the partner consulting firm knowingly oversold licenses for used software products and sold software products that the software vendor/partner consulting firm would have known could not be implemented or otherwise would not be used.

About SAP Software Licensing Usage Analysis

  • There is frequently deliberate “stuffing” of software bill of materials by vendor sales teams.
  • Often the software vendors position themselves between being a salesperson (which is what they are) and being a “trusted advisor.” They will correspond with their customers by saying they “recommend” a certain number of software products and licenses without ever acknowledging that they are incentivized to sell as many products and as many licenses as possible.
  • This stuffing of the software bill of material with what ends up being unused licenses is typical, particularly among the most prominent software vendors.

Providing excellent software license consulting support for usage analysis means understanding the implementability of the purchased systems and the objectives of the software buying company.