SAP’s new worldwide channel chief sees a shift coming in the software company’s channel program away from volume and towards value in terms of how partners are tiered.
Friedrich Neumeyer, who moved into the role of senior vice president of volume reseller and service partners for SAP’s global ecosystem and channels group earlier this year in a shakeup of channel leadership on the heels of the departure of former channel chief Patricia Hume. It created a president-level position for Eric Duffaut, and moved Neumeyer into the role of managing the company’s reseller base.
Now he liberally hints at changes yet to come that will leave his mark, and the mark of a changing way of doing business at SAP, on the company’s partners.
“My personal vision, thinking two years ahead, is that we want to make our Medallion levels less driven by sales performance metrics and more towards customer-relevant expertise metrics.”
In other words, like so many channel chiefs in the current market, Neumeyer has taken a look at the Value vs. Volume debate in structure channel programs, and has come down on the side of value.
“I want us, in the future, to be talking about a business analytics Gold partner, a human resource silver partner, that sort of thing. The medallion level should tell me the level of their expertise in my needs as a customer.”
But here’s where the plan differs a little bit. Neumeyer said he doesn’t see volume going away. Total sales volume will still be crucial in what kind of discount partners get from SAP on the software they sell. But when it comes to branding and tiering partners, the company is looking at “divorcing discount schema from the medallion levels.”
It’s happening because of a changing reality among the SAP partner base. After major acquisitions including Business Objects and Sybase, the SAP channel – and the products those partners represent – are not the homogenous group they once were.
But it’s not just how SAP recognizes its partners that has to change, Neumeyer asserts. It’s also how a partner works with an SAP customer. Or perhaps, rather how partners work with an SAP customer.
As SAP expands beyond its ERP base into more and more applications, business intelligence and analytics, Neumeyer believes the company will see – and will need to foster – an explosion in partner-to-partner connections, bringing in multiple partners to provide the best possible service to customers who now buy a variety of products from SAP. To Neumeyer, as SAP looks out into multiple fields, there’s the need to “build networks of specialized partners.”
“I would love for any partner to take as much of the portfolio as they can represent to the end customer, but you can encourage a partner to sell everything, and they still may not sell more,” Neumeyer said.
To make it happen at the speed SAP needs it to happen, the company can’t get away with creating “ad hoc” or one-off connections between partners.
“If we’re not doing it programmatically, we won’t achieve the goals we’re trying to achieve,” he said.
At the same time, SAP has to undo a lot of work it’s done with both customers and partners to establish a “one partner for each customer” model of engagement, to foster one where multiple partners work with an individual customer to get the best possible results.
“Fifteen years ago we said to our customers that it’s a good thing to buy from our partners for the value that they add,” Neumeyer said. “We have conditioned customers to think that one partner is the primary vehicle to get that done. We need to change that paradigm. “
That also means building trust with channel partners, and making sure that everyone involved is living up to their end of the bargain. That means quality assurance in the vendor’s program structure, and it also means the company will need to provide incentives to partners to work together.
Catch more of ChannelBuzz.ca’s conversation with Friedrich Neumeyer, including his thoughts on building the channel for Business By Design and its HANA in-memory computing technology, later this week on ChannelBuzz.ca.