When an organization starts its digital transformation journey, it does so expecting great outcomes. Whether that means increasing competitiveness, efficiency, innovation, growth, employee satisfaction, reducing costs, or all of the above — expectations are always high.

Expectations can also be very diverse. End users want their jobs to be made easier and more productive. The typical CIO wants scalability, greater data protections, and a secure IT infrastructure that runs with lower total cost of ownership.

And we — the cloud software provider — also have a clear-cut expectation that customers should actually use the software. Otherwise, bold transformation objectives won’t be met and subscription contracts won’t be renewed.

Disappointment is often described as the gap between expectations and reality. When software adoption is low and expectations for digital transformation outcomes are high, disappointment is almost guaranteed.

That is why we are making the changes necessary at SAP to increase customer adoption. Adoption is our main lever for increasing customer satisfaction by ensuring we deliver on the promise of large-scale transformation.

A New Ambition for Service Delivery

My goal leading our new Customer Services & Delivery Board area is to make it easier and faster for customers to adopt our solutions. We want to ensure that customers get all the benefits they are expecting out of their large-scale cloud transformation by reducing the hurdles and ensuring long-term value.

We are fully committed to ensuring that new digital opportunities are not only introduced, but also used to their full potential. Our focus is not on “lift-and-shift” to the cloud, but on holistically and actively supporting our customers in their transformation. And we act as customer advocates, trusted partners, and guardians of their interests.

My new Board area will therefore bundle services, including professional services, premium engagements, customer innovations, and customer support. In addition, it will include cloud infrastructure, cloud operations, cloud lifecycle management, and private cloud provision for SAP customers worldwide.

Why Now?

Adoption has always been at the core of our efforts. What’s different now is that a truly transformative technology — artificial intelligence — has emerged and is enabling end users to interact in more natural human ways. This has powerful technological and societal implications.

It is also presenting software providers like us with unique opportunities to enhance adoption. Think how easy (and fun) AI interactions have become. AI innovation is a catalyst for us to enhance adoption, and we are seizing the moment with determined steps toward providing SAP Business AI.

But for our valued customers to benefit from all the advantages of SAP Business AI, we really need to be there for them throughout their cloud transformation journey, because AI innovation only happens in the cloud.

What’s Changing?

We know that cloud customers want flexible and innovative solutions that help them solve their biggest challenges and that can be deployed quickly and consumed easily. For the past 52 years, we have been vested in the success of our customers with the best team of experts in the industry to support them at every point of the customer value journey. That has not changed!

What has changed, however, is that we are putting the power of my new Board area behind the delivery of our solutions, providing governance and support to our delivery ecosystem, and continuously improving our cloud delivery and support methodologies. And we have created a unique opportunity to bring together cloud operations to streamline the entire customer experience.

Our overarching objective is customer satisfaction. We are committed to increasing it through comprehensive and innovative post-sales technical delivery services or partner-led implementations to drive our customers’ business transformation and deliver measurable value, which is “business speak” for absolutely delighting them! That’s how we will ensure organizations can fully realize their new digital opportunities.

Offering Transformation as a Service

We deliver the most complete business transformation suite in the industry. That has been our ambition since launching RISE with SAP some years ago. With the range of capabilities on offer today — including RISE with SAP, GROW with SAP, SAP Signavio, cloud application lifecycle management, SAP LeanIX, and, of course, SAP Business Technology Platform — we are well on our way to enabling customers to accelerate transformation.

We are committed to optimizing our portfolio for delivery, and we are working on tooling and automation to speed up the process. That’s how we are reaffirming our promise to provide transformation as a service. 

Closing the Gap Between Expectations and Outcomes

Adoption of our portfolio opens new possibilities for business model innovation along with increased competitiveness, cost savings, and employee satisfaction, while realizing the benefits of new SAP innovations more quickly: essentially all the outcomes organizations are expecting when they set out on the pathway to digital transformation.

So, you could say, we’re more dedicated than ever to closing the gap between expectations for cloud transformation and the corresponding outcomes.

Thomas Saueressig is a member of the Executive Board of SAP SE, leading Customer Services & Delivery.

WALLDORF — SAP SE (NYSE: SAP) today announced that Deutsche Telekom, one of the world’s leading integrated telecommunications companies, has chosen the RISE with SAP solution to accelerate its journey to the cloud.

Deutsche Telekom is the first enterprise to implement RISE with SAP through SAP’s recently expanded partnership with T-Systems as a premium supplier of RISE with SAP, marking a significant milestone in the relationship between SAP and Deutsche Telekom.

As Europe’s largest telecommunications provider, with more than 252 million mobile customers, 25 million fixed-network lines and 22 million broadband lines, Deutsche Telekom operates in more than 50 countries. Aligned with the company’s vision to be the leading digital telecommunications provider in the world, Deutsche Telekom has chosen RISE with SAP to transform a major part of its ERP landscape to SAP S/4HANA Cloud. As a premium supplier of RISE with SAP, T-Systems will migrate, consolidate and manage more than 300 systems into the public and private cloud using T-Systems’ Future Cloud Infrastructure (FCI) and select hyperscalers. This is designed to enable customers to meet all German and European data protection requirements, as well as to benefit from tailored migration and orchestration of complex landscapes.

Peter Leukert, chief information officer of Deutsche Telekom, said, “SAP is a trusted and important partner for Deutsche Telekom in both reliably running core business processes and accelerating innovation in the cloud. Through RISE with SAP, we can drive business transformation and take our partnership to new heights. With SAP S/4HANA Cloud, Deutsche Telekom will be able to drive efficiency across key business functions such as logistics, procurement and finance.”

“Deutsche Telekom’s decision to select RISE with SAP to migrate and streamline more than 300 of their systems to the cloud marks an important milestone in their business transformation and continues a long history of our two companies innovating together for our customers,” said Scott Russell, member of the executive board of SAP SE, customer success. “This investment by Deutsche Telekom will give them new capabilities, drive greater efficiencies, and allow them to access key insights from across their enterprise so they can adjust to changing market conditions and seize new opportunities faster than they could before. We look forward to supporting Deutsche Telekom in this exciting new era of their cloud transformation.”

As a premium supplier of RISE with SAP, T-Systems offers “Thrive with T-Systems,” a collection of end-to-end transformation services that includes consulting, migration, implementation and operation of RISE with SAP and support for RISE with SAP S/4HANA Cloud Private Edition.

Visit the SAP News Center. Follow SAP at @SAPNews.

About SAP

SAP’s strategy is to help every business run as an intelligent, sustainable enterprise. As a market leader in enterprise application software, we help companies of all sizes and in all industries run at their best: SAP customers generate 87% of total global commerce. Our machine learning, Internet of Things (IoT), and advanced analytics technologies help turn customers’ businesses into intelligent enterprises. SAP helps give people and organizations deep business insight and fosters collaboration that helps them stay ahead of their competition. We simplify technology for companies so they can consume our software the way they want – without disruption. Our end-to-end suite of applications and services enables business and public customers across 26 industries globally to operate profitably, adapt continuously, and make a difference. With a global network of customers, partners, employees, and thought leaders, SAP helps the world run better and improve people’s lives. For more information, visit www.sap.com.

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Businesses have always relied on third-party services to help them get things done. Today’s business environment makes procuring the right services at the right price from the right provider crucial for success. And yet, many organizations lack a mature approach to sourcing and managing services. This exposes them to greater risk and higher costs, and it leaves them unable to measure project outcomes effectively.

These are among the findings of the newly released Benchmarking Services Procurement: A Global Study, conducted by Art of Procurement and sponsored by SAP. In examining the current state of services procurement, the study seeks to answer two basic questions: Is procurement moving beyond the role of “a pass-through for services contracts”? And how are procurement teams using new approaches and technology to innovate services procurement?

The Challenges of Procuring Services

Whether it’s for IT consulting, marketing services, facilities management, or legal services, procuring services through a third party gives organizations access to personnel with advanced skills and expertise. It can also be cost-effective.

Business leaders have taken note, as highlighted in 2023 research from Ardent Partners. “On average, professional services spending comprises between 45% and 65% of an organization’s total non-employee spending,” Ardent reports.

However, acquiring these services requires a significant level of procurement sophistication. Many services are too complex to fit neatly into a catalog and sourcing them requires organizations to consider key questions, including:

• Are we buying labor or an outcome?
• What is the cost mechanism – daily rates, time and materials, fixed-fee?
• Can we balance risk with agility?
• How do we maintain our service provider relationship?

Procurement teams have the expertise to bring a higher level of maturity to professional services. They provide a strategic approach that streamlines everything from sourcing and contracting to invoicing and vendor management. But are businesses taking full advantage of their expertise?

Three Things the Study Tells Us

The Art of Procurement study reveals a lot about the state of professional services procurement. Here are a few of my thoughts – from a global perspective.

Many organizations aren’t benefiting from technology.

Fifty percent of respondents said they purchase services contracts via e-mail and phone, and 23% buy from the same procurement catalogs they use to buy goods. Only 27% use a technology platform designed for services procurement.

Choosing not to use services procurement technology creates compliance and governance challenges. It also limits buyers’ ability to get the best pricing. Moreover, e-mails and phone calls don’t provide a secure, centralized data trail, which is useful for demand planning and forecasting and for making strategic decisions about insourcing and outsourcing.

Too often, bidders seek fixed pricing. That inhibits innovation.

Seventy-nine percent of respondents said they use some form of fixed pricing to buy services. Although this allows them to know the price up front, it also presents challenges. For example, with fixed pricing, statements of work must be tightly written to detail exact project requirements. Otherwise, businesses could pay for more than they receive.

The Art of Procurement research also notes “a worrisome lack of risk and reward mechanisms in services procurement contracts.” It warns that disregarding these innovative mechanisms can jeopardize supplier relationships and stifle innovation. “Without clear incentives for success and mitigations for failure, procurement could unintentionally foster a transactional, short-term mindset in suppliers, leading to cut corners or a reluctance to invest in long-term innovation.”

Organizations prefer single project bids, which are less efficient.

In the survey, 39% of respondents said they set rates by project. Managing bids one by one forces businesses to go back to the market continuously – requiring more proposals, more negotiation, and more contracts.

But there’s also good news. The remaining 61% of respondents say they use either frameworks or preferred supplier panels to drive efficiency. A framework is a general agreement with pre-qualified suppliers, outlining terms and conditions under which specific goods or services will be procured. Panels are groups of pre-approved suppliers, selected for their ability to deliver specific services. These suppliers meet specific qualification criteria and have undergone a competitive selection process.

Overall, the Art of Procurement study paints a picture where procurement is not putting forth its expertise to help the business acquire and manage professional services. As such, it is conceding its strategic role to stakeholders and suppliers.

How Technology Can Help Turn the Tide

The Art of Procurement study advises procurement teams to “select and implement technology with breadth in mind, aiming to address as much services spend as possible rather than allowing pockets of sourcing activity to flow through non-standard platforms and processes.”

SAP Fieldglass Services Procurement is a broad technology application that can simplify how external services projects are initiated, engaged, managed, and completed. It can enable procurement teams to:

• Initiate service requests with competitive bidding, facilitating collaboration on bid criteria with colleagues, expedited approvals for authorized terms and budgets, and distribution of bids to services providers.
• Engage selected vendors through a negotiation process that follows a side-by-side evaluation of all responses, and then finalize an agreement.
• Manage global services engagements within a single, centralized system – securely onboarding workers, tracking deliverables, validating work, and generating invoices.
• Complete the project with automated offboarding, including terminating system access, retrieving assets, and giving performance feedback.

SAP Fieldglass has been named to the G2 list of Best Software Products for 2024, based on user reviews. It is also one of G2’s Best Mid-Market Products for 2024.

Procurement Must Lead the Way

Based on the findings of the Art of Procurement study, it’s clear that organizations need to adopt a more mature approach to services procurement. Procurement teams have the expertise to lead this transformation, although they must do more to assert themselves within the business. Technology can help accelerate this by enabling procurement to establish consistent, end-to-end processes for initiating, engaging, and managing external service projects.

Read the Art of Procurement report here.

Gordon Donovan is global vice president of Research, SAP Procurement, and External Workforce at SAP.