When we last spoke with Matt Angell, VP and head of strategic pricing and commercialization at SAP, he shared the news that SAP had decided to extend its Digital Access Adoption Program. This program makes two financially attractive incentives available to SAP customers who switch to digital access licensing anytime before December 31, 2021.
SAP Customers Still Assessing the Digital Access Model
Customers have been turning to the program’s offerings to help them evaluate what their current use looks like. Depending on the complexity of the connections between the SAP ERP core and third-party applications, this can be a complex undertaking for customers. The good news is that SAP offers tools and a consulting service to help customers navigate this process.
Johnsonville CIO Ron Gilson shared his team’s journey as they evaluated whether the new model would align with the company’s technology needs. Ultimately, Johnsonville decided to adopt the new model for the reasons he shares in his final blog post of the series.
Now Is the Time to Start Your SAP Licensing Evaluations
If you’re interested in whether the user-based licensing model or the digital access model is best for your organization, now is a good time to start the evaluation process. Although SAP has extended its adoption program once, it does not seem likely that it will again. That means customers have about a year to complete their assessments and make a decision in time to take advantage of the discounted rates offered in the Digital Access Adoption Program.
In our conversation with Matt, we heard about how customers are using the various assessment tools that SAP is providing to help with their licensing evaluation process and his recommendations about how to get started.
Ann Marie: What updates can you provide on the Digital Access Adoption Program? How have the benefits changed since your announcement in May 2020?
Matt: The SAP digital access program remains an optional model for our customers to license their indirect access usage requirements. We believe this offer is a simpler, more transparent, and predictable approach that determines the customer’s licensing needs based on the outcome they achieve with the software—in other words, by the number of the nine document types they create versus the number of named users using the software. There have been no further changes to the benefits of this program since the spring when we announced the extension of the digital access adoption program through December 31, 2021.
Ann Marie: So, SAP customers still have until December 31, 2021 to take advantage of the benefits?
Matt: Absolutely. When we made the announcement in the spring, we deliberately wanted to make sure we gave customers an extended period to evaluate the option and ultimately make their purchasing decisions. The original program ran for a year, and we added a full year-and-a-half extension on top of that.
Ann Marie: What numbers can you share on how many customers have taken advantage of the program since last year?
Matt: We’ve seen deal growth of 148% since we launched the program. We put out such a customer-friendly promotion that we’re now seeing far more uptake in volume than we are in actual revenue growth. I think that’s a great indication that the program is a fantastic option for customers.
Ann Marie: What have you learned from SAP customers as more of them adopt the digital access model? Have you made any enhancements to the adoption program based on customer feedback?
Matt: We absolutely have. Based on customer feedback, we have issued several enhancements to some of the measurement tools that we that we provide as a part of the program. Communication is key. Customers need to understand their options for measuring document creation now and to know that SAP provides the support to help them through that process.
There are two possible ways customers can measure their document use. The first method is through the estimation note and the second method uses the functionality from SAP Passport, which customers can access in current SAP software releases. We’ve continued to enhance the estimation tool to make it easier to use and provide more consistent results. We’ve also released technical information sheets for the passport measurement tool to make that capability easier to adopt.
Ann Marie: What can you tell us about the Digital Access Evaluation Service?
Matt: The Digital Access Evaluation Service is a free-of-charge engagement that we’ve offered customers through our Global Licensing Audit and Compliance (GLAC) team to help determine an estimate of the number of documents they are creating that are part of the digital access licensing model. The service provides customers with a general explanation of the licensing model and support in using the estimation note. It also includes consulting to gather, analyze, and ultimately validate and explain the data related to the creation of the digital access document types. In short, it helps customers understand their licensing needs and how they align with the digital access model.
Ann Marie: What process do you recommend to customers who are looking for accurate document counts so they can make their business case for digital access? And if you’re a customer who is seeing some unexpected numbers, what should you do?
Matt: I would highly recommend they take advantage of the free Digital Access Evaluation Service, as well as to leverage the estimation note and the SAP Passport functionality. What we’ve determined through our experience is that customers need to have a solid view of their third-party solutions and how those solutions connect to their SAP ERP software. After running the initial estimation note for all interfaces, then customers can focus on those that are generating any of the nine document types covered under the digital access model. This will narrow down the number of interfaces to focus on and help customers quantify their use.
Ann Marie: Which third-party applications or SAP applications should customers pay special attention to when determining those estimates of use?
Matt: There is no one type of solution to pay particular attention to. What really matters is how those applications are interfacing with the SAP digital core, as well as those that are generating documents that are part of the count. The creation of specific types of documents is how we license the digital access model. Ultimately, customers can learn whether they have an indirect use requirement and decide whether it would be better to license the digital access model or continue to choose traditional user licenses.
Ann Marie: It sounds like a good idea to go into this exercise with a map of what is connected to your SAP landscape—especially those third-party tools that are part of a business process that would generate one of the nine document types covered in the digital access model. What is the best process for customers to use to estimate their costs under the digital access model?
Matt: That, I think, is one of the real benefits of the Digital Access Adoption Program. We saw the program as a two-step process, knowing that the first step is to help customers understand the number of documents that they’re generating. Once a customer understands their document generation needs, then the second step is to make a decision about whether to proceed. The promotion available through the program, with its 90% discount, makes the costs of this change transparent for customers.
Ann Marie: One question that customers bring up is about how their document generation needs may change. How can customers know their costs now and project them over time?
Matt: Understanding the interfaces and third-party applications that are generating those documents and their underlying business processes puts customers in the best position to prepare for greater utilization as a result of natural growth, growth through acquisition, or through other means.
The Digital Access Adoption Program does not constrain a customer from purchasing greater amounts of use in support of anticipated growth. Customers can take advantage of the very aggressive 90% discount today if they feel that they will see an uptick in their document creation over time.
Ann Marie: What changes, if any, should customers expect to see in the audit process as they engage with the GLAC team in the future?
Matt: We are giving customers time before implementing any audit related to digital access. The GLAC team is available to assist with the estimation note, and there is no correlation whatsoever to customers who experience an audit. As mentioned before, we’ve very purposefully ensured that there is a full separation of duties and responsibilities between the GLAC team and the sales organization. The GLAC team is truly there to help determine a customer’s licensing requirement. Customers should feel free and comfortable in taking advantage of this service. Ultimately, it’s the customer’s choice. Customers still have the opportunity to stay with the traditional user model.
Ann Marie: So, the regular audit schedule wouldn’t kick in until I’ve had a chance to adapt to the new model?
Matt: That’s absolutely the intention. We would allow for a grace period because we recognize that our customers are making a transition.
Ann Marie: What role do you see discussions about moving to digital access playing as more customers plan to move to SAP S/4HANA, for example?
Matt: The digital access model is an outstanding way to license indirect access use requirements under SAP S/4HANA because it’s an outcome-based model. Customers are licensing their use of the service as opposed to simply licensing any user who accesses or takes advantage of the service.
Ann Marie: What steps would you recommend to customers who are interested in digital access, but they’re not sure how to get started?
Matt: I would encourage customers to contact their account executive first. Their account executive can put them in touch with the GLAC organization to get a free evaluation started. Or they can reach out to the GLAC team directly. They can also find ways to do this on the SAP Digital Access microsite. Once they have gathered all of the relevant information, they can evaluate what they have learned to determine whether or not the digital access model is right for their business and whether the digital access adoption promotion will offer the right benefits.
Ann Marie: Matt, I appreciate the update on the program. Thank you for your time today.
Visit our SAP licensing insights for in-depth coverage of this topic. You can also visit the SAP Digital Access microsite for details.