Part­ners have been cen­tral to the suc­cess of SAP since it was found­ed in 1972, and the com­pa­ny has become increas­ing­ly focused on its part­ner ecosys­tem as it empha­sizes cloud indus­tries and seeks to offer best-in-class solu­tions to dri­ve cus­tomer suc­cess. Today, as enter­pris­es shift to cloud ERP sys­tems, con­tin­u­ous­ly trans­form their busi­ness­es, and embrace tech­nolo­gies such as arti­fi­cial intel­li­gence (AI), SAP’s part­ner ecosys­tem has an impor­tant role to play. 

ASUG recent­ly spoke with Karl Fahrbach, Chief Part­ner Offi­cer at SAP, to learn how SAP will lever­age its part­ner ecosys­tem to become even more ​“part­ner-cen­tric and part­ner-dri­ven,” in his words.

Fahrbach leads SAP’s chan­nel orga­ni­za­tion, sup­port­ing cus­tomers through dig­i­tal trans­for­ma­tion and tran­si­tion to the cloud. A 19-year SAP vet­er­an, he start­ed his career as part of the team that devel­oped the com­pa­ny’s flag­ship SAP Part­nerEdge pro­gram and lat­er served as glob­al head of chan­nels and chief oper­at­ing offi­cer for the company’s Glob­al Part­ner Orga­ni­za­tion before being named chief part­ner officer. 

This inter­view has been edit­ed and con­densed.

Ques­tion: Let’s start with the strate­gic role part­ner­ships play at SAP. How did this part­ner ecosys­tem form, and how do part­ners con­tribute to SAP’s success? 

Answer: Part­ner­ing has always been at the heart of SAP. Part­ner­ing start­ed at the very begin­ning, and we have 51 years of his­to­ry. Our founders came from IBM, which meant we were already in part­ner­ship with IBM, and through that part­ner­ship, SAP was able to achieve scale and reach more cus­tomers. But if you look at the evo­lu­tion and back to the on-premis­es world, part­ner­ing was all about sell­ing; it was about part­ners tak­ing our soft­ware and reselling it to oth­er com­pa­nies, pri­mar­i­ly in the mid-mar­ket space. We also need­ed part­ners to imple­ment our solutions. 

Today, I believe that about 80% — maybe a lit­tle more — of all our new cus­tomers year­ly come from part­ners. If you look at project imple­men­ta­tions, 90% are done by part­ners. We have more than 25,000 part­ners (devel­op­ing & inno­vat­ing, advis­ing & inte­grat­ing, and sell­ing part­ners) — a rich, live­ly, and diverse ecosystem. 

As we move to the cloud, our main KPI is cus­tomer suc­cess. Part­ners need to be embed­ded in every­thing we do. When you look at the SAP prod­uct port­fo­lio, we can­not devel­op every­thing on our own. That’s why, as we con­cen­trate on our core busi­ness and ERP in the cloud, we have white spaces in our port­fo­lio for part­ners to come and devel­op and then inte­grate. Our port­fo­lio is becom­ing more partner-led. 

In terms of growth, we need part­ners to con­tin­ue to reach and scale and to gain new names and cus­tomers. In terms of cus­tomer engage­ment, it’s about mak­ing sure our cus­tomers receive val­ue to cre­ate val­ue and make sure our cus­tomers are hap­py. We need part­ners for this. Becom­ing a part­ner-cen­tric, part­ner-dri­ven com­pa­ny has been a big shift in strategy. 

Q: How do you work with part­ners to intro­duce inno­va­tions into your solutions? 

A: Cus­tomers don’t nec­es­sar­i­ly want a spe­cif­ic SAP or part­ner solu­tion. They want to solve an issue, engage in a busi­ness trans­for­ma­tion, improve their sup­ply chains, or run more sus­tain­ably. To deliv­er to these cus­tomers, we do the core very well, and then we part­ner to offer an end-to-end solution. 

We look at our white spaces and do mul­ti­ple port­fo­lio reviews. We iden­ti­fy where we want part­ners to play and look at dif­fer­ent solu­tion areas and even indus­tries to ensure we have com­plete solu­tions. Then, we invite part­ners to fill those white spaces. We also empha­size enable­ment and readi­ness to make sure those part­ners can build solu­tions and inte­grate them on top of our SAP Busi­ness Tech­nol­o­gy Plat­form (BTP). We help part­ners mon­e­tize their solu­tions through the SAP store and incen­tivize our account exec­u­tives to sell part­ner solu­tions. This is how we inno­vate and close the circle. 

Q: SAP is focused on deliv­er­ing indus­try solu­tions. How does this play into the SAP part­ner strategy? 

A: For com­par­i­son, going back to the on-premis­es days, what cus­tomers want­ed from and loved about SAP was the depth of our indus­try solu­tions. We could take an indus­try and mas­ter it end-to-end. 

As we move to the cloud, cus­tomers have the same needs. They want SAP to offer the end-to-end solu­tion for their indus­tries with knowl­edge and depth. But if we were to devel­op solu­tions for every indus­try end-to-end, it would take years. And it would require a lot of investment. 

We’ve decid­ed to do this with part­ners, devel­op­ing about 20% of these indus­try solu­tions, with 80% still need­ing to be built. Every indus­try cloud has SAP solu­tions; some have big and small part­ners, all of whom will con­tin­ue to add value. 

Q: AI emerged as a cen­tral point of focus at SAP Sap­phire 2023. How do you inte­grate this fas­ci­nat­ing tech­nol­o­gy into joint cus­tomer engage­ments with partners? 

A: For SAP, AI is not new. We’ve been work­ing with it for years, devel­op­ing AI capa­bil­i­ties and solu­tions and work­ing with part­ners to embed their AI in spe­cif­ic use cas­es and solu­tions. Of course, we’re embed­ding more and more AI into our busi­ness solu­tions. We believe in the con­cept of busi­ness-dri­ven AI. 

We want to make sure that AI is in ser­vice to the busi­ness. If we embed that into SAP solu­tions so cus­tomers can lever­age AI in their busi­ness process­es, we can deliv­er a bet­ter user expe­ri­ence and more value. 

We already have part­ners that deliv­er AI. A cou­ple of exam­ples include: 

• Eight­fold is an AI com­pa­ny for learn­ing and recruit­ment that we’ve been part­ner­ing with for 3 – 4 years, and it’s super suc­cess­ful with our customers. 
• Icer­tis does intel­li­gent con­tract management.
• Price­fx has embed­ded AI in its dynam­ic pric­ing solution.
• Sap­phire Ven­tures, for­mer­ly the SAP ven­ture cap­i­tal arm, is invest­ing in and screen­ing star­tups and scale­ups; we have a part­ner­ship there as well. Togeth­er, we screen the mar­ket for AI solu­tions and partners. 
• DataRo­bot is anoth­er good exam­ple that we recent­ly added to our portfolio. 

We’re look­ing for part­ner­ships that can make a big dif­fer­ence to embed in our portfolio.

Q: As SAP accel­er­ates its cloud-native, go-to-mar­ket strat­e­gy, how will it change the rela­tion­ships with estab­lished part­ners who have a suc­cess­ful track record of deploy­ing on-premis­es solu­tions as well as new part­ners that add val­ue to the SAP cloud-based strategy? 

A: We have a very loy­al, mature, and com­mit­ted ecosys­tem. And there are part­ners whose main busi­ness is SAP. They don’t want to do any­thing else because they have enough busi­ness with SAP. Of course, we don’t want to leave those part­ners. They want to con­tin­ue on the jour­ney with SAP. But they’re in the midst of a trans­for­ma­tion as well. 

With a move to the cloud, you have to evolve your prac­tice. You need to change your infra­struc­ture, your process­es, your peo­ple, your lead­er­ship. You need to change your go-to-mar­ket strat­e­gy, your solu­tions, and your products. 

We are invest­ing to help part­ners make that shift, but obvi­ous­ly they’re still in tran­si­tion. As we help them, we need to look at new oppor­tu­ni­ties and new part­ners out there with a pure cloud DNA, with a born-in-the cloud approach that we can lever­age to con­tin­ue our growth trajectory. 

Q: SAP intro­duced SAP Build ear­li­er this year. Can you give an exam­ple of how this is pro­ceed­ing with your part­ners and its cus­tomer benefits? 

A: The cus­tomer ben­e­fit is to be more agile when it comes to build­ing inno­va­tion: low code, no code, all those capa­bil­i­ties that help the cus­tomer be more effec­tive at cre­at­ing inno­va­tion. That’s what SAP Build does for the cus­tomer, and the part­ners play a key role. If you look at the new appli­ca­tions being built, this is exact­ly what our part­ners are doing. This does not just touch the part­ners that build, but any reseller or ser­vice part­ner can quick­ly cre­ate appli­ca­tions. SAP Build plays a big role in terms of being more agile and deliv­er­ing val­ue faster when it comes to devel­op­ing applications. 

Q: Trans­for­ma­tion is con­tin­u­al. How is SAP work­ing with part­ners to future-proof SAP imple­men­ta­tions and adapt to con­stant change in tech­nol­o­gy, the indus­try, and the economy? 

A: It’s all about readi­ness. We invest a lot in mak­ing sure our part­ners are ready, with enable­ment and train­ing. We recent­ly launched a new dig­i­tal learn­ing plat­form for part­ners, SAP Learn­ing, to make it easy for part­ners to get up-to-date train­ing. Some of the offer­ings, by the way, are free. And we’ve includ­ed new cer­ti­fi­ca­tions, such as the enter­prise cloud archi­tec­ture cer­ti­fi­ca­tion. It’s not just about mak­ing them ready; we want them to use what they learn. 

There are teams in the field, in every coun­try, that take care of mak­ing inno­va­tion a real­i­ty. They do use cas­es and pro­vide coach­ing ser­vices. They do what we call Hack2Build events, where we help part­ners ideate, devel­op, and inno­vate to solve busi­ness problems. 

We also cre­at­ed the Cus­tomer Adop­tion Part­ner Pro­gram, which helps part­ners and SAP align on what should be done for every cus­tomer to real­ize val­ue. We want to make sure that they build future-proofed solu­tions. We work togeth­er to define what cus­tomers want, to define qual­i­ty stan­dards and expec­ta­tions that are best for our customers. 

Q: Look­ing for­ward, what does the sec­ond half of the year look like? What are your pri­or­i­ties and aspi­ra­tions for part­ners and customers? 

A: We want our part­ners to con­tin­ue to move our SAP ERP Cen­tral Com­po­nent (ECC) on-premis­es cus­tomers to the cloud and do that with RISE with SAP, using clean core method­ol­o­gy and build­ing exten­sions on SAP BTP. That’s num­ber one. The next step is lever­ag­ing the launch of GROW with SAP to increase mar­ket share and gain new cus­tomers. The third pri­or­i­ty is to expand our port­fo­lio by hav­ing part­ners that build on top of BTP solu­tions that we can include in our portfolio. 

Next would be to con­tin­ue to help and push our part­ners to dri­ve adop­tion and trans­for­ma­tion at scale while main­tain­ing the high­est stan­dards. If we do that right, we achieve only our goals and num­bers as well as our aspi­ra­tions to become part­ner-cen­tric and partner-driven. 

Our pri­or­i­ty for cus­tomers is the call to action to move to the cloud and lever­age inno­va­tion. SAP is putting all its inno­va­tion on the cloud, because we believe that’s the right plat­form to achieve busi­ness trans­for­ma­tion, sus­tain­able sup­ply chains, and become bet­ter in terms of man­ag­ing the ​“green ledger.” That’s what we offer with RISE with SAP, GROW with SAP, and SAP BTP.