Top Gun 51 Profile: SAP’s Karl Fahrbach on Becoming First Chief Partner Officer
… the partners from a sales component only. The view and the mindset has changed to looking at what we can do for the partner. And that includes involving them in every part of the sales cycle of the customer so they can generate value. And that’s really growing the economy, so that the partners can make more money, because they’re going to be more involved in the life cycle of the customer. And that is not only selling but playing multiple roles. And the more we involve the partners, the more value the customers get, and then the more businesses we will do. So, I think that’s the collective mindset change that we have been taking with that role.
CF: How has that changed the interaction and the business relationships between the partners, SAP and customers?
KF: In terms of the relationship with the customers, we’re really pushing to make sure customers understand that partners don’t only play a role in the sales cycle — closing contracts and doing the implementation and then disappearing. Now the relationship between the partners and the customers will be even more strategic. And since in many of those cases the contract is direct with SAP because of the cloud, the three of us need to really be playing a key role. And so, it’s becoming a more strategic relationship now between the customer, the partners and SAP.
CF: Besides management changes [spurred by some channel and partner executive departures] that preceded it, what why was this the right time to do this?
KF: First, customers are becoming more informed than ever. Our main metric at SAP is customer success. And because we look at customer success, we decided that to make customers successful we need the partners to play a key role. And since we are now moving very rapidly into the cloud and the customer is becoming the key metric, we wanted that to include the partners as well, in the game of managing the life cycle of the customer. And then the other big reason for doing it now is because if you look at the market and how it has changed with emerging technologies, like the cloud, artificial intelligence, machine learning, you name it, the market of innovation is really completely changing the landscape of the of our industry, and it’s changing very, very rapidly. Then if you compare the speed of the market and innovation, and you compare that to our programs and business models that we had with partners a couple of years ago, to be very honest, they were obsolete. And that’s what we’re doing, by the way, with our initiative called Next-Gen Partnering.
CF: How are you measuring customer success? Besides obviously, revenue growth?
KF: Customer success is measured in many ways. It is definitely growth, but we look at renewals. For example, we look at the adoption and at the size of the deals and the life cycle of the customer. Our biggest deal, when we enter into a relationship with a customer, is not actually the first one. So we don’t go and close a big deal up front, and then that’s it. We have seen that in the clouds, the biggest deal is actually the third one. So we start kind of small, and start showing value, and we prove the value and then the customer is convinced, and they are successful and then they buy more.
CF: In regard to the next-gen partnering, where are you in a continuum of that? What have you implemented so far, and what is sort of next up on the agenda?
KF: So next-gen was launched in May at the global partner summit before Sapphire. It will take a couple of years because it’s a profound transformation that we’re going through. The approach is focused on three main pillars. The first one will be partner innovation. The second one will be partner economics. And then the third one will be partner experience. So, with partner innovation we want to make sure that as we enable our technologies, we enable, as well, our programs for partners to build on top of …