Cultivating Quality Partnerships in Latin America

April 28, 2004 by admin

The aim of the 3-day summit was to familiarize the assembled business partners with SAP’s offering for the SMB market, communicate the strategy for the region, and facilitate networking and knowledge transfer. Partners attended from countries throughout the region including Argentina, Brazil, Chile, Colombia, Costa Rica, El Salvador, Guatemala, Honduras, Mexico, Nicaragua, Panama and Venezuela.
Raúl Véjar, President of SAP Latin America and founder of SAP México y América Central, opened the event on a positive note. He pledged his support for the SMB initiative and spoke confidently of the opportunity for SAP and its partners to corner the Latin American SMB market. Véjar highlighted the importance of cooperation in SAP’s ongoing SMB strategy and gave participants a first taste of SAP’s SMB portfolio and the characteristics that make it so attractive to the SMB market – vertical scope, transparent integration, scalability, a speedy return-on-investment, and short implementation times.

The full package

Véjar spoke animatedly about the winning combination provided by SAP and its partners. “We have the product, the markets and, most importantly, we have you – who we consider critical allies in this strategy. We want to strengthen this message and lay a foundation to ensure that the story can be repeated, but this time with SMBs…You can rely on my commitment.” Véjar cited sales targets that reflected his optimism – SMB sales are to account for 10 percent of SAP’s total software sales in Latin America, with this figure doubling by 2006.
Hans-Juergen Uhink, Senior Vice President SAP Global Field SMB, took participants through SAP’s global SMB strategy providing more detail on the company’s keystone SMB solutions – SAP Business One and mySAP All-in-One. Uhink stressed the superior value proposition that SAP and its partners can offer their customers and explained how solutions will be customized and delivered by a partner network of value added resellers (VARs) or independent software vendors (ISVs). SAP’s role in the process, he explained, is to provide the right technology and a strong backing in training, marketing efforts and lead generation.
Uhink painted SAP as a trailblazer in the market, stating that competitors currently just don’t have a comparable product on the market. This represents an enormous opportunity for SAP and its partners. Juergen Kleinsteuber, Global Field Vice President for SAP Business One, outlined how SAP will help sustain partners’ profitability through quick knowledge transfer, sales training, and appropriate planning. Fulfilling the specific needs of SMB customers will come down to careful project planning and design – from analysis and preparation through to project execution. Both Uhink and Kleinsteuber also underscored the importance of an open communication channel between SAP and its partners to communicate goals, strategies, expectations, and market trends.

Quality not quantity

John Dix, SMB CEO at SAP México y América Central, will fly the SMB flag in the region. Dix pointed up SAP’s commitment to recruiting the best partners, citing quality rather than quantity in the partner channel as a key success factor. SAP will look to its partners to provide expertise in their respective markets. Dix elaborated, “We have a very good product with a huge amount of support behind it and 30 years of experience. Furthermore, we have found people who are highly experienced in these markets.”
SAP México y América Central is currently supported by 10 mySAP All-in-One partners and 10 SAP Business One partners. Dix plans to expand the mySAP All-in-One network to 15 partners within the next 18 months, further penetrating the market through micro-verticals. SAP will look for partners in industries such as automotive, public sector, health, agriculture, and trade. According to Dix, the tactic for mySAP All-in-One is to sign up partners who are sufficiently skilled in their field to support the cost-effective, straightforward nature of mySAP All-in-One with quick and inexpensive implementations. Close proximity to the customer will also be vital.

Close to home

The goal for SAP Business One is to increase the coverage to 25 partners within the same timescale in order to achieve a wider geographical reach. SAP will focus primarily on recruiting well-established local players in the Northern region of Mexico, the middle region, and Bajío. Partners should be well acquainted with their locality in order to track down potential customers and be available for onsite consulting.
Dix explained the strategy behind local coverage, “A partner’s business is to sell solutions and services rather than charge for airplane tickets or travel expenses, because this makes projects more expensive. Therefore, the strategy consists of having better coverage but without going too far. I’m interested in quality.” A more specific profile of partner requirements has not yet been defined for the region.

Payback

According to Dix, the incentives for partnering with SAP are considerable. Highlighting once again SAP’s value proposition, market experience, and business acumen, Dix stressed, “We do not sell computers, software, or data bases; we sell business solutions and that is our value proposal.” He added that SAP is committed to investing heavily in its partner channel. Solid partnerships are the key to success on the market, “because what we can do alone is nothing compared to what we can do with good partners.” Referring to specific partner benefits, Dix cited collaboration on business plans, joint marketing efforts, sales support, and joint market penetration as a few examples.
In return, SAP expects a lot of its partners, counting on sales of between 15 to 20 solutions a year per partner. This makes sound business sense. As Dix explained, partners need to sell at least 10 to 12 solutions a year to sustain growth and profitability. Average partner profit margins, according to Dix, are approximately 40 percent. Fixed price conditions and set implementation times mean that partners are assured a quick return on investment. 33 new mySAP All-in-One solutions and 25 SAP Business One solutions were sold in 2003 in Mexico. “This is the SMB strategy that will grow like a tree with huge branches, but only with quality partners,” Dix enthused.
Fernando de Allende, SAP Latin America Vice President of Strategic Initiatives, was also upbeat about SAP’s potential on the SMB market. However, he also touched upon the image challenges facing the company. According to Allende, SAP is up against misconceptions that it deals only in direct sales with big-budget corporations that can afford lengthy implementations. Allende refuted these “myths”, as he called them, and contended that SAP would prove itself in the SMB space through its quality partner channel, micro-vertical coverage and short implementation times.
The rest of the 3-day event gave partners the opportunity to hear about customer successes in the region and discuss local country issues with SAP and other partners. A number of partners were honored for their contribution in 2003 in an award ceremony on March 11. Mexican company Xamai went home with Best SAP Business Partner Mexico for both SAP Business One and mySAP All-in-One. In the Andina and Caribbean category, Quantum picked up the Best SAP Business Partner award for SAP Business One, while Compunet was honored for mySAP All-in-One. In the Sur region, Brazilian partner Procwork walked away with the award for best mySAP All-in-One partner.

Lindsay Johnson

Lindsay Johnson

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