The SAP University Alliance Program (UAP) has been existence for more than 15 years and has grown to include more than 1200 universities globally. The program provides a number of benefits to universities and more information can be found in a blog by SAP Mentor, Simha Magal (here). From SAP’s perspective the program has been very successful in injecting new SAP skills into the ecosystem. The provision of skills was one of the original goals of the program. This was reinforced through the UAP management facilitating curriculum development in key areas to distribute universities. Academic train the trainer workshops were conducted to support the new curriculum. This assisted universities to incorporate these technologies into their curriculum.
The member universities of the UAP access SAP solutions via University Competency Centres (UCC) throughout the world. The UCC’s charge a fee to universities to access the SAP solutions. The fee structures vary from region to region. The America’s UCC’s adopt a buffet approach where there is a set fee to access all SAP solutions. In APJ and EMEA it is A La Carte approach where universities are charged for the solutions they use.
In 2010 SAP provided Business By Design (BYD) to universities free of charge. One of the UAP management’s KPI’s was to get universities to adopt BYD. It was decided to roll out BYD to regions in a phased approach. Initially BYD was provided to universities in China, North America, United Kingdom, India, Austria, Canada, Singapore and Germany. There are approximately 200 universities that have adopted BYD into their curriculum. The UAP developed a BYD certification including exam for academics to undertake.
The offering of BYD to universities by SAP was underpinned by a different strategy. It was not about addressing the skills shortage as there were approximately 1,000 BYD customers (November, 2011). It was more about introducing BYD to students so they could understand its potential and act as marketers once they had left university. It was contribute to SAP’s positioning as an innovative company in the eyes of future corporate leaders. I do not have a problem with this approach as universities get access to a good teaching environment and students benefit. Universities have embraced BYD as a preferred teaching environment. The accompanying data set was rich and could be used to demonstrate various business scenarios.
So what is the problem?
SAP have now decided to charge universities to access BYD. Although the UAP indicated that universities would get access up to the end of 2012 and what would happened after that was unclear. The fee is approximately $5000 per annum. The new charge will impact on the rollout of BYD to universities in a number of ways.
Universities have invested quite a lot of time and resources to incorporate BYD into their curriculum through the encouragement of SAP and UAP management. In the America’s the universities have not budgeted for this additional cost as there was a set fee for SAP solutions and this would be extra. In the remainder of the world this is an additional cost to them accessing ECC. In APJ, universities have to pay a fee to the UCC for ECC even if they don’t intend to incorporate this solution into their curriculum. So they cannot pay for BYD instead of ECC. Universities I have spoken to are reluctant to pay an additional fee for BYD when they can use ECC to teach many of the concepts. They will stop using BYD and are annoyed by the decision.
This is an embarrassment for SAP and will diminish the level of trust between academics and SAP.
So what about SAP’s strategic objectives of positioning BYD and the “innovative company”? It would also be worth knowing if the 189 BYD universities were counted as part of the 1,000 BYD customers. If this is the case then there will be a negative impact on customer numbers which will be hard to explain to analysts.
SAP need to re-visit the decision about charging universities for BYD and continue to look at the big picture rather than short term cost recuperation.
Paul Hawking
