A Forrester Consulting

Thought Leadership Paper

Commissioned By SAP

Nov ember 2014

Achieving Business

Success With The Right

Technology Services

Partner The New Requirements For Finding A Technology Services Provider That Can Drive Results

Table Of Contents

Executive Summary ...........................................................................1

Business Buyers Are Taking A More Active Role In Technology.............2

The Selection Process For Picking Services Partners Is Changing .........3

Business Buyers Select Services Partners For Skills And Speed............5

But The Real Value Gained Is In The Business Results ..........................5

Appendix A: Methodology...................................................................9

Appendix B: Supplemental Material .....................................................9

Appendix C: Demographics/Data ....................................................... 10

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1

Executive Summary

Technology decisions are no longer under the primary

purview of a company’s IT department. The solutions

selected and implemented will have a wide-ranging impact

on the business, and line-of-business (LOB) owners are

rightfully playing a role in the decision-making process.

Increasingly, LOB owners are even leading the decisions.

In May 2014, SAP commissioned Forrester Consulting to

evaluate how line-of-business (LOB) buyers evaluate,

purchase, and engage with professional services and

services providers. To further explore this trend, Forrester

analyzed data from its Business Technographics Global

Priorities And Journey Survey, 2014, and conducted 12 in-

depth interviews with human resources, procurement, and

sales executives who have had involvement selecting or

working with services providers for the technology in their

business area.

The study set out to answer the questions of why, how, and

when LOB buyers would engage with professional services

providers; high-level business transformation was not a core

topic.

In conducting in-depth surveys with 12 LOB professionals,

Forrester found that these companies are savvy about what

they are looking for, not only in software capabilities, but

more importantly in a technology services partner to help

enable real business value.

KEY FINDINGS

Forrester’s study yielded three key findings:

› LOB owners are changing the criteria by which

partners are selected. Business executives look for

different capabilities in a technology services provider

than their IT counterparts. They want business results and

value a partner that is familiar with the latest technology

and is more likely to skip RFP processes either because

traditional RFP processes are too focused on cost instead

of business value or because the right fit is obvious based

on proven skills and expertise.

“We have a skill gap. We use a third

party as an advisor when

implementing functionality. We don’t

have the expertise or skills required of

[our HR software]. Providers fill in

these gaps.”

— SVP Group Head Human Resources, Financial services

› Partners that complement and enrich the customer’s

existing team are the most valued. LOB services

buyers know their own teams’ capabilities and engage a

services partner to provide specific expertise and best

practices to fill a knowledge gap. Clients get the best

strategic advantage from partners who are able to listen

to their clients’ needs – and their clients’ customers’

needs – as well as partners who fit well with the culture..

› Business execs want to partner for business

outcomes, not IT ones. In the world of IT, where long

implementation cycles and waterfall methodology ruled, it

made sense for services providers to be engaged on a

fixed price or T&E basis. This is not the case for BT —

business leaders are increasingly looking for providers to

get their “skin in the game” and link their common

success not to effort, but to results.

Business technology (BT) focuses on the

systems, technologies, and processes to win,

serve, and retain customers.

Information technology (IT) focuses on the

systems, technologies, and processes to

support and transform an organization’s

internal operations.

2

Business Buyers Are Taking A More Active Role In Technology

Business stakeholders are increasingly influencing

technology decisions as the focus shifts from the cost

containment of information technology (IT) to customer

attainment goals of business technology (BT), which

enables growth. Forrester defines the IT agenda as

supporting and transforming internal operations, whereas

the BT agenda focuses on winning, serving, and retaining

customers (see Figure 1). In areas such as HR,

procurement, and sales, where technology has a direct

impact on the ability of a company to serve its customers —

and ultimately, its profitability — LOB owners are changing

the criteria by which technology services providers are

chosen.

Forrester’s Business Technographics has surveyed

thousands of business decision-makers, and the 2014

results reinforce the emergence of the business buyers as

an active voice in determining what their own technology

future holds. This is reflected in growing relative spend

among business decision-makers. (see Figure 2).

The quantitative and qualitative research shed light on a

number of key themes resulting from the business and

technology worlds being drawn ever closer:

FIGURE 1

IT Versus BT

Source: “Starting Or Restarting Your EA Effort,” Forrester Research, Inc.,

June 6, 2014

Why? Because technology is more important to the

business. Almost half of business decision-makers spend

their own budget on technology due to the increasing

external pressures from their customers to keep current

pace or risk losing existing or potential business (see Figure

3). In the current climate, technology decisions are too

important not to be involved in, especially when the

technology selection and implementation need to meet or

exceed a rising customer expectation for agility. Whereas

traditional IT would be selected, funded, and supported by

the IT buyer, we are now entering the age of the customer

and business technology, where BT investments are made

with the customer in mind and are therefore influenced by

the business buyer.

FIGURE 2

Technology Spend Is Increasing Among Business Decision-Makers

Base: 6,450 global business decision-makers

Source: Business Technographics Global Priorities And Journey Survey, 2014, Forrester Research, Inc.

› Level of business involvement varies by role. While

there is a general prevalence of business involvement in

business technology, the extent to which the LOB owners

influence BT selection varies with the role.

Interviews with human resources executives revealed that

services provider decisions are led or made entirely by

the business. In HR, there is also a tendency to sidestep

using a formal RFP process in lieu of engaging with

services partners early on in the technology selection

cycle — via pre-existing vendor relationships,

marketplace reputation, software provider

recommendations, and proof of concepts — so that

ExternalizedCustomertouching

EmpoweredOperational

TransformativeOperational

User impact

Internal IT

BT

Business impact

External

“How has your group/department spending ontechnology products orservices changed overthe past 12 months?”

“How do you expect itto change over thenext 12 months?”

Don’t know

Decrease morethan 10%

Decrease 5%to 10%

About the same

Increase 5%to 10%

Increase morethan 10%

Don’t know

Decrease morethan 10%

Decrease 5%to 10%

About the same

Increase 5%to 10%

Increase morethan 10%

2%

3%

6%

47%

32%

11%

4%

2%

5%

36%

36%

19%

3

buyers identify exactly which implementation partner they

want while they are evaluating BT options, not as an

afterthought.

In contrast, procurement technology selection is generally

led and funded by the CIO or CFO (likely because many

procurement execs report up to the CIO or CFO) and is

focused primarily on cost, as evidenced by the reliance on

formal RFPs. Sales respondents were well represented in

making sales technology decisions but still shared both

the final decision and funding with technology groups.

Overall, while IT and business may agree on many

initiatives, business decision-makers are more focused on

using technology as a means for growth more so than

their IT counterparts or any other type of initiative (see

Figure 4).

FIGURE 3

Business Leaders Tell Forrester They Must Be Involved In Spending

Base: 4,066 global business decision-makers

Source: Business Technographics Global Priorities And Journey Survey,

2014, Forrester Research, Inc.

The Selection Process For Picking Services Partners Is Changing

As business technology decisions are influenced by LOB

owners, there is recognition that this investment is not about

pure software or technology — there are implementation,

change management, and business process implications

that have as much weight or more in determining the

success of a BT endeavor. Software selection almost

always leads the way, but services partners are being

evaluated early on, even if it is done informally through

industry word of mouth, at conferences, or as

recommendations by the technology provider. There are

many services partner options ranging in specialization

levels and price, including software providers, consulting

and systems integration, and niche players. How do LOB

owners decide which partner to use?

BUSINESS EXECS SKIP LENGTHY RFPS

Our research found that LOB owners often skip traditional

cost-focused RFPs, Business buyers explained that:

› LOB owners know their industry and partner options.

One sales VP interviewed described their reasoning for

skipping the RFP: “The industry for this [niche] process is

small; we’ve already worked with most of the vendors.

The decision was based on track record and familiarity

with our business.” In short, many times — especially

within HR and sales — the short list of potential partners

is already known and can be solidified through some

upfront engagement, aligning with the business and IT

expectations.

› With cloud solutions, services are sometimes a

bundled deal — or a no-brainer. When considering

cloud solutions, business owners are changing the way

they think about partners, and what they want to get out of

the relationship. Deciding to go with a cloud solution

means relinquishing more control than with an on-

premises solution. Cloud buyers reported being more

likely to use the cloud provider’s own resources when

possible because they had unique expertise and access

to the software.

Having the implementation services bundled in with the

software purchase not only eliminates the time and

expense of having to go through two RFP selections, but

also allows for synchronization between the software and

services provider.

“Why is your group or department spending moreof its own money on technology?”

(Select all that apply)

Technology is too important for thebusiness not to be involved

47%

The rising expectations of customersrequires the business to push IT to

keep technology current45%

Business executives’ understanding oftechnology is increasing so they can

interact more effectively with IT36%

The rising expectations of younger workersrequire the business to push IT

to keep technology current26%

Business leaders’ use of consumertechnology has changed their expectations

of how technology should be used22%

It is faster to do it ourselvesthan to wait for IT

16%

It is cheaper to do it ourselvesthan to use IT

12%

Our technology-related requirementsare not a priority for IT

9%

IT does not have enough fundsto meet my group’s needs

6%

IT does not have the knowledge ofthe technologies that can help my

team innovate6%

IT does not understand enough abouthow my business operates

6%

Don’t know 2%

4

FIGURE 4

The Difference Between IT And BT Priorities Is Growing The Business

Base: global business and technology decision makers

Source: Business Technographics Global Priorities And Journey Survey,

2014, Forrester Research, Inc.

RISE OF CLOUD APPS MEANS NEW PRESSURES FOR

PICKING SERVICES PARTNERS

Cloud technologies are changing the way business buyers

select technology services partners. According to LOB

owners:

› Cloud is increasingly the deployment model of

choice. The influence of business leaders on IT services

has led to the use of more SaaS applications in a third of

organizations. Cloud solutions were purchased in each of

the LOBs examined, and three-quarters of the

interviewees opted for cloud over on-premises. When it

comes to new purchases, especially for point solutions,

cloud applications are finding popularity with business

users due to their ability to scale with needs, growth, and

technological advancements. Cloud also helps

organizations to “put up the steel curtain” through

multitenancy and work through configuration to stay

focused on their business case.

› Newer technologies (e.g., cloud) create a skills gap.

Companies that select a leading-edge solution will

oftentimes not have resources familiar with that

technology embedded in the organization. The role of a

services provider is even more crucial in this type of

situation to fill that skills gap and get the company up and

running as quickly and smoothly as possible in order to

realize business benefits. As the CIO at a Germany-

based multinational manufacturer said: “[Our SaaS

solution] is a rather new system — we’ve spent a lot of

time making changes, fixing bugs, patches, etc.

Integrators have a lot of experience with more mature

systems, but not with [the one we chose] at the time of

implementation.” The newer the solution, the more impact

what type of services partner selected (software provider,

Big 4 consultancy, India SI, etc.) will have on the overall

success of a BT project.

A natural outcome of newer technology and being one of

the first to deploy is that the software provider retains the

bulk of the expertise, while third parties are still getting up

to speed and may not have the past performance history

to prevent the customer from becoming their first trial-by-

fire guinea pig. In some cases, cloud solutions are too

niche to attract much of a partner ecosystem or the

software vendor locks down the ecosystem, meaning

choices for services providers are more limited.

“It is their solution; they understood

intimately what they could do with

the solution and how it could help us.

Now we are realizing the benefits of

the tool as well.”

— Senior Director, Global Sourcing and Contracts, Publishing

› Cloud buyers take a “best practices” approach rather

than overcustomizing. Using a cloud solution as

designed out of the box enables faster deployment but

also means that there is an increased need for process

consulting and change management. Services partners

that operate closely with the selected solution should be

able to guide customers through the use of best practices

templates and quick-start implementations and provide

unique insight into the “how” and “why” of a BT tool in

order to maximize its value to the organization. In the

words of an HR executive, going with services provided

“Which is the most important initiative for yourorganization in the next 12 months?”

Grow revenues 35%28%

Improve the experienceof our customers

24%25%

Reduce costs 17%15%

Improve differentiationin the market

8%10%

Better comply with regulationsand requirements

7%9%

Improve corporateenvironmental sustainability

4%6%

Prepare our business for theimpact of digital disruption

4%7%

Businessdecision-makers(N = 6,429)

IT (N = 7,349)

5

by the SaaS vendor was a no-brainer: “It is their solution;

they understood intimately what they could do with the

solution and how it could help us. Now we are realizing

the benefits of the tool as well.”

Business Buyers Select Services Partners For Skills And Speed . . .

The common denominator of what all LOB executives

interviewed looked for in a services partner was expertise.

Regardless of whether selected through RFP or engaged

directly, through the cloud, or on-premises, partners are

sought after to not only fill a temporary skills gap, but to

bolster the organization to deploy a tool faster than it could

by itself. Companies we interviewed had these insights to

share:

› Top priority is “skills” or “expertise.” After carefully

selecting a software product, organizations are often

eager to see the system deployed and consider services

providers for their immediate and deep familiarity with

(new-to-them) technologies. Especially when the

business tool or software of focus is expected to bring

innovation through technological advancement,

respondents reported they “needed deep expertise and

the resources to expedite the project,” or they risk losing a

time-sensitive competitive edge.

› Time-to-value and pricing model matter more than

cost. When working with a services partner, business

users have learned to not just rely on price to determine

which partner to take along the potentially long journey of

implementation. Time is money, so investing in partners

that can deliver on schedule, as promised, and without

schedule or cost overruns is key. There is also a growing

interest in outcome-based pricing to incentivize partners

to focus on hitting business milestones efficiently. The top

two responses in Forrester’s Forrsights Services Survey,

Q3 2013 on the rising influence of business leaders on IT

services decisions also points to a focus on more rigorous

ROI and demand for outcome-based contracts (see

Figure 5).

In one case, a procurement VP recounted how they

initially used a consulting service for implementation that

promised it had the technical chops for the first half of the

project, and then ended up settling out of court and

having to engage with other services partners to fill the

gaps. The VP said: “We did use [the software provider’s]

consulting services for part of the project, and maybe we

should have used them wholly. [As a] matter of fact, our

CIO brought in [original consulting service], and ultimately

he was pennywise and pound foolish. Hurt our

implementation. Getting real good results now.” Of the

three LOBs we surveyed, HR and sales leaders focused

on value; only one procurement exec focused on cost.

. . . But The Real Value Gained Is In The Business Results

Once all is said and done, what matters to the business

stakeholder is not that the final task on a project plan is

ticked off and a new technology tool has been launched, but

what return on investment they are receiving as a result of

it. Has procurement lead time been reduced? Sales

FIGURE 5

Services Must Be Able To Justify Their ROI And Seal The Deal With Outcome-Based Contracts

Base: 480 business decision makers from Canada, France, Germany, the

UK, and the US

Source: Business Technographics Services Survey, 2013, Forrester Research, Inc.

“How will (or has) the rising influence of businessleaders’ in IT services decisions impact your firm’s

IT services spending over the next 12 months?”More rigorous ROI/cost justification process

to justify more services spending 51%

More business-outcome-basedservices contracts 40%

Use of more SaaS applications in thebusiness like salesforce.com, Workday,

or SuccessFactors34%

Outsource maintenance of our IT infrastructureto reduce the central IT budget because more

services spending will be in the business33%

Outsource maintenance of legacy applicationsto reduce the central IT budget because

more services spending will be in the business33%

More services spending is outsideof IT’s budget

33%

Bring work in-house as the business wantsmore control (please specify the

work coming back in-house)30%

Hire a third-party consultant to help usimplement a more distributed sourcing

and supplier governance model28%

Hire a third party to help us developapplications for mobile smartphones/tablets

28%

The business is using different vendorsthan our traditional preferred

IT services/consultants26%

Don’t know 1%

6

increased? Workforce management streamlined? The

success of a BT implementation — and by proxy, a services

partner— can be and is determined in time, dollars, and

cents. Use these tips to help your organization keep

focused on the end game and rise above the day-to-day

noise:

› The real value of these partnerships is the strategic

improvements resulting from business and

technology collaborating. BT is exactly what it says it is:

the marriage of business and technology. Although LOB

and IT come from different parts of the organization, with

their respective and differing interests in mind, in the end

both parties want to see the company select the right

tools and services that will enable the company to excel

(See Figure 6). The implementation of new business

technology should not simply swap out and replace

functionality, but enhance it. IT cannot accomplish this

without input from the business, and the business should

not make technology decisions in a vacuum. Every

technology investment will eventually find the need to be

integrated with or supported by the larger IT group further

down the line. Therefore, services providers have an

important role to play in helping bridge the gap and

connecting IT’s desire for stability with LOB’s need for

agility in order to bolster the business capabilities

provided by BT’s strategic process improvements.

“Ultimately, we will have a system

that is simplified and easier to

manage and administer. The big

benefit is productivity. The process

will go from a week to minutes.”

— Director, Sales Effectiveness, High Tech

› Overwhelmingly, our research found that the biggest

benefits from working with services providers came

from business process outcomes achieved. LOB

executives we talked with were most pleased with

services providers that were focused on business

processes as an end result instead of just bolting on

another system. A procurement stakeholder emphasized

that a partner helped them “consolidate both our systems

and our processes. The contracts are now in one place

whereas before, for example, legal had their own

department in a separate place.”

“The advisory services arm was able

to leverage the internal engineering

team to expedite some new custom

solutions. They had deep insights we

would not have been able to garner.”

— VP US Ad Sales and Affiliate Systems, Media

› Working with the software provider’s service arm,

while expensive, offers unique advantages. Business

execs we interviewed who used services partners

affiliated with the software they were implementing usually

did so because they valued the tight connection between

those developing the functionality and the resources

implementing it. An HR executive justified the premium

cost by explaining that “the other ones are still a step

away. When you really want top-of-the-line service, you

go right to the source.” In this case and others, working

with the software’s services allowed LOB users to give

feedback on functionality directly to the company

producing the product and to have access to product

FIGURE 6

The Age Of The Customer Creates Two Tech Management Agendas With Different Impacts

Source: “Starting Or Restarting Your EA Effort,” Forrester Research, Inc.,

June 6, 2014

The ITagenda:

Costcontainment

Successmetric

The BTagenda:Customerattainment

Projectsuccess

Leadership Sharedcustomerobsession

Multipleoptions

Customerexperience

Embeddedand

differentiated

Strategydesign

Strategyand

planning

Servicedelivery

Diminishasset

specificities

Emphasizeresourcesharing

Increasecost and

operationalcertainities

7

engineering resources that other third-party providers

could not easily tap into.

8

Key Recommendations

In the competitive world of BT, LOB owners must work with IT to balance their respective interests in the selection of

both the technology and services provider in order to move the company forward. Of the three factors at play —

business value, cost, and speed — the one that companies should not compromise on is business value. There will

always be pressure to give into cost and speed; however, compromising on value will result in the most damage over

the long run by decreasing future business gains.

Forrester’s in-depth interviews with line-of-business executives yielded several important recommendations:

› Look for benchmarks that will help you learn what the business can achieve — and how. Know how you

are going to measure the success of an implementation before you begin. What kind of value is this business

technology going to bring? To whom and at what part of the process?

› Pick partners that can put their “money where their mouth is” and tie payments to business results.

Choose to work with partners that are as invested in improving the business as you are and willing to put their

money where their mouth is. Demand outcome-based, skin-in-the-game pricing.

› Watch out for “too good to be true,” low-cost proposals that mean either low value or hidden costs later.

Awarding a contract to the lowest-cost partner is the opposite of saving time and money if you are forced to

spend more of both to bring in reinforcements later on down the road to do the job right. Know what you are and

are not getting for your money.

› Dig into promises of assets and accelerators that drive time-to-value. Demand details of how often any

“assets” or “accelerators” have been used. Demand to see the solution in a proof of concept (POC), and explore

how using best practices templates out of the box may provide a competitive edge.

› Remember that BT is both business and technology. BT requires involvement and cooperation between both

the business and technology sides of the house, and it does not portend the best of results when done in a

vacuum at either extreme. Keep in mind that every niche, agile business solution (especially if particularly

successful) will eventually need to be supported and integrated into the larger IT picture — whether through

analytics, product catalogs, etc. — bringing broad IT interests and specific LOB focuses together over the longer

term.

9

Appendix A: Methodology

In this study, Forrester interviewed 12 enterprise organizations (organizations of 1,000-plus employees) in the US, Germany,

and Singapore to assess LOB attitudes and experiences related to professional services and professional services

providers. Survey participants included HR, procurement, and sales executives who have had direct involvement selecting or

working with services providers for the technology in their business area. Questions provided to the participants focused on

the selection process and purchase of a recent professional service and professional services provider, and the business

benefits and perceived customer satisfaction received from working with the provider. In exchange for their time and input,

respondents were offered a PowerPoint summary of the findings as well as an invitation to the external webinar detailing the

study’s key findings and recommendations. The study began in May 2014 and was completed in July 2014.

Forrester fielded the online Business Technographics Global Priorities And Journey Survey, 2014, from January through

April 2014. Forrester surveyed 13,822 business and technology decision-makers located in Australia, Brazil, Canada, China,

France, Germany, India, New Zealand, the UK, and the US from companies with two or more employees.

Forrester’s Forrsights Services Survey, Q3 2013, was fielded to 1,050 IT executives and technology decision-makers located

in Canada, France, Germany, the UK, and the US from enterprise companies with 1,000 or more employees. This survey is

part of Forrester’s Forrsights for Business Technology and was fielded during August 2013 and September 2013.

ResearchNow fielded this survey online on behalf of Forrester. Survey respondent incentives include points redeemable for

gift certificates. We have provided exact sample sizes in this report on a question-by-question basis.

Each calendar year, Forrester’s Business Technographics fields business-to-business technology studies in 10 countries

spanning North America, Latin America, Europe, and Asia Pacific. For quality control, we carefully screen respondents

according to job title and function. Forrester’s Business Technographics ensures that the final survey population contains

only those with significant involvement in the planning, funding, and purchasing of business and technology products and

services. Additionally, we set quotas for company size (number of employees) and industry as a means of controlling the

data distribution and establishing alignment with IT spend calculated by Forrester analysts. Business Technographics uses

only superior data sources and advanced data cleaning techniques to ensure the highest data quality.

Appendix B: Supplemental Material

RELATED FORRESTER RESEARCH

“Navigating The Fast-Moving Landscape Of Digital Implementation Partners ,” Forrester Research, Inc., May 7, 2014 “The Forrester Wave™: SAP Services Providers, Q1 2014,” Forrester Research, Inc., January 29, 2014 “SAP Services Market Overview,” Forrester Research, Inc., December 23, 2013 “Setting A Technology Sourcing Strategy For Digital Disruption,” Forrester Research, Inc., November 19, 2013

10

Appendix C: Demographics/Data

FIGURE 7

Interviewees

Title Industry Company size

Director of HR Apparel and footwear ~100,000 employees

Head, HR information systems Manufacturing 40,000+

Manager, accounts payable, travel and expense reporting Utilities 10,000+

Senior director, HRIS Distribution 8,000+

SVP group head, human resources Financial services 8,000+

Director, procurement Pharmaceuticals 30,000+ employees

Head of corporate procurement, digital media Publishing 10,000+

VP, supply chain Apparel and footwear 10,000+

Senior director, global sourcing and contracts Publishing 5,000+

Senior director, global procure to pay transformation Media and entertainment 3,000+

VP, US ad sales and affiliate systems Media 5,000+ employees

Director, sales effectiveness High tech 3,000+