I thought I should pen a few words around the changes at SAP.
In just a few days there have been big changes. If you haven’t already seen the leadership team has changed. Leo Apotheker has resigned and the board appointed two co-CEOs: Bill McDermott, head of the field organisation and Jim Hagemann Snabe, head of product development. Meanwhile, CTO Vishal Sikka has been appointed to the SAP Executive Board, of which McDermott and Hagemann Snabe were already members. In addition, SAP named Gerhard Oswald, a board member in charge of SAP’s service and support operations, as chief operating officer. John Schwarz who joined from Business Objects and who was also a board executive resigned as well saying that the integration of Business Objects into SAP had been successfully completed. At the same time Hasso Platner is back to take on an overseeing role in the company at the request of the supervisory board.
Over the last 18 months, (twice as long as Leo Apotheker was in sole charge) SAP through unwisely embarking on their Enterprise Support path changed its relationship with its customers. At the same time the world has changed as a result of brutal economic conditions that means the value that IT offers to the enterprise is now under a much higher level of scrutiny.
Many of us have felt that SAP recently were not as customer friendly as they have appeared in the past. However, in recent months all that has changed with a far more proactive approach, certainly evidenced through the interaction with the user groups. The company has also been criticised by some for losing its way technically. This is not true. Let’s be clear, technical developments continue to come from the research teams and are creating a more robust solution through:
- the mainstream support of their core product with enhancement packs,
- the development of the Enterprise Support package to deliver demonstrable value,
- the availability of the hybrid software as a service solution,
- and the incredible integrated Business Objects solutions that are being offered.
I hear a lot of criticism from the software industry pundits, but I also hear a lot of praise from the real users of the products, and they know more about the value being delivered than the pundits.
The new structure (with a joint CEO) in my view offers a lot of promise. It is important to have a balance between product and sales. At the end of the day you need great products and then you need to sell it well. Selling in this context means highlighting value, explaining it well and then effectively delivering that value. This is something you’ll get with a product/sales combination. Leo inherited the company at a very difficult time and he also inherited Enterprise Support. He put forward the link to value for Enterprise Support and oversaw the return to a tiered support structure, both of which were vital in building bridges with customers. He also made sure that difficult internal cost decisions were taken, and that is vital in these difficult economic times.
For me some things Hasso Platner (SAP’s co founder who is to take an enhanced role again in the company) said in the conference call on the board changes were the biggest indicator that it will work: firstly admitting a mistake had been made over maintenance and secondly recognising the importance of the smaller customers.
Time will tell but we are hearing promising noises on several fronts.