New CEO brings changes…..why are people acting surprised?

So in the next couple of weeks a new CEO brings a lot of management changes at SAP. But what is all the surprise and concern all about in the press?

A change  at the top always brings change to any organisation, so why should any change at SAP be expected to be any different? What is important is what does that change bring and how does it effect all the stakeholders. Let’s analyse what we know. From my perspective as one of SAP’s customers – change is only a concern if it brings change that impacts them adversely. As a customer those are things like higher costs, lower service, lower quality and directions that generate conflict with their individual business direction and strategy.

Costs – as an existing customer are they seeing increases?  At first you might think not, but actually yes a lot of them are with the gradual increase to Enterprise and Standard support – but this has been in place since 2008 and can’t be pinned on the new singular CEO as this started before his reign. In fact he has publicly stated that he has to effect change without impacting his loyal customer base – but maybe he should effect change by impacting customers and stopping any further rises now – that would be perceived as a positive gesture by the loyal base.

Lower service? Already SAP offer an SLA for Severity 1 support activities – as far as I know, still the only software vendor to do that – and certainly the only one to offer a full suite of products support organisation in their singular AGS team. In fact with the Customer connection program a further strengthening of the support offerings. Will a new CEO change that? Wouldn’t have thought so given how that immediately touches existing customers and with nothing to indicate so, as the solid leadership in this area remains active and intact.

Quality lower? Not aware of any immediate indication of that, and in very simple terms – those that are there today who do the delivery of products and services remain in place. Lay-offs in this cadre of the organisation isn’t apparent and certainly isn’t on the cards at the moment – in fact with the new CEO moving with family to the heart of the operation in Germany (not an insignificant undertaking) a sign to the contrary at this stage.

Change in direction? Well actually there is change in direction – but this isn’t a surprise, mobile, cloud and in memory. This is not new it started with Sybase, and was complemented by Successfactors, Hana and Ariba over a number of years – what is new is the increased determination to deliver this direction, but again a clear statement not at the expense of the existing customer base. That reflects an awareness of the way these directions can be adopted by customers – that in the new cloud and mobile based era we live in,  the whole premise is easy adoption and an almost seamless connectivity of business processes, whilst maintaining options for flexibility, scalability and rate of adoption.

For the new CEO there is a challenge – what differentiates SAP from it’s competitors? The reality, in all the areas there are competitors, the “me-too” products are out there.

I would offer some thoughts. To succeed a business needs to offer difference that it’s customers want and can digest. For any customer to improve its market positioning there are only three things a business can do, cost less, sell more or charge more. In today’s competitive market to charge more is just not an option anymore (even Apple are realising that) so that leaves cost less and sell more. So any offering from anybody offering something, be it software or food products has to entertain those two deliverables. A great example here is the current rumblings of, in fact, food retailing in the UK marketplace so long the domain of the big 5 retailers, where the new upstarts of Aldi, Lidl and Netto are costing less and selling more and more, disrupting the market place in a way that has permanent benefits for them and their new customers. Even Apple have looked inwardly and done the same with the two versions of their series 5 iPhone to try to safeguard their market position.

At the end of the day the choice will come down to the leadership within SAP and the decisions they make – let’s hope they make the correct ones!

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