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4/30/2010
12:32 AM
Bob Evans
Bob Evans
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Global CIO: Inside SAP: 10 Factors Behind Its Dramatic Turnaround

Here are 10 ways SAP's new leaders have reinvigorated the company, redefined its strategy, and reestablished the primacy of its customer.

Almost three months ago, when SAP founder and chairman Hasso Plattner ousted CEO Leo Apotheker and replaced him with co-CEOs, Plattner presented a daunting list of companywide shortcomings and problems that required urgent attention from the company's new leaders. And to understand just how much progress new co-CEOs Bill McDermott and Jim Snabe have made during that brief time, it's striking to take a quick look back at the ugly diagnosis offered by Plattner in early February.

Here's how we interpreted that diagnosis in a Feb. 9 column called Global CIO: SAP's Last Chance: It's The Customers, Stupid!:

So it was that over the past couple of months, co-founder and chairman Plattner reinserted himself into the company's top-level operations and came to several conclusions:
  • SAP has failed to focus with sufficient intensity on fresh technologies such as cloud computing.
  • SAP has failed to look into or understand the mindset of any but its top 100 customers.
  • SAP has failed to develop and execute rapidly on a strategy for the next decade.
  • SAP has failed to organize and inspire its employee base toward common objectives, goals, and purposes.

SAP had also lost the trust of its customers, Plattner said, rounding out a description of a deeply troubled company whose key customers look to it for not only great technology but also market insights, business strategy, and market-focused innovation.

Now, about 11 weeks later, propelled by strong first-quarter financial results and some key wins against arch-rival Oracle, SAP appears to have made significant progress in turning around its vision, strategy, and execution under McDermott and Snabe. And to illustrate how and why that's been happening, I've put together a list of 10 reasons why those co-CEOs have SAP feeling organized and bullish once again.

Reflecting the split-responsibility structure of the co-CEOs, I've allocated five reasons for Snabe and five for McDermott, based on their comments during Wednesday's earnings call with analysts and on a phone conversation with McDermott later that day.

Five Reasons From Co-CEO Snabe

1) A clear and unified product strategy. Snabe elegantly tied together SAP's strategy by presenting an overarching approach with three interrelated components: on-premises, on-demand, and on-device. We know all about the first two but the third refers to the company's belief in the coming preeminence of mobile platforms and its commitment to having all of its software run seamlessly regardless of device. "With the investments and innovations in all these three categories—on-premise, on-demand, and on-device—SAP represents the most complete and consistent application and technology portfolio in the industry, a portfolio that will deliver superior value to our customers and expand our addressable market and fuel our growth," Snabe said during the earnings call (per the transcript on SeekingAlpha.com).

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2) Uniting business applications and business intelligence. As more businesses require real-time access to not only transactions but also analytics, SAP believes it has the means to tie those two disparate information sets together. "In addition, we continue to leverage in-memory computing power to achieve an unprecedented speed and simplification of applications going forward," Snabe said on the earnings call. "With this technology, we plan to pave the way for real real-time analytics and finally remove the decade-old barrier between business applications and business intelligence."

And next come mobile, Business ByDesign, and analytics:

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