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11/17/2010
07:25 AM
Bob Evans
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Global CIO: SAP's Striking Turnaround Triggered By Customer-Centric Strategy

The Year's Top Tech Stories: A year ago, SAP was rudderless and lost. Today, under new co-CEOs, innovation is back and frustrated customers are now excited and delighted. (#6 on our Top 10 list.)

In one of the most striking turnarounds ever undertaken by a big, global IT company, SAP this year has totally recast how it creates products, why it creates products, how it engages with customers, how it co-defines and co-develops value with its customers, and what type of strategy it needs to extend its lead as the world's most successful provider of business applications.

Other than that, 2010 was just another hum-drum year for SAP . . . .

Pushing the company far beyond its roots in rigid ERP applications created in massive, Newtonian development processes, SAP co-CEOs Bill McDermott and Jim Hagemann Snabe have blown out the company's stuffy and inflexible culture and myopic management perspective that earlier this year led to founder and chairman Hasso Plattner firing former CEO Leo Apotheker and installing the new leaders.

Less than 10 months ago, Plattner contritely confessed that his company had lost the trust of its customers and that its employees were miserable.

Less than 10 months ago, Plattner admitted SAP's development processes were outdated and ineffective.

Less than 10 months ago, Plattner said SAP had lost touch with what the vast majority of its customers wanted, needed, and expected from SAP.

(For extensive analyses of SAP, its competitors, and its customers, please check out the "Recommended Reading" section at the end of this column.)

Today, under its new leaders, SAP is growing at a double-digit pace, is once again solidly profitable, and has stopped providing Oracle executives with juicy soundbite material stemming from the weak financial and market-share results posted during Apotheker's reign as CEO.

Today, SAP's revamped development processes are allowing it to bring multiple new products to market more rapidly than ever before in strategically vital fields such as analytics, mobile, real-time business, and collaboration.

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And today, instead of viewing its customers as merely ballast for its stock price, SAP is engaging with customers in innovative ways that tie SAP's fortunes to the business outcomes of its customers, provide those customers with the unparallelled insights SAP has into best practices, and radically redefines the relationship between software vendor and enteprise customer.

After a recent conversation with Hagemann Snabe, I wrote the following in a column called Global CIO: SAP's Sweeping Turnaround: Exclusive Co-CEO Interview:

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