Global CIO: SAP's Top 10 Priorities To Become Undisputed #1
Welcome to SAP Week, our in-depth look at the company's strategy, products, and customers. Today: 10 steps SAP must take to reclaim its global leadership.
Crisis and opportunity often go hand in hand, and just over 100 days ago, SAP appeared to be hell-bent for the crisis ward: one CEO ousted, two new co-CEOs appointed, and a legendary chairman speaking out with brutal candor about lousy employee morale, outdated product-development approaches, and worst of all the loss of trust from customers.
That bumbling and troubled organization of early February is hard to recognize here in mid-May as SAP kicks off its Sapphire global customer conference reinvigorated by impressive quarterly earnings and last week's high-profile agreement to acquire Sybase.
But the biggest change at SAP is one that's simple to describe but often so difficult to achieve: assertive, confident, and highly informed leadership. Co-CEOs Bill McDermott and Jim Snabe—and, of course, chairman Hasso Plattner—have done a magnificent job of clarifying SAP's strategy, articulating its vision, reclaiming its customer-focused perspective, and calming the jittery nerves among employees wondering where in the hell their company was headed in an increasingly aggressive and high-stakes business.
Here's an example: in their comments after SAP announced its quarterly earnings last month, Snabe and McDermott simply and confidently explained not just what had happened in the last three months but how SAP would shape its destiny in the coming year.
Snabe's key points were the unified thread of on-premise, on-demand, and on-device; the enormously important melding of business apps with business intelligence; mobile's move to preeminence (and three weeks later, hello Sybase); and the role Business ByDesign would play in SAP's future.
Simple, clear, confident: here's what we have, here's where we're going, here's how customers will benefit.
Then McDermott, in equally simple and clear messages, pounded home the company's resurgence by describing the return of transformational deals accompanied by some "knockout" wins against Oracle (except he didn't say it was Oracle, but it was); emphasizing that double-digit growth was broad and deep; and signalling the return of customer trust by noting that 90% of customers were purchasing SAP's top-tier support package.
Enthusiastic, focused, clear, simple:
Here's the market, here's what customers need, here's where we fit in, here's how we'll drive even greater customer value.
As someone who's followed SAP's strategies and activities very closely for the past 18 months—and who's been sharply critical of SAP during some of that time—I have to say I've found this turnaround to be nothing short of remarkable. And in the belief that a healthy and aggressive and customer-focused SAP is much better for its CIO customers than a stumbling and apologetic and internally centered SAP, we're kicking of SAP Week with this list of 10 priorities that SAP should establish to become the world's top enterprise software company. (Share your reactions to our list—pro or con—at email@example.com.)
1) Keep Rebuilding Customer Trust: Help Them Grow. McDermott has been pounding home the message that SAP is the only company that seamlessly connect the corner executive office to the shop floor, and that's certainly an essential capability. But customers already expect that from SAP; what they need on top of that are powerful connections to customers, prospects, and markets: more emphasis on the world outside rather than the world within. What better way to build customer trust than to help those customers increase their own revenue and actionable market intelligence? Another vital chore McDermott and Snabe have undertaken is to gain insights into the feedback from all of SAP's 100,000 customers, not just the top 100. In his February comments about the company's problems, Plattner said SAP had developed a habit of devoting rigorous attention to its top 100 customers attitudes and impressions and then assuming those opinions held true for SAP's other other 99,000 customers. That deep disconnect made many of those customers outside the top 100 feel SAP didn't care about their opinions. didn't listen when they were offered, or both. Conversely, McDermott and Snabe are making it clear that the interests, needs, and priorities of customers--all customers—will drive much of the company's decision-making going forward.
2) Keep Rebuilding Employee Morale: Beyond Adrenaline Rush. Snabe and McDermott have delivered clear and concise strategic messages, they've engineered a dynamic acquisition with Sybase, and they've delivered some very promising financial results, and all of that has certainly fired up the troops and got the adrenaline surging. But Red Bull exists because adrenaline is temporary—so the co-CEOs have to prove that the buzz wasn't just fleeting and that the proof will be in the execution of the product strategy of on-premise, on-demand, and on-device; that last month's quarterly financials weren't a one-time blip but rather the beginning of the new normal for SAP; and that the synergies promised from Sybase are rapidly transformed into tangible customer value and business value.
3) Articulate And Pursue A Grand Ambition. "Best-run businesses" is a great line and SAP should do everything in its power to live up to that. But SAP's rapidly moving into a position where its primary value to its customers won't be in how they help them run their businesses but rather in how they help those customers grow, expand, innovate, and transform their businesses, as often as necessary, to keep ace with and take full advantage of the markets those customers serve. IBM has "smarter planet": what's SAP's grand ambition?