It is no secret that SAP casts a sizable presence in the business applications and solutions market, but even at its notable scale it sought to adapt to a cloud-forward, digital world internally and with its clients.
Juergen Mueller, CTO and executive board member with SAP, is responsible for the company’s infrastructure, technology platform, and more. SAP has acquired numerous companies over its history, he says, often integrating their technology stacks and other resources. Mueller spoke with InformationWeek, and says his company continues to change in its own right, taking advantage of the cloud for flexibility and speed of innovation.
Given the breadth and history of SAP, were there challenges in getting across to customers how the company was evolving?
Always there are challenges when you do such changes, if you are successful, because the largest competition is the success of the past. Some customers say, “Hey, everything is fine. Why should we move now? We only get an update every year, or we only upgrade every few years. It’s so convenient, and it works fine.”
Whenever you start a new generation of software, then you compete against your past success.
What can be said to folks who might dig their heels in and question the need to change?
We also have those discussions internally. We all need to change if the world around you is not changing. In the last two and a half years particularly, the world is changing massively. We’ve had the pandemic; consumer behavior changed massively.
Supply chains were disrupted massively. The chip shortage. What that means for companies is that they used to do, for example in the planning space, demand-driven planning. They were just figuring out, “Where I can sell and how much, assuming I can produce almost an unlimited amount of goods?”
Now it’s exactly the other way around -- “Where can I get material because supply chains are very fragile? And then with what I produced, how can I best distribute that and sell that in the world?”
Then of course the war in Ukraine, initiated by Russia, is a recent example of when our energy prices in Europe went through the roof. If they get some consensus on getting some wheat and seeds out of the country, via Turkey potentially, that will otherwise lead to a crisis when it comes to food.
Then we saw in China massive lockdowns because of the pandemic. Then we saw a massive influx of capital, especially in the US, to private individuals. Now we see the opposite -- one of the consequences we see is very high inflation rates.
If you are a company not affected by any of that, everything is perfect. No change. I would say 99% of all companies are massively hit and affected by all those changes, and therefore they need to change. They need to change their customer relationship management. They need to change how they deal with employees. They need to change how they, for example, [use] supply chains where they get their resources and also then how they manufacture or how often they change business models. Now it will be a time when companies are not willing to spend so much money, so capital, and cash is important. So that often leads to a wave where you want to rent more. You will not sell your machine, but you will rent it. You will potentially not buy a car, but you will rent it. That again on the IT side then means that you need to have the right tools in place and applications in place. Of course, you are cost conscious so you will drive automation.
If you don’t see any pressure, if you don’t see any disruption in the world then it’s fine, but maybe then you should open your eyes.
Where do you see us in the stages of change? Are we still very much in the early stages? Are we more in a sophomore phase? Are we much further along, gaining our stride and adapting to these changes?
It depends on industry. It depends on the company. Even sometimes within companies, it depends on the department you work on. We do see customers who completely changed. For example, the Parkland Hospital in Texas, they actually completely digitized their whole hospital chain. They drove a lot of data to data-driven efforts. They were implementing, what we call a digital boardroom for companies. They basically created a digital situation room because every day they had to deal with COVID patients, in-between they had not enough ventilators and they had to manage that situation. Being data-driven, having real-time visibility into the assets, into employees, into the customer -- clients and patients coming in -- was a huge advantage for them. They developed a mobile app such that even without entering the building you could do your symptom assessment. All of that is driven by IT, otherwise it doesn’t work.
It is a really good example of how drastically you can change in times of crisis. Digitally enabled companies recover much faster, accelerate, and make use of this. Parkland will continue to use a lot of these technologies, which have been created basically in a crisis.
What do you see as limiters or catalysts for ongoing change in the enterprise space?
The inhibitors and accelerators are culture and leadership. You can always choose to not do something, which maybe in the short-term the easier way. Or you can choose to lead your organization, your team, your colleagues, yourself into the future. Of course, there are supply chain shortages but there’s nothing that should hinder companies to move into a digital world.