Q&A: SAP's Bill McDermott on IT Priorities in a Tough Economy

Leading executive at the world's largest enterprise applications vendor says cash management and process efficiency head the list of strategic initiatives that are still getting funding.
When the discussion turns to performance management, is it about financial PM -- the controlling the cash part -- or are operational initiatives getting attention as well?

It's both. It started out with the CFO -- "I have to have compliance" and "I have to know what's going on with cash and liquidity" -- but the CEO needs his or her dashboard, too, because they care about what's happening with the company's talent. If you're heading a company that has to do more with less, I better know where the top 10 percent of my people are in the world, what function they are in. And if I can't afford big bonuses, I better have some secret sauce to keep that top 10 percent within the company. That's an HR operational initiative that the CEO cares about. At the same time, if I have to cut my supplier base by a third so I get more bang for the buck with all my suppliers, I better focus operationally on the performance of my supply chain. And if I'm the head of sales, I better know what's going on with my sales pipeline in real time. In today's market, sales also has to be worried about CFO-related questions such as, is days' sales outstanding going in the wrong direction? Do I have a customer on the close plan that is also a high credit risk such that I can't get them financing or they can't pay their bills? There are all kinds of analytical issues now exacerbated by this tough economic scenario, and it's forcing all lines of business to focus on digital dashboards, real-time insight and analytics to run the business.

Are you seeing new IT initiatives aimed specifically at coping with crisis conditions?

Anything having to do with getting a handle on cash and liquidity is likely to be a net new application, even for some of the most sophisticated customers. The idea of lean operations is also very hot. How do I do a lot more with a lot less? You'd be stunned to find out how many applications are in place at the average bank. With no exaggeration, the average large bank is probably running 100 or more financial applications. So the whole idea of getting lean, rationalizing operations, choosing the winners and improving efficiency is huge.

In times like these, everybody in senior management needs business intelligence and analytics to measure, manage and report on what's going on in the business. When the CEO walks into the board room these days, it's not enough anymore to have the PowerPoint deck. Boards are asking tough questions, and they are getting right into the balance sheet, the P&L and the operating units. They want to know what's going on, and if you can't report on that and give them data that's consumable very quickly, you start losing control.