Global CIO: An Open Letter To SAP CEO Leo Apotheker

And finally, two suggestions for your company's new "clarity" theme. First, Weier described it this way: "Clarity is central to a new marketing slogan at SAP that goes something like this: Customers that use SAP technologies get clarity about what's happening in their businesses." That can present strong value to your customers, but it also carries perhaps too much of an echo to SAP's back-office legacy: We can tell you how many valves are made per minute per factory and the cost of materials and labor and the destination for each and the number of workers required to source/make/package/ship/bill/reconcile each value. But I will submit that while all of that's nice, the clarity that your transforming and transformed customers will want is not so much about what's going on inside their business as it is about what's going on with their customers and prospects, and what those revenue-givers want and need not just now but in a year or two. Give your customers clarity into today and you'll be competent; give them clarity into tomorrow and you'll be a hero.

Second, the clarity thing didn't come through so well with your discussion of Business ByDesign at Sapphire. As I mentioned earlier about perspective, the issue here isn't that what you're saying about Business ByDesign and your SaaS strategy is wrong; rather, it's that while from your perspective all you said about it is true and up to date, from the perspective of some of your customers and prospects it came across as incomplete, evasive, and unconfident. As Mary Hayes Weier wrote in another May 13 article, called "Inside SAP's Idled Business ByDesign Suite":

"But while the suite may not be dead, what Apotheker didn't tell his audience is that Business ByDesign will have to undergo major reconstructive surgery before it can go to market with a product profitable enough to please its shareholders. And that could take another year, or maybe more." And also: "Some questions remain unanswered about the suite. If parts of it need to be reengineered, then why did SAP reduce its workforce on Business ByDesign to 800 people from 2,600 and provide in a March e-mail its explanation that "as large parts of the software are already developed ... SAP will transfer most of the programmers to its flagship project Business Suite." "

Seems to me, Leo, that customers want to see leadership from you and your company on what your plans are for Business ByDesign, and that desire translates into a need for clarity. As you know, Leo, your CIO customers are under tremendous pressure from their CEOs to lower the cost of infrastructure, and many believe SaaS applications can play a big part in that. Those CIOs are trying to build strategic plans for when they can start testing such products and begin basing budget projections on them, and that requires, well, clarity from you. It's another one of those difficult balancing acts you've got to handle as you continue to drive your enormously successful on-premises business while also diving into the potentially less-profitable SaaS model, and your customers will understand your dilemma better if you speak to them about it from their point of view. They know SAP's perspectives very, very well -- what they want to know now is, do you understand their perspectives?

Well, Leo, the old Chinese curse proposes, "May you live in interesting times." And although these times are certainly interesting, you have it in your power at SAP to turn that reality from a curse into a blessing. Best of luck.