Blog Nomen Nescio

A Sense of Urgency

SAP CEO Christian Klein obviously does not feel any pressure to act. He spends his days doing small-scale maintenance work, working committedly, and forgetting the big picture—but this has left Klein without a strategy.

Even my own management board has experienced this. SAP is transforming itself into a cloud company. SAP’s balance sheet figures show the success of this ambitious project. When I presented Christian Klein’s SAP strategy in my own words at our annual board meeting, I received only mild smiles in reply. The board did not want to doubt or discredit my words, or the ideas Christian Klein had passed on, but transforming a technical operating model from on-prem to cloud is, at best, an operational challenge. It is by no means a visionary strategy.

Personnel policy

SAP is under pressure due to existing legacy issues. The personnel policy of the Supervisory Board has been limited in recent years. For example, one of the members Executive Board was elected by only one vote—that of one of the original founders of SAP, Professor Hasso Plattner. No one dared contradict him. The SAP executive board has an “old boy’s club” of sorts with former Microsoft staff. One of the Executive Board members is currently in the process of vacating one of these positions. At the same time, another member of the club is not allowed to leave because SAP fears reprisal from the press; namely, that the press might say “SAP can’t retain female employees.” Memories of Jennifer Morgan and her ill-fated co-leadership with Christian Klein come to mind. The game of chess SAP played with its CFO is another case, and Asam’s placement came as a surprise to many.

Another example of this personnel policy can be seen in how ex-SAP CFO Luka Mucic was forced to leave, and now Dominik Asam has been tasked with repairing Mucic’s “mistakes”. Professor Plattner felt pressure to act because SAP’s stock price was no longer to his liking, and Luka Mucic was labelled the culprit. He communicated too little with financial analysts and experts at banks, with investors, and at stock exchanges. Now Dominik Asam is supposed to do better. For Christian Klein, however, the pressure to act remains, both operationally, i.e. finding suitable members for his Executive Board, and strategically, i.e. finding a long-term and successful strategy for SAP.

SAP strategy

Our Executive Board has also asked me for a robust SAP strategy. Cloud computing, S/4 maintenance until 2040, and Abap on the Business Technology Platform are all well and good, but they are not insights that board members of one of Germany’s leading industrial companies wants to hear. Our board also does not want visions of blockchain, artificial intelligence, and machine learning to act as our guides. Nor is our Executive Board interested in hearing any whimsical attempts at explaining the future from Christian Klein himself— in that respect, as an “SAP ambassador”, I suffice.

In our Executive Board meeting, the sense of urgency for a long-term ERP strategy became obvious. Our Executive Board is aware that neither the highly esteemed Supervisory Board member Gerd Oswald nor CEO Christian Klein possess a veritable crystal ball. Nevertheless, it seems to be the order of the day to think about Industry 5.0, an S/4 successor, and the future of data management with and without Hana. The first step an ERP discourse should take is not to divine final answers, but rather to discuss possibilities.

Under Christian Klein’s leadership, SAP is neglecting the future. His corrective behavior is currently preventing the collapse of the ERP world market leader; however, our board’s question is: does SAP not have capable managers to handle the operational minutiae, so that CEO Klein can devote himself to the future? When Christian Klein is asked about the future of SAP, the community always receives the same answer: cloud computing and S/4 maintenance by 2040. But these statements are not enough. Our Executive Board does not want intimate boardroom discussions with SAP executives, but rather a public discourse on how a possible ERP future would look like, and it wants the discourse to happen with existing customers, partners, analysts, our SAP user group, and the entire SAP community. The discussion must include the agenda for 2050 and it must be democratic, transparent, and public. This discourse must happen, and it must happen soon.

Any questions, comments, or concerns? Feel free to let us know in a comment below.

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N. N. (Nomen Nescio)

Nomen nescio, abbreviated to N.N., is used to signify an anonymous or unnamed person.

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