SAP Is Back On Track, Right?
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SAP Is Back On Track, Right?

In general, SAP CEO Bill McDermott is doing alright. However, he’s often getting the details wrong. A top manager certainly shouldn’t make these mistakes, but does SAP need a new CEO because of that?

I’ve recently visited some of my friends in Walldorf, SAP’s headquarters. Unfortunately, there are only a few of them left – and the overall atmosphere is unpleasant at best, thanks to Bill McDermott’s restructuring program.

SAP employees are complex, diverse, innovative, disruptive – but also loyal to their company. Even though Dietmar Hopp has long since stopped working at SAP, the team spirit he invoked inside the company still exists.

Henning Kagermann, Gerd Oswald, and many more were able to uphold said team spirit for many years. It wavered under former CEO Léo Apotheker’s reign, but former co-CEOs Jim Hagemann Snabe and Bill McDermott were able to restore the faith in the company. Until McDermott started going after Snabe, that is.

Hasso Plattner reacted quickly, but not quickly enough. He wanted to make Snabe his SAP supervisory board predecessor, but Jim Snabe went to Siemens instead.

Bill McDermott, Plattner, Qualtrics

As soon as Bill McDermott got complete control, he searched for SAP’s true north. And he got the direction right, but the devil is in the details.

“Cloud First” with a hybrid strategy for B2B is a widespread goal. But why did Bill McDermott have to buy a company like Qualtrics for 8 billion dollars to achieve it? Inside SAP, people are still shocked, and many are asking why Plattner did not intervene.

However, that might be the wrong question. Maybe people should ask if this acquisition happened because it had Hasso Plattner’s approval.

Bill McDermott will also have to come up with a spectacular introduction for his Sapphire keynote this year to distract attendees from SAP’s HR problems (Goerke, Leukert, Enslin). My friends at SAP have already told me about frantic preparations.

After the failed rebranding of Hybris to C/4, Qualtrics is supposed to be the star of the show this year. However, C/4 is not exactly successful. It’s far away from actually being a threat to Salesforce. Success stories about C/4 are usually just slightly adapted Hybris use cases.

Bill McDermott’s visions are lacking content, innovation, and sustainable contribution margins – which also has an effect on SAP’s stock price. It will stay steady for now, but an increase cannot be expected in the near future.

SAP’s HR catastrophe

But that’s not all. Hasso Plattner and Bill McDermott also wreaked havoc on SAP’s HR planning. Beginning with Juergen Mueller, their most recent decisions had a catastrophic domino effect.

Why did the young Juergen Mueller have to become CTO right away? Don’t get me wrong, my friends and I weren’t always impressed with Bernd Leukert’s work and progress. But he was trained by Gerd Oswald to become Michael Kleinemeier’s successor. This could have been a very successful hand-over.

However, maybe I am looking at this all wrong. Maybe Hasso Plattner wanted something that Bill McDermott could give him. So he went, “Dear Bill, you can buy Qualtrics if I get to make Juergen Mueller CTO. Bjoern Goerke and Bernd Leukert are collateral damage.”

In any case, Hasso Plattner does not have the same intuition for employees and HR as his co-founder Dietmar Hopp. Inside the company, many people are equally shocked by the Qualtrics acquisition as they are by its HR chaos.

With Rob Enslin’s departure, Bill McDermott’s cloud strategy imploded. It was going in the right direction, yes, but what does it matter now that SAP can’t follow through anymore?

Furthermore, the integration of the different cloud acquisitions – which would normally be a task for the CTO – is now the responsibility of Christian Klein and Jennifer Morgan. Both of them are experienced executives, but not technicians. SAP’s cloud is in the wrong hands, and we’ll have to wait and see if it will survive another terrible decision.

E-3 Magazine May 2019 (German)

About the author

N. N. (Nomen Nescio)

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

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