Global CIO: SAP's Sweeping Turnaround: Exclusive Co-CEO Interview - InformationWeek

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10/5/2010
09:18 PM
Bob Evans
Bob Evans
Commentary
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Global CIO: SAP's Sweeping Turnaround: Exclusive Co-CEO Interview

Vowing to create "people-centric software," SAP's retooling for greatly accelerated development, deployments, and time to value, says Jim Hagemann Snabe.

During these times of enormous change and upheaval within the IT industry, as major and midsize players try to outposition each other for the cloud and mobility and analytics and real-time business, perhaps no company is transforming itself more broadly and more deeply than SAP, the former poster-boy for the rigid and product-centric school of IT-vendor strategy.

But even as a slew of acquisitions are reshaping the IT-vendor landscape, and as the major players look to scramble out of commodity and diminishing-value sectors, these daunting challenges that encompass not only technology but also culture and people and branding and reputations and sales tactics can take years to complete.

Knowing that former management had already squandered any such multi-year cushion, SAP co-CEOs McDermott and Hagemann Snabe have spent the past eight months remaking their sprawling company and its vast product lines from the inside out, shredding the traditional SAP approach that I think we could call "Complexity as a Service" in favor of one that puts a premium on customer value, speed to value, and consumability.

To understand the scope of SAP's transformation that co-CEOs Hagemann Snabe and McDermott have undertaken since assuming control of SAP eight months ago, consider these comments from a very recent phone conversation I had with Hagemann Snabe:

  • "Large enterprises have begun to prefer simplicity to perfection—that was not the case before the global economic crisis."

  • "We knew we needed to simplify the consumption of our on-premise offering."

  • "On-demand has become more popular not because customers want to consume software over the Internet but rather because they wanted quicker time to value."

  • "For Business ByDesign, we want to build up a channel that is low-touch: customers are not interested in adding a lot of services to something that's already simple."

  • "Instead of building software for companies, which SAP has always done, we are now designing software for people."

    Those are great soundbites, to be sure, but can SAP deliver on that sweeping promise? Can it revise not only the technology it produces but also the pervasive culture and outlook among its many thousands of developers and engineers whose prior orientation had been totally focused on creating transaction-oriented industrial code whose power was matched only by its complexity?

    Can SAP—for decades the prince of process, the sultan of sameness, the count of conformity—truly become a company that's deeply focused on speed to value, "people-centric software," delightful user experiences, and tailored business outcomes?

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    Co-CEO Snabe says it's already happening through a combination of radically different design processes and objectives plus a new focus away from selling just software and toward selling enduring business value that combines software with unmatched insights into customers' best practices, industry norms, and ways to optimize time to value.

    And he says SAP's "central planning" model is largely to blame:

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