Heads Roll at SAP

The SAP helmsmen: Oswald, Lamadé, Klein

Who on the SAP Executive Board makes decisions about SAP strategy and human resources? Normally, the chairman of the supervisory board of a public company has the final say. For years, Professor Hasso Plattner dominated not only SAP's Supervisory Board, but the entire company. His word was an order to all employees—even if this approach was not always compatible with corporate compliance. As co-founder, largest single shareholder, and for many years CEO, SAP Supervisory Board Chairman, Hasso Plattner was the ultimate authority at the global ERP market leader.

The question of Professor Hasso Plattner's successor has therefore dominated the discourse in the SAP community in recent years. The ERP company found a worthy successor in former Deloitte boss Punit Renjen. Renjen was elected to SAP's supervisory board and prepared to take over Plattner’s position. However, his activist and committed behavior displeased many supervisory board members, executive board members, and executives at SAP—some feared they would lose their influence and advantages under a supervisory board chairman like Punit Renjen.

The “coup” was successful and, at the last minute, Punit Renjen was removed from the list of candidates for the election of a new SAP Supervisory Board Chairman. Who were the helmsmen and puppet masters back then? Pekka Ala-Pietilä, who was already a member of the SAP Supervisory Board, was proposed as Renjen’s successor for a two-year term. He was elected and has since been considered a two-year stopgap and puppet, since the real power at SAP has been in the hands of Supervisory Board members Gerd Oswald, Lars Lamadé, and SAP CEO Christian Klein for many years.

Actionism at global ERP market leader SAP

Pekka "the Puppet" Ala-Pietilä, Gerd Oswald, Lars Lamadé, and Christian Klein have now decided to say goodbye to SAP Executive Board members Julia White and Scott Russell. My colleague Christina Kyriasoglou from the German-language Manager Magazin writes, quite logically: "However, the question is why SAP's top management did not come to the conclusion at the beginning of the year that the two divisions needed to be repositioned—after all, the business figures were already good and Klein and Co. had previously worked for months on a far-reaching restructuring, which the CEO then announced in January and which is intended to keep SAP competitive in the future age of AI."

The story is more complex than it seems at first glance: Julia White's performance had already been below average in recent years, so at the beginning of 2023 there was already a proposal on the table not to extend Julia White's Executive Board contract and to part ways with the former Microsoft manager. But then, quite surprisingly, Chief Human Resources Officer and COO Sabine Bendiek submitted her resignation.

Of course, this was too much actionism for SAP: the global ERP market leader did couldn’t lose two women from the Executive Board at the same time. Sabine Bendiek left SAP at the end of 2023, and Julia White was allowed to remain temporarily. Then the problem of finding a successor for Professor Hasso Plattner was solved by replacing Punit Renjen with Pekka "the Puppet" Ala-Pietilä. An action rarely seen on German supervisory boards.

Bad news for the SAP community: pricing

With the aforementioned SAP reorganization at the beginning of 2024, board member Julia White was also given responsibility for pricing—the PKL (SAP Price and Conditions List) is an eternal work in progress at SAP. The task must have been quite the challenge for Julia White to take on. The DSAG (German-speaking SAP User Group) has been calling for a more comprehensible, simplified, and transparent price list for many years.

However, with all due respect to Julia White's management skills, consolidating PKL is a lose-lose proposition. She was bound to fail at her task and perhaps this was the final straw that broke the camel's back.

SAP share price at all-time high

Despite the bad mood in the SAP community and among the employees of the ERP world leader, the SAP share price is at an all-time high. Why is that? SAP CEO Christian Klein and CFO Dominik Asam are doing everything they can to deliver good news to investors, shareholders, and financial analysts. Dominik Asam's predecessor, Luka Mucic, had to leave because, according to Professor Hasso Plattner, the SAP share price was not satisfactory. At the time, SAP's numbers were good and promising, but the share price was below average compared to Oracle, Microsoft, and Salesforce.

SAP's focus is now entirely on its own share price—other areas are being neglected and up to 10,000 employees are being laid off in order to increase the contribution margin. This is a negative development for the SAP community, partners, and customers. The mood among SAP employees and their confidence in the Executive Board's strategy are also low.

It remains to be seen whether a reduction in the size of the SAP Executive Board and a focus on AI and public cloud will be a suitable solution to the many unanswered questions. The SAP community is wondering what will happen next. Will the SAP Executive Board remain the same, and who will succeed Scott Russell? The first answers should be available at the annual DSAG conference in Leipzig, Germany in October.