Lack of Trust in SAP Executive Board
Who saves whom?
Next year, Supervisory Board Chairman Professor Hasso Plattner will hand over his chairmanship to Punit Renjen, who was Deloitte's global CEO until the end of last year. Renjen knows the SAP business from his own experience, and for him SAP should remain a manageable task. Shareholders elected Punit Renjen at the last AGM with 99 percent of the votes cast, probably because they hoped for something similar to what Renjen achieved at Deloitte: within seven years, he increased Deloitte's revenue from 35 billion USD to 60 billion USD.
Christian Klein will therefore have to keep SAP on track and stabilize it until the final election, despite all the adversities in his way. Klein, together with CFO Dominik Asam, must initiate a safe and calm handover in operations. Once in office and equipped with new Supervisory Board members, Chairman Punit Renjen can return the favor to Christian Klein and Dominik Asam by providing advice and support. Punit Renjen and Christian Klein are thus an unequal pair, but they will have to help and save each other in the coming 18 months.
Only 58 percent of employees in Germany are "enthusiastic" about SAP's future, according to the German magazine Handelsblatt’s website. Only 48 percent say, "I have full confidence in the Executive Board." This internal lack of faith cannot be ignored, especially since it is mirrored outside SAP in the community and within the German-speaking SAP User Group (DSAG). The future innovations from SAP board members Jürgen Müller and Thomas Saueressig will be available only to customers who use SAP S/4 Hana Cloud, Public Edition or Private Edition via Grow with SAP or Rise with SAP contracts. Jens Hungershausen, CEO of the DSAG, put it in a nutshell: "From the DSAG's point of view, this is a 180-degree turnaround from previous statements. SAP had previously claimed that it did not want to limit improvements to cloud-based offerings. The statement is a major blow. It amounts to a paradigm shift."
Jürgen Müller and Thomas Saueressig will in all likelihood not survive this 180-degree turnaround, and the internal dissatisfaction with the Management Board unscathed. And there are other construction sites, as the Handelsblatt reported: though the company has been researching artificial intelligence for years, SAP has nevertheless—several developers complain—little to show when it comes to the new generation of the technology, which can generate content such as text, images and program code. The innovations announced so far have been quite vague.
While there is a global technology race and an unprecedented mood of optimism, Christian Klein and his colleagues on the board remain in a state of AI shock paralysis. When it comes to AI and machine learning, board members Christian Klein, Thomas Saueressig and Jürgen Müller are content with vague promises and shallow collaborations. The Handelsblatt magazine writes further: in of Jürgen Müller and Thomas Saueressig’s technology and product development departments, two people who are supposed to develop innovations above everything else, many employees are critical of the management board as well as of future prospects.
Council, supervision and action
If Punit Renjen wants to take his SAP forward next year and lead it to success beyond Hana and S/4, he will need an ally in Christian Klein and Dominik Asam. Renjen's task is already clearly outlined: all of Hasso Plattner’s friends must be removed to make room for members with more competence. Details can be found in the current editorial of the September 2023 supplement of E3 magazine or, as of August 25, as a downloadable PDF at e3mag.com.
SAP has many construction sites, many projects still in progress, and CEO Christian Klein will not be able to solve all of them at the operational level. If SAP wants to have a chance in the future, Punit Renjen will have to become an active Chairman of the Supervisory Board and act entirely in the spirit of the word. He must exercise stringent supervision and give good advice—something that few Board members are likely to survive. There will undoubtedly be a culling.
Be sure to read the report on the Handelsblatt website (in German): Software Manufacturer SAP - Employees Give Executive Board Poor Marks