Christian Klein has brought his SAP into a safe haven. The share price is satisfactory and existing customers are appeased. Employees are not overly demotivated and some partners are surprisingly optimistic. What is missing is a plan for how to proceed.
SAP CEO Christian Klein seems deeply relaxed. He is taking the train to the World Economic Summit in Davos, where he is being interviewed by the hired and sponsored editor-in-chief of the Handelsblatt newspaper. All is well and everything is under control. Even during the stage appearances at the Sapphire in Orlando and Barcelona, the existing customers and partners saw a good-humored and confident Christian Klein.
To ensure that no one disturbed this idyll, only three journalists from Germany were present at the Sapphire in Barcelona, one accomplished editor from Wirtschaftswoche and two trade editors - not too much of a challenge for Klein's press team. This year's SAP AGM also went successfully and without escalation: Professor Plattner received very broad support from the shareholders for himself, his Supervisory Board and Executive Board team, and his proposals. Everyone involved was very pleased with themselves.
There is currently only one person who disturbs SAP's idyll: Larry Ellison. Once again, the Oracle CEO has shown that things can be even better. By making smart decisions, he outperformed SAP in terms of technology, business management and his own share price. Hasso Plattner and Christian Klein did not do a bad job in recent months, but Larry Ellison was many times better.
Why does Oracle seem better than SAP? The answer is simple: Larry Ellison is looking into the future - in other words, the Oracle boss is consulting an oracle; while Plattner and Klein are trying to preserve what they have achieved. SAP CEO Christian Klein does not consult an oracle about the ERP future, but tries to save his SAP from collapse - that is commendable, but not strategic! The efforts of Klein and his fellow board members can be summed up in one sentence: We guarantee support for S/4 Hana until 2040; no other IT provider makes a similarly far-reaching commitment.
Conversely, S/4 support until 2040 means: Christian Klein, Thomas Saueressig and Jürgen Müller have no idea how things will continue. There is no vision for an S/4 successor. The ERP strategy is based solely on Hana and S/4. Embarrassing for Christian Klein is the fact that his existing customers, the community and the user association DSAG are already much further along. A discussion held in June showed, among other things, the potential of the Business Technology Platform (BTP) and the resulting Embedded Abap, also called Steampunk. Some experts are certain that BTP and Steampunk must be the SAP basis for a successor to S/4.
Everything will be better in 2024, when Punit Renjen takes over from Professor Hasso Plattner as Chairman of the Supervisory Board. At the same time, many supervisory board mandates expire in 2024, giving Punit Renjen the chance to put together a new, innovative team. The new Supervisory Board Chairman would be well advised to do as Jim Hagemann Snabe did at Siemens. Former SAP co-CEO Snabe has his supervisory board members evaluated once a year by an external HR consulting agency. At Siemens, supervisory board positions are not awarded on the basis of friendly relations, but exclusively according to a strict performance catalog.
The alternative supervisory board culture of a Jim Hagemann Snabe is perhaps one reason why he never thought of rejoining Professor Hasso Plattner after leaving the SAP Executive Board. After all, Plattner's vote is still the only one that counts on the SAP Supervisory Board until 2024. Anyone who can be sure of his affection, like SAP Chief Technology Officer Jürgen Müller, can hope for an undisturbed working life. For a successful SAP future, Punit Renjen needs an agile, innovative supervisory board. He needs people who can fulfill their supervisory duties with competence, constructive criticism, and a sharp mind, while at the same time using their experience and vision to convey the right advice to a retreaded Executive Board in an open and transparent manner.
Anyone who consults the oracle will learn that SAP has enormous potential, that the future of SAP can be as successful as Larry Ellison is currently demonstrating. But to activate this potential, SAP under Punit Renjen needs a supervisory board similar to that of ex-SAP colleague Snabe and definitely a visionary and courageous executive board that sees its work as more than just administering the ERP world market leader. The past SAP innovations such as Hana and S/4 are only technically administered. Customizing is reduced to a cloud computing discourse. At the moment, neither the Supervisory Board nor the Executive Board is delivering added value for SAP's existing customers.
