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SAP’s Strategy Has Lost its Sense of Reality

In October, with an outlook to 2024, the question is: can SAP still be trusted? What was once an innovator for standard business software has now become hesitant, lagging behind.
Peter M. Färbinger, E3 Magazine
11 October 2023
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This text has been automatically translated from German to English.

Where is SAP CEO Christian Klein taking the ERP world market leader? At first glance, the question about SAP's future seems heretical; after all, SAP is the ERP world market leader. Christian Klein leads SAP with a sure and steady hand and the share price is satisfactory. The supervisory board behaves calmly and most of SAP's partners are loyal.

These positive aspects would be enough to satisfy Professor Hasso Plattner (one of the original SAP founders) and Christian Klein, if it were not for three major factors on the negative side: SAP customers, the company's own employees, and the German-speaking SAP User Association (DSAG).

In two of the three cases, Christian Klein can even consider himself lucky: employees and DSAG articulate their displeasure and criticism loudly and clearly. SAP customers, on the other hand, are calmly and quietly accepting the inevitable Hana and S/4.

However, the silence is deceptive. Is it the calm before the storm? "If you're no longer angry, you're no longer moving," was what the German magazine Manager Magazin posted on its website a few weeks ago. The calm in the SAP community should be making Christian Klein extremely nervous.

Many SAP customers have accepted the inevitable Hana and S/4 and are moving in a different direction. SAP is losing its claim to sovereignty in the ERP landscape. SAP is confusing everyone alike with its contradictory behavior: cloud computing contrasts starkly with a very successful on-prem product: SAP BRIM, Billing and Revenue Innovation Management, which is not only exceptionally good software, but also a cash cow for SAP.

Antonia Götsch wrote in Manager Magazin: "Workers who constantly complain and grumble have a bad reputation. But companies need dissatisfied employees. For SAP manager Nina Strassner, anger and dissatisfaction have often been the driving force behind important changes." Thus, the DSAG user association fulfills a especially important cleansing and critical function. DSAG members and the board complain and grumble—SAP could learn a good deal from this. Unfortunately, SAP is all too often resistant to learning and ignorant of its fellow DSAG members. 

Only 58 percent of employees in Germany are "enthusiastic" about SAP's future, as the German magazine Handelsblatt reported on its website. Only 48 percent say, "I have full confidence in the Executive Board."

Manager Magazin author Antonia Götsch spoke with Nina Strassner, Global Head of People Initiatives at SAP, and she said that employees who complain show the company where there is potential for improvement. They drive change; they have their finger on the pulse. The SAP employee figures published by Handelsblatt thus show great potential for change—whether SAP CEO Christian Klein recognizes this opportunity is unknown.

The situation is dramatic, however, with SAP customers. If their complaints are not articulated via the DSAG association, they often go unheard or are not even made known in the first place. SAP customers’ public silence is a major threat to SAP because it can lead to the assumption that many users have already left. Other IT vendors also have interesting SCM, CRM and PLM products. Cloud computing does not have to take place in the SAP private or public cloud, but can also be implemented by outsourcers, hosts, and hyperscalers.

However, future innovations from SAP board members Jürgen Müller and Thomas Saueressig will only be available to customers who use S/4 Cloud Public Edition or Private Edition via Grow-with-SAP or Rise-with-SAP contracts. Jens Hungershausen, CEO of the German-speaking user association DSAG, put it in a nutshell: "From 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 not survive the dissatisfaction with the SAP Executive Board unscathed.

SAP has recognized the discontent on the subject of cloud computing and surprisingly cancelled the certification for outsourcers and hosters in order to strengthen the Rise and Grow program for its own public cloud. Is this not a loss of a sense of reality?

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Peter M. Färbinger, E3 Magazine

Peter M. Färbinger, Publisher and Editor-in-Chief E3 Magazine DE, US and ES (e3mag.com), B4Bmedia.net AG, Freilassing (DE), E-Mail: pmf@b4bmedia.net and Tel. +49(0)8654/77130-21


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Work on SAP Basis is crucial for successful S/4 conversion. This gives the so-called Competence Center strategic importance among SAP's existing customers. Regardless of the operating model of an S/4 Hana, topics such as automation, monitoring, security, application lifecycle management, and data management are the basis for the operative S/4 operation. For the second time already, E3 Magazine is hosting a summit in Salzburg for the SAP community to get comprehensive information on all aspects of S/4 Hana groundwork. With an exhibition, expert presentations, and plenty to talk about, we again expect numerous existing customers, partners, and experts in Salzburg. E3 Magazine invites you to Salzburg for learning and exchange of ideas on June 5 and 6, 2024.

Venue

Event Room, FourSide Hotel Salzburg,
At the exhibition center 2,
A-5020 Salzburg

Event date

June 5 and 6, 2024

Tickets

Early Bird Ticket - Available until 29.03.2024
EUR 440 excl. VAT
Regular ticket
EUR 590 excl. VAT

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Venue

Event Room, Hotel Hilton Heidelberg,
Kurfürstenanlage 1,
69115 Heidelberg

Event date

28 and 29 February 2024

Tickets

Regular ticket
EUR 590 excl. VAT
The organizer is the E3 magazine of the publishing house B4Bmedia.net AG. The presentations will be accompanied by an exhibition of selected SAP partners. The ticket price includes the attendance of all lectures of the Steampunk and BTP Summit 2024, the visit of the exhibition area, the participation in the evening event as well as the catering during the official program. The lecture program and the list of exhibitors and sponsors (SAP partners) will be published on this website in due time.