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SAP's crystallization point

At a crystallization point, the further course of the roadmap is decided. Will the project freeze and break up, or will it become fluid, agile and successful? Christian Klein has recklessly led his SAP to such a point.
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November 3, 2022
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This text has been automatically translated from German to English.

SAP tilts

Many SAP projects in the Group are on the back burner, and I can't complain about a lack of work. Of course, SAP is not always the initiator, but many of our projects are currently being put to the test because the basic conditions have changed. But what used to be waved through by the CIO, because it is SAP, is currently being scrutinized particularly critically.

SAP CEO Christian Klein has left an ambivalent impression on us in the Group: In personal interactions, he is very polite, courteous, modest and a very good listener. The results and impact of his work, on the other hand, are below average. (There was a different word here in the original manuscript, but my wife admonished me, saying that I should be more tolerant of such a young manager, even if he is CEO. Please.)

So I don't want to evaluate Christian Klein's work from the perspective of one of SAP's largest existing customers, but simply refer to the current stock market price. The SAP share has been moving sideways for weeks in a corridor between 83 and 93 euros. Not so long ago, analysts saw the share at 140 euros and more. Professor Hasso Plattner is certainly not satisfied with this stock market value of his SAP.

For Christian Klein, the challenge is to get SAP moving again, to make SAP fascinating and desirable again, to make SAP open, agile and communicative again. We rely and trust in SAP because we see the potential - beyond Hana and S/4. There can still be a lot and interesting things to come, but SAP must make an effort. SAP must overcome its shock paralysis. SAP must not freeze and freeze up at the crystallization point.

Where is the new energy coming from? An important energy center is now leaving SAP. CFO Luka Mucic has voluntarily, involuntarily resigned. His successor is Dominik Asam from Airbus. My CFO says that this new CFO for SAP is an excellent choice, but could also become a threat to the other very young SAP board members. Dominik Asam would not be the first CFO to become CEO very quickly. Plattner's capricious personnel management is well known and notorious. Next year marks the beginning of his last year as chairman of the supervisory board, and we all know that he wants to leave behind a well-ordered house. What is missing is an experienced manager who is young enough for the board and not yet eyeing the chair of the supervisory board - for this, Professor Hasso Plattner will have to find someone else.

Don't panic: Other IT groups have already sounded out their directional decisions at the crystallization point where SAP currently stands. Microsoft has succeeded brilliantly in opening up in the direction of open source, the cloud and GitHub. At IBM, the move away from hardware and toward software and the cloud was correct in principle, even if the management has not yet executed it perfectly. What will become of the Oracle adventure with Cerner's software for the healthcare sector, I cannot assess. We have no involvement in this area.

SAP CEO Christian Klein has arrived in a polycrisis. The cleanup after Bill McDermott was too slow. Now SAP is on fire everywhere: Hana and S/4 are gaining momentum, but much too slowly. Share price and contribution margin are falling, and only price increases will help. Even more travel cost savings and organizational optimizations are hardly possible after two years of pandemic. There is a lack of qualified employees because many have left for partners and competitors such as Celonis. Calm and a firm guiding hand from the supervisory board are not to be expected at the moment either - Professor Plattner is too busy with himself. Christian Klein doesn't want to meet the activist German-speaking existing customers at the DSAG annual congress in Leipzig either. What to do?

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Working on the SAP basis is crucial for successful S/4 conversion. 

This gives the Competence Center strategic importance for existing SAP customers. Regardless of the S/4 Hana operating model, topics such as Automation, Monitoring, Security, Application Lifecycle Management and Data Management the basis for S/4 operations.

For the second time, E3 magazine is organizing a summit for the SAP community in Salzburg to provide comprehensive information on all aspects of S/4 Hana groundwork. All information about the event can be found here:

SAP Competence Center Summit 2024

Venue

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

Event date

June 5 and 6, 2024

Regular ticket:

€ 590 excl. VAT

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.