SAP and Digitalization—Friends or Foes?

In brief, digital transformation or digitalization means the implementation of new processes or the optimization of existing processes with modern applications and new technologies. The goal is to become part of the new digital economy and stay competitive in a fast-paced market environment.

Digitalization drivers

At the Annual Conference of the German-speaking SAP user group DSAG, chairman Marco Lenck and his colleagues presented the results of a survey among members regarding digitalization efforts. The survey revealed that boosting the efficiency of existing operational processes and developing new business models are among the biggest drivers of digitalization projects.

Interestingly, factors like market dynamics, closer collaboration with ecosystems and optimization of customer service and transparency were not as important in digitalization projects.

The survey also revealed the role of SAP in customers’ digital transformation efforts. Marco Lenck said, “As companies are increasingly turning to hybrid environments as part of digitalization, SAP needs to make its design, development, and operation, including its licensing models, as simple, flexible, and appealing as possible. Otherwise, projects will stall again.”

Co-CEOs Morgan and Klein

Even though a lot of customers have been with the ERP company for decades, SAP always manages to surprise them again. The most recent example: Bill McDermott’s abrupt departure. Jennifer Morgan and Christian Klein took over the reins. Up until her promotion, Jennifer Morgan had been President of the SAP Cloud Business Group, which includes all of SAP’s billion-dollar cloud acquisitions.

Concerning SAP’s own digitalization efforts, Morgan has reportedly been supporting the expansion of SAP’s business model—to not only rely on licensing, maintenance and consulting revenue, but also push its own cloud services.

CDO and/or COO

Not many companies have a Chief Digital Officer (CDO). SAP at least had a Chief Operating Officer (COO), and now that Klein is co-CEO, I can only assume that SAP’s digital transformation will remain one of his top priorities.

Hopes are high in the SAP community that the new co-CEOs will focus more on customers’ digitalization needs again. If that will be the case remains to be seen, but SAP’s management has at least made promises in that regard during SAP Capital Markets Day 2019, held in November 12 in New York City.