SAP HRD, Human Resources Dilemma
Diligence and vision at SAP
SAP's young CEO, Christian Klein, is described in the community as a tireless worker who not only works on strategies, but also has a great attention to detail. Klein is both hard-workinh and strategic, but whether his approach is appropriate for his role as CEO remains to be seen.
In contrast, Professor Hasso Plattner is considered a visionary like no other in the IT scene. Professor August-Wilhelm Scheer once said that he didn’t know anyone who could see as far into the future as Plattner could. SAP's history has shown time and again that Plattner was very early to recognize developments that were on the way.
From client/server to in-memory computing
SAP did not invent client/server computing, but Hasso Plattner recognized its importance for an ERP system like SAP R/3. After a difficult start, the three-tier client/server model was ultimately a resounding success and is still considered the blueprint for ERP systems.
In connection with APO, Hasso Plattner developed the first database in the main memory of the server (in-memory computing). Advanced Planning and Optimization (APO) was an SAP SCM module for ERP operations. APO is an excellent idea, but the execution speed of the module was far too slow. Disaster was imminent! No one could use an optimization that would give good advice for the supply chain long after the end of production. Within APO, a database was integrated into the main memory of the SCM server, which accelerated the module many times over.
The Hana disaster
Speed is always a challenge in IT. Many years ago, the Hasso Plattner Institute (HPI) at the University of Potsdam, Germany, developed an in-memory computing database for SAP's ERP system. In a workshop with students, Professor Plattner evaluated the weaknesses of current ERP systems. To achieve real-time behavior, the system needed a much faster database. SAP Hana was born.
Development of the new SQL database, which runs entirely in memory on the ERP server, was transferred from HPI to SAP. For future ERP versions, such as S/4, it was decided that only Hana could be used. For SAP Business Suite 7, users can still choose between AnyDB (Oracle, IBM, Microsoft, etc.) and Hana (SoH, Suite on Hana).
With the Hana dictate for S/4, SAP has plunged customers into a disaster: anyone who wants to use the latest ERP generation from SAP must now choose Linux as the operating system and Hana as the database, regardless of the existing and implemented IT architecture. However, since many non-SAP applications run on Oracle, IBM, and Microsoft databases, only SAP customers will have to pay double database fees (licenses), all without any demonstrable added value.
The money-making vision
Outside of analytics, the Hana SQL database is just as efficient and quick its competitors. No in-memory database is needed for operational tasks such as posting invoices, tracking inventory, etc. However, by forcing SAP to use Hana, SAP will rake in even more licensing fees. The ERP pricing model has been extended to the underlying database. Many SAP customers currently pay DB licenses for Hana, as well as for Oracle, IBM, or Microsoft.
SAP has compounded this disaster with very restrictive rules: even in a transition phase from Business Suite with AnyDB to S/4 with Hana, Hana license fees have to be paid. A very good deal for SAP with no added value for customers.
SAP Human Resources Dilemma
It is completely unclear who will be responsible for innovative database concepts and advanced ERP architectures at SAP in the future. With the departure of Professor Hasso Plattner, SAP has lost not only a visionary, but also a visionary's authority.
In recent years, Plattner has played a dual role as CEO and chairman of the supervisory board: visionary and motivator (some would even say driver). In fact, Plattner has often given his own team a wake-up call when they have become too sluggish. Plattner's agility well into old age is another phenomenon of this exceptional figure.
Of course, Plattner's innovation and agility were not always compatible with SAP customers’ needs. Plattner once wanted to break up the successful SAP R/3 into microservices. This may have been a logical step for a computer scientist, but it would have been disastrous for operating a homogeneous black box like R/3. We have already reported on the Hana disaster.
SAP visionary activist
SAP is now missing an activist visionary, and the dilemma at SAP is the lack of such a person on both the Executive Board and the Supervisory Board. SAP's Chief Technology Officer, Jürgen Müller, does not inspire confidence. Müller's contract was only for three years, and if his mentor Hasso Plattner is no longer on board, things could get difficult for the CTO.
Plattner's designated successor, Punit Renjen, would not have been the visionary technologist, but rather a motivator with plenty of energy to drive SAP forward. At the 2023 Annual General Meeting, SAP shareholders elected Renjen to the Supervisory Board with 99 percent of the vote, and even Plattner had nothing but praise for his designated successor.
The current solution provides for a two-year transition period with a supervisory board chairperson who is likely to be considered a mere puppet due to this short term. An agile and visionary successor to Plattner is nowhere in sight, and many potential candidates will not be encouraged by the action taken against Punit Renjen. SAP has a human resources dilemma on its hands!
