SAP CEO Christian Klein tries. He removed several SAP construction sites and reorganized the executive board. However, real, tangible success and a clear strategy are still missing.
I had the opportunity to spend a few days with SAP executives and I have to conclude that, despite the proven successes, there is considerable uncertainty and nervousness at the SAP executive level.
Needless to say, the planned departure of CFO Luka Mucic early next year has thwarted, if not ruined, some SAP plans. In SAP’s fifty -year history, Mucic is only the third CFO. It is pointless that you look for this continuation in other areas of the board. Most executive board positions already have turnover rates in double digits.
None of the people I spoke to really wanted to comment on the departure which came as a surprise to many. Of course, everyone involved knows that Professor Hasso Plattner is extremely dissatisfied with SAP’s current stock price and often vents his resentment at supervisory board meetings. Plattner’s criticism may be correct, as it is clear that the low share price is not just due to current politics or COVID-19. SAP is to blame a lot for this, and it seems to need a mortgage. Of course, it’s possible that SAP and Luka Mucic are just far apart.
In the past, Christian Klein and Luka Mucic have repeatedly demanded higher share prices based on SAP’s successes. If SAP is a startup in its cloud offering, it is possible to double the share price height. But what should be blamed on SAP in any case is the very cumimentary and inadequate communication. Is there an impressive narrative for the future of SAP? Is there an understandable approach? SAP storytelling falls into three terms: Hana, S/4 and RISE – as well as demand: Cloud First.
In my conversations, it became apparent that despite all past successes, Professor Plattner was in little mood to celebrate. Although there will be a 50-year celebration in Hamburg at the Elbphilharmonie, for now it is doubtful whether Plattner will be there. His SAP is exploding: The CFO is leaving the (sunken) ship, Plattner’s own planned successor (Gerd Oswald) is in all likelihood unavailable, SAP has poor communication, no narration, no storytelling for financial analysts and no product strategy for beyond Hana and S/4.
In my recent conversations, it seems like an apology: Yes, we may have some problems, but we promise to continue maintaining S/4 until 2040! That may be a good message for many SAP customers who won’t complete their S/4 conversion until 2030, but it doesn’t help anyone who needs to develop a future ERP concept for their own board of directors over the next three years – which is precisely why I wanted to spend a few days with SAP executives in the first place. I want to get information about an S/5, S/6 and S/7 and finally find out how Hana will proceed.
I can now empathize with Hasso Plattner’s desperate situation: I felt the lack of speech, the lack of a narrative and the disorientation. All my communication partners were anxious but determined. At the same time, however, they appeared helpless in the face of low stock prices, the continuing loss of CRM market share in Salesforce, and the cloud threat from ServiceNow, Workday, Google, and many others. Of course, it must also be said that SAP itself made many strategic mistakes: the downfall of Celonis and reliance on Signavio, who will now be rescued with the help of Professor Scheer, was not a tour de force from RISE inventor Christian Klein .
Twitter and dissatisfaction have their reasons. So, ultimately, my visit to SAP was not about arming myself with new arguments, but about realizing that the future of SAP seems uncertain right now.