The global and independent platform for the SAP community.

Rescued rope teams

It was a dramatic time at SAP headquarters in Walldorf as many Supervisory Board members, Executive Board members and executives fought to keep their jobs. SAP Supervisory Board member and former Chairman-designate Punit Renjen was a danger that had to be averted.
Peter M. Färbinger, E3 Magazine
March 5, 2024
avatar
This text has been automatically translated from German to English.

SAP is doing well. The administration at SAP headquarters is running smoothly. The share price is at an all-time high and SAP CEO Christian Klein regularly provides financial analysts with the two buzzwords they want to hear: Cloud and AI. At the beginning of the new year, 8,000 employees were also made redundant. The signs are pointing to efficiency, reorganization once again and further cloud growth.

Professor Hasso Plattner could be satisfied in his last year as Chairman of the SAP Supervisory Board. He is handing over a well-positioned and consolidated company to his new designated successor, Pekka Ala-Pietilä. CEO Christian Klein is managing this company conscientiously and diligently. There is only one disruptive factor in the successful SAP structure: the users and customers.

Cloud and AI

SAP's problems in the ERP market can be summarized with two buzzwords: Cloud and AI. There are existing SAP customers who need a cloud and AI due to their own wishes and requirements; these users opted for outsourcers, hosters and hyperscalers many years ago. ERP providers can find cloud computing and artificial intelligence everywhere in the IT market. Their own SAP system can remain downstream in their own data center or be lifted and shifted into the cloud.

But where does SAP's cloud success come from? For new customers, there is only the private or public cloud. For existing customers, many successor products are only available in the cloud, such as the discontinued APO (Advanced Planner and Optimizer) and its successor IPB (Integrated Business Planning), which is only available as a cloud application.

On-prem

SAP is not giving customers the choice between on-prem and cloud. The ERP monopolist interprets this compulsory measure as a desire on the part of existing customers to migrate to the cloud.

When voluntariness reaches its limits, SAP has one last, very convincing argument: license and maintenance fees. A new initiative is currently making the switch from S/4 on-prem to an SAP cloud system very inexpensive, so that many existing customers are no longer paying attention to business management and technology, but are almost blindly signing up to the special offer in order to save themselves a lot of fees and license costs for a few years. And SAP has won: There is no escape from the S/4 cloud! SAP will increase the cloud subscription to compensate for the current loss of revenue.

SAP wants to accommodate users who have already followed the SAP strategy towards S/4 and have functioning on-prem systems with the Rise Migration and Modernization programme. At the 2023 Annual Congress, DSAG called on SAP not to leave existing on-prem customers out in the cold. SAP has presented various resources, services and financial incentives to convince customers to migrate to the cloud.

Next year, S/4 will be ten years old and the majority of existing customers are still working on the previous version ECC; S/4 was never designed for the cloud, so there is no technical argument for moving to the cloud with S/4; only a financial advantage could convince existing customers of SAP's cloud computing. The Rise with SAP Migration and Modernization program is designed to provide support for two fundamental issues: Scope and cost. However, existing customers do not need a repair service program, but a retread.

Corporate governance

Punit Renjen, elected to the SAP Supervisory Board a year ago and designated as Plattner's successor at the time, would have contradicted the law of "Never Change a Running System" as activist Chairman of the Supervisory Board and created a new SAP. This SAP would have been focused on its own existing customers. No stone would have been left unturned. A reorganization of unprecedented proportions would have taken place.

Ultimately, however, those at risk and under threat at SAP found an ally in Professor Hasso Plattner. Punit Renjen will leave the SAP Supervisory Board this May and will therefore not be Plattner's successor. His presumed successor is of no significance. According to the Supervisory Board plan, he will only be elected for two years. He was previously a member of the Supervisory Board for almost 20 years. He is familiar with all of the rope teams and sensitivities. He will not disturb or irritate anyone.

Everyone is saved. Professor Christian Strenger is Director of the Corporate Governance Institute at Frankfurt School and commented in the German Handelsblatt newspaper: "SAP is not necessarily a model company in terms of corporate governance. 

avatar
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


1 comment

  • joachim Schirra

    Lieber Herr Färbinger,

    ich liebe Ihre klare, unmissverständliche Art und Formulierung, wenn es um SAP als Unternehmen bzw. um fachliche SAP Themen geht. Da wird kein Blatt vor den Mund genommen, deutlich Tacheles geredet, Missstände aufgedeckt und benannt und sehr klare Kante gezeigt. Sie legen mit Ihrem Magazin den Finger in die Wunde, genau da, wo es SAP und auch den Kunden am meisten weh tut. Beschönigung ist Ihre Sache nicht.

    Ich bin mir sicher, dass das nicht jedem in Walldorf gefällt. Aber es scheint Sie nicht zu stören, oder Sie davon abzuhalten – und das ist auch gut so. Es braucht die unbequeme ReiĂźzwecke im etwas fĂĽlliger gewordenen, manchmal doch etwas sehr trägen Hintern der SAP, die zwickt und manchmal auch ordentlich weh tut. Nur so besteht die Hoffnung, dass der ein oder andere sehr sinnvolle AnstoĂź und Kritikpunkt von einem High Potential in Walldorf, der sich gerade warm läuft aufgenommen und – vielleicht(?) – verfolgt wird. Die DSAG hat sich meines Erachtens von diesem notwendigen Ansinnen leider längst entfernt.

    Weiter so – und wenn Sie hoffentlich bald auch mal Data Warehouse (SAP Datasphere) und Analytics Themen (SAP Analytics Cloud) behandeln, dann freue ich mich sehr darauf mir die entsprechende Ausgabe zu besorgen.

    Herzliche GrĂĽĂźe

    Joachim Schirra

Write a comment

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.

Venue

More information will follow shortly.

Event date

Wednesday, May 21, and
Thursday, May 22, 2025

Early Bird Ticket

Available until Friday, January 24, 2025
EUR 390 excl. VAT

Regular ticket

EUR 590 excl. VAT

Venue

Hotel Hilton Heidelberg
KurfĂĽrstenanlage 1
D-69115 Heidelberg

Event date

Wednesday, March 5, and
Thursday, March 6, 2025

Tickets

Regular ticket
EUR 590 excl. VAT
Early Bird Ticket

Available until December 20, 2024

EUR 390 excl. VAT
The event is organized by 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 attendance at all presentations of the Steampunk and BTP Summit 2025, a visit to the exhibition area, participation in the evening event and 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 course.