SAPPHIRE - SAP on software, CRM, staying honest

Last May, Hasso Plattner stepped down as SAP AG's co-CEO and chairman of its executive board. Plattner now chairs SAP's supervisory board, the German equivalent of a U.S. company's board of directors. But Plattner is still active within SAP, and at Sapphire '04 he spoke with Computerworld about his current role and other issues involving the vendor.

What have you been up to since you changed your position? I'm chairman of the supervisory board, with some formal responsibilities to watch over the execution of the company's (operations). I run several councils involved with technology, human resources and a general one where we discuss investments and acquisitions and so on. The technology committee handles all aspects of development. The task I feel most comfortable with is software design and finding ways to improve it.

What milestones have you achieved in that area? We have reached some solid ground with (changing) the behavioral patterns (of coding) and how we should engage with customers and with other people. We have to be much more complex: We build our applications on top of Microsoft Office and multimedia applications and embedded systems and RFID and Global Positioning Systems, and then there is our ERP and CRM and SCM applications. In these new areas of applications, we have to connect with all these other applications, and we need different design styles and techniques and different people.

There has been some talk about a "Project Vienna." Can you explain what it is? It's a development project -- not a product, like Longhorn -- to develop a consistent piece of functionality and move it a piece at a time into the mySAP (suite). Project Vienna involves finding engines (software-enabled processes), and if we have multiple ones, we can build one to serve multiple purposes. Vienna is a big project.

What are you doing in that area? I have small teams to make prototypes of prototypes. I have always wanted to do something like they do in car manufacturing. They do dozens of versions of prototypes, and then management goes for "2-B" and they decide that makes sense and then they spend the real money. We give (our teams) tasks to fulfill, and the designers come up with completely different ideas.

As the market leader, what keeps SAP honest? Extreme alignment with the customer. With large companies, you can't convince them to act against their own will and desires. There is still enough competition -- our applications are far from being like Microsoft Office.

Are you pleased with your penetration rates around R/3 and mySAP? Till the end of the millennium, we were exactly where we prognosticated we would be: We would have 20,000 implementations, and we passed that. Now our next milestone will be 100,000 implementations, and we're probably close to being halfway there.

We could have done things differently and not gone after the superlarge customers. When you have opportunities with those customers, it's hard to say no. We could have had higher penetration with midsize customers. We will accelerate (adoption) with small customers. Success stories are the only way -- testimonials by small companies who say, "I have done it, and it changed my company."

Where does CRM fit in your strategy? It's one of the key components of our applications, probably 20 percent to 30 percent of our business. If you improve sales, you're a hero, and most companies can use CRM. Not everyone uses supply chain management.

What do you think about the hosted CRM market? It's an entry-level service, which is good for small companies to experiment with, but I can't see it being an ultimate solution. I'm a bit pessimistic about hosted software. We had a very expensive experiment, Pandesic, a joint venture, that couldn't make money. We were probably too early. We'll probably revisit that -- we won't exclude it from our future.

SAP has had a reputation for developing software that is very rigid. Are you a more humble company now? You might find some hard-core (SAP employees) who said, "We have done this for you to use and it's as good it gets," and others who said, "Tell me more about your problems and I can solve them all, or try to." If you think you are untouchable, that's not good. I think the tough years in the dot-com era changed SAP.

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