The new CEO McDermott "promised to 'radically speed up' the pace of innovation at SAP."[1] SAP plans on doing this radical increase in output by greatly increasing the amount of acquisitions the company makes. The first affect of the new approach will be the July release of the company's new version of the Business by Design software, which is an online package of application for small and medium size businesses. The new development plan expects sales to rise by 1% in 2010 and hopes to eliminate the former criticisms about slow paced releases and lack of implementation of new programs that can be accessed through the web and mobile devices.
One strategy being used to increase the pace of new engineering of products is an increase in company-wide efficiency. In the new version of Business by Design software SAP was able to use about two-thirds of the amount of engineers used in previous similar products, that equates to hundreds less employees working on the project. Along with the new idea of efficiency and production rather than Apotheker's 'sales focus' management plans on catering to customer's needs.
I think that the strategy that SAP is planning to take will be very beneficial for the company for sales in the long run. The new sense of urgency that management is planning to take will give customers more trust with the company and the customers will be sure that SAP will always be a leader in the ever present ERP system integration. The efficiency and innovative engineering will ensure that SAP is a worldwide leader in business management tools giving the companies that choose SAP the software that they need to manage their databases in the best possible manner. I think that the acquisitions of other companies will also help SAP to boost their innovation with new talent and new products that can add to their sales mix and allow them the outlets for expansion that they will need. Overall I think the risk that they are taking with a different form of management and a new bold quicker-paced business plan will be well worth the switch and will pay off for SAP.
1. "SAP Execs Pledge Speedier Product Innovation - BusinessWeek." BusinessWeek - Business News, Stock Market & Financial Advice. Web. 17 Mar. 2010.
I recently commented on the article pertaining to the release of an RPM system, which will soon be used by companies in all industries to gain up to the minute data on their company events. This is one way of gaining a competitive advantage, as I previously stated. In this article, SAP is attempting to achieve a competitive advantage by changing their management and pace of technology development. SAP believes that in order to boost their revenues and sales, a change must be made in their management, which I believe is definitely understandable. If the current executives and not having a positive impact, then a change needs to be made. However, it is a possibility that sales may have dropped due to the recession, and the fact that a majority of companies are not interested in investing in technology systems at this current time. With that said, I do think that regardless of the change in management, increasing the pace of engineering new products will be crucial in the recovery from their recent losses. This increase in efficiency will no doubt help to cut down that bottom line and rapidly increase sales.
ReplyDeleteThis blog especially caught my eye because I am looking at trying to get an internship with SAP this summer. I didnt know, though, that they have been losing sales or felt the need to restructure the system enough to fire their CEO. I do think that it was important for SAP to make big changes after losing sales, though, especially in an age where people are turning more and more towards technology to help with their businesses. I also think the promise for a speedier response is a good one, because an information systems company must have the image of being on top of everything and in control of problems.
ReplyDelete