As 2010 approached, SAP found itself in a critical position. The competition was evolving to be leaner and more targeted. Customers were becoming more knowledgeable, demanding and price sensitive. SAP’s image was quickly becoming outdated, and there was a growing rift between employees and upper management that threatened to pull the organization apart. A new case study by Matthew Quint of the Center on Global Brand Leadership, Run Marketing as a Business: The Transformation of SAP Marketing, is a two-part study that delves into how SAP’s leadership worked to reinvigorate the company and how SAP Marketing evolved into a department focused on culture and ROI-driven results.
The financial crisis of 2008 impacted SAP and other enterprise resource planning providers in three major ways: it sharply contracted IT investments, it changed the ways that companies evaluated and purchased ERP services, and spawned a powerful new competitor in Software-as-a-Service (SaaS). Spencer Osborn from Ogilvy notes, “…There is an increasing trend of ‘prosumer’ purchasing behavior in the business IT sector. Google, Apple, and others brought simplicity to the IT interface and professionals now expect the same for business software.” The business was becoming more and more complex, and traditional methods of product management and marketing were no longer applicable.
Amidst these business and consumer challenges, SAP’s Board brought in new co-CEO’s, Jim Hagemann Snabe and Bill McDermott, who quickly set ambitious goals for SAP: generate a revenue target of €20B, create an operating margin of 35%, and reach 1 billion people with SAP technology and services.
The CEO’s broke from tradition and focused on expanded SAP’s portfolio of offerings through mergers and acquisitions. Simultaneously, SAP Marketing developed a strategy to transform SAP’s image to a more innovative, dynamic and approachable company. In 2011, Jonathan Becher was appointed CMO, and immediately began driving a platform effectively combining both the art and science of marketing. He elaborated, “[I]… think ‘business first, marketing second.’ From that comes a mantra that marketing is a business, not just a division that supports a business.”
Becher recognized that SAP Marketing was excellent at communicating clear messages that grew brand awareness, but he wanted to institute an approach that would align his team to build a culture that supported a measurable SAP Marketing strategy with overall company goals. Thus, SAP Marketing developed 5 key “transformation pillars” to drive all future marketing activities. By using these pillars as guide posts, Becher and SAP Marketing set to update SAP’s image to match its new and expanded product portfolio. Key performance indicators (KPIs) were created to measure marketing outcomes, rather than marketing activities. To further align incentives and encourage staff members to work together, bonuses were tied to achieving the 10 collective KPI’s.
SAP Marketing’s changes led Paul Greenberg, a customer relationship management and technology author, to declare, “SAP has transformed their company from…a highly traditional, conservative, closed company, to an open innovative, accessible organization…” Learn how SAP Marketing was able to revitalize SAP’s brand against target business metrics and read more about how they plan to continue moving forward in today’s dynamic business environment in the new case study.