SUGTalks, Series, 16, Episode 8: An interview with Thomas Saueressig from SAP

Thanks for having me.

Thanks.

I'm actually indeed a coffee enthusiast, I have to admit. But I have to say, in the morning time, I would definitively prefer a good cappuccino. But in the afternoon, actually, sometimes also a good espresso. So certainly, coffee is a favorite topic of my life.

And actually, cappuccino is fitting well to SAP. I'm not sure if you know that, but if you do an espresso, you have 40 different variables to configure the taste of an espresso. So certainly, if you think about our SAP systems, we also have quite some configuration capabilities.

Yeah, I'm more than happy to do so. So yeah, I'm already 20 years with the company. Time flies, unbelievable. I started in the consulting of SAP, focusing on CRM back then in the days. And after roughly 40 implementation projects, I actually had the opportunity to go to the US, join the partner ecosystem team in Silicon Valley, which was for sure amazing to, you know, get Silicon Valley, all the innovation spirit, everything firsthand. And then I moved back to the headquarters and served as executive board assistant of Gerd Oswald, who was the longest-serving SAP Executive Board member, and which was for me an amazing learning opportunity. And I fundamentally did my career in the IT function of SAP itself. Started then as a first-level manager in the IT organization, grew year by year the responsibility, and became the global CIO of SAP in 2016, with all the responsibilities for our own internal business systems, where we clearly have the best ambition about being the best and first reference customer of ourselves in this case. And there I basically tried to implement and integrate all of our required companies from SuccessFactors, Ariba, Concur, you name it. And that led actually to the point that in the end of 2018, Hasso Plattner, our founder, actually asked me to take over standard development, and I switched to product engineering. And I consolidated all of the application development teams of the company and also basically was appointed to the Executive Board of SAP in 2019. Fast forward now five and a half years later, I switched again the role to Customer Services and Delivery, what you just also explained. So yeah, that's my time at SAP, basically did all the various functions. The only thing which I was holding to, I never worried about the price of SAP.

Yeah, that's a great question. And let me start with why we actually did the Customer Services and Delivery board area before I explain what it is actually, because the why I think is important. End of last year, we already saw a significant increase in our cloud revenue, and we clearly see that our customers are following the strategy with RISE with SAP and GROW with SAP and the likes, which is great. We see the growth in the cloud. And just again, if you think about the last quarter, Q3, we talk about 29% current cloud backlog growth on a 15.5 billion line item. So phenomenal growth, phenomenal strength. But, and that was important for us, it was clear we also need to help our customers to move to the cloud and to accelerate the move to the cloud. But not only for the cloud for the cloud's sake, but actually to truly transform and help transform those companies and customers itself. And most importantly, adopt our innovations. And that to a point, I was not only the champion of our products, but actually I have so much passion about the innovations this company is driving. And we talk about 6.5 billion R&D which we use every single year to help our customers succeed. And then it was clear for us as a company, we need to establish an organization which is fully focused on the customer, helping the customer to adopt our innovations, to help them on their moves to accelerate these transformations. And that's something why we brought together CSD. And now with CSD, we brought together, in simple terms, all of services, all of customer support, all of cloud operations, and our security and sovereign cloud activities. For sure, in a more nuanced way, we talk about premium engagements like MaxAttention, we talk about custom development, especially AI for our customers. We talk about sovereign clouds, like also in the UK, we just launched our sovereign cloud in the UK. So all of these activities we bring together. So fundamentally, once you sign a contract with SAP, everything which is delivered and served afterwards is basically my organization coming together. And I'm still actually a champion of the product, because that's something where from our understanding, for sure, we need to help our customers get the best value out of our products in this sense.

Yeah, so I think actually, first of all, we see a tremendous growth in the numbers for S/4HANA in general, but for sure also in the cloud. I mean, in the meantime, we have more than 7,000 customers with RISE with SAP. And quite frankly, if we take the revenue of those customers, we already serve more than 32% of the global economy already with RISE with SAP. So this is a massive number. So you clearly see that the move is happening, and we see the numbers accelerating in that sense. Same actually with GROW with SAP. We fundamentally double our number of customers with GROW with SAP every year. So it's a massive growth rate in that sense. But, and I think that's the important but, we want to help our customers. We want to help our customers to do that more seamlessly, more easily, cheaper. And that's something where my area is for sure hyper-focused in what are the methodologies, what's the tooling, what is the AI we can use to help accelerate those migrations. Because in the end of the day, the more accelerated and cheaper we drive these transformations, the more funding is available on the customer side for new innovations, to embrace new topics. And that's something what we want to enable from our end. And that's the reason why with the RISE with SAP methodology and the tooling associated with it, we want to really help drive that acceleration in the market. And we also don't stop here, because the reality is more than 95% of all of the implementation projects around the globe are run by partners. And it's the reason why we want to actively help our partners. We want to actively share the best practices with our partners, the tooling with our partners, that we can scale differently in the market. So that's for sure a clear ambition for us. And that's the reason why one of these examples what we announced at Sapphire was the RISE with SAP Validated Partner Program. It's just a further signal how we want to actively leverage the ecosystem to drive these migrations forward.

I think we see on a global level a lot of interest in that sense and a lot of acceleration. So I think there's per region not a big difference, but I think it's fair to say clearly in APJ, in the US, the people are more used to adopt new innovations, to try out new innovations. And for sure, if you think about Europe, UK, Germany, there's also more, let's say, topics where people do first the POC before they go into production. And we see in Europe specifically, if you think now about AI, a lot of POCs, a lot of interest for the topic. But for sure, if you think about real productive use, we clearly see in other markets also a further acceleration. And I hope, quite frankly, that in the UK and in Europe, in the EU, we see more acceleration also, quite frankly, to also increase the competitiveness of Europe in the entirety in this sense as well.

Yeah, absolutely. And that's something we started beginning of 2024 already with launching the RISE with SAP Modernization and Migration Program. And already in that program, we provide financial support, financial means to also appreciate customers who followed our strategy. So if a customer already went to S/4HANA, which is clearly the strategy we embarked on, we give extra funding to help the customers move to the cloud. So we started with that program, and this program evolved into an entire methodology which we launched at Sapphire, the RISE with SAP methodology. And here we have best practices, optimization of how to run these projects, best practice content, but also quite frankly, we embedded all of that in tooling. And that's the reason we talk these days a lot about the so-called integrated toolchain for business transformations with our Business Transformation Management Suite. So basically, we want that customers can embrace these migrations in the right way. So to give you the context here, we fundamentally believe a transformation always follows four dimensions: the application side, the process side, the data side, and the people side. And here our acquisition strategy is now also showing that we consequently follow this business transformation approach. We acquired Signavio for process management, we acquired LeanIX for the IT and application side of those, we acquired WalkMe for the change management of the end users, and fundamentally with Cloud ALM and our BTP with our tooling to bring all of that together for our customers. And that's what we now embodied in the RISE with SAP methodology to leverage that toolchain to drive that change. We also quite frankly embedded the so-called clean core principles in CALM, in the toolchain, to help our customers to do the differentiating extensions on the Business Technology Platform. Because while we want to keep the core clean and while we want to help our customers to standardize, we absolutely know that every customer is specific and individual and that has individual differentiation capabilities in their business operations. And that's the reason why this extensibility strategy is super important, but not just on PowerPoint, but actually embedded in the system and leveraging our tooling as well. So that's the second topic. And then we also invested our customer with a new role which we now want to scale to all RISE with SAP customers, the so-called Enterprise Architect. So basically a resource from SAP, an engagement lead who guides you along the way in this transformation to the modular cloud suite of SAP fundamentally. And as you see, we want to be closer to the customer, we want to be more closely engaged, we want to have a systematic approach to drive business transformations. We help with financial means, and then for sure one of the topics is also that if you think about the migrations, we have a dedicated program for AI to use AI to accelerate migration steps, to accelerate testing and the likes. Because fundamentally, we want that our customers, as I mentioned, want to use the funding they have in IT for innovation. And that's something where we want to leverage AI strategically to support that activities as well.