On Tuesday, 8 September, SAP’s Chief Financial Officer, Luka Mucic, participated in a virtual keynote session at Citi’s 2020 Global Technology Virtual Conference. The SAP executive discussed the core elements of the German multinational software company’s intelligent enterprise strategy and how this fits into the SAP business roadmap.
The SAP Business on Sustainability
Mucic highlights how SAP is helping its customers manage their green line, bring down their carbon footprint, and ultimately achieve their sustainability goals through a integrated environmental and carbon footprint management systems. He said,
“We have been a long-term believer in the significance of focusing as a company, not only on our financial performance but also on our environmental and social performance and we have adopted integrated steering mechanisms in order to support that. But while we have been for many years the leader in the Dow Jones Sustainability Index for our industry, we believe that we can make an even greater impact as an enabler now through our customer base.”
According to the SAP veteran, he believes that the company is uniquely positioned to do this by enabling customers in effectively identifying the individual elements that drive carbon footprint and defining methods to bring these down through intelligent digital business processes by integrating the data model and the Datalogics across their entire value chains.
He says that with SAP S/4HANA’s Datalogics capability, companies will be able to get full visibility on their carbon performance across their entire business process systems. He further notes,
“We see a lot of interest from customers that want to co-innovate and that want to lead with us and it’s a great factor therefore that will further accelerate the move and the migration to S/4HANA. So, we couldn’t be more excited about that and in return, we believe that this will also have a very positive impact on our economic performance too.”
Strengthening SAP’s Market Position
Mucic also elaborated on SAP CEO Christian Klein’s statement in the latest Q2 earnings call on the company’s strategy of maintaining its focus on existing markets and expanding into new markets to strengthen and cross-fortify the SAP business’s market position.
According to Mucic, SAP invests 10% to 15% of its portfolio capacity in deep level end-to-end business process integration across its business portfolio that includes core ERP and supply chain management, human experience management, data management, and customer experience management.
He says that SAP is planning to build native cloud applications for industry-specific processes and new scenarios where the company has a strong trust of its customers. He explained,
“We believe that this is, first of all, a strategy that has an optimal risk and rewards profile for SAP. And some of those new adjacent areas have actually tremendous total addressable market. So, they offer lots of space for SAP. The flip side is though that we are also going to be disciplined about looking at alternative options for areas of the portfolio where we have not been able to build such a strong position over the course of quite many years. And in those areas, it does not mean that we are exiting the market, but we have smart partnership opportunities.”
Mucic further notes how the announcement of the partial IPO of Qualtrics will boost SAP’s growth opportunities in the experience management space. He says the move will set up Qualtrics for greater independence and will allow the SAP company to more effectively penetrate non-SAP ecosystems.
Another area that SAP is looking into for growth opportunities is in e-commerce—a core investment priority for many companies around the globe right now. Mucic said that with Hybris, the company has a strong cloud fit to meet the growing demand which has been heightened by the ongoing global COVID-19 pandemic.