In July, Andrew Barkla took up the role of president and managing director of SAP ANZ, left vacant by Tim Ebbeck earlier in the year. Barkla joined SAP from senior regional roles at Unisys and PeopleSoft. He spoke with Freya Purnell about what’s on his agenda for the next 12 months, the challenges ahead for SAP, and the role of the ecosystem in helping SAP ANZ double in size by 2015.
Freya Purnell: What attracted you to the role at SAP?
Andrew Barkla: I’ve been involved in the application software business for much of my career. When I got the tap on the shoulder, I was running Unisys Asia Pacific in Japan and was also on the executive board globally. I’ve been spending a lot of time talking to customers about some of the disruptive trends like big data, consumerisation of IT, cloud, and mobility. I can see a big shift happening in technology at the moment – a shift that I believe is bigger than the shift we saw when the internet was deployed in the commercial and government sector.
The fundamental reason [I decided to join] was you’ve got the largest application software company in the world making huge bets on the innovative technologies of tomorrow – cloud, mobility, SAP HANA. To be quite frank, looking at the investments that SAP was making and the assets the company has in its customer base, it was just too good an opportunity to turn down.
FP: Since joining SAP eight weeks ago, what have your immediate priorities been, and what is on your agenda over the next 12 months?
AB: My immediate priorities have been getting out and listening to our customers and our partners. In my first seven weeks I met 77 customers and around 20 partners, so I’ve been doing a lot of listening, understanding how we’ve been performing and whether we’re delivering on the expectations they have of us, and getting an understanding of where they are with SAP and what opportunities the innovation portfolio is going to bring to the table. I’ve also been spending a lot of time with our people, again gauging our focus on customers and on making our partner and customer community successful.
Going forward, it really is about driving a growth agenda, and is very much around bringing innovation to the table for our customers – whether that’s a customer trying to save money because of some of the challenges they face, or organisations that are looking to take advantage of new business possibilities and solve new business problems with a set of new market categories that we just didn’t have two years ago.
BusinessObjects added analytics, Sybase added database and technology in a mobility platform, we’ve added SAP HANA into the mix around database and real-time in-memory computing, and then of course the cloud with the acquisition of SuccessFactors and Ariba – all of those present a whole new set of possibilities for customers and for the ecosystem. So that will be my focus; just ensuring that we have the new innovative technologies in front of our customers, not for technology’s sake, but looking at industry and business problems and trying to solve them.
FP: From those initial discussions with customers and partners, what is your sense about how they feel about what SAP has been delivering up until now?
AB: Generally across the board I’ve been really impressed. Most of the customers I’ve talked to have been extremely complimentary, and many of them are in that consolidation phase from an applications perspective – they have completed the ERP foundation, and the exciting thing is that now they have this platform in place, they’re looking at how they get the benefits of being more agile and more responsive, and how they extend the platform, leveraging some of the new technologies to deliver front-office benefits that are relevant for their industry.
FP: With so many shifts taking place right now, and so many different solutions that SAP is offering, how should customers be trying to work out where to invest to yield the greatest value?
AB: We’re at a point where you don’t know what you don’t know. I’ve met with some customers who know what they want, but they’re not sure what they really need. From a pragmatic perspective, it comes back to looking at the markets they are operating in, and looking at their own business strategy and the challenges that they have in executing that, and then engaging with us to help them identify how they can best take advantage of some of these new innovations, on top of the investment they’ve made, to deliver business benefits aligned to their strategies.
I think actually one of our big challenges in engaging as we go forward is getting linked back into the business challenges. We were certainly there, front and centre, through the shift into ERP. Those were transformational decisions made by customers at the time. As I look at the future challenges, we have to get back in front of the business to really understand how it aligns to the strategy and the business problems of today, and not just show up with a technology product proposition. I think one of the big challenges we’ve got is working with our ecosystem to get ourselves back in front of the business and having business-relevant conversations.
FP: So what do you see as the role of the ecosystem in the future?
AB: It’s helping us understand, particularly from an industry perspective and from a customer perspective, what are the business problems we need to be engaging around. Of course we have many ecosystem partners and channel partners who have very deep industry knowledge, and in some cases, very deep departmental or functional knowledge, and we need to leverage and take advantage of that knowledge.
We are setting out to double the size of the business by 2015. We can’t do it alone, we just can’t grow that quickly without really enabling both the channels and the ecosystem to help us grow and help us solve those customer business problems.
FP: Which market segments do you expect to be strong contributors to that growth?
AB: All market segments. If you go to government at the moment, there are significant budget challenges at the state and federal level, and that presents a real opportunity to do things differently. Getting better data and analysis on citizens and the services that can be provided presents opportunities for SAP HANA. When they’re looking at significantly reducing the cost of their shared services operations, cloud becomes a significant proposition.
In the mining and resources sector, we’re looking at increasing our investments in Western Australia and strengthening our alignment with our partners and ecosystem to prepare ourselves for growth in those markets. The retail sector is facing significant challenges, so we’re working with them on both lowering costs and getting better engagement with suppliers, through procurement solutions to improve supply chain and giving them a stronger online presence.
So there are things happening and challenging each of the industries, and we serve over 24 industries that are presenting opportunities. SAP is not just applications, and now we have the five market categories that are giving us a chance to understand the problems that customers have and bring these new solutions and innovations to the table. I’m pretty bullish, as you can tell.
FP: How does the level of available SAP resources in the Australian and New Zealand market affect your thinking about growth?
AB: In Australia and New Zealand, if we’re setting out to grow 30 per cent and double the size of the business, we will need more skills and more talent. How do we go about doing that? One dimension is growing the ecosystem, being more strategic with our alignments and our transparency about our focus areas and how we grow together, improving our enablement of the ecosystem and channels, that will play a big part in it.
Our ecosystem equally sees the opportunity of the additional four market categories to complement the core, and to grow new SAP customers. I’m seeing in my conversations a reinvigoration of the ecosystem in investing in SAP HANA, in mobility, and supporting implementations of SuccessFactors and Business ByDesign. We are all looking at growing at the same time, so that’s one way we have to fulfil the opportunities in concert with our own channels and ecosystem, and then of course we are looking at growing our own services business to support that.
This will be a challenge, and I don’t underestimate the challenge. In this day and age, we leverage global delivery centres, and we’ve got rapid deployment solutions in place for most of the portfolio. The cloud is a different paradigm in terms of how quickly you can implement and the amount of resource that’s required and the risk. I think that also assists – you don’t necessarily need as much resource to set up and support the cloud solutions as you would have three years ago for an on-premise style solution.
FP: How do you see the maturity of the SAP Australia and New Zealand market compared to the Asia Pacific region?
AB: Australia and New Zealand is a mature market. What we need to be careful about is it’s also a market that’s very innovative and there is a lot of early adoption of technology here. Let’s take the cloud for example – in the US, cloud is penetrating about 85 per cent of organisations, and in Australia it sits at around 65 per cent. We’re not that far behind, and we’re catching up very quickly. Because Australia and New Zealand is a mature market, it is looking to innovation to better expand into adjacent markets in Asia, and to compete more effectively. Businesses will either thrive or fail in a mature market now with so much innovation going on in technology.
It’s very different to Asia. Markets like China, India and Indonesia are still significant growth markets for the ERP platform in its own right, and that’s different from Australia and New Zealand.
FP: For SAP ANZ as a company, what are the greatest challenges you’re facing here?
AB: That’s a tough question because I just feel so positive about everything I’m seeing at the moment. The greatest challenge I think will be leading our customers into and through the innovation that’s available to them. We are going to need to spend more time with the business leadership in our customers, helping them look at some of the challenges they have in front of them, and think differently about how they solve some of those problems – because a year ago, we didn’t have some of the technologies that we have available to us today.
Our customers can put down what they want on an RFP, but understanding what they really need is going to be a much more collaborative process with somebody like SAP and our ecosystem to really think through some of the game-changes that can be delivered based on what is huge innovation in our industry. So getting that business connection and that insight with our customers into what’s possible is probably our biggest challenge at the moment.
Imagine if we only began to think about mobility in a year’s time, and the time that we would have lost competitively if we delay really understanding how the technology and the opportunity around mobility is applied to our business. I think what people don’t understand is how quickly things are changing. With so many shifts going on at the same time, businesses are going to change dramatically.