German enterprise software giant SAP AG finally succumbed to U.S. economic pressures early this month when it said it would lay off 300 employees, or about 7 percent of its U.S. work force. The company is paring its focus from 21 vertical markets down to 12, while at the same time promising to next year deliver tools that will make it easier to integrate SAP applications with those of other developers. Wolfgang Kemna, CEO of SAP America Inc., says his company is committed to enriching its CRM (customer relationship management), supply chain management and ERP (enterprise resources planning) software. Kemna engaged in a conversation this week with eWEEK Department Editor John S. McCright and eWEEK Senior Writer Renee Boucher Ferguson from the SAP America headquarters in Newtown Square, Pa., to discuss the companys direction.
eWEEK: What effect will SAP Americas move to reduce the number of vertical markets addressed have on customers?
Kemna: We are realigning resources in the U.S. organization to position SAP for growth and profitability in 2002. … The reductions will affect positions in numerous areas, with an overriding goal to minimize impact on revenue-generating positions.
The change will affect our sales and marketing efforts in 2002. It will not affect service to our existing customers, regardless of the industry. SAP will continue to support 21 vertical industries on a global basis and all of our products will continue to be available to customers in the U.S.
eWEEK: Which verticals will SAP America target, and which will it de-emphasize?
Kemna: The 12 industry clusters will be high-tech; aerospace & defense/engineering & construction; automotive; chemical/pharmaceutical; mill products; oil/gas; consumer; retail; apparel and footwear; service provider; media communications; and insurance.
We also will focus on three areas in the public sector: federal, state/municipal governments and utilities. Areas that will be supported globally, but where there will be less of a proactive sales focus in the U.S., include mining, health care and higher education.
eWEEK: SAP executives talked about maintaining 15 percent revenue increase in their most recent earnings call. Is that still attainable?
Kemna: Our guidance for the full year has not changed.
eWEEK: What specific areas are you going to be steaming ahead on?
Kemna: CRM--big time. Supply chain, big time, and ERP. For example, in the HR [human resources] space, its all about employee self-service and portals. Thats a hot, hot, hot ticket.
eWEEK: It sounds like SAP Markets and SAP Portals are operating very independently of SAP America; how is your relationship with those companies going to be different going forward? Will you have to go through [SAP AG headquarters in] Walldorf [Germany] to get any joint development done?
Kemna: SAP Markets and SAP Portals are separate subsidiaries of SAP AG, and each is responsible for determining how it will reach its own financial targets. As always, we will coordinate our activities very closely with SAP Markets and SAP Portals to ensure that we bring our customers all of the e-business solutions of SAP. Development will continue to be available through multiple areas of SAP, including SAP Labs, which is based in Palo Alto [Calif.]. We can offer our customers the very favorable position of being supported by SAPs entire global organization.