SAP CIO on leading IT when the business is IT

I recently spoke with Michael Golz, CIO of the Americas at SAP, about his role as an IT leader and how it differs from those of his peers in other industries. 

Martha Heller: SAP is a technology solutions provider. Does that make the CIO role different than if you were in a different industry?

Michael Golz: At SAP, IT implements what SAP builds. As a result, everyone in the company has high expectations for the kind of solutions IT provides, from their individual work environment to the solutions used for all business processes. All of the discussions that people are having in every company about cloud, real-time computing, user-centricity and big data are amplified here.

As an IT leader at SAP, I consider it a privilege to have access to the latest technologies, but it’s also a challenge. We need to run our operations effectively and efficiently while at the same time living on the bleeding edge.

How does IT participate in the product release cycle at SAP?

Just as in any company, the IT organization at SAP supports all aspects of the business from product development, to finance and HR, sales, service and support, and more. But we also implement new products in our own environment early so that we can identify what needs to be improved, and then provide that feedback. In some cases, running products in our production environment is a prerequisite for releasing the product. We are able to demonstrate how a large enterprise customer can use SAP’s new solutions, and we can share experiences regarding benefits, implementation approaches and operations. This way, we can bring reference stories and business cases to our customers. 

LinkedIn

IT at SAP has always played a vital role in product development, but over the last few years, we have really ramped it up by moving to cloud, adopting in-memory computing, and bringing all applications to the most recent releases. When we started out, we picked two topics — mobile and in-memory computing — and made a major effort to deploy those technologies. We’ve placed high emphasis on mobile computing and user experience, and put the end user at the center. 

As CIO Americas of SAP, you spend plenty of time in front of customers. What is the primary message you are driving?

The primary message is that digital transformation is real. It impacts every company in every industry, and it leads to fundamental business model changes. Customers and employees are hyper-connected, and they want to interact in ways that are immediate, modern, engaging and fun. The ability of digitally interconnected business networks, as well as pulling in data from sensors, is creating major disruption in manufacturing and supply chain. This transformation is at the core of our solutions.

Are you finding that your customers are rethinking their relationship to their vendor partners?

Companies are much more willing to co-innovate, to work with us in identifying disruptive opportunities and seizing upon them. They know they cannot have that conversation with every supplier, so they are focusing on the companies that are truly strategic to them.  

These days, we spend as much time with non-IT business executives as we do with CIOs. That’s a change from five years ago. Today, most business leaders are technology savvy and believe that they don’t need IT to get things done. But while making technology decisions without IT may seem like a way to do things quickly, it also can introduce major integration challenges down the line. As CIO, I understand that vendors engage with business leaders directly, but chances of success are best in scenarios where IT and the business are in lock step.

What do CIOs need to do to drive digital transformation in their companies?

CIOs have a duty to identify opportunities for growth and efficiency and bring them forward. If they do this proactively, they are seen as leaders who think bigger than IT delivery. CIOs need to understand the changing dynamics of their industry, the competitive landscape, and their customers’ changing expectations. CIOs in industrial markets need to bring a consumer mindset to their businesses. This means understanding the outside-in perspective of the company.

CIOs must keep a strong hand in digital transformation, because without it, the chances of failure are high. Digital transformation is more than making the website pretty or getting to the next level of marketing. Digital is taking a very broad perspective of how digital technologies are changing customer expectations, supplier networks, and the competition. CIOs are well positioned to take and communicate this broad view. Their role is also critical to ensuring the proper implementation and integration of new digital technology investments.

What are the critical success factors for an SAP implementation?

In addition to having good executive relationships, it is important to determine the target architecture for the IT landscape. How do you get to a digital core? What should go into the cloud, public or private? What is core to our business and may not fit into a SaaS solution today? What is the right form factor and functional scope?

For many companies, the target architecture involves carving out horizontal processes and moving them to the cloud as they focus on implementing a real-time, digital core for their differentiating processes. For others, it means untangling a complex landscape and dramatically simplifying processes. Either way, it is critical to look through the lens of simplifying the infrastructure, processes, and IT landscape, and thinking in short implementation cycles: agile, shorter iterations, and prototyping. This way, you can avoid lengthy transformation programs that deliver in month 35 out of 36. Think in terms of radical simplification. Don’t perpetuate complexity that has developed over time.

What advice do you have for an up and coming CIO?

Very few people will remember a CIO for that last bit of cost savings, but they will remember a CIO who uses technology to move the needle. Whether your first CIO job is in a turnaround situation or in an environment primed for innovation, the expectation is the same: that you understand the business, build rapport with stakeholders, and drive digital innovation. Your focus, from the beginning, needs to be broader than your own organization and improving IT delivery.

About Michael Golz

Golz joined SAP in October 1998 as global IT director. Since then, he’s held a number of roles, including vice president of IT and senior vice president of global IT application services, and senior vice president and CIO Americas, his most recent role. He received a Bachelor’s Degree in Business and IT from EBS Universität für Wirtschaft und Recht in Germany.