SAP Co-CEOs Chart a Bold New Course

(page 2 of 2)

Cutting Bureaucracy

Aside from disbanding the corporate values project, McDermott has been reducing bureaucracy. In April he combined SAP's 9,500-person field sales force with 14,000 consultants who customize its software for clients and a group of several hundred people who handle relationships with partners including International Business Machines (IBM) and Hewlett-Packard (HPQ).

Now account reps can keep an eye on all facets of a sale "without having to navigate through a complex system," McDermott said.

About two weeks later, he ordered SAP's 200 top managers to gather with their reports at "coffee corners" where SAP employees at branch offices refuel and explain their agendas without using PowerPoint slides.

He's told managers to stop calling meetings to review data they can look up in the company's computer systems. "We no longer have an interest in this upward cascade of information," he said. "Managers who can't get comfortable with that won't do very well."

Formerly SAP's global head of sales, McDermott focuses on operations and coordinating sales teams across continents.

Snabe, who started as a trainee in 1990 and ran consulting and product development groups, brings engineering chops. He lives in Copenhagen and says he tries to be "at least somewhere in the world" three days a week, shuttling among Germany, the U.S., India, China, Russia, and South Korea to meet with employees and customers.

"Agile Development"

By the end of this year, SAP plans to have 12,000 of its 14,000 engineers using a programming method called "agile development" that aims to kick out new test versions of products every four weeks and incorporate quality assurance into the development process.

In the past, SAP fixed bugs in another department after the code was written. The new Business ByDesign software is a result of the new approach. "It sounds crazy, but you get both faster outcomes and higher quality," Snabe said.

Sybase will operate as an independent unit under its current chief executive officer, John Chen, who will join SAP's executive board when the deal closes, probably in July. The two companies share an engineering-oriented culture, and McDermott and Chen have worked together on partnerships between the companies prior to the acquisition.

Snabe and McDermott are inviting more customers into the company's development process, too. SAP has brought clients to Germany, Israel, and Bulgaria to help define requirements of upcoming products.

"The thing Jim and Bill have done very well is they've stopped everything else" that's not related to bettering products and increasing sales, said Executive Vice-President John Wookey, an Oracle veteran who joined SAP in 2008 and leads a product-development team. Case in point: the values inquiry, which Wookey had worked on. "It's a big transformation," he says. "I don't think we're worried about losing our moral compass."

Ricadela is technology editor for Bloomberg Businessweek.com in San Francisco.

Business Exchange

Track and share business topics across the Web.