Executive Interview – SAP – Greg McStravick

Greg McStravick, President, SAP US and SAP Americas

Keynote Topic: Sales Imperative: Deliver Value or Risk Obsolescence

Video Transcript:

Gary Tubridy: We are here with Greg McStravick of SAP. He is President of SAP US and SAP North Americas. The subject you are going to be talking about is deliver value or risk obsolescence. This is a great subject and first let me welcome you.

Greg McStravick: Thank you very much, Gary.

GT: Great to have you here.

GM: Pleasure to be here.

GT: Tell me a little bit in this field of technology, in which SAP is a leader in so many things; what kind of value are your customers asking for you to deliver?

GM: I do not think that when you go back to the title of delivering value or risk obsolescence, I actually do not think that as I was preparing for this that there ever has been a time where you have not had to deliver value. I think value—I was really thinking a lot about this, value over time in a product can change meaning if the product stays from date of introduction through its lifecycle, the same product, I do believe you risk the chance of obsolescence for at least being commoditized, and in your best value is your price.

Areas where I see value being differentiated is through things like technology, innovation with technology on top of product and I am going to give some examples tomorrow of that but it just so happens that by being in the technology space, I have the chance to see a lot of those innovations take place. For me, our products both help companies innovate—innovate their products themselves. Add value on top of say, a traditional hard good product with technology but I also, by selling that technology, have to demonstrate the value proposition of it and I hope that makes sense. What I have to do is, and it is really, really being required of us today, I have to have the ability with our technology to go into a customer’s environment and literally show them how that technology will help them deliver value to their end customers and to the markets they serve.

Today in our methodology of sale we do things like proof of concepts where we will deliver product with consultants and with subject matter experts and do conference room pilots or test case studies of implementing our solution at a customer environment to showcase the value for them. In addition, we will have to a lot of times build what we call value engineered business cases. We will come in with value architects and value consultants who will help build board-ready business cases for why an investigation in this technology makes sense for the company.

GT: How did you get your sales force from where it was to—in selling product to where it is today in delivering value or coordinating all those resources to deliver value?

GM: What we have had to try to do is we continue to evolve our portfolio is keep them up to speed on the value props of all the products and to your point change the way we sell. Because if an account executive relies on this team of people and the technology requires some sort of demonstration or proof of value in the marketplace before people will spend their money the sale process has to change. We knew that. We could see it. Customers brought us there and so we have complimented the core account executive with, as I mentioned, these industry specialists and these solution specialists but also these value architects and these technologies. You literally have data scientists that work for us where we will go out and help companies build algorithms and build proof of concepts on-site to demonstrate the technology.

Honestly, since we started ERP we had to begin to do that but as we have added more and more technologies, it is required and even greater investment, quite frankly, outside of the core AE and complimenting them with this portfolio of subject matter experts.

GT: So many resources come together to make it a success. Any comments that you could share with us on the challenge, some of the biggest challenges associated with bring that all together?

GM: When I am speaking to our sales force, I try to remind them that they are the CEO of their own territory. When you think about a CEO’s ultimate responsibility, it is to maximize the return to the shareholders on a fixed number of assets. That is their job. That is the ultimate job of a CEO to the board and to all the shareholders. If an account executive thinks that way and says my job is to maximize my return in my territory, my company is my territory, with a finite number of resources available to me and if they think about it that way, then they will hopefully have a disciplined approach to building a strategy and building a plan in their territory to utilize those finite number of assets. Because let me tell you, they are not freely available. Constantly sales reps are grabbing these resources and trying to deploy them in their territories.

The question is, how hard is it to do that? It is very hard and every year what we try to figure out is, what is the right proportion of account executives in territory versus specialization around territory? If I were to share with you that ratio today versus that ratio when I first joined the company, I would tell you it has flipped on its head. It has completely flipped on its head. A lot of our investment is not in direct territory anymore.

It is in compliment around direct territory. It is our biggest challenge, is rationalizing those resources.

GT: Sales representatives are grabbing for the resource as fast as they can because it is good for them but not all opportunities are created equal. How do you rationalize that?

GM: We certainly enter every opportunity into our CRM system and we have a pretty standard way of codifying entries and so we have different phases, which the sales rep is allowed to announce to the company the phase that they believe the opportunity is in. It has to meet certain criteria and pass certain litmus test but once they do, then that is the, I guess pass, to say go ahead now you can engage pre-sale support or data architects. Or you can move to a proof of concept. We will invest in hardware and software and people to deliver a concept to a customer site.

But again they have to be in certain phases. Now one could say, well, couldn’t they just jimmy the system and put the phase in. Sure they could but every sales rep is measured on both sales performance and pipeline so if we see a lot of things in pipeline at a very good far along stage but none of it is closing, then we have a different issue and we know how to solve for it. It is another way of thinking that one of the real big benefits to management in having these great systems is visibility. I mean we have clear visibility into everything that is going on.

GT: What kind of value are you thinking about bringing next up for your customer base?

I see us going into the world of big data further than we are but we are doing it with customers, which is a really neat situation to be in because quite frankly we co-develop solutions with customers and it is a unique place.

GT: You help put your customers into more expansive businesses and change their value propositions and enhance their ability to make money.

GM: In a lot of cases we do.

GT: There you go.

GM: It is becoming more and more prevalent for us because we were not always a big data, data management company. We were more of a data creator throughout enterprise apps. That is how we are innovating at our company. It is a new space for us.

GT: Greg McStravick, President, SAP US North America, glad to have you with us.

GM: Thanks for having me.

GT: Thanks for joining us.

GM: Appreciate it. Thank you.

See what Alexander Group does for other companies like SAP. See more information on the Chief Sales Executive Annual Forum.