Friends in the Right Places are always good to have.

As it turns out, Punit Renjen had a much easier path towards our Chairman role than perhaps meets the eye. That is due to the fact that all of the largest SAP shareholders (who of course vote for the Chairman) are all customers of Deloitte. This includes companies such as Black Rock, the Vanguard Group, Fidelity Investments, Harding-Loevner, etc.. This familiarity with all of our major shareholders provided Punit Renjen an excellent platform as he went 1 by 1 to lobby for this position - Easy Peasy. Friends in the right places are always good to have.

Now there is nothing wrong with using your network to land a position. It's done everyday. However the higher the position the greater the expectations will be on performance - as they say you have to have the sauce to go with the meal. In this regard I would see three hurdles that Punit Renjen will have to contend with for him to be successful and the shareholders to be satisfied with his performance:

How familiar was Punit Renjen when putting together a strategy of offshoring jobs to India with the level of control the Works Council has over the destiny of its members? We all know that there will be zero layoffs and no job transfers out of Germany any time soon and if attempted it is likely we will see a job action executed by our German colleagues. Germany rightly so has the largest contingent of employees and presents no opportunity for downsizing. HC in Deutschland will remain just as it is today - Period. full stop.

Offshoring and cost cutting are one-time items - the reductions are only valid for the year they are recognized and after that a new benchmark is established and future savings would require another round of savings. As SAP transitions more and more to the Cloud and leaves behind our ERP business, we will lose our legacy ERP customers. These are the ones who bought large customized installations at significant cost and who have absolutely no interest in an off the shelf Cloud package to run their complex businesses. In all of these cases by far the biggest loss will be the maintenance revenue which was spun off year after year and provided Billions of Euros to make acquisitions after acquisition - cloud revenue will not replace our maintenance revenue. Has Punit Renjen a "growth" plan beyond just cost cutting/offshoring to replace this enormous cash cow provided by our maintenance revenue? If yes, we would love to hear it sometime if and when he gets the chance to address the employees.

We now have a 360 degree circle of Leaders who do not have the qualifications for the positions they hold. Specifically our Executive Board are all apprentices ( other than perhaps Dominik Asam) where I guess the thought process was to allow these people to learn on the job. Say what you will about Hasso, but we all must agree that he obviously knew quite well the SW industry as well as our company itself and all the technology behind. Accordingly in Hasso we had someone who could provide industry knowledge and stabilization against the juniors on our Executive Board. Now we will have a Chairman who comes to us from an Accounting company and just as our Executive Board, he also possesses no experience in running a SW/Cloud business or even just in functioning in a Chairman role (which ironically will also be his apprenticeship). In fact Punit Renjen while at Deloitte never had to answer to Shareholders, so this will also be a new experience for him - isn't that an interesting fact. Deloitte is not a public company and as such is owned by the Partners not the stock market.

It cannot be that the strategy upon which a Chairman is selected is solely based on cost reductions and offshoring. There has to be, and must be, a strategy for growth. Especially for a company who is determined to depart the business upon which we were built and which has provided continuous revenue streams for the life of the customer and now wants to transform over to a low margin business, where customers only buy a one year subscription and then go out and reprice against others and where we will be competing against every SW/Cloud Fortune 100 company all the way down to Mom and Pop operations having next to zero overhead. Actually when these hurdles are put on the table, it's clear that what SAP really required was a highly experienced SW/Cloud Leader who has the credentials of building a SW/Cloud company into a Fortune 100 market leader. who could then guide our junior Executive leaders in such a time of severe transition. This we did not get.

Yes, friends in the right places are always good to have..... but then you must have the sauce to go with the meal, otherwise we will all have to find another restaurant to dine at, including our shareholders as well.

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I believe most of you are totally overestimating the role of Punit Renjen (who is chairman of the supervisory board, a body that is explicitly not involved in business operations of a company according to German law which SAP as a German company falls under) and his agenda which you all conclude from one cr-ppy interview he gave to an Indian reporter. Come on, if you are interviewed by an Indian reporter for an Indian audience, being Indian yourself you will praise your countries future.
On the other hand, most of you are totally underestimating CK. This man has an agenda for SAP which is driving up the stock-price and market cap. Do not get fooled by his appearance, he would absolutely cut his mothers throat if he had to to achieve his business goals. He is one of the people that strive for ultimate power and will not make any compromise on his ruthless way towards it.

Listening to Punit Renjen's interview on you tube, I come away that CK had better come up quickly with his plan to increase HC in India. Otherwise he is at high risk. His sponsor, Hasso, will soon be out of the picture and he is dependent on keeping Renjen happy.

The only way CK can quickly increase HC, which is what Renjen is expecting, is to relocate major teams from their existing location to Bangalore. CK has no ability to create new jobs and so he must find places he can transfer the functions. Germany will not be a candidate, which then leaves NA as his target.

What Renjen is expecting, per his video, is significant increases - not shifting a couple of hundred jobs . All teams involved in any type of Customer Support are likely to be CK's first move.

Basically this company will become the wild west, every man for himself. and for CK to keep his nice job ( which he would have great difficulty attempting to get this package someplace else) is to deliver on what Renjen wants and to do it quickly.

Is not Punit Renjen deserving of some title in the country of India? Think about it, he has told that he moved 100,000 jobs within Deloitte over to India. Soon he will be moving another significant number of SAP jobs to India, maybe 20,000 will be lifted and shifted to this new location.

What other private sector individual person can lay claim to such a massive transfer of jobs to the Indian labour market, or any country market for that matter? It's clear that he has a complete commitment to increasing our presence in India, just as he did at Deloitte, and he assures CK is already working on this. It is a pity that we only know about this from a you tube video and not from a disclosure from our own leadership.as to what plan they are working on and how it impacts all of the employees of SAP.

No sarcasm intended but Punit Renjen should be not be the Chairman of SAP ( or any other enterprise) but rather he should be working in some capacity within the India Government where he can use such a position to garner jobs from all industries to support his home country and contribute in a more substantial way to really making this India's century - this would hardly seem to be the responsibility of someone holding the chairman role of SAP.

Ranjan , The lord voldemort !

Renjen has little time to waste in implementing the cost reduction plan ( or I guess we should call it the "restructuring plan") where we will offshore thousands of jobs to India and save hundreds of millions.

Last week the market gave two thumbs up to the announcement that SAP will unload some 8,000 jobs. Our stock was up 7.5% while the market was only up 2.5%, The investors liked what they heard and excited to see Renjen was delivering on the plan he presented to them when lobbying for the position.

The stock price is continuing to climb a week later, showing the investors want much more of what they heard last week and reinforce the downsizing and offshoring plan Renjen has proposed.

No doubt this is just the beginning and we will see waves #2, 3, etc... as he progresses thru his execution plan and gains the full support of the shareholders. Never thought I would say this , but it wasn't anywhere near this bad when Elliott Group took out the hatchet and was cutting everybody in sight.

Get ready for a real bloodbath this year.

Punit Renjen may never have been a Chairman or had to deal with the stock market before, but he definitely was a very good Boxer.

Just look at his one, two punch - first take away the WFH and then replace the complaints with fear of job loss. Yeah, that's how to play the game - well done, it's a knockout round.

So then we have an Executive Board of which most are in over their heads on the positions they hold. And now we have a Chairman, who has no experience in leading a
SW/Cloud company and who has never been in a position of Chairman before and never had to work with Shareholders either.

And all this in a company which is desperately looking to basically emerge into what is effectively a brand new business for us as we go for Cloud market. For sure experience does not seem to be high on anybody's agenda, we just need people with the right connections to lead us thru this remaking of ourselves.

You could not have written a better script for a colossal mess.

That's the root cause of the problem: https://pluralistic.net/2024/01/26/noclar-war/#millionaire-on-billionaire-violence

This entire system is a fraud. ;)

Ahh,,,,, Nothing like good old fashioned politics to get your job!

You are correct Deloitte is not a publicly traded company and as such Punit Renjen has never dealt with a Shareholder/Investor community, but rather only inside Partners. There is a huge difference between the two.

FYI Deloitte has about 6K employees in Germany, there is no Works Council so he has no understanding of the control the Works Council will have on his plans.

BTW, when speaking about getting a chairperson who comes from the same industry as the business they are about to lead ( which is a pretty simple idea) unlike what SAP has done. The story gets much different when you look at the qualifications of the Chairperson of Deloitte - here they didn't get someone from the Automotive, Hospitality... etc industry, but rather a seasoned veteran of the Accounting and Audit business to lead an Accounting and Audit company. I guess this person didn't have to rely on friends in the right place to secure the chairperson position -:)

Very interesting post. Had no clue that Punit Renjen had such a level of kinship with all of our major shareholders. It would certainly appear that his association with all of these shareholders while he was at Deloitte outweighed his lack of experience in the SW industry and they voted him in.

The question is, will he just be doing their bidding and taking the company apart for favorable returns or will he be able to push back to support a long term growth plan, assuming he has one?

But it sure is clear how he got into this position.in the first place.

Thx for posting this.

It should be alarming that Punit Renjen has not disclosed at all what was his business case which he made to the shareholders to secure this position.

I see this as a failed leadership trait in that he completely disregards the concept that employees are entitled to know what strategy the company they work for will pursue as it changes course under new leadership.

I would have fully expected that for a new Chairman assuming the position that they would want to engage and build an alliance partnership with the employees to insure they get the support needed to carry out their agenda. Assuming of course it's an agenda the employees would favor.

Thread regarding SAP layoffs

Friends in the Right Places are always good to have.

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