SAP turns controversy into an opportunity

The software company utilized a blogger crisis to clarify itself as well as explain business strategy

The software company utilized a blogger crisis to clarify itself as well as explain business strategy

Last fall, SAP'S communications team was caught by surprise when Wall Street Journal blogger Ben Worthen posted a blog accusing the business software company of hypocrisy for freezing spending on IT. Worthen had obtained an internal SAP memo that outlined a series of cost-cutting measures, including a review of its IT expenditures. He responded to the leaked memo with a blog post stating, “We're not sure whether to file this under irony or hypocrisy.”

“[The internal memo intended to] say that we were cutting IT costs that were commodities,” explains Herbert Heitmann, SAP's SVP of global communications. “Our employees understood that. But then our sales guys started saying, ‘Our customers are coming back to us with memos saying that SAP doesn't invest in IT.'”

In addition to clarifying the content of the memo, Heitmann's team took the gaffe as an opportunity to explain other details about the company's business strategy, like the difference between strategic IT projects and commodities.

“We changed the challenge... into an opportunity,” he recalls.

Heitmann's strategy worked, and two days later Worthen posted a blog titled, “SAP: We're still spending on tech.” Heitmann credits the communication team's nimble response to the situation with Worthen to a reorganization the communications department underwent about two years ago.

The reorganization centralized the company's communications department and created a service center that houses all of its communications resources and tools.

“It has helped us to communicate with all stakeholders – investors, media, government,” Heitmann says.

And during economic woes, stakeholders can be hungrier than usual for new information. SAP's centralized communications department has helped the company address different – but equally inquiring – audiences amid the recent financial crisis.

“Investors want to know what kind of revenue we expect,” Heitmann says. “While employees want to hear about how [the economy] fits into our overall strategy, and the government wants to know how we're poised to handle the crisis.”

The team is also more dedicated to using communications to help push SAP's business objectives.

“We don't want to do media relations for its own sake,” Heitmann notes. “It has to be tied to business function. So we make sure senior communications people have a seat at the management table.”

When Worthen's blog post hit, it wasn't Don Bulmer, VP of global communications and blogger relations, who handled the crisis. Because of SAP's strategy for separating blogger outreach from media relations, the incident fell under the purview of media relations.

“It seems like every stakeholder or constituency is blogging, so to have a blanket blogger relations program is difficult,” Bulmer says. “So we compartmentalize it based on their business model.”

The team works with bloggers who primarily earn revenue from advertisers, while Bulmer handles bloggers whose business models are largely tied to research, education, and advice, like industry analysts, management consultants, or IT consultants.

“We work [with these bloggers] in a way that is much more consultative,” Bulmer says. “We do that because... for these people to provide high-quality education and advice to customers, we need to engage with them a bit more deeply than we would a journalist.”

Throughout the internal changes, SAP has retained Burson-Marsteller as its global AOR since 2002. But Brian Lott, MD at Burson, says the agency's function has evolved.

“We were originally brought on to help SAP globalize its communications,” Lott says, noting the company's communications function now spans 25 global markets. “Now I see our job as being SAP's central nervous system.”

Despite being well prepared to handle the blogger crisis from last fall, the incident helped the company make at least one lasting change to its communications.

“You can imagine every internal memo since then has been written as if it could be potentially leaked out so we don't go through this cycle again,” Heitmann points out.

At a Glance

Company: SAP AG

Co-CEOs: Henning Kagermann and Léo Apotheker

Headquarters: Walldorf, Germany

Key trade titles: CIO Magazine, CIO Insight, CNET, Computerworld, CRM Magazine, eWeek, InformationWeek

Comms budget: Undisclosed

Communications team: Herbert Heitmann, SVP of global comms; Christoph Liedtke, VP of global media relations; Stefan Gruber, VP and head of IR; Don Bulmer, VP of global comms, responsible for industry and influencer relations

Agency: Burson-Marsteller

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