Corporate Case Study: SAP remains tranquil amid stormy software market

While many software firms are caught up in turmoil, SAP's PR team works to solidify the company as a leader in its market by focusing on its stability and maintaining a consistent message.

While many software firms are caught up in turmoil, SAP's PR team works to solidify the company as a leader in its market by focusing on its stability and maintaining a consistent message.

When Oracle stunned the business and tech world with its hostile takeover bid for PeopleSoft in June 2003, it didn't take long for pundits and industry watchers to weigh in with their platitudes and predictions. But while everyone spent the first 48 hours wringing their hands wondering what this would do to an already volatile software market, SAP knew exactly what it would do - take advantage of an opportunity. The enterprise-software market leader quickly developed a marketing campaign within those 48 hours to woo Oracle and PeopleSoft customers unsure of what the hostile takeover meant for them. Since then, stability and reliability have been the cornerstones of SAP's marketing. "Within 48 hours, PR was very involved in letting companies know that we were a safe haven for them," says Herbert Heitmann, head of global communications. "We had interviews with the media to explain what we could offer during this time of uncertainty. We had letters from customers drafted. We worked with advertising to define their messages. This was a joint effort. And it impressed even us that we were able to do this in such a short amount of time." The Interbrand/BusinessWeek list of the top 100 global brands noted that SAP's "establishment image and sharp marketing have helped SAP thrive in a volatile software market." Wired recently pointed out that SAP now commands 59% of the business-software market, winning new customers around the world, including Airbus in Europe, Ashland Oil in the US, and New China Life Insurance. And sales in Brazil, China, and India grew at double-digit rates. Oracle and PeopleSoft aren't the only companies in turmoil. Siebel Systems is facing a second charge of violating Regulation Fair Disclosure, BEA Systems has been beset by executive departures, and several other software firms recently announced reduced revenue expectations. The most recent move to convince customers, current and prospective, that SAP is an isle of tranquility in an otherwise stormy software sea, is to reorganize its global communications structure to have top PR execs more aligned with four key audiences - customers, investors, employees, and the public. Heitmann now has four leaders, who oversee communications for each of those audiences. By making the global communications team more audience-centric, Heitmann says, it allows SAP to respond to market and industry changes more aggressively, with a more consistent and aligned message. "Whether we're taking a position on key industry issues or talking to multiple audiences across multiple regions, we want to talk with one consistent voice, which is very important in establishing an image," he says. "So it's incredibly important that we be seen as a reliable and trusted adviser. I think a lot of the uncertainty out [there] because of Oracle and other market factors is the opposite of what customers are looking for. Very early on we knew we had to be that safe haven in the stormy sea." Giving PR a new focus Heitmann insists that communications focus on proven business value to customers, moving away from that "press release machine" mentality that afflicts too many firms. With 120 people on the global PR team, and another 60 on local and regional teams, in 10 regions, it takes time to get people to focus on the story they're telling, instead of the press release. But the team has adapted quickly and admirably, he says. While announcements still must be made, he wants a PR team that opens its ears and eyes to the issues people and companies care about, and how SAP can contribute to and impact that. Developing stories that journalists want to write and audiences want to read is far more important than just churning out endless press releases. "That way, we can set the agenda in a focused way," he adds. PR was previously more about the "caring and feeding" of analysts and the media, says Anne McCarthy, who oversees customer and product communications. "It's now more about finding a middle ground between what journalists need and the stories SAP wants to tell, without bombarding customers with relentless news updates. By being more aggressive with the media - rather than waiting for the media to react to releases - SAP can put together a story that incorporates trends and also shows SAP's role in the bigger picture. "We are really focused on building relationships with the media and anticipating their needs," says McCarthy. "There's still a role for the press release, but we want our relationship to be a conversation, not just a Q&A. We want to be a reliable source for whatever is going on in the industry." As the company continues its push toward global communications, it is considering its audiences internally and externally. Any successful PR work starts inside the company, says Torsten Busse, who leads internal communications. Be it the overall communications strategy or product PR, companies must disseminate that to their people if they want it to work, he says. "If you have messages that don't resonate with employees, how will they resonate with customers?" Busse asks. "How is it representative of the company, because every employee is a representative of the company?" Before Heitmann's team began its global shift a few years ago, there was a tendency for employees to think locally and regionally, but not globally. Now employees the world over know what is going on within the company, thanks to executive e-mail updates, the company's online magazine, and even a three-minute radio program accessible through cell phones. Now employees are more inclined to think globally and act locally, says Busse. SAP also recently created a position overseeing public communications, held by Chris Sorek. As it cements its market-leader position, having someone dedicated to its public image will help it be seen as a thought leader. What was once seen as a large German software company is now viewed as a global business leader, says Sorek. "As a brand, we are getting more and more well-known," says Sorek, who looks at everything from how the media regards SAP in regions from Europe to Latin America, to where it stands when it comes to corporate citizenship. "Now that we have the name and brand out there, and more proof points behind the brand, the different parts of communications need to work more closely to present a consistent global image of who we are and what we stand for." Relationship with Burson And making all this work seamlessly around the globe means having a global partner, such as Burson-Marsteller. Heidi Sinclair, chair of Burson's global tech practice, says that anywhere from 150 to 200 agency staffers are at SAP's disposal. The relationship is extremely collaborative, she adds, from developing strategy, to account leaders being involved in the daily morning calls with SAP's communications team to cover what the media and analysts have been saying, and what's on the horizon. What also makes the relationship work well is Heitmann's ability to "pull the trigger" on PR planning and initiatives, something not all communications leaders can do, says Sinclair. And that authority gives SAP and Burson the confidence to be innovative and nimble. Not that SAP is without its challenges. As it focuses more on small and midsized businesses, it has to put a local face on that global image. Without that local voice, those customers won't listen to you, says Heitmann. Because small and medium businesses aren't as likely to see global advertising in airports, reaching that small and medium business base falls largely to PR. Heitmann is also looking at how PR can help SAP move into new regions, such as China. "My objective, wherever we're going, is to develop reach into those regions, and how can we better leverage what we have at our disposal," says Heitmann. "That is why our image of trust and reliability is so important. I can't do my job without trust and credibility, and neither can SAP. You can't be successful, not in a sustainable and long-term way, without that. So we're always looking at what more we can do, how can we provide more value to the company. And that fosters creativity, and the potential for doing a better job." PR contacts Head of global comms Herbert Heitmann Public comms Chris Sorek Customer and product comms/SVP of North America comms Anne McCarthy Internal comms Torsten Busse Investor relations Stefan Gruber Comms management Gerhard Rickes Strategic issues group Nigel Wood University alliances Dan Pantaleo

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