SAP Is Counting on Organizational Change
SAP Is Counting on Organizational Change
1. Which of the forces for change are causing SAP to undertake major organizational change? Explain. There are various forces that are making SAP undertake the organizational changes, however the biggest one is the market change. The core business of SAP is business applications. SAP is threatened by the attack of their competitor-Oracle. According to the data in the text the market share of SAP has fallen dramatically from 15,5% to 14,8% in the year of 2010, when the market share of their competitor Oracle has risen from 9,9% up to 10,7% in the same year. This was one of the main reasons why SAP started worrying about their organization.
2. Which of the four targeted areas of change is SAP focusing on? Provide examples. There are four main areas, which SAP has identified as those, which need to be changed: people, technology, structure and strategy. However they focused mainly on technology. SAP is trying to achieve a competitive advantage based on cheaper memory chips in the servers with the purpose to make business calculations faster, so the companies can make something that usually requires a lot of time within several seconds. If SAP will manage to achieve this competitive advantage they will be able to revolutionize the business computing.
3. To what extent has Hasso Plattner followed the four steps for fostering innovation? Do you think he could have done more to accomplish step 3? Explain. Recognize problems and opportunities and the devise solutions: Since the industry is full of many rich and big competitors, Plattner has come up with the thought that unless SAP does something dramatic and big, they will sink in the industry as a whole. As an example when SAP has been losing the market share, when its main competitor Oracle has been more successful. Communicating the vision and gaining the allies: The corporate research and development department, which consisted of thousands of engineers, was hard to be handled and not capable of doing something radically different, which was needed for the company. For this reason Plattner has decided to contact the universities and communicate his vision to the students, so they can experiment with the database of SAP and come up with new innovative solution and new prototype, which would have helped company to grow.
This decision is common for companies which are working in the technology industry, when new and fresh ideas and solutions can bring company to the new level and help to overcome the high level of competitiveness. Overcome the resistance of employees, empower and reward them in order to achieve some progress: The students were driven by the intrinsic motivation, which was expressed by them not having to follow the rules and regulations and be able to work outside the corporate R&D department. Also the fact that Plattner has been backing the students up during the presentation before the SAP’s top engineers was the reason why the students were so empowered.
When Plattner has faced the resistance of the T-Mobile, he has promised them that if HANA fails, they will not have to pay. But Plattner in my opinion could have came up with the better solution to improve the relations in the company, for example by making some students work together with the couple of engineers and recruit. Execute well: Plattner has contributed in helping HANA to work out, when saying that if it will not work the T-Mobile will not have to pay. And whether HANA has been accepted to the marketplace and managed to revolutionize the industry will be clear with time.
4. Why are some SAP employees resisting change? Explain.
Usually when the company has to go through any kind of changes it faces resistance from the existing employees, since the fear of the unknown is one of the most common types of the resistance of change. Corporate R&D engineers were worried by the fact that some young students, who were coming to the company and doing something innovative and revolutionary and change the already existing structure and even eliminate the jobs that already exist in the corporate R&D. 5. How might Plattner have used Lewin’s and Kotter’s models of change to increase the probability of achieving positive organizational change? Provide specific recommendations.
Lewin’s change model is consisting of three steps: unfreeze, change, refreeze. When Kotter is suggesting an expanded version, which consists of eight steps model, where steps one to four are representing the unfreezing, steps five to seven represent changing and the last eighth step stands for refreezing. If Plattner has involved the corporate R&D and let them take part in creating the change and has created the cross-functional, cross-level groups of people, who were strong enough to lead the change and has tried more in “selling” his idea to the SAP and the corporate engineers, the unfreezing stage would have been better facilitated. Also these actions would have reduced the resistance to change of the employees and also it would have been beneficial for SAP, which would be able to gain much more from many innovative ideas, by just letting the R&D to participate in the change.