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MarketScreener Homepage  >  Equities  >  Xetra  >  SAP AG    SAP   DE0007164600

SAP AG

(SAP)
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SAP : Are Traditional Management Models Evaporating?

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09/18/2019 | 09:17am EDT

We all know how traditional organizations are structured: Employees are grouped together in departments that follow a traditional chain of command, with a designated group leader or manager.

These hierarchical structures are often based on the level of experience of each individual member, placing those with more years under their belts and experiences at the top, and giving them the responsibility of leading their team to success.

I can't tell you that this didn't work in the past. But I can tell you that this model will not continue to work moving forward, not with the makeup of today's workforce constantly changing, and its behaviors and needs evolving.

We've seen how emerging technologies like artificial intelligence (AI), machine learning, and social media have changed business models and structures. These very same factors are also changing the ways in which management leads and develops the next generation of workers - those who will eventually take the helm of these organizations.

These future leaders represent Generation Z, the young adults that have grown up in the age of the Internet and social media. They are used to having the information they need right at their fingertips - and they expect the same level of accessibility and gratification from their employers. In order to remain competitive in today's landscape, businesses need to re-imagine the nature of their workforce, and pivot their team strategy.

Traditional management models that once provided structure are now viewed as creating guardrails and restrictions, stifling innovation and creative thinking. We've seen these structures slowly be replaced by self-managed teams, giving workers at all levels an enhanced level of independence and responsibility.

This flattened, flexible structure is a concept that I've been involved in introducing at SAP and has been met with great enthusiasm. Within a specialized subset of teams, we've provided colleagues with the freedom and autonomy to manage themselves.

After implementing this management structure within one of my groups of AI experts, I was pleasantly surprised to see all team members rising to the occasion. With these subject matter experts in the room, my presence was barely needed. While I may have had the management experience to help provide overall guidance, they were able to self-organize and self-manage just fine without me - truth be told, I'm thinking they may have done even better without my contributions.

On a broader level, today's organizations are faced with the challenge of remaining agile and effectively reorganizing at any given moment. There are still many examples where the reflexive answer to a new business challenge is a traditional reorganization. Employee surveys consistently confirm that individuals find themselves distracted by a never-ending stream of organizational changes.

In addition to adding flexibility within individual teams, expanded, boundary-less networks will be key to allowing organizations to tap the right people across various sectors of the business when needed. Most of the business issues that arise today impact multiple roles and departments, making it imperative that we break down silos among different company segments. This flexible network structure will allow employees to embrace fast-moving change together, helping to drive greater productivity and, ultimately, success.

Beyond creating the right structures, models, and workflows, organizations must embrace a people-first attitude. Customer experience has become a top concern for all businesses, especially here at SAP, and we're applying what we know about customer experience to build superior employee experiences that drive engagement, retention, and productivity.

While we've long provided access to training and learning opportunities within SAP to help our employees gain the hard skills they need to excel, we're also placing a great deal of emphasis on providing them with soft-skills training. The application of AI and automation to everyday tasks will help customers resolve their issues faster, but it also makes the occasional instance of human interaction that much more impressionable. In any services-oriented company, I believe that future leaders need to learn and apply a more empathetic approach to work.

In addition to the hard- and soft-skills training we offer, as well as further growth opportunities like temporary job rotation and coaching, we've also introduced a mentorship program in Customer Success Services, where individuals can partner with a more experienced colleague to enhance their knowledge, skills, and self-awareness. Not only does this program allow a mentee to develop skills in a targeted area and gain valuable feedback on career growth, it also provides mentors with the opportunity to develop their management and coaching skills and share their insights across an entire network. With 38 employees in my area of responsibility currently enrolled in the program, we're already seeing how rewarding it has been for both sides.

With a new generation entering the workforce and customer experience top of mind for all businesses, human capital has become the richest currency for every industry. As we move toward a more digital, automated world, we must be willing to adopt the new organizational structures and strategies necessary to help today's talent flourish and ultimately drive business success.

Andreas Heckmann is executive vice president and head of Customer Success Services at SAP.

Disclaimer

SAP SE published this content on 18 September 2019 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 18 September 2019 13:16:03 UTC

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Financials (EUR)
Sales 2019 27 641 M
EBIT 2019 8 183 M
Net income 2019 3 405 M
Debt 2019 9 192 M
Yield 2019 1,28%
P/E ratio 2019 39,6x
P/E ratio 2020 28,2x
EV / Sales2019 5,49x
EV / Sales2020 5,02x
Capitalization 143 B
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Number of Analysts 37
Average target price 131,11  €
Last Close Price 119,50  €
Spread / Highest target 30,5%
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Spread / Lowest Target -27,2%
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William R. McDermott Chief Executive Officer
Hasso Plattner Chairman-Supervisory Board
Christian Klein COO-Intelligent Enterprise Group
Luka Mucic Chief Financial Officer
Juergen Mueller Head-Innovation & Technology
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