Kevin McKay, chief executive officer and president of SAP America, Inc., is a corporate leader with a commitment to excellence. McKay learned this value at an early age. "My father always told me that if you are not going to do it right, don't do it." recalls McKay. In his present role, it is a value that blends perfectly with the corporate philosophy of the company he leads. When McKay came to SAP America in 1996 as CFO, he joined a company with a long-standing tradition of excellence.
McKay explains, "SAP is now 27 years old. Founded in 1972 in Mannheim, Germany, the company's initial goal was to build integrated software. At the time, all of the software that was written was functional or silo-oriented not process-oriented. The five founders got together and built what they called the R/2 product, which was the mainframe product it was integrated software enabling companies to be quite efficient and effective. They garnered an enormous market share in Europe, especially in the German-speaking countries." Originally known as System Anwendungs Produkte, the company has always been dedicated to providing users with a better return on information. The name SAP was adopted to more adequately describe the company's focus Systems, Applications and Products in Data Processing. SAP now offers a broad spectrum of products and services covering enterprise needs from core business functions to decision support, e-commerce, supply chain management and customer relationship management.
"Hasso Plattner, one of the founders, is the technological visionary at SAP. In the early nineties, Plattner recognized what could be done with three-tier client/server, the application layer, the presentation layer and the database. The resulting product SAP R/3 was responsible for SAP's enormous explosion and growth and its move into the international market. SAP was the first to seize that opportunity and the first software company to migrate from a mainframe to client/server. We were able to bring an enormous number of install-base customers from our R/2 to our R/3 solution, and we now have more than 10,000 customers worldwide. Today we are a company that has reinvented itself a couple of times, an accomplishment enabled by the creativity of our people worldwide and the strength and vision of SAP's founders," says McKay.
SAP's entry into the data warehousing and business intelligence market with its Business Information Warehouse (SAP BW) in September of 1998 has been very successful. McKay explains, "I am glad we finally unlocked the wealth of business intelligence that had been sitting in transaction systems. Our customers can now analyze that information to set corporate direction or validate a strategic course of action."
The company recently announced SAP BW Release 1.2, which includes expanded business content such as more than 45 InfoCubes, over 100 key performance indicators and more than 180 predefined reports. For companies presently using SAP R/3, predefined extraction components Info Objects and Info Sources will enable faster data mart implementations. Additionally, this new release provides open interfaces to non-SAP data and other data warehouses which will enable companies to create informational supply chains that incorporate real-time operational data. McKay adds, "Our BW product is designed to be compatible with R/3 as well as to function as a fully scalable data warehouse for all information from other ERP vendors as well as third-party data."
According to McKay, SAP's ability to "reinvent" itself to rapidly respond to the needs of customers and potential customers is a concrete example of the company's commitment to excellence. "SAP is leveraging the Internet and repositioning itself as a total solution for a variety of industries. We are very capable of leading companies into the next millennium as their strategic platform because we have the ability for inter-enterprise operability," McKay states. "My goal is to reposition SAP America from being known as one of the best-in-class ERP vendors to being known as a company that can now leverage Internet technology to take business solutions to the next level."
"I think that there is a perception in the marketplace that the ERP vendors are unable to cope with the Internet, and I want to provide a high level of assurance that the SAP focus on solutions is certainly capitalizing on the power of the Internet. Our structure and our capabilities can enable companies to leverage the Internet to become profoundly more efficient," McKay emphasizes.
According to McKay, while SAP BW provides important decision-support functionality, it also extends the overall mySAP.com Internet business strategy. System mySAP.com is SAP's new, comprehensive, open e-business solutions environment consisting of portals, industry-specific enterprise applications, Internet applications and services, as well as XML-based technology. System mySAP.com provides the means to integrate internal applications with Internet services. SAP will demonstrate the mySAP.com solution and more than 50 industry-specific, Internet-enabled business scenarios at its North American SAPPHIRE '99 user conference in Philadelphia, September 13-16, 1999.
Building on the foundation of SAP R/3 and part of the SAP Business Intelligence initiative is SAP Strategic Enterprise Management (SAP SEM). "I am profoundly impressed with the capability of SEM. Providing value-based management processes such as strategic planning, risk management and value communication, it will support managers and senior executives as they make key business decisions," says McKay.
Another long-standing tradition at SAP is the commitment to respond to the continuing advances in technology by harnessing the power in effective software solutions. "We are reinventing ourselves in more rapid cycles as the market demands, and I think that is one of the core strengths of the company. From a technology perspective, we have a venture capital fund that allows us to have insight into various emerging technologies. We guard against complacency. The founders and the company overall are not prone to giving in to short-term financial results. At SAP we take the long-term approach with huge investments in research and development. That strategy has made us very successful," states McKay.
Kevin McKay, CEO and president of SAP America, Inc.
As head of SAP America, a company that generated 45 percent of the global SAP revenues in 1998 that were in excess of $5 billion, the challenges McKay faces every day are a combination of internal structure and external demands. "SAP America is too large to have one individual run it. We have restructured into fully empowered sectors which allows us to be very market focused. We have seven very highly motivated, capable and qualified people leading each sector," he states. "Our growth strategy was to expand into vertical areas. We were already strong in three sectors: discrete manufacturing, process manufacturing and consumer product goods/retail. We created four new sectors public sector and higher education, financial services, human resources and a services sector with a dedicated mySAP.com team which is leveraged across all industries. Our growth strategy was directed to this vertical expansion, to moving into the mid-markets and to a geographic expansion into Latin America. We have been very successful in the vertical markets and in moving our accelerated solutions into the mid-market. Right now within the Americas, more than 50 percent of our revenue comes from that market. Our move into Latin America was thoughtfully planned and very successful. We did not transplant management we hired citizens of those countries for our teams. We demonstrated that we were not just a vendor of software but a company interested in the total solution. We took the time to work with local companies, and we've gained enormous market share by making that type of a long-term commitment."
McKay acknowledges that he is frequently asked if SAP has the breadth of talent and R&D capability to move into new vertical industries. He explains that by leveraging the core products and adding industry-specific solutions, they are able to draw on a huge wealth of information from their worldwide customer-base, obviating the need to completely rewrite the applications. McKay also emphasizes that SAP has a dedicated focus supported by a substantial R&D investment. "Nothing will sway us from that course," he emphasizes. "Deep in the research labs at SAP, we are pushing technology to the absolute limit the bleeding edge. We're particularly good at understanding what the bleeding edge is and then providing a path forward that's economical and technologically sound. And, we don't make claims to things that are not valid. We deliver what we say we are going to deliver. I don't think anybody can match either our financial strength or our bench strength in terms of people and their qualifications."
"We are firmly committed to supporting our customers. Our responsiveness on service and our ability to provide 7x24 support are world-class advantages we provide to our customers. Our commitment to excellence also extends to our employee base. We take very good care of our employees, our employee benefits are the best they can be and we offer an opportunity for creativity. People can really build careers at SAP," says McKay.
"SAP is absolutely dedicated to ensuring our customers' success. We're committed to excellence, and we're in it for the long run. Based on our longevity, our accomplishments, our people and our ability to reinvent ourselves as technology advances, anyone who is selecting a software provider or a total solution provider will come to the conclusion that we are the most logical choice," McKay concludes.
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