We Have to Win our Deals

Diego Lozano, Country Manager SAP (Photo: SAP)
Diego Lozano, Country Manager SAP (Photo: SAP)

SAP.info: What opportunities does SAP have in Argentina?

Lozano: SAP has clear leadership in the application software market in every segment in Argentina. IDC estimates that SAP’s market share is more than 43% of the total addressable market. We are very present in both the midmarket and large enterprise markets. And because there are a lot of foreign companies here, Argentina actually has more global companies than Argentine ones – and more than any other Latin American country. Oil companies, airlines, telephone companies, they’re all foreign enterprises.

SAP.info: What challenges is SAP facing?

Lozano: The current economic crisis simply means a lot of uncertainty for everybody. However, we Argentines have been living with uncertainty for so long that it feels quite normal. In 2002 we experienced a severe downturn, which led to a huge devaluation. As a result, nearly all long-term investments that were made in the 1990s ground to a halt. At that time, it was very difficult to make long-term project proposals. Actually, I think that we are now confronted with a similar situation worldwide: While companies will continue to do business, every deal will have to be justified. Value propositions will have to be much clearer, and return should be short-term.

In Argentina, SAP has a lot of projects, but we also now have to compete more. We have to win our deals step by step. If we want to sell business intelligence (BI), we have to be good in business intelligence – companies won’t purchase a BI solution from SAP just because they’re SAP customers.

SAP.info: What is your advice for handling the economic crisis?

Lozano: Be close to the customer. And while that may be easy to say, it’s not so easy to implement. I think SAP has to be very creative in how it approaches the crisis. It’s true that crises can conceal opportunities – there’ll be winners in this crisis.

SAP.info: Which are the industries that drive IT, in particular, the implementation of SAP applications?

Lozano: The industries that drive the Argentine economy are public services, financial services, retail, and agricultural. Everything related to the business user is also a market driver.

SAP.info: Which role does the small and midsize market play in Argentina?

Lozano: That depends on how you define SME. In Germany, every company that has revenues of less than U.S.$500 million is considered midmarket. If I take that as a measure here in Argentina, then my entire market is SME – with the exception of maybe 20 companies. Even if I reduce that figure to less than U.S.$300 million, the SME market still comprises 40% of my business, with an important percentage coming through indirect channels.

SAP.info: What IT trends are influencing the market?

Lozano: Service-oriented architecture, outsourcing, compliance, and technologies such as radio frequency identification (RFID). Compliance, in particular, is still an issue for most companies, large or small. You have to be SOX compliant. Business intelligence is also influencing the market quite a bit.

SAP.info: How did the Argentine market react to SAP’s acquisition of Business Objects?

Lozano: The entire business user portfolio sets big expectations. We are in a traditional mature market for enterprise resource planning (ERP). The Business Objects portfolio is opening new doors for us, given the chance up-sell and cross-sell in our installed base. Also, it is a key part of our strategy to penetrate the non-traditional SAP customer. To summarize, SAP BusinessObjects solutions are a key asset in our growth strategy to approach a mature market.