The new president of SAP Japan sat down at his clean desk the day after financial services giant Lehmann Brothers collapsed. Promptly thereafter, deals became scarce. As somber as it may seem to show up on your first day to watch the pipeline constrict, Garrett Ilg was doggedly optimistic: “You have to stay positive; you need to stay focused.”
His first day at SAP makes for an interesting anecdote, he concedes, but points out, “I have seen other market phenomena that – for the Japanese market – have been equally disruptive.” Having done business in Japan for the past 25 years, Ilg has steered IT companies through various crises. Crises, Ilg argues, help companies hone their business. “Business is about how you manage your company through the peaks and troughs of an increasingly volatile global economy.” As Ilg explains, for SAP this means equipping companies with solutions that help them adjust quickly to downturns and switch back to growth mode when demand picks up again.
From user to president
Ilg’s role as president at his previous employer, Adobe Japan, has particularly qualified him for his position at SAP. Adobe ran on an SAP-built platform. Ilg credits SAP with helping Adobe drive its business at a higher margin than ist competitors. “This gave us the budget to continue innovating and to stay ahead of our competitors,” he says.
Before Adobe, Ilg had held positions in Japan at companies that, combined, represented the entire IT stack, giving him a keen eye for the total solution. Now, after more than a year at SAP Japan, Ilg is encouraged: “There are more opportunities in Japan than I had originally thought for SAP to do for other companies what it did for Adobe.”
The quality crux
One of the first things Ilg made known when he joined SAP was that the company would improve its customer satisfaction scores. “I looked at our scores and at the surveys, and what I saw was not what I had personally experienced as a user of SAP at Adobe,” he says. “I knew we could do better.”
To boost customer satisfaction, Ilg established what is known as the SAP Japan Customer Satisfaction Task team, comprising elected members from across lines of business. The efforts of this team have boosted customer satisfaction significantly over the past year. Customer satisfaction as a reflection of quality is incredibly important in the Japanese market, Ilg emphasizes. “Whether they are individuals or enterprises, consumers treat their budgets with the utmost care,” he says.
Also, competition in Japan is very intense, which drives up consumers’ expectations of quality. The number of vendors of similar products and services is astounding, giving consumers an array of choices unlike in any other market. SAP has done a strong job of living up to these expectations, Ilg says, but these expectations are constant. “You don’t get a reputation for quality in this market and then just live on it; you have to constantly develop quality to rise along with customers’ expectations.”
Japan is partner country
As in other markets, SAP Japan relies on partners to cover demand in areas such as education, hosting, support, and technology. However, much more hinges on successful partnership in Japan. As Ilg explains, there is a partner of some kind involved in almost all of SAP’s customer relationships in Japan. This is partly due to the different role of a CIO within Japanese companies, Ilg contends. Many customers rely on IT partners to take on this role: to manage their IT budgets, manage their infrastructure, and manage even their IT strategy and direction.
Partnership in technology, too, is a hallmark of SAP Japan. “SAP has worked together extensively with customers, partners, and SAP’s field organization to both develop new ideas and to make sure that SAP is aligned with the demands of the Japanese market,” says Ilg.
Solutions Japanese companies want
The amplified role of partnership in Japan has its roots in customers’ requirements to have software customized specifically to their needs. In the recent past, customization was the only way for Japanese customers to exploit IT, due to double-byte language requirements. In the early years of multitier computing, Japanese IT providers essentially created their software in a handwritten format and delivered it to customers.
But as technology evolved, companies needed to upgrade their software more often to take advantage of new innovations. Hence, continual custom development became an expensive and timely ordeal. This triggered a realization of the merits of standardization. With this in mind, SAP developed a very strong installed base for its enterprise resource planning software in the 1990s.
Ilg now sees massive potential for the SAP BusinessObjects portfolio in Japan. As he explains, the Japanese market is very datacentric: “Customers value the ability to collect, manage, and make use of that data. We’ve got the portfolio, and we’ve got the people to give them this and many other abilities.”