“People are getting desperate”

Javier Colado, managing director SAP Spain & Portugal (Photo: Javier Colado)

When Javier Colado took on the role of managing director of SAP Spain & Portugal in January 2012, the unemployment rate was 22.8% in Spain and 14.6% in Portugal, and the Bank of Spain was predicting a 1.5% decrease in the Spanish economy over the next 12 months. It was clear: Four years after the housing bust that started it all, the financial crisis was nowhere near over. How can businesses thrive – or simply survive – in such difficult times? If there’s one person who can answer that, it’s Colado.

Case in point: General strikes across Spain, Portugal, and Greece are planned for the second day of SAPPHIRE NOW in Madrid. The worst timing in the world for the new managing director, but it doesn’t have him worried. In fact, he thinks the backdrop of the crisis will prove to attendees what he already knows – that every situation in life presents new opportunities. At the very least, a crisis forces companies to challenge themselves and do things differently. Now, he says, is the time to innovate, make aggressive changes, reinvent yourself, and prepare for the future.

Read the full interview with Javier Colado below:

SAP.info: Mr. Colado, you’re fairly new to SAP. Can you tell us a little about yourself?

Javier Colado: I joined SAP in January of this year, but I’ve been working in the IT sector for more than 20 years. And although I’m from Spain originally, I was living outside of the country until last year. So I didn’t really know what it was like to live and work here during the financial crisis. I have to admit, I did not imagine that the situation would be as bad as it has turned out to be. Since the situation has been going on for four years, you’re really seeing the impact on society now. People who have been unemployed for two or three years are running out of reserves. They’re getting desperate.

The financial crisis started in the housing market in 2008. What is the situation like today for companies in the IT sector?

It’s true that the crisis affected the construction sector first, but there were a lot of other companies involved in that sector – suppliers, for example. So there’s been a sort of wave effect, and the crisis is now affecting companies in other sectors, too. Also, the consumption level in the country is going down, which will probably be the case for the next one to two years. So companies are reducing costs, reducing spending, and just trying to minimize the damage. But in my view, a crisis is also an opportunity to take a more aggressive approach. Companies should be investing and innovating, but for the moment they’re just frozen. That’s the general feeling in the Spanish market right now.

Next page: Why companies need to invest, even on a tight budget

Do you feel like it’s your job to help companies to see the crisis as an opportunity? 

Yes, that’s exactly what we’re trying to do here. The companies that challenge the way they’ve been doing things in the past will be in a much better position once the crisis is over. The world today is global, and there are many companies from Europe and around the world that are coming to do business in Spain. If Spanish companies don’t invest now, they won’t be able to compete against other companies in the future.

A lot of companies probably say, ‘We’d love to innovate, but we really just don’t have the money.’ How do you respond to that?

Actually I think most companies say this! In terms of finding the money to make investments, the first thing companies usually think of is trying to reduce their maintenance fees. But they should be revisiting every aspect of how their business is set up today – improving their existing processes, their data architecture… We’ve also learned that it’s critical to show companies how an investment will affect either their top line – increasing sales – or bottom line – saving money. Without the business case for innovation, companies won’t make the investment in the current economic environment. Another important aspect is financing. This year, we’ve been financing a much bigger percentage of deals than in the past.

What sort of innovations are companies investing in?

Most customers are interested in mobility, especially Afaria. That’s probably because the investment for mobile solutions isn’t very big. We also have quite a few customers on HANA, and a lot of potential projects that we’re expecting to close in Q4.

As the managing director of SAP Spain & Portugal, how have you approached running a business in a financial crisis?

I’ve focused on three areas of change. What I found when I joined SAP was a group of good professionals who were very good at selling ERP. One of the things I’ve tried to do this year is to increase the focus on specialization. We have added a lot of high-caliber people to specialized teams for LOB, database and technology, analytics, and cloud. Another top priority for me has been to create a ‘one team’ mentality. Traditionally in Spain, sales and services were totally separate. Now we’re aiming to attach services to every deal where we’re selling innovation, to make sure the implementation is optimized. Finally, we’re trying to work with the partners much more heavily to cover the market. We’ve also recruited some specialized partners during this year, and this is already paying off. We’re growing 20% in the SME segment; that’s more than any other country in EMEA. I think there are two reasons for this – the channel of course, and the fact that our team has been forced to be more aggressive and do things differently.

Next page: Strikes in Madrid during SAPPHIRE NOW and expectations for growth

One of the big changes you made involved investing in employees. From your perspective, what is the unemployment situation like in Spain and Portugal?

I have to say that most of the people we’ve recruited are skilled workers with experience selling HR, CRM, or mobile solutions. In Spain and Portugal, there’s a lot of unemployment among young professionals looking for their first job. We simply don’t have many positions for people like that. But we are trying to do our part to help the unemployed. We had a team put together and deliver a special SAP training for people who are unemployed. The idea is to give them a basis in SAP so that they might have an easier time finding a job.

What is morale like in Spain – at SAP and in general?

Everyone is concerned about the country’s situation. One of the things I learned when I moved back here is that you have to disconnect from the news a little bit. It’s very easy to get negative if you only pay attention to what’s on the TV or radio. It’s been a tough year at SAP in Spain, but the morale is good. Employees see that we’re making a big effort and doing the right things. I think SAPPHIRE is helping us significantly. The fact that SAPPHIRE is coming to Madrid shows that the company is investing in Spain and it will help us attract potential customers.

What about the strikes?

Obviously it would be better for us if they would happen on any other day. But I’m not expecting any major issues with SAPPHIRE. There might be some people trying to block off roads or interrupt traffic in some areas.

What do you hope attendees take away from SAPPHIRE NOW?

I hope they see that there are good business people and business practices in Spain, and that sooner or later the situation will improve. I also hope that SAPPHIRE will change the perception of SAP in Spain and Portugal. The perception of SAP in this region is good, but people here see us as a pure IT company selling ERP. Companies should know what they can achieve using our innovation solutions, how they can use them to transform their business. On top of that, we have all our specific industry solutions and many customer references in those areas.

Are you optimistic about growth for next year?

I think the country will be in a very similar situation next year as it was in this year – maybe even a bit tougher if we ask for the bailout. But we’ve made a big effort at SAP Spain & Portugal during this year to change the way we do things and reinvent ourselves. So I’m convinced that we’ll have a much better year in 2013, even if the situation in Spain and Portugal doesn’t change much. And I don’t think it will. I think we’ll need to live with this crisis for at least one or two more years.