Vyacheslav “Slava” Orekhov is the youngest managing director at SAP, yet he leads the difficult CIS (Commonwealth of Independent States) region with wisdom beyond his years.
How is the CIS region currently doing, especially in SAP’s innovations segments?
Slava Orekhov: Nothing has changed so far in an overall difficult situation. The consequences of low oil prices have gravely affected Russia as one of the largest supplier countries. The ruble has lost value. Economic sanctions and countermeasures are putting a strain on the business climate. We have seen many customers suspend previously planned investments.
On the other hand, we now perceive a great need for simplicity and innovation, such as SAP S/4HANA, from companies in our region. The demand for cloud solutions is also bringing in customers, because SAP is one of the first and few suppliers in this market segment in the CIS region that complies with local legal requirements.
The situation is very similar to the one during the 2008/2009 crisis, when we won many new customers. Forty percent of our revenue in the first quarter of 2015 came from “Net New Names”. Experience shows that these customers will slowly increase their business volumes with our help.
This way, the current situation even allows us to rise higher above the competition than ever before – because we are anchored more deeply in the region, form closer relationships with our customers than our competition, and because we have perseverance.
What are the current business needs of companies in the CIS region? Are there any basic trends?
Many companies are transitioning into the digital age. As I said before, we can draw parallels to the years 2008/2009. Both today and back then, the companies in CIS took advantage of their pause in investments to map out their future course. This process often results in transformation projects, for which the companies need our help. At the same time, the competition for the brightest minds has become very intense. The top talents use such times to decide which company is best suited for them. Strategic transformation projects are the perfect way to engage the best talents and keep them in the company with challenging tasks.
In what way do the current circumstances influence the general employment situation, especially in Russia?
The unemployment rate has grown, of course. But the economy will rebound because labor has become cheaper overall for the companies. We will be able to open a Custom Development Delivery Center in Russia this year, because we can hire skilled personnel at reasonable cost.
In growth markets it’s generally quite difficult to find suitably qualified people. Is this still a challenge in CIS?
Unfortunately, this remains a problem. This is not so much an issue with developers, but it’s a big challenge finding people with industry know-how. There is also a gap in technical and business knowledge. This is particularly evident in governance, risk, and compliance. Plus, it is not always helpful to bring in foreign colleagues because English is not prevalent in Russian companies.
The good news is that our CIS team is a united group with colleagues dedicated to helping each other out. Also, the SAP University Alliances program has enabled us to maintain a good relationship with about 80 universities, and we have reached out to around 50,000 students in the past year. Some of the graduates still work for us. A survey has revealed that many young people are interested in the IT sector but do not know what really awaits them there. So this year, we have decided to send some of our SAP leaders to the universities to explain how the IT world runs.
The SAP Forum in Moscow is always a great opportunity to network with customers. What is the business outcome of this year’s event?
This year, we have generated more than 100 leads for SAP S/4HANA – the topic of the event. Secondly, we have managed to increase our sales pipeline so much that half of our expected total revenue is covered just through potential deals. The presentation of our disruptive innovation SAP S/4HANA to the Russian market generated extremely high interest and by now we already signed 12 deals on this solution – including Georgian Railways that I’ve mentioned earlier. The 3,200 visitors were more than we have ever had before. And this is only in Russia – other forums we have planned for the CIS region this year are not included in these figures.
According to a recent survey, SAP CIS customers are pretty much satisfied. Why?
It is a compilation of several things. First of all, we communicate a lot with our customers. We also started several initiatives last year. For example, we started inquiring our customers about the project development after 100 days. We openly take responsibility for the project’s success, which the customers value highly. This commitment goes beyond our support for strategic customers, by the way. The number of delivery colleagues, who support customers with specific requirements, has increased as well. Lastly, we also teach our partners and customers how to best approach a project – for free.
Where do you see room for improvement?
Localization will remain a great challenge when legal changes and new tax regulations have to be implemented quickly. We still have to improve in this area. We have managed to get a handle on the higher maintenance costs resulting from the weak ruble – our customers pay the fees in euros – by introducing a special internal exchange rate. Our customers approved of this measure because their total cost of ownership continues to decline and stays predictable – just as we planned. This means we are sacrificing some of our profit, but the loyalty of our customers has become much stronger.
You are the youngest managing director within SAP. What advice would you give to a junior account manager starting his career?
I always tell them that SAP is first and foremost a global network organization. The more people you know, the more you will profit from this network. There is so much knowledge behind our enterprise that at some point, you simply start finding the answers to your own questions. Remember, everything is possible at SAP – as long as you have a team-oriented mindset, do your job well, and always put your customers first.
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