Q: It’s now been 7 months since you’ve taken over as managing director of SAP Mexico and Central America. What have been the important milestones so far?
The first milestones were setting up and executing the 100-day action plan, which allowed us to build our core processes. There were four major priorities in the plan: making the short-term numbers; solving critical customer issues; building a governance system; and finally, building a three-year strategic plan. The management team did a very good job in fulfilling the expectations of this plan. As a result, we started building a midterm plan, called the 1.3.3., which has the goal of turning our subsidiary into one of the top ten subsidiaries worldwide, by tripling our software business in three years. On a regional level, the plan is called 1.5.5., meaning that we also want to become a leading subsidiary, multiplying our software business by five in five years – which is a little more aggressive.
The other framework for evaluating our milestones consists of short-term results. During the first quarter of 2011, we grew very nicely in the software business by 63%, and in Q2 we grew 76%. Each of those milestones shows very strong results.
Q: What’s the situation in your local markets today? What are “hot topics” in the industry there right now?
The situation in general in our markets is very positive. In Mexico the economy is very healthy right now. We are having growth rates of around 4- 4.5% of the GDP, so that is a fairly optimistic scenario for our industry in general. In Central America the situation is very similar or even more positive, with economies like Panama growing 8% over the last seven years and Costa Rica growing a little less than that but on a sustained basis. We are living in a very healthy economic environment.
The other thing that is very positive in the region is a strong drive for innovation. We see a lot of customers looking for projects that lead to greater competitive advantage, more productivity, and higher margins. We also see the willingness to invest, innovate, and take some calculated risks. So, when you compare good economics with a good investment attitude towards our solutions or innovation in general, it turns out to be a very positive scenario for SAP.
Q: What challenges do customers in the region face? How does that affect SAP?
We all know that Mexico and most of Central America went through a difficult time. Now customers are leaving the crisis behind, and have a big lineup of projects that were not funded during the crisis and now need to be prioritized and executed. So, that is the first challenge for many of our customers.
The second challenge is driving productivity. Now that they have confirmed that the positive economic environment can justify many projects, these companies face a huge list of pending projects and they do not necessarily have all the time or resources to implement them.
The third challenge is the clear bottleneck in the SAP ecosystem given the strong growth rates we are experiencing. This means there might not be enough consultants and implementation specialists now that the market is growing so fast. It takes time to react to that increasing demand with capacity.
Q: What are growth drivers in Mexico? Which industries and solutions are important?
In terms of drivers, the numbers that we saw in Q1 and Q2 demonstrate where the main areas of growth are. Clearly, business analytics is a huge growth area, including the SAP HANA platform and some other sophisticated business intelligence tools that we have. The second growth area as a market is the public sector, which has had tremendous growth in Q1 and Q2. And we see a very strong pipeline for the second half of the year. The third area is retail, which was also the star in Mexico during the first half of the year.
Q: What role does the SAP BusinessObjects portfolio play in your markets? What do you hear from customers?
The SAP BusinessObjects portfolio plays a key role in the growth of our business intelligence solutions. If you look at the numbers for example in Q1, we grew 150% compared to the previous year. That was purely the SAP BusinessObjects solutions; so, that is clearly a critical component in our total sales. We also increased our market share in the first half of the year and during the last few months of 2010. In terms of what customers are actually saying, most feel that a business analytics solution that naturally integrates into their ERP system, and is strongly supported by SAP in terms of that integration, adds a lot of value to their IT environment.
Q: How do you see the midmarket evolving? What’s the customer feedback on SAP Business ByDesign and SAP’s other SME solutions?
The SME market is also growing very fast in our region. We had more than triple-digit growth in the first half of the year in terms of indirect sales. In Central America the greatest majority of the growth is coming from SMEs. Mexico is one of the biggest markets for the SAP Business One application in the world. And the SAP Business All-in-One solutions have also been very strong in our region. Around 70% of our customers come from the SME market and most of them are using SAP Business All-in-One solutions.
We just launched SAP Business ByDesign in early August, so it’s fairly new and we have not received a lot of feedback from customers yet. It is clear though that the flexibility and the financing model embedded in the licensing model are very attractive to them.
Q: What are your personal goals as managing director? What is your vision for SAP’s future?
My vision and mostly the team’s vision for Mexico and Central America is very well summarized in our 1.3.3 plan, which basically says that we are aiming at becoming a number one subsidiary by tripling our software business in three years. How are we going to do that? We have around thirty initiatives that support seven major areas, like people, management, our solutions, our markets, and so on. Those seven key areas, and their thirty initiatives, make sure that we will be able to get to those numbers in three years. Actually, if we look at our current performance, I think that we will triple our business much earlier than three years.
With over 12 years of experience in the IT and software industry, Diego Dzodan is the managing director of SAP Mexico and Central America. During his six years at SAP Latin America & Caribbean, Diego served as vice president of Large Enterprise Sales at SAP Brazil, general manager of SAP Colombia, director of value engineering, and director of competitive sales. Before arriving at SAP, Diego cofounded and was president of Certant, Inc., a regional business and technology consulting company. Born in Buenos Aires, Argentina, Diego holds a Bachelor’s degree in accounting from the Universidad de Belgrado and an MBA from Harvard University.