Executive shuffle rolls through ERP industry

Cloud transition is difficult

The question that remains is this: Was 2019 an unusual year for executive change in SAP and the ERP industry or was it a case of nature taking its course?

The changes happened at the CEO level, which is generally stable, and it could be a matter of ERP vendors feeling the pressure to get their customers to move their systems to the cloud, said Chris Devault, director of industry relations at Panorama Consulting Group.

ERP vendors are still trying to formulate cloud plans and it has been difficult to get customers to a cloud or multi-tenant state in big numbers, Devault said.

"They've done a good job from a marketing standpoint and a sales perspective in representing what the cloud picture is going to look like," he said. "But when you start actually implementing these applications, you have your EAM [enterprise asset management] talking to your ERP, you have field services talking to ERP behind the scenes and that's still a nightmare for a lot of these vendors."

Some of the vendors may be looking to bring in executives who have ERP industry experience with other firms because they promise some consistency but can also bring in some insider knowledge.

"You have [Roos] at IFS who came from SAP and he obviously knows in-depth where they've been and where they're going," Devault said. "It's a bit of a unique year, and I think everybody's trying to figure out what everyone else is doing and trying to hide that burden that's behind the scenes as much as possible."

The executive changes are representative of changes that the large ERP vendors are undergoing, said Eric Kimberling, CEO and founder of Third Stage Consulting, an ERP consulting firm based in Englewood, CO.

"The industry is in a major state of transition and turmoil as they rush to the cloud and migrate from legacy on-premises environments," Kimberling said. "The result is the need to completely rewire their organizations to support cloud-based products and ecosystems. This requires strong organizational leadership in addition to a strong technical vision, which is something not all executives are cut out to handle."

Economic pressures from investors may have also played a role in the executive shakeups, according to Kimberling.

"In the case of Infor, private equity firms invested heavily and expect to see strong returns as part of its transforming business model, and this could be contributing to its executive shakeup as well," he said.

Grass may be greener at smaller firms

People shouldn't read too much into the ERP industry executive movement, but market conditions may play a role, said Jon Reed, co-founder of Diginomica, an enterprise computing news and analysis site.

"When executives leave companies, you have to look at what market pressures they might have been feeling and why they think the grass is greener elsewhere," Reed said. "There's no question that running a software firm that has a big on-premises install base on older releases is a huge challenge right now. You can see why executives would want to be in situations where that is not an issue, either for customers or Wall Street valuations."

Sometimes an executive from a large company moved to a small startup because of the technology. That was the case for Hala Zeine, who took the role of chief product officer at Celonis, a Munich based startup, after a long career at SAP.

It was not easy to go to a startup after 19 years at SAP, but Zeine was convinced after seeing Celonis' process mining software in action.

"I was at a meeting with someone who was looking to reorganize his entire supply chain. He was asking the fellow C-suite executives in this meeting for advice and to exchange experiences and one of Celonis' customers said, 'Don't even think about starting that process without Celonis,'" Zeine said. "He plugged in his computer and started demoing and I was blown away." Zeine immediately sent an e-mail to Celonis CEO Alex Rinke and subsequently left SAP to move to Celonis.