Why can’t SAP keep a UK MD for longer than two years?


SAP has announced that yet another UK MD is moving on. Michiel Verhoeven will step down as managing director of SAP UK and Ireland at the end of Q1 2023. The announcement comes 2 years and 7 months after his appointment. The latest departure marks the twelfth UK&I managing director to leave SAP in 16 years.

After taking the role in July 2020, Verhoeven gave his first media interview to ERP Today and said that the quick turnover at SAP showed “we’ve not been particularly consistent and reliable for our customers and partners in the way that we should be” ­­and that he was “hoping to do better than [two years] in terms of tenure”.

Verhoeven had previously occupied several senior roles within SAP and told ERP Today that “it’s been an aspiration of mine to be responsible end to end for an SAP business” and went on to say that “leading the UK & Ireland business was a great opportunity and one that he was relishing.”

During his tenure, Verhoeven made a positive impact on customers and the SAP user group so it’s surprising that a long-time SAPer who finally got a top job should leave for pastures new.

Commenting on Verhoeven’s departure

Paul Cooper, chair of UK and Ireland SAP User Group (UKISUG), said at the last UKISUG conference in Birmingham that Verhoeven wanted “to listen and to understand” and that “there’s definitely a greater degree of engagement [with] much more emphasis on what the user group can do for SAP and what they can learn.”

But after expressing the priority that SAP builds trust with customers, it doesn’t look promising after MD number 12 passes through the revolving door. Now, with under four years left until the ECC6 deadline, and with SAP user stats showing dissatisfaction in SAP services at the last UKISUG, SAP chiefs must find a new leader who can navigate the challenging timeline until the end-of-life deadline in 2027.

Cooper told ERP Today this afternoon: “UKISUG has enjoyed a great collaborative relationship with Michiel, so we are sad to see his departure. Michiel has been supportive of the whole UKISUG community, and we welcomed his strong focus on customer success. Together we have fostered greater transparency and a valuable two-way dialogue between SAP and its customers. We wish Michiel well and look forward to continuing this momentum with his successor.”

Rohit Nagarajan, president EMEA North at SAP, said: “The UK&I continues to be one of our largest market units. Michiel has been integral to the continued success of SAP in the UK and Ireland, and leaves with our best wishes. He can look back on his time with SAP with great pride and has been a central figure to ensuring SAP invests over €250m in the region in the next three years.”

Why is this a problem for SAP?

One could argue that Verhoeven has done a great job and ten years at any company is long enough for most people. His stewardship of the UK and Ireland business lasted more than 2 and a half years and he has overseen the onboarding of numerous S/4HANA customers and fostered a positive relationship with the user group. It could be said it’s been a job well done and changing leaders is not so significant. However, there is an important reason why the stability of leadership is vital for SAP which harks back to comments Verhoeven made in his first interview.

Customers are facing big decisions. Decisions that have long-lasting implications and which are easier made when the landscape is settled and predictable. There are literally thousands of SAP customers at an inflection point: stick or twist. Stick with SAP and move from ECC6 to S/4HANA before 2027 or prepare to find an alternative ERP provider before the imposed deadline.

Whilst few mid-tier SAP customers will make that decision based on how long a UK MD has or hasn’t served for, the change of leadership creates a degree of instability which will not foster confidence.

Despite booming cloud numbers and stellar growth for S/4HANA in recent quarters, SAP has a huge challenge on its hands and some important decisions of its own to make. The growth in cloud and S/4HANA is not being driven by swathes of existing small and mid-tier customers – instead, it is being powered by big enterprise and net-new wins. That dynamic is going to present a big dilemma for SAP at some point in the next three years: does it accept that a significant proportion of its install base won’t switch to S/4 and allow them to drift away or will it find a way to make RISE with SAP palatable for its bread and butter customers?

In a previous ERP Today article, we said that SAP won’t maintain its position as the global ERP leader with a solution that only works for the top 10 percent of its customers. Despite significant progress since that article in February 2021, SAP still hasn’t quite found the solution to the ECC6 deadline and with time running out, any new UK MD will have to hit the ground running, fast.