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Fear of Failure is Part of SAP’s DNA

by John Ripma

July 30, 2012

Consider this somewhat gloomy remark made by Dietmar Hopp, one of the five co-founders of SAP:

 “Germans live with a haunting fear that we might fail. That attitude is a clear disadvantage.” 

I don’t think the innate fear of failure that Herr Hopp refers to is unique to Germans and I’m not sure it is a disadvantage.  But I do agree that fear can stop people from trying new things or venturing beyond their own horizons.  Fear of failing is why we seek help and more often than not we find excellent help in the form of technology. 

If Dietmar Hopp and his gang were haunted by the fear of failing, they kept it in check.

To illustrate this point, let’s consider the events of 40 years ago, in 1972.  Dietmar Hopp along with former IBM employees Hans Werner Hector, Klaus Tschira, Claus Wellenreuther and Hasso Plattner created a small company headquartered in Weinheim, Germany called Systemanalyse und Programmentwicklung ("System Analysis and Program Development") or simply SAP.    With one customer, Imperial Chemical Industries, and a handful of employees these entrepreneurs went on to transform the corporate world.  And, if Dietmar Hopp is telling us the truth, fear of failure was with this group of Germans every step of the way.

Failure wasn’t in the cards for fledgling SAP.   In BusinessWeek (European Edition) an article was published back in November of 1997 (15 years ago) called Silicon Valley on the Rhine.   This excerpt exemplifies the impact SAP was having and would continue to have on the world.  

“Indeed, enterprise applications are emerging as a corporation’s most strategic asset – possibly more so than any software sold by Microsoft.  ‘Microsoft’s applications are trivial compared to SAP’s’, says management guru Michael Hammer.   ‘If all of Microsoft’s applications got wiped out, we would have to type our documents manually.  But if SAP’s applications were to disappear, the worldwide industrial complex would grind to a halt.’ ” 

Consider what made SAP unique and appealing from the very beginning.   First, the mainframe was king of the technology landscape and was constantly searching for new and better software programs to run.   SAP R/1 was the first mainframe program to move toward ‘real time’ data processing.  The co-founders believed that real-time data processing could bring complex organizations closer to true business intelligence, and they were right.    Second, the five leaders at SAP were also committed to collaborate and co-create software solutions with their customers, which is a practice SAP continues up to the present time. 

Jumping forward a few years to 1981, R/2 became stable and was ready to offer to the marketplace.   Twelve years after that in 1993, R/3 was ready for commer cialization, sale and distribution.   Then in 1996 The Coca Cola Company, the world’s largest manufacturer of soft drinks, decided to implement SAP R/3.  This decision by Coca Cola accelerated SAP’s acceptance in the US and countries outside of Western Europe.  Incidentally, this is actually when I first encountered SAP and began working with R/3 at Coca Cola on something called the Infinity Project. 

For those of you not familiar with R/3 or the latest version called ECC, let me take you through a very quick scenario of how SAP works.

Let’s use the example of processing a sales order through a global shoe manufacturing company.   An incoming sale triggers a chain reaction of events throughout the enterprise.   First a sales rep receives an order for 1000 shoes from a Portuguese retailer.  The rep logs into their SAP system back at the company headquarters to check on pricing and any discounts the retailer in Portugal might be entitled to.   During this process, SAP’s inventory module checks the available stock of shoes and notifies the rep that half the order can be filled immediately from their Portuguese warehouse.  The other shoes will be delivered in ten days direct from the factory in Taiwan. 

The next step is that SAP’s manufacturing module schedules the production run of 500 shoes in the Taiwan factory and alerts the warehouse manager in Portugal to ship the shoes he already has in stock to the retailer.  An invoice gets printed up in Portuguese.   Of course manpower will be needed to fill this order, but when SAP’s HR module identifies a shortage of workers scheduled to process the order in Taiwan, the personnel ma nager is alerted so she can arrange for temporary workers. 

To keep ahead of future orders, SAP’s materials management module notices that this order put the company below their minimum stocking threshold for shoelaces and automatically prepares a purchase order in Mandarin. 

Based on data from SAP’s forecasting and financial modules, the CEO sees that sales for these particular shoes are trending up in Europe, but trending down in the United States.   He decides to beef up his inventory in the Taiwan manufacturing plant since that is where the shoes are made for the European market, while reducing the number of those particular shoes manufactured in the US. 

Today SAP is still marching forward and adding to its storehouse of enterprise enhancing systems.   SAP is leading the way with their Big Data advancements, mobility, and SAP cloud computing. 

There are many characteristics that are common to mankind and computers, but following the lead set by Dietmar Hopp, perhaps the most significant difference is that men feel fear; computers do not.   Could it be that fear drives men to create machines, computers and software?   

Clearly, machines of all types provide competitive advantages in business, help humans endure the whims of Mother Nature, and even enhance the propagation of our species.  Human beings are endowed with the ability to fear and I believe that ‘fear of failure’ is possibly the most important sensation we humans feel and that sensation drives us to survive and prosper.   Just look at SAP!

John Ripma has been in the field of Information Technology since 1981when he co-founded one of the first PC-based software development and consulting companies in the Midwest. Since then, John has been involved with technology in various capacities as a senior consultant, project manager, sales person, business development manager, and a vice president. John is currently the Southeast SAP Sales Director for Secure-24 and has been in this capacity with Secure-24 since 2009.

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