SAP CFO’s Big Gulps

Finance chief Werner Brandt has handled three multibillion-dollar acquisitions for the enterprise software company since 2008, and now he’s gearing up for a fourth.

For Werner Brandt, CFO of enterprise software company SAP, the biggest challenge of the past few years has been executing, financing and integrating a steady stream of acquisitions. SAP purchased Business Objects for $6.7 billion in 2008, Sybase for $5.8 billion in 2010 and SuccessFactors for $3.4 billion earlier this year. And in May, it agreed to acquire e-commerce company Ariba in a deal valued at $4.3 billion.

When it comes to integrating acquisitions, there is no one-size-fits-all, Brandt says. “One of the learnings for us was that it is good to treat every acquisition differently from an integration perspective, depending on the reasons for the acquisition itself.”

“For example, we implemented Business Objects into SAP straight away because from a product and solution perspective, it was an enhancement of SAP’s existing solution,” Brandt says. “In the case of Sybase, we acquired a company which was very strong in the mobile and database business—fields we wanted to expand in—and we decided to integrate in phases over two years.”

The SuccessFactors deal moved SAP into a new market, he says, so the company did what he refers to as reverse integration: “We took the cloud business we already had at SAP and combined it with the acquired cloud business to create a new SAP cloud unit under the leadership of Lars Dalgaard, the former CEO of SuccessFactors.”

Another of Brandt’s major projects over the past few years has been the globalization of the company’s finance function. “SAP’s finance function incorporates the field finance organization, controlling, legal and the global finance infrastructure, as well as corporate functions including tax, treasury, and equally governance, risk and compliance,” he says. “All of these functions are set up such that the heads of the functions have global responsibility, so we have a global finance function for the entire organization.”

SAP has also been investing in its shared service center infrastructure as another way to improve efficiency. “Finance transactions are managed out of three service centers in Europe, the Americas and Asia Pacific,” Brandt continues. “We have all of our transactional processes integrated into the shared service center, including purchase-to-pay, order-to-cash and record-to-report.”

SAP, with 14.2 billion euros ($18.4 billion) in 2011 sales, continues to focus on growth. By 2015, the company aims to achieve revenue of 20 billion euros ($24.6 billion), as well as a non-IFRS operating margin of 35%.

“In addition to our core business, applications and analytics, we have defined three major areas of growth: cloud, in-memory and mobile. Among these, in-memory, with our in-memory technology SAP HANA, has the highest growth potential,” Brandt says. “On top of this, we have launched growth plans for some of the emerging markets such as Brazil, China and the [Middle East and North Africa] region. In China, for example, we are planning to spend $2 billion by 2015 on four key areas: creating solutions, extending our geographical footprint in the country, building our support network and nurturing the local IT ecosystem.”

Brandt, who joined SAP as CFO in 2001, has served as the company’s interim human resources officer and labor relations director since July 2011. He began his career at PricewaterhouseCoopers before moving to Baxter in 1993, and also served as CFO of healthcare company Fresenius Medical Care.

 

 

See Treasury & Risk’s 2012 100 Most Influential People in Finance list here.

See a slideshow of the CFOs on this year’s list here, and complete coverage of the list here.

 

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