The executive who has been managing SAP’s North American channel organization since January has been promoted to oversee all of SAP America’s small and midsize enterprise (SME) operations.
Kevin Gilroy was named senior vice president of SME, SAP America, earlier this month. He said the move is further evidence of SAP’s increased emphasis on the channel as a vehicle for growing its sales in SME markets.
“They’ve entrusted [SME] to a channel veteran and that shows the support for the channel,” Gilroy said in an interview. “SAP is well aware that the future of SME with SAP is through a channel play, not a direct play. And that’s an important proof point of SAP‘s support for the channel.”
Gilroy is best known for his 24-year career at Hewlett-Packard, including serving as the company’s channel chief and leading its global SMB operations. Since leaving HP in 2005 he has served as CEO of OnForce and managed Arrow’s Enterprise Solutions Computing group. He was named to the North America channel chief post in January.
Gilroy has taken the post held by Tom Cooper, who is currently on leave and will be taking another post within the company in the fall. While Gilroy’s channel management post will be filled at some point, Gilroy said, “Right now I’m doing double-duty.” Gilroy now reports to Steve Winter, chief operating officer for SAP North America.
"For SAP, building a successful volume business requires us to expand our ability to deliver our products, solutions and services via multiple routes to market," said Rob Enslin, president, SAP North America, in an e-mailed comment. "Our channel business is critical to this approach. Having a senior executive like Kevin Gilroy heading our SME team will accelerate our channel strategy and increase our ability to deliver our industry solutions to more and more SMEs across North America."
In interviews shortly before and after his elevation to head of SME for North America, Gilroy said has been developing and implementing plans for making significant changes to SAP’s North American channel operations. Those include recruiting additional partners, increasing spending on channel-related marketing, and better targeting those dollars toward generating sales leads for partners.
“We’re in a complete transformation, re-engineering mode because we want to grow double-digit. We’re not going to be satisfied with market growth, we’re not even going to be satisfied with low double-digit growth. We’re looking for high-end, double-digit growth. We’re going to triple this business in the next few years,” Gilroy said.
“One tenant of our plan is to materially increase the awareness of SAP in the SME space. We need more and more SMEs around North America to be considering SAP and to really understand how powerful our portfolio is. It's not just an ERP company anymore, it’s a much broader portfolio of products. Our partners are going to see an enormous awareness campaign come up on SAP in the SME space.”
Next: Overcoming "The Momentum Of The Status Quo"“We have a great group of partners, but to be quite honest we need more feet on the street. There are geographic areas where we don’t have enough coverage. There are vertical markets where we don’t have enough coverage. In fact, [for] the math we’re looking at over a three-year planning phase, we need an additional thousand feet on the street,” he said.
While not providing dollar figures, Gilroy said spending for marketing by SAP SME North America is already “double-digit” as a percentage of revenue and Gilroy’s plan calls for increasing that by 35 to 40 percent.
“But most important is the re-purposing of the spending into very predictive, analytically driven lead generation,” he said. “Our marketing spend will be on measureable ROI. There’s a lead-generation machine that already is pretty good, but we’re fine-tuning it to make a predictive analytics-driven marketing machine. And we’re going to pour more gasoline into that engine, which means we’re going to create a hell of a lot more demand and hot leads.”
In making changes to SAP North America’s channel operations and the parent SME organization, Gilroy has had to overcome what he called “the momentum of the status quo” – a problem he has run into every place he has worked. “When you’re driving a change-management agenda – and let’s be very honest, this is a very change-management agenda – there are always people who are not energized by change but concerned about change,” he said.
But Gilroy has been surprised by what he described as “the pent up demand for change by the SMR channel team. They’ve been looking for a breakout move. When I came in I thought I would have to convince them that they need a breakout strategy.” Instead he found people who were waiting for the right leadership to harness that energy and kick SAP’s channel efforts into a higher gear.
Gilroy said SAP has assembled a top-notch team of channel veterans to help manage the SME channel operations, including Mike Coleman, vice president of volume channels for SME; Annie Neubrech, vice president of North America channel operations; Marcus Starke as national vice president of North America marketing; and Andy Flanagan, national vice president of sales for SME, North America.
Gilroy said he has been supported in his efforts by SAP’s top management, including Robert Enslin, president of SAP North America, and SAP co-CEO Bill McDermott.