#90, Renaud Heyd, CFO @ SAP UK: Evolving the role of CFO

0:00We lived in the times of artificial stupidity. Most of the interaction we had with computers was, oh, computer says no, but for no reason, or you don't know why the computer says no. Yeah, yeah. And this is why we're advocating for using integrated systems like ours because you have all the data in the same place. And when you re-engineer your business processes and the underlying data sets, then you have a clean base to enable artificial intelligence.

0:38I have to say this is probably one of the most significant guests we've ever had on. SAP are just one of the most influential tech companies in the world, or maybe even one of the most influential companies in the world, depending on which way you look at it. I was very privileged to interview the CFO for the UK and Ireland region, Renault Haid. We talked about many things. We cleared up once and for all whether it's called SAP or SAP, which was very interesting. But we also talked about the evolving role of the CFO, why SAP are moving their customers into the cloud, how they justify that and how that transformation is going.

1:17We also took apart how ready organizations are for AI technology and the wave of AI adoption, which is coming up over the next couple of years. Plus, we discussed how SAP helped developing nations and how helped their existing customers be more mindful of their carbon footprint score and much, much more. It doesn't really get much bigger than this. It was a super authentic conversation. Renault was very open, very candid and spoke passionately from the heart, which is what the Tech Leaders podcast is all about. It is Renault Haid.

2:00Reynon, I'm so glad that you agreed to do this. Thank you for coming on the Tech Leaders Podcast. How are you today? Yeah, I'm doing great. Thank you very much for asking. I hope you're doing great too. Yeah, fantastic. We've got a lot to talk about today. I've been really excited to speak with you. But I think the best place to start on the Tech Leaders Podcast is our opening question in all of our episodes. What does good leadership mean to you, Reynon? I may offer a different answer than the one usually here. to me a leader and a good leader starts with being the leader of your own life and this is something that I've experienced that really helped me by knowing my values my motives and my trends and this is helping me being a leader of my own life and it helped me make all the decisions in life much easier and I use that as a compass and I believe that when you're clear you have your self-awareness and you are able to lead your life with purpose, it's much easier to lead others because then you're genuine and true and people can read in the way you behave and the decisions you make.

3:11That is fantastic. I think that is very similar to the philosophy of stoicism and focusing on what's in your control, doing the basics well sort of thing, focusing on things things that are directly in your control in your everyday life, I think start with the basics and everything else will come from there. I think that's a brilliant answer. Going back to basics answer, Reino, I love that. So look, I want to jump straight in, okay? Your career, you've had a fantastic career. Some of the listeners who may not be familiar with yourself. So could you give the listeners a little bit of an introduction to yourself and also in terms of your current role and what your responsibility is in your current role?

3:46Yes. So I was born and raised in France. then I graduated in Glasgow, Scotland and from there I started as a young graduate at SAP in Waldorf, Germany and I'm still working for the same company 25 years ago but it all started differently actually when I was 15 I decided that I wanted to be independent and I started a course to learn a vocation to learn a job and be independent in my life and I think that was really helpful for me because it gave me a purpose also and a meaning. And I can only be grateful for the people who helped me back then because it has paved the way for my future. And within SAP, so when I joined the corporate office, and very quickly I wanted to discover more and get involved in different topics.

4:36So I was involved in multiple business areas on group level. And from there, I decided it was time to get closer to the shield. So I took on the role of regional controller for the region EMEA. And after a while, I took the same role for global operations. Then I moved to Belgium to be responsible for financing Belgium and Luxembourg as the CFO. From there, I became a group CFO of multiple global organizations, among which the global partner organization of SAP, which really was an eye opener about the ecosystem around SAP. So SAP is not only an organization, it's also surrounded by thousands of partners who built this ecosystem.

5:22And I was then responsible for leading finals for an integrated cloud business, which helped me learn about the cloud mechanics and how to make a cloud business successful. And six years ago, I moved to the UK. And I did that in Palo Alto, by the way. Of course, being able to experience innovation at the heart of it and be surrounded by software engineers, professors from Stanford really helped me build a better picture of what technology holds for the future. What was it like working in the U.S., especially the west coast of the U.S., in Palo Alto, from a cultural standpoint? I'm not talking about just living in the country.

6:04I'm talking about from the culture of SAP in the U.S. Is it different or have they managed to retain their European culture in the US? Because I know SAP was set up by a bunch of guys who worked for IBM, wasn't it? So it was quite an American element to it anyway. But how would you describe the difference in culture between the US and the European? So I'm glad that you talk about culture because this is what drives me. I've been living in more than six countries so far. And living in the US was one of my objectives because spending vacation in the country is one thing, living as a local for a long period of time is a completely different thing.

6:41And I wanted to understand the American mentality. And you can only do that when you are completely immersed in it and you are treated as a local. I was always on local contracts, so I experienced the life of an American. And I would say that the beauty of SAP is that we can combine the multiple cultures. So, of course, we have the German engineering side that is very strong, but it's combined with the entrepreneurship from the U.S., the art of communication and marketing and branding. And in Palo Alto, it's a melting pot of cultures. In the Silicon Valley, 70 % of the people were not born in the U.S.

7:19So you can't really talk about an American culture, but it's a complete melting pot. And I think this is what makes it so successful, is that everybody comes with their own culture, vision, assets, and make it work collectively. It sounds like you took a lot from that experience. So if I was to put you on the spot then, Reino, and ask you about SAP, in terms of the culture of SAP? I told you I've been with the company for 25 years, and that was never my plan. I never imagined or conceived that I could stay solo. That tells you everything you need to know, really, doesn't it? You've never thought of leaving.

7:51And the reason is the culture and the people. And of course, the opportunities are received. And I'm someone who is very curious, someone who likes to learn and progress and grow. And I did that through the people of the organization and the extreme openness that you can find here. Also, I'm a very genuine person and authentic. And I like the fact that I can be who I am without hiding any part of my personality. And you don't have to pretend. This episode was brought to you by Be Digital. Be Digital support leadership teams to optimize cost and get more out of technology investments. Be Digital and the team have unrivaled expertise with technology license management and data remediation and are therefore perfectly positioned to help prepare organizations for AI technology capability.

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9:09Let's maybe use this opportunity then to talk about your current role and especially the role of a CFO, okay? So I'm really keen to get your take on that. But the role of a CFO, a lot of people is perceived as being very left brain orientated, spreadsheets, numbers, etc, etc. I understand that the role is evolving into more of a right and left brain. And there's a lot more of a people element, the mentoring and the stuff you talk about. What does a typical day look like for you, Renaud, right down in your current role? I told you I've been in the role for six years. and I usually don't stay that long on the role because I get bored and I think that I've seen it all.

9:45The role has evolved a lot and there is a say that you can either change roles or change the role. And I decided to change the role. So as you said, when I started, it was really the left brain. I was responsible for running finance and I was managing people. I was managing a very large finance organization. And we went through a finance transformation journey where we reorganized and out of the one of the people who are touching my accounts, none of them report to me now. So it's a big revolution for me because I moved from a role of being mostly a manager and a little bit of a leader to be a complete leader and a leader without authority to get my finance organization run smoothly but also be a sought leader for my business partners for customers and partners.

10:38The typical day is, I would say, in proportion, it would probably be 40 % statutory role, so really taking care of finance activities, core finance activities, and 60 % being dedicated to conversations, meetings, review, business appraisals for internal matters, and then probably one to two days a week on the road meeting customers and partners. Yeah, sure, absolutely. Which part of the role gives you the most satisfaction, Reynon? What do you enjoy most? I like the combination. I sometimes say that customers can be like alcohol. It can be very exciting in small quantities, but could give me headaches in big quantities.

11:20That's why I'm not embracing a career in sales, because I don't think that would be the right thing for me. But I tremendously enjoy the interaction with customers, and especially when I can inspire customers who are a bit lagging behind us in terms of business and finance transformation to embrace this, to embrace a digital transformation, for example. It can be very daunting. And when you are responsible for a large organization, you want to take calculate risks before you embark on a transformation journey. And I think by being able to share the SAP experience in a very honest way, in a very candid way, it helps people gain more confidence that they can achieve that too.

12:03Sure, absolutely. So I have to ask you this, Renaud, you were the CFO of a different region previously, Belgium and Luxembourg. I'm sure a very big region for SAPs, a lot of big enterprise customers there and things. You're now the CFO of the UK and Ireland region. What's the biggest difference in terms of the UK and Ireland marketplace from the Belgium and Luxembourg marketplace? How does their role and the region differ in your experience? I would say the scale, but also intimacy. Belgium and Luxembourg is a relatively small market and it's a bit like a village. Everybody knows each other. So it's very important.

12:43it's very important that you maintain your brand and and the intimacy is extremely important because yeah your business contacts will move from company a b c from partner a to partner b to partner c so when i talk about the ecosystem it includes the customers and it's a broad family where each member is keeping in touch so the promises that you make you need to deliver that was my learning that you need to act as a business partner, as a tri-sex business partner, and whatever you promise that the technology can do, all the business outcomes that you promise, you need to help the customer deliver on that.

13:22And this is why I kept that in mind, that it's very important to create this intimacy. So when I came to the UK, the previous CFO didn't have this intimacy with the customer CFOs and the partners. And that's the first thing I triggered is creating a SAP customer CFO network so that I can bring this community together and share best practices and that I can understand what is the expectation from the customer from our technology and checking on that, how we're doing. And this is most important in the cloud as we transition from a legacy business model to software as a service. And in software as a service, you've got software.

14:07well, this is what we do best, but also service. And this is where we need to excel because customers will never renew a cloud service if they are not delighted and if they didn't get the business outcomes they expected. So I see my role as being the gate of that, checking with the customers, how we're doing. Is our technology, is our cloud solutions really helping you achieve your business outcomes? So you talk about obviously the transformation, moving your customers from the traditional on-premise ERP into a cloud-based product. How has that transition gone for your customers? I know not all of them have moved over.

14:47How is that transition going? And how do you sell them that sort of idea of having a cloud-based solution? What are the benefits for your customers in terms of moving over to this new cloud product? I would say that the first benefit is innovation. because in the software industry, all the innovation goes into the cloud. It wouldn't make much sense for SAP to continue investing in the legacy on-premise software solutions. So if you want to keep up with innovation, cloud is probably the best option for you. Also, the pace of adoption. In the on-premise world, customers were very often stuck with very old versions of the software.

15:29And for them, moving from one version to the next or from one release to the next was extremely painful and at times expensive. While in the cloud, if you keep the core clean, as we say, that means that if you don't create too much monsters around the core solution that we provide, then we automatically push the latest innovation in your solution. So you might wake up in the morning noticing that a new functionality has been added to the business process you run in our solution. And this is exactly what we want, that seamless adoption of technology. That's something that can only be achieved in the cloud.

16:10Then let me use a buzzword, AI. I promise I won't use it too much in this podcast, but I have to. But I may, Reino. So yeah, apologies in advance. Go for it. AI is based on data. And the data, you can only use AI if the data is in the cloud, because this is where it gets processed and analyzed. And this is why you move your data into the cloud where you can leverage AI combined with the latest innovation that is pushed. But also, I would also charge the customers saying, what do you want? Do you want to have your own resources managing data centers and a technical infrastructure and networks and firewalls and all of that?

16:53Or you want your resources to be focused on your core business, which might be producing cars or delivering a banking service or providing water to a city? And this is the decision that CFOs have to make. Where do I put my resources? Do I continue to put more resources in IT because it gets more and more complex, so you have more and more resources in IT, or I want to put them in my core business? Our value proposition is to say, we take care of everything. Come as you are. Come with what you have. We'll take responsibility of that, hosting it on our own infrastructure and managing it with our experts, but also securing it, making it safe.

17:40cyber crime as a big threat for many organizations. Oh, yes. An organization, a private organization or public organization, can only have so many experts in cyber crime or in cybersecurity, while SAP has employed hundreds of them and the best in the world because we attract the best experts in the world. And we do it at scale. We protect thousands of customers on our data centers rather than you being just on your own. And we do that 24-7, 365 days a year. So I think these would be the three main reasons why customers should choose to move to the cloud. It's for leveraging AI, safety, security, and innovation.

18:29So look, I don't know, and apologies if this is a bit of a stupid question, but I'm going to ask you anyway, because I think it's fascinating. Okay. I understand that an enormous amount of the world's food supply chain is run through your products. Okay. The data, I'm just using food as an example. This, obviously there's other examples, but I was at something like, I think I read 80 or 85 % of the world's food supply chain data is run through SAP. Maybe less, maybe more, but we're talking big numbers nonetheless. Do you work with your customers to achieve efficiency or once you have delivered, once they are working with your product, Because you obviously see their data.

19:05Do you basically work with them for them to become more efficient to save money on licensing costs? I'm not sure. But obviously just basically feed more people and just do good for society. Do you point efficiency out to your customers or is it totally their responsibility once they purchase your product? Thanks for raising the fact that most of the world transactions go through an HTTP system. we claim that at least 70 % of the world transactions, not only for food, but any type of transactions, goes through an SAP system. So it's an honor. We are proud of that, but it's also a responsibility.

19:41We need to make sure that it is safe and we have to make sure that it is serving a purpose. And beyond food, for any business, the purpose of SAP is to help the world run better and improve people's life. This is also a reason why I'm with the company for so long, because it relates and resonates with my own values. But the purpose is to make the world run better. This is all we do, and this is what we've been doing for 50 years. This is why the software is designed. It's designed to improve every business process in an organization. And yes, when a customer is deploying our solutions using it, they build up the data.

20:21the design processes that are optimal. And then we offer a solution that is called Signavio. It's business process intelligence. And this is a solution that is literally mapping all your processes, checking the efficiency of it and benchmarking it. Because as you said, we have access to the arrow. There are probably 70 % of the business players in the world. So this information in the cloud is anonymous. but can be used for benchmarking purposes. So our customers can map their processes in Signavio and then benchmark it with their peer group. And they can see what the gaps are and how much efficiency gains they could generate by fixing their processes.

21:11And then they can simulate this process in a kind of digital twin organization to simulate what the would-be process would deliver before implementing it. For people who are not familiar with digital twin on that term, you're talking about creating a virtual environment test for testing purposes. Is that what you're saying? Yes, exactly. It's creating a virtual company that mirrors your actual company using all the data that you have available in the system. And this is where you can input the new process and see what the output would be on the entire performance of your organization. In terms of developing nations, okay, how much of a footprint do SAP have in developing nations in terms of trying to improve supply chain and improve generally how efficient countries are with their data?

22:03Yeah, very much so. This is probably a big differentiator between SAP and its competitors. We are not an American company. So although the American market is, of course, crucial for us, from the get-go, we've been present in almost every country in the world. and so our footprint is already very strong in Asia, in Africa, so in the Middle East. And yes, the adoption is very high, but you have to approach it in a different way. It has to be easier to consume. So for example, we would mostly use mobile applications because in certain places you don't have the infrastructure to have mainframe systems or cloud computing, but through a very good network of 5G, You can push solutions through mobile devices.

22:52So we have the example of female farmers who are cultivating plants that they can negotiate and sell via the app. And you don't need to read because it's all through icons. And I think this is where technology can be a game changer when you make it accessible to everyone. Technology shouldn't be only for people with a PhD in computer science. You should simplify life of everyone without any IT knowledge. Yeah, for sure. I mean, it's quite astonishing how much of a footprint and how influential in terms of helping countries improve their supply chain with critical infrastructure and food and so on and so forth.

23:40It's fascinating to hear you talk about it. You mentioned AI right now, okay? And inevitably, I did promise you I wanted to bring it up. So let's maybe talk about this for a minute, okay? How ready are your customers for AI capability? And I'm asking you this in relation to data. How easy is it going to be for your customers to benefit from AI capability and large language models? Are you talking to your customers about this stuff at the moment? What kind of AI conversations are you having? It's in every conversation. And we lived in the times of artificial stupidity. most of the interaction we had with computers was oh computer says no but for no reason or you don't know why the computer says no try to buy a train ticket from an automatic dispenser it's very difficult even I do it very often I still struggle with getting the right train ticket with the right price so it shows that we're not there yet And what makes the big difference is, A, the data underlying artificial intelligence.

24:49So this is the big topic. And you said, how ready are our customers? This is a drive to the cloud because they realize that currently their data set is not well managed, not well governed, is inconsistent because they use multiple systems which don't talk to each other. There is no standardization of the data, no harmonization of the data. So a customer could be reflected in multiple systems with multiple names, multiple numbers. A customer could be a supplier, but you will know. So it would be two different entities, although it's only one. So you're right that this is the main issue right now is creating this foundation.

25:35And this is why we're advocating for using integrated systems like ours, because you have all the data in the same place. And when you re-engineer your business processes and the underlying data sets, then you have a clean base to enable artificial intelligence. Yeah, sure. So what products, SAP products, have an AI element at the moment and what products are you potentially going to develop to basically improve the AI capability within your customers or within the organization? You know what I mean? From a product standpoint, point what are you actually doing right now two things first of all we keep on doing what we've done best for 50 years which is bringing intelligence in business processes and so this is nothing new for SAP we've been doing it for again five decades making business processes more intelligent through clever automation and and as you said most of the logistic chain in the world, supply chain in the world, is managed through an SAP system for a reason.

26:39It's because it offers the flexibility, the adaptability to move goods around in record times, re-adjust manufacturing and sourcing. So this is anyway something that we do and it's embedded in everything that end users are touching. And this is how we drive adoption of artificial intelligence is by improving every functionality of the software by adding AI capabilities to it so that customers don't have to say, oh, I need to buy a new module of AI. No, you don't have to buy a new module of AI. You just upgrade to the latest version of the software that will embed AI in everything you touch. So I'll give you an example.

27:22I work in finance, account reconciliations. This is something that will benefit greatly from artificial intelligence, being able to match invoices and payments. And it won't be an additional product that companies will have to license. It's just simply something that a collector will enjoy more and more as we improve the capabilities of AI. and every day it will be easier for the collector to reconcile invoices and payments and freeing up time to engage with customers who are raising a dispute case, for example. Yeah, sure. Now, on top of that, I agree with you. We need to add something more, which is more the intuitive part of AI.

28:04We are all using ChatGPT. Maybe the question you're asking me came straight from ChatGPT. Who knows? I'm real. I can assure you of that. But yeah, I use ChatGPT all the time in search purposes. So it could work. Yeah, you're right. We all do. And why wouldn't we? But joke aside, you want to have the same capabilities when you interact with an SAP system. So ultimately, what I want as a CFO is to be able to say, hey, SAP, show me the performance of my division in Ireland with mid-market customers for the HR solution. and show me that in the diagram, in black and white, because I'm colorblind. This is what I expect.

28:47This is the future. This is how people should interact. It's not right now, people need to have access to reporting. They need to know which report to run. They need to understand what they are getting. And it's displayed in a way that doesn't talk to everyone. Some people can't do with numbers, but they are very visual. They can see graphs and understand immediately. This is where I expect artificial intelligence to help. Or, hey, SAP, I'm the cash collector, and I need to raise a dispute case for my customer McDonald regarding their cloud invoice. And the right screen will show up, and the employee will just have to enter the content or the details of the dispute.