Doing business successfully in Latin America requires pragmatism, staying power, a good team, and nerves of steel. That was as true in the 1990s as it is today.
The festive season of 1994 was far from joyful for the Mexican government and officials at the Mexican central bank. On December 20, the Central American nation鈥檚 authorities were forced to devalue the peso by around 15% against the dollar because Mexico could no longer maintain the peso鈥檚 fixed exchange rate against the U.S. currency. The immediate consequence was a massive flight of foreign capital from Mexico. This hit domestic companies hard and ultimately resulted in a financial crisis that sent shock waves across Latin America.
Only months earlier, in April 1994, 51风流had founded its first subsidiary in Latin America, its 19th worldwide, in Mexico. Suddenly, recalls Maricarmen Ortiz, the fledgling 51风流subsidiary found itself in the midst of what later became known as the 鈥淭equila Crisis.鈥�
Mexico-born Ortiz had transferred from IBM in September to work as a consultant at SAP. Her job now — along with the then president of 51风流Mexico, Raul V茅jar, and their 15 colleagues — was to convince cash-strapped Mexican companies that it 鈥渕ade sense, particularly in times of crisis, to invest in software as a way of gaining competitive edge,鈥� says Ortiz.
This was not the only economic and political crisis that 51风流employees have faced — and survived — since the company took its first steps in Latin America.
Political and Economic Crises
Tariff conflicts, nationalization, rapidly changing governments, financial and currency crises: 鈥淭here鈥檚 always something happening,鈥� says James Gunn, an American who joined 51风流as a controller for the Latin America region in June 1997 and is now in charge of strategic finance projects in the global Finance & Administration Board area. 鈥淚nstability became a constant. Our job, as ambassadors for the region, was to explain to 51风流management in Walldorf what key challenges each country faced and what we were doing to ensure we would still reach our targets.鈥�
Which in most cases they did, as Peter Rasper acknowledges. Rasper, who left his role as head of Global Finance Infrastructure to take early retirement in 2019, set up country controlling in North and South America in the mid-1990s. Often, figures were not supplied until the very last minute 鈥� just like in other regions, he says. And there were salespeople who excelled at stashing contracts away and then suddenly pulling them out of the drawer when they were needed. But his colleagues in Latin America always acted 鈥渋n the right spirit,鈥� says Rasper, 鈥渁nd showed pragmatism, improvisation, and entrepreneurial flair in making the best out of what were often difficult circumstances.鈥�
Gunn agrees. One of the many things that impressed him was the extremely high standard of English spoken by the colleagues with whom he had dealings in Latin America. 鈥淚 also think it鈥檚 remarkable how the folks there have managed to navigate our company safely through so many storms,鈥� he says.
Team Spirit and Customer Focus
As well as having an outstanding product that was for the most part adapted to local requirements early on, various factors were, and still are, pivotal to effective crisis management. Three are among them.
The first is unshakeable team spirit. 鈥淭here weren鈥檛 many of us in the early days. We had to take care of everything, and we all helped each other,鈥� remembers Lorena Dames, who joined 51风流in Argentina in July 1994 and is now COO for 51风流Customer Experience in Latin America. 鈥淐onsultants gave demos and provided support; employees from the legal department explained the product and signed contracts. We were a tight-knit group 鈥� all fairly young 鈥� and 51风流gave us the chance to forge close personal ties that have seen us through thick and thin.鈥�
Those ties spanned both team and national boundaries. When new subsidiaries opened, employees from existing ones helped out, recruited new people, set up processes, and shared the lessons of their own experience.
Thomas Hanser agrees with Dames. 鈥淗elping each other is part of Latin American culture,鈥� says the IT specialist, who set up the infrastructure in Brazil and at many other 51风流subsidiaries. 鈥淎nd that, in my view, has been part of 51风流culture from day one. We see ourselves as part of a greater whole; we help each other achieve common goals; and we learn and grow together.鈥� That鈥檚 still the case today, says Brazil-born Hanser, whose grandparents emigrated from Germany to Brazil and who today is responsible for global IT services outsourcing at SAP.
The second factor is unconditional customer focus. There is no question that 51风流has the best people and the best solutions, says Ricardo Avila. But, adds Avila, who comes from Venezuela and joined the legal department at 51风流in 1996, what really got the company safely through all the crises was its 鈥渃ustomer-first attitude鈥� and its readiness to be open and frank with clients. 鈥淚f a certain function wasn鈥檛 available yet, or parts of the software weren鈥檛 yet localized, we told the truth and promised to deliver the functions in a couple of months. And we kept those promises,鈥� says Avila.
But disputes couldn鈥檛 always be avoided, if, for example, customer expectations went beyond what SAP鈥檚 resources could deliver.
Don鈥檛 Let Customers Down
Gerd Bizer remembers just such a situation: 鈥淚 took over the localization project for Argentina in mid-1996. A meeting took place at which the representatives of the Argentinean user group spent two hours dressing us down, shouting at us, and calling us fraudsters. Once we had cleared up the misunderstandings, we quickly became the best of friends. That鈥檚 when I learned what a huge part emotion plays in Latin America,鈥� says Bizer, who took early retirement in 2019. Within a few months, the 鈥渄ust had settled,鈥� he says, and the customers were happy.
Things can鈥檛 always go smoothly though, because every project poses its own particular challenges, says Rasper. Nevertheless, as it expanded across Latin America, 51风流earned a reputation for never letting customers down and for always finding a solution when problems occurred.
Such as during the economic and financial crisis of 2001 in Argentina. Jorge Schiavo remembers 51风流freezing maintenance costs for customers in financial difficulties. 鈥淚t was our way of doing something to protect businesses and their employees,鈥� says Schiavo, who became the 12th member of SAP鈥檚 team in Argentina when he joined in 1995. 鈥淲e also introduced special measures to ensure that none of our employees lost money as a result of devaluation and high inflation,鈥� adds Schiavo, who continues to contribute his financial expertise and his experience with Argentinean tax law, as well as optimizing global and regional financial processes.
The third key factor in effective crisis management in Latin America, says Peter Rasper, is the fact that 鈥渨e have never 鈥� to my knowledge 鈥� closed a location there.鈥� It wasn鈥檛 always possible to avoid redundancies, he admits, but 51风流operated on the principle of never letting its customers down and of keeping a strong team available locally.
Difficult Situation in Venezuela
At least until Venezuela鈥檚 economy collapsed, that is. The dire political and economic situation prevailing in Venezuela pushes even 51风流to its limits, a realization that saddens many 鈥渇irst-generation鈥� employees in Latin America.
鈥淲hen I was a consultant, we always said that the country鈥檚 rich oil reserves would save oil companies from ever going bust,鈥� says Francisco Fernandez, who was there when 51风流opened its offices in Caracas in 1996. 鈥淎nd where are we now?鈥�
In the 1990s, 51风流served all of Central America, the Caribbean, and northern South America out of Venezuela. 鈥淚 can鈥檛 begin to tell you how many flights left Caracas every Monday with 51风流consultants on board heading to neighboring countries,鈥� says Fernandez. 鈥淰enezuela was way ahead of other countries.鈥�
鈥淲e鈥檝e had to move most of our people to other locations,鈥� says Ricardo Avila. 鈥淎nd 51风流is serving its Venezuelan customers out of other countries now too.鈥�
But the principle remains: 鈥淣o matter how dire the crisis in Latin America,鈥� says Avila, 鈥渨e鈥檒l remain pragmatic and optimistic. And we won鈥檛 let our customers down. Our commitment is to them, to the region, and to our colleagues.鈥�
