Jumping Into Treasury At the Deep End with Steffen Diel

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To this week's Treasury Career Corner podcast where I interview treasury professionals about their treasury careers. Each and every week I talk to treasurers about how they've built their careers, where they are now, where they see both themselves and the treasury profession. Going to next in this week's show, delighted to be joined by Stefan Diehl, the Senior Vice President, head of Global treasury at SAP se. Now SAP, everyone knows this in finance, it's one of the world's leading producers of software for management of building business processes, developing solutions across organizations and information flow and everything else. And we'll get into that a little bit later with Stefan. But the company and the group was actually founded back in 1972. It was abbreviated to SAP. So I'm not going to say all the details there, but it's grown from five people back in 72, as Stefan just explained, to 110,000 employees globally. Great story, but as always with the show, I'm going to hand over the microphone to Stefan. Maybe if you would, Stefan, take us back to your, you know, the beginning of your career and how you first ever started. Like many of my guests, you started in banking and then discovered the wonderful world of Treasury. But back to you, sir.

Yeah, thank you very much Mike and thank you for having me in the show. Thank you. I'm excited to be here. When I look back quite a few decades now to the beginning, I would say that my, my interest in, in financial markets really started in the last few years of my school career. And then I really decided to, to start an apprenticeship as a bank clerk with Deutsche bank just to test whether this is something for a more sustainable career later on. Learned a lot during those two years, was also assigned. It was the 1990 coming down of the Iron Curtain, so I was assigned to the eastern part of Germany, which was a great experience at that age. But it was very clear that I would like to go further with studying business administration. And after those two years I indeed started International Business Administration to get a university degree. But I was still working for Deutsche bank which, which gave me a decent salary at the time and that helped a lot, I can tell you. And then towards the end on the last phase of my studies, I really got strong interest in treasury topics and I decided to do my master thesis for a mid sized company on their FX hedging strategy, which was very interesting topic at the time. After my studies I returned to Deutsche Bank. I worked as a deputy branch manager and a relationship manager for business and private clients. But it was kind of clear that I would like to change from a bank to a corporate environment. At the time I really wanted to work on the, let's say original problem in the business. Rather than providing tools, providing different products to solve the problem problem, I really wanted to work in the original business problem environment.

So to say you had this exposure to treasury, which is actually quite unusual. I think we've recently done a series of podcasts with the guys at Corporate Treasury 101 and about people saying how do they get into treasury as a graduate, you know, things like that. Now you sort of came across it. Was it part of the course? Again, that's quite unusual because then it gave you that interest level or was that more from the banking side? Where did that come from then?

As I said, I think it kind of developed during the apprenticeship at Deutsche bank and also during the studies where I was most interested in the finance topics. I think it really gradually developed over time. But then when I really started my career after the finalization of my studies, there was a clear ambition to go into Treasury. So that was passion, I would say very early in my career, joined a.

Company that this is before SAP and everything else and became head of Treasury. Can you give us a bit of a background to that, what, what that role was like before you then joined the size of the company of SAP, what was that like?

And talk us through that was an, actually an interesting start at that company. I mean I did apply for quite some jobs in treasury during that time. Was a bit of a difficult economic environment back then and the labor market was tight. But fortunately I got this head of treasury position at IWKA at the time. Now it's called Kuka. Actually it was a one man show. There was not much of a outlined function for that, but there was a treasurer as my predecessor and when I arrived, my predecessor told me, well look, I will be there for another two days and then you are left on your own. You can imagine being only nine months out of university, I was really shocked about this statement, but it turned out to be really a great opportunity. So there was a bit of process description, there was a bit of rules for the treasury function, but it was really something scattered and more, let's say combined with accounting topics and everything. So I really had the chance to shape the treasury function, to describe and define processes, to describe and define interfaces to accounting to the planning areas. I wrote, let's say, my own treasury guideline based on the knowledge I had and of course a lot of interactions with other treasurers got into contact in the first one or two years at the end of the day was a great start because I was also forced to learn to swim very quickly, take my own decisions, build a team step by step, which also helped me as a young professional in that role to really push that up to a professional function, to recruit people step by step to find the right place also for the strategic aspects of the function at Kuka. So that was a great start and once in a lifetime opportunity to, you know, to being able to shape the whole function.

It's an interesting point you make there. There's a guy who's a regular listener to the show. You'll know who he is. I won't name check him here. He stepped into a very similar situation with the UK private listed or privately held company. They will list at some stage later but smaller group and things. But he was, you know, had the experience as a Treasury manager. He went in there as head of treasury of a one man band, you know, treasury and that was not a criticism but he was like, he came back to me and said, oh, have you got a bit of an ebook maybe of some of the things about, you know, the checklist that you can come in now as you said, you went in there and made up your own guidelines. You created them from going out to different peers and colleagues. If someone's in that similar situation, how would you suggest they do it? Because I know that we meet up regularly, we're going to meet up at conferences soon. Did you go and meet those guys or did he go back to your books or what was the sort of guiding light, if you like, for you in those early days?

Yeah, I think it's really a variety of tools and activities that you can use to get speed on the treasury topics. Of course there was some dedicated knowledge from my university time. There was some interactions, as I said, with fellow treasurers that I met at conferences. Of course there is the association of German Treasurers which provided some, some guidance on the topic and it's really reading articles in magazines that, that focus on such topics. So it's really a variety of information sources that, that I used and I, I would actually recommend that because only relying on one or two sources gives you not the full picture and I like to have as much information as, as possible to really have very comprehensive view of the topic and then I can make a decent decision on, on what to focus on.

And one of the reasons he's actually recently moved on because he said he did all that and he got it to a decent state but he Then wanted more. You know, he wanted, you know, mentor and he was looking for mentors outside of the function because he wanted someone to guide him. Now you've then made that transition from a smaller group to a larger group and the global leadership position as well. What was that like for you?

We.

Was that one of the things you were maybe searching for at the time, would you say? Or did it just. Actually it was just the next. Next time to move. What influenced that if you like?

That of course is an interesting question. And have been with Kuka for eight years. Then at the end of the day when I moved to SAP, I mean by the time it was really a lot of things going on in the company itself. We, we have. We had to deal with the first shareholder activist in Germany. There was a lot of rebuilding within the company, a lot of finance support needed for M and A transactions as well as divesting activities. So there was a lot to learn and a lot to to do. It was a small headquarter with only 60 people covering all functions. So you really could learn a lot beyond Treasury. But at the end of the day, some stage the learning curve becomes flatter, becomes more not so exciting anymore. And then I think that was the, the driver behind something else. Of course I had also the. The ambition to lead a larger team in a more professional organization at the SAP. Opportunity came along at, at the very best point in time. But those were the triggers I think for moving on from Kuka.

And you joined SAP. Can you everyone in them find out? So they just heard of the group and everything else but pretend we haven't just got off your spaceship and you're explaining what the company does, who you are and things like that. Maybe you could explain that from a basic point of view and then we'll sort of explore a bit more about when you joined them, what it was like. So obviously there was a number of years ago now, 16 odd years ago I think we said before, you know, wow, talk us through that if you would.

Yeah. As you said at the beginning, SAP is the market leader in enterprise application software. We help our clients which have all sizes and work in all indust to become intelligent and sustainable enterprises. I mean we started with ERP with our one ERP product back then 50 years ago. And that turned out to be a very big advantage because by providing that product we could accompany our customers along the value chain. And when you look at the situation today, still 77% of the global transaction revenue touch an SAP system in some way or another. And this gives us the unique opportunity to really help all of those customers in their business transformation, in their digital transformation, irrespective of the industry they work in. So this is what SAP is all about. In the meantime, it's a company of more than 110,000 employees. Last year we had a total revenue of roughly 28 billion euro. And we offer our products to all of the company constituents, not only the ERP, which is now based on our S4HANA database, the real time view on all of the financial and other data. We provide a comprehensive HR solution. We help our customers in terms of intelligence, spend and the business network. So procurement, travel and expense contingent workforce and the business network itself, customer experience, applications that we offer. And we have our business technology platform that kind of plays a special role in our portfolio since it is a foundation as well as a platform for partners and customers to extend the standard solutions with their customized needs. And so I think we are still very close to the customer and in a phase where every company in a very volatile environment has to transform. SAP is an excellent partner.

If we then go back to the beginning of your role when you joined the group a number of years ago, what was SAP treasury like at that time and how has it evolved over time? I would have, was going to make a, you know, the, you know, oh, we have.