SAP is known to make bold statements about the pervasiveness of our solutions: we touch over 70% of the world’s beer AND chocolate production and 86% of the worlds’ athletic footwear. In our Sustainability Report, similar statements are made that might have you scratching your head, saying “How can SAP possibly know this?” Or a more critical reader might say to themselves: “This sounds like an awfully big number, this can’t possibly be right.”
I can share with you the methodology how we come up with these numbers and maybe you’ll even agree we are a little conservative.
For example, we say we protect over $5 trillion in revenue? Just where did that come from, you might ask? Here is a summary how we got to this number:
- We listed out the customers using our product safety solutions (only active users, not licenses). They are mostly in chemicals, but with a growing number in consumer products and high tech/electronics. Typically the products from a chemical factory become the starting material that eventually goes into a consumer product – think of the materials in a can of paint, cleaning products, even a car.
- We added up the revenues from our customers – it was in the hundreds of billions.
- We scaled up the value of these products from just the chemical industry as a component of a finished good. The American Chemistry Council states that 4.3% of finished goods output is made up of chemicals. (Report available on request).
- So if you scale up our customers revenues as 4.3% of the value of the end products, you get a number well into the trillions.
- We realize not every customer used SAP for 100% of their products so we backed that number down to $5.5 trillion
As a reality check we tried to “prove” the number by looking at how broadly our customers use our solutions and scaling up to finished retail value as well as looking at total global chemical sales. For example, Unilever say they use our solution to protect over 10,000 personal care products which are $15 Billion in sales in their last annual report, and from there the retail value is even higher when you buy at Wal-Mart, Carrefour or any other retailer.
We used similar methodologies in determining the energy saved or workers protected. For energy we used the savings cited by just a handful of our reference customers, while for workers protected, we looked at customers known to be using our health & safety solution and looked at total employees. Here too, we backed down the number as we didn’t assume that 100% of a company’s workers were covered by our solutions.
I hope this gives you some insight into the realistic way we calculate these numbers. We have shown the calculations to external analysts and have had several long discussions internally to ensure they pass the reality test!