SAS Case Study

“With no shareholders demanding short-term returns, we are free to invest in a sustainable future. That’s why we invest in a dedicated workforce, sustainable operations and a strong community – to make everyone, not just SAS, successful" *

• Flat and Informal
• Privately Held, No Shareholders
• Guided by Code of Ethics
• Company With A "Conscience" - Sustainability, Environment, Public Policy Efforts

“Take care of your people, they will take care of your company” - James Goodnight

• Reduces Distraction, Increases Innovation
• Lowest turnover rate in industry (>4% vs 15%+)*
• Happy Employees aka Productive Employees
• Family-friendly and Fun Working Environment

“Because employees bring their whole selves to work, SAS strives to reduce stress and distraction so they can do their best" *

• Egalitarian Approach to Management aka Employee Equality
• Encouraging & Innovative - Creativity is "Competitive Advantage"
• Employee-centric Environment
• Cultural Philosphical Pillars - Trust, Flexibility, Values

BUSINESS ENVIRONMENT

SAS success also stems from its business model

Business Environment

• Unique sales proposition within the software industry where SAS sells annual licensing for its products
• SAS has a 98% renewal rate
• SAS can take a long-term view because it is private and does not have to report earnings to shareholders
• 30% of its revenues on R&D alone more than 2X the industry average
• Company believes that SAS should be used everywhere
• Therefore, it trades off margins in the short term for a greater level of market penetration

BUSINESS ENVIRONMENT

SAS success and competitive advantage stems from its ability to hire and retain top talent in the software industry

• Attraction and Retention of talent is a key factor in the company’s success
• “SAS is a knowledge-based business with continuing requirements to evolve and upgrade its software offerings.”
• Companies seek to hire the best to “build and maintain its intellectual capital.”
• Software development market is highly competitive and software talent is a scarce commodity

BUSINESS ENVIRONMENT

“SAS Institute’s advantage is its level of integration and the range of product line”

• Unlike its competitors, the company designs its products to work on mainframes, midrange computers, workstations, personal computers and mainframe platforms.
• It’s policy is to listen to customers and give them what they want

SAS success metrics

• Largest privately owned software company and 9th largest independent firm
• 97% of Fortune 100 run SAS. More than 80% of Fortune 500

BUSINESS ENVIRONMENT

SAS Competitive Advantage Stems from the following three factors

1. The level of integration and range of product line

2. It’s ability to hire and retain top talent within the software industry

3. The companies business model

CASE OBJECTIVES

• Company overview
• Strength/Weaknesses
• Employment "DEAL"
• Business Environment
• Conclusion

SAS

Strengths

“If you treat people well, things will take care of themselves”

• Customer-driven development process
• Never turn down a product idea
• Offer free upgrades with their licensing fee
• No specific financial goals
• Family-friendly environment/Fun working Environment
• Little to no outsourcing - allows employees to know their jobs are safe
• "SAS Institute's organizational structure is both flat and informal."
• "One the norms of the company is that all managers are working managers"
• Open door policy - Goodnight is visible in the company
• Four Principles
• Treat everyone fairly and equally
• Trust the employees judgment in doing a good job
• Make sure all decisions are long-term
• Bottom-up decision making

SAS

Weaknesses

“Even in the sales organization, there is little emphasis on financial rewards. Account representatives are not paid on the basis of sales commissions.”

• 27 units report directly to Goodnight - Messages get lost in translation
• No clear description of job duties
• "I think you can set short and long-term goals. And you can sit back and see if it happens or it doesn't happen."

Strengths/Weaknesses

SAS

Recommendations

• Have someone who is direct assistant to Goodnight to filter messages
• Find a way to make sure no messages are lost in translation
• Descriptive work duties- spend more time on training
• "Why fix it if it isn't Broke" -Innovation MGMT

CONCLUSION

Where is SAS today?

• The World's Top Ten Places to Work
• It ranks with Google, Salesforce & Twitter
• SAS is used by 93 of the top 100 companies on the Fortune Global 500®
• $3.09 billion revenues, 13,660 employees, Customers in 139 countries

EMPLOYMENT "DEAL"

Company Overview

Work-Life Balance

Organizational Structure

*SAS ranks No. 2 on 2014 Fortune list of Best Companies to Work For in the US | SAS, http://www.sas.com/en_us/news/press-releases/2014/january/great-workplace-US-Fortune-2014.html

*http://www.sas.com/en_us/company-information/corporate-social-responsibility.html

Business Environment

Company Culture

• The average tenure at SAS is 10 years; 300 employees have worked 25 or more
• Annual turnover was 2% in 2009, compared with the average in the software industry of about 22%
• Women make up 45% of its U.S. workforce, which has an average age of 45
• 4200 employees at North Carolina headquarters; an additional 7000 employees located in other countries
• The typical week is 35 hours
• Average number of sick days is two - not monitored by anyone
• Many employees can set their own schedule
• Two subsidized day-care centers for 600 children, and summer camp offerings
• Centrally located health-care center - Last year 90% of SAS employees and their families -- Goodnight included -- made 40,000 visits
• With a budget of $4.5 million, health center still saves the company $5 million annually
• The business of doing business was (is) everyone's job
• Recognizing employees for their value to the company was part of the early SAS heritage
• Flexible work environment and some of the "trademarks" of the employee-friendly SAS culture - including M&M's and breakfast goodies - were born in the first months of the company's existence
• Received awards from FORTUNE, Working Mother, BusinessWeek and Mother Jones magazines, along with prominent print and broadcast media coverage in the United States, Europe and Australia.
• “Balanced lives mean good business and great technology” website

*http://www.sas.com/en_us/company-information/corporate-social-responsibility.html

Please look over your Brochure!

Business Environment

Strategy for Work/Life Balance

• Culture of SAS
• Best Company to Work For: Employees, Family, Retirees

Primary threats to SAS’s successful business environment

• IBM: SPSS
• Alteryx, Knime, RapidMiner, Revolution Analytic
• Big Data – Data Variety (Gartner, Kumar)

Is it Sustainable?

• Benefits & Compensation
• Competition

Business Environment

What's the "DEAL" at SAS?

BUSINESS ENVIRONMENT

Gartner Chart 2014

Challenges

Leaders

Gartner Chart 2015

Challenges

Leaders

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