The latest thougths on how even large software companies can achieve "customer-centered product innvoation" with Design Thinking, Customer Co-Innovation, Business Model Design and Business Model Innovation as well as Agile Software Engineering practices (KONAKTIVA conference, TU Darmstadt, Germany, December 2014)

1. SAP’S ROAD TO CUSTOMER-
CENTERED PRODUCT INNOVATION
- BUILDING RIGHT THINGS RIGHT (AGAIN)
Dr. Tobias Hildenbrand, Products & Innovation, SAP AG
Volker von Seggern, Products & Innovation, SAP AG
Technische Universität Darmstadt, Germany, 12 December 2014

2. © SAP 2014 | 2
“Ich wollte Mitarbeiter so motivieren, dass sie mehr leisten
als der Durchschnitt. Freie Entfaltung und Kreativität, ohne
bürokratische Zwänge und Regeln. Dazu passt auch keine
Stempeluhr, die mir immer zuwider war.”
Dietmar Hopp (one of the founders of SAP)

3. © SAP 2014 | 3
WHAT DOES SAP DO?

4. © SAP 2014 | 4 …A LOT MORE THAN 40 YEARS AGO WHEN WE STARTED
Cloud
HANA
Mobile
70k
Analytics
Applications

5. © SAP 2014 | 5
HOW TO BUILD RIGHT
THINGS RIGHT AGAIN?

6. © SAP 2014 | 6 “CUSTOMER-CENTERED PRODUCT INNOVATION”
“Back to the Roots”

7. © SAP 2014 | 7 WHAT IS PRODUCT INNOVATION?
i.e. addressing
end user needs
and wanted by
customers
i.e. there is a market
that justifies the
corporate investment
Desirability Feasibility
Viability
i.e. being able to
build a product
with existing
technologies and
deliver it in time

8. © SAP 2014 | 8 WHAT DOES CUSTOMER-CENTERED MEAN?
Co-Innovate continuously with Customers & End Users
 Learn about Customer Problems & User Needs
 Design, Develop and Test continuously
 Validate Sprint Results regularly

9. © SAP 2014 | 9 DON’T ASSUME YOU KNOW THE FINAL SOLUTION YET
Create
Choices
Make
Choices
We don‘t know… yet!
Iterate
cp. Tim Brown (2009)
and Ozgur Eris (2004)
Innovate

10. …by INTERTWINING Design Thinking,
Agile Engineering, Business Model
Development & Co-Innovation

11. © SAP 2014 | 11
QUALITY AND EXECELELENCE DOES NOT START WITH A TOOL
BUT WITH THE BRAINS OF YOUR DEVELOPERS
* Scrum or any other agile / iterative process
TDD
Pair
Programming
Test
Isolation
Refac-
toring
ATDD
Retro-
spectives
Unit
Test
Clean
Code
Continuous
Integration
Planning Exploratory
Testing
Team
Work
Backlog
Estimation
Automated
UI Testing
Scrum*

12. © SAP 2014 | 12
WHAT IS IN IT FOR SAP?

13. © SAP 2014 | 13 INCREASED LIKELIHOOD OF PRODUCT SUCCESS
Agile Engineering
Design Thinking Co-Innovation
Diverse
Teams
Business Model Development
Desirable
Feasible
Viable

14. © SAP 2014 | 14
HOW DID WE GET THERE?

15. © SAP 2014 | 15 40 YEARS OF SAP, ALMOST 40 YEARS OF WATERFALL
Source: SAP

16. © SAP 2011 | 16
LEAN IS ABOUT THINKING DIFFERENT

17. © SAP 2011 | 17
MAXIMIZE CUSTOMER VALUE
ELIMINATE WASTE

18. © SAP 2011 | 18
THINK LESS IS MORE –
ELIMINATE WASTE

19. © SAP 2011 | 19
WE’RE NOT BUILDING CARS – LUCKILY!

20. © SAP 2011 | 20
SOFTWARE DEVELOPMENT IS A
CREATIVE PROCESS
... DONE BY KNOWLEDGE WORKERS

21. IT’S ABOUT SCALING

22. © SAP 2011 | 22
ONE SIZE FITS ALL?

23. © SAP 2014 | 23
WHERE ARE WE TODAY?

24. © SAP 2014 | 24 TODAY, WE MANAGE OUR REQUIREMENTS THE AGILE WAY
fixed
estimated
Requirements
Requirements
Resources Release Date
Resources Release Date
Plan-driven (traditional) Customer value-driven (agile)

25. © SAP 2014 | 25
AGILE = “QUICK, BUT WELL-COORDINATED”

26. © SAP 2014 | 26 AGILE DEVELOPMENT WITH SCRUM

27. © SAP 2014 | 27 OUR DELIVERY IS MORE RELIABLE AND EFFICIENT TODAY
Chief Product
team
Release
Backlog
Sprint
Backlog
Product
Backlog
Scrum
Teams

28. © SAP 2014 | 28 SCRUM REDUCES PRODUCT RISKS DRAMATICALLY
Conduct regular
Retrospectives
Split organization
into teams
Split work
Split time
Deliver more
frequently
Risk
Risk

29. © SAP 2014 | 29 DELIVER MORE RELIABLY AND PREDICTABLY

30. “Building something nobody
wants is the ultimate form
of waste.” – Eric Ries
© SAP 2014 | 30

31. © SAP 2014 | 31
WHERE DO THE
IDEAS COME FROM?

32. © SAP 2014 | 32 SCRUM STARTS WITH A GIVEN PRODUCT VISION
?

33. © SAP 2014 | 33
‘‘A DEVELOPER NEEDS TO BE CURIOUS AND
ALSO DEVELOP EMPATHY FOR END USERS“
Source: interview with SAP co-founder Hasso Plattner (2012)

34. © 2012 SAP AG. All rights reserved. 34© SAP 2014 | 34 PUTTING OURSELVES IN THE SHOES OF USERS

35. © 2012 SAP AG. All rights reserved. 35© SAP 2014 | 35 DESIGN THINKING TO DEVELOP EMPATHY & IDEAS

36. © 2012 SAP AG. All rights reserved. 36© SAP 2014 | 36 DIVERSE TEAMS CAN SOLVE TOUGH PROBLEMS

37. © 2012 SAP AG. All rights reserved. 37
Team Rooms and Spaces at SAP?

38. © 2012 SAP AG. All rights reserved. 38© SAP 2014 | 38
THE DESIGN THINKING STEPS. © SAP 2013 | 38

39. © 2012 SAP AG. All rights reserved. 39© SAP 2014 | 39
Design Thinking Approach

40. © 2012 SAP AG. All rights reserved. 40© SAP 2014 | 40
Access through Problem Space…

41. © 2012 SAP AG. All rights reserved. 41© SAP 2014 | 41
Understand – Why and How?

42. © 2012 SAP AG. All rights reserved. 42© SAP 2014 | 42
Observe – Why and How?

43. © 2012 SAP AG. All rights reserved. 43© SAP 2014 | 43
Define Point-of-View – Why and How?

44. © 2012 SAP AG. All rights reserved. 44© SAP 2014 | 44
Now Entering the Solution Space…

45. © 2012 SAP AG. All rights reserved. 45© SAP 2014 | 45
Ideate – Why and How?

46. © 2012 SAP AG. All rights reserved. 46© SAP 2014 | 46
Prototype – Why and How?

47. © 2012 SAP AG. All rights reserved. 47© SAP 2014 | 47
Test – Why and How?

48. © SAP 2014 | 48 DESIGN THINKING & AGILE DEVELOPMENT SHARE VALUES
Short Iterations Incremental
Delivery
Small Cross-Functional Teams
Focus on
Customer
Value
Fast Feedback
Continuous
Improvement

49. © 2012 SAP AG. All rights reserved. 49© SAP 2014 | 49
Innovation and Effectiveness,
i.e. building the right things
 First-hand empathy for end users
 Creative solution finding and ideation
 Validation of assumptions and
early prototypes with end users
Efficiciency and Delivery
i.e. building things right
 Process framework and
engineering practices
 Agile planning and estimation
 Continuous improvement
COMBINING SOFTWARE DESIGN AND DEVELOPMENT
= Building the right things right

50. © 2012 SAP AG. All rights reserved. 50© SAP 2014 | 50 PROJECT EXAMPLE 1: DESIGN THINKING & SCRUM
Product Backlog

51. © 2012 SAP AG. All rights reserved. 51© SAP 2014 | 51 USER STORY MAPPING TO DEVELOP THE BACKLOG

52. © 2012 SAP AG. All rights reserved. 52© SAP 2014 | 52 PROJECT EXAMPLE 2: CO-INNOVATION SETUP
Common Roadmap

53. © SAP 2014 | 53
HOW TO ALSO ENSURE
ECONOMIC VIABILITY?

54. © SAP 2014 | 54 BUSINESS MODEL DEVELOPMENT & INNOVATION (BMDI)

55. © SAP 2014 | 55 BMDI IMPLEMENTS “BUILD-MEASURE-LEARN” AT SAP
Analyze &
Improve
Challenge
& Change
Test & Verify
Evaluate
& Decide
Enterprise View = Business Model Canvas
Business Model Network View

56. © SAP 2014 | 56
CONCLUSION

57. © SAP 2014 | 57 CUSTOMER-CENTERED PRODUCT INNOVATION AT SAP
Create
Choices
Make
Choices
We don‘t know… yet!
Iterate
Innovate

58. Customer-Centered Product Innovation at SAP
Agile Engineering
Design Thinking
Product
Development
Teams
Business Model Development & Innovation
Desirable
Feasible
Viable
MVP
Prototypes
Co-Innovation
Minimal Viable Product Product Innovation
incl. Delivery and GTM

59. Thank You
tobias.hildenbrand@sap.com
v.von.seggern@sap.com