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1© 2014 SAP SE or an SAP affiliate company. All rights reserved.
Customer-Centered
Product and Service Innovation
Dr. Tobias Hildenbrand, Products & Innovation, SAP SE
Marco Cigaina, Service Innovation & Design Thinking, SAP SE
Marc Dietrich, Service Innovation & Design Thinking, SAP SE
Laurent Dupraz, Director IS R&D, Firmenich SA
European Innovation Forum, Paris, France, 15 January 2015

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© SAP 2015 | 2
What does SAP do today?

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© SAP 2015 | 3 MORE THAN 40 YEARS AGO WHEN WE STARTED…
Cloud
HANA
Mobile
70k
Analytics
Applications

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© SAP 2015 | 4 …YET QUITE EXTENSIVELY AND SUCCESSFULLY
of Global Fortune 500
86%
Customers
of the 100
Most Valued Brands
98%
of Forbes Top
Sustainability Companies
100%
are SME Companies
>80%
SSRA Revenue
€14.03bn
(+11%)
SW & Cloud Revenue
€5.28bn
(+11%)
Total Revenue
€16.90bn
(+8%)
4 years of double-digit SSRS
growth
Industries
26
Lines of Business
11
3,600 HANA Customers
HANA
1,200 Startups
5,700 Trained Partners
Employees
as of 6/30/2014
67,651
EMEA: 31,614
Americas: 19,647
APJ: 16,391
Nationalities Worldwide
120
Financials (FY 2013)
Solutions Employees

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© SAP 2015 | 5 WHERE DID WE COME FROM AND WHAT IS OUR GOAL?
Source: SAP

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© SAP 2015 | 7
“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)

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© SAP 2015 | 8 CUSTOMER-CENTERED PRODUCT AND SERVICE INNOVATION
Approach:
Customer-
Centered
Goal: Continuous Innovation

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© 2015 SAP AG. All rights reserved. 9© SAP 2015 | 9
LARGE-SCALE LEAN & AGILE DEVELOPMENT WITH SCRUM
Conduct regular
Retrospectives
Split organization
into teams
Split work
Split time
Deliver more
frequently
Risk
Risk
Deliver more reliably
and predictably

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© 2015 SAP AG. All rights reserved. 10© SAP 2015 | 10
DESIGN THINKING TO DEVELOP EMPATHY & FRESH IDEAS

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© SAP 2015 | 11
What about Lean Startup?

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© SAP 2015 | 12 …OR HOW DOES SAP IMPLEMENT “BUILD-MEASURE-LEARN”?
Analyze &
Improve
Challenge
& Change
Test & Verify
with MVPs
Evaluate
& Decide
Enterprise View = Business Model Canvas
Business Model Network View

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© SAP 2015 | 13 HOWEVER, BUSINESS MODEL INNOVATION TAKES MORE
Organizational Setup Requires Business Model
Innovations to be Managed Across Board Areas
Recent Examples for Business Model Innovations

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© SAP 2015 | 14 CO-INNOVATION EXAMPLE – SAP FASHION MANAGEMENT
 Consortium with 4 industry-leading customers
 Co-Innovation with Co-Funding of Development
 Common Product Vision + regular Reviews
 Technical Proof-of-Concept for new platform
 Design Thinking for new needs and capabilities

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© SAP 2015 | 15
What about Service Innovation?

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© 2015 SAP AG. All rights reserved. 16© SAP 2015 | 16
SERVICE INNOVATION
CUSTOMER
SERVICES
REGIONAL
INNOVATION BOARDS
RESEARCH
• JOINT INNOVATION CENTER:
(BM)² & A2X APPROACH
• X- PROJECTS
• CEIEXPLORATION
SERVICE INNOVATION FUNCTION
• UN/SOLICITED IDEA
MANAGEMENT
• IM ROLLOUT
CONTINUOUS
INNOVATION
Idea Pipeline &
Evangelism
Thought Leadership
VERY “EARLY PRODUCT”
SERVICES ENGAGEMENTS
• CLOUD ADOPTION
• IOT
• INNOVATION MANAGEMENT
• …STRATEGIC
PLAYS
CENTERS OF EXCELLENCE
• COE DESIGN
THINKING
• COE INNOVATION
MANAGEMENT
ENABLEMENT &
DELIVERY
Customer Engagements
Internal Engagements

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Start small
© 2014 SAP SE or an SAP affiliate company. All rights reserved. 17Public© SAP 2014 | 17
SERVICE INNOVATION

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© 2014 SAP SE or an SAP affiliate company. All rights reserved. 18Public
Here ?
Here ?
Or here ?
Existing products
Start on safe
ground
© 2014 SAP SE or an SAP affiliate company. All rights reserved. 18Public© SAP 2014 | 18
SERVICE INNOVATION

18.
Show success
© 2014 SAP SE or an SAP affiliate company. All rights reserved. 19Public© 2014 SAP SE or an SAP affiliate company. All rights reserved. 19Public© SAP 2014 | 19
SERVICE INNOVATION

19.
Expect
failure
Stay
persistent
© 2014 SAP SE or an SAP affiliate company. All rights reserved. 20Public© 2014 SAP SE or an SAP affiliate company. All rights reserved. 20Public© SAP 2014 | 20
SERVICE INNOVATION

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© 2014 SAP SE or an SAP affiliate company. All rights reserved. 21Public
Disruptive
Adjacent
Balance your
Portfolio
© 2014 SAP SE or an SAP affiliate company. All rights reserved. 21Public© SAP 2014 | 21
SERVICE INNOVATION

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© 2014 SAP SE or an SAP affiliate company. All rights reserved. 22Public
Discipline
and
Efficiency
Creativity
and
Passion
vs
Think in different
ways of organizing
© 2014 SAP SE or an SAP affiliate company. All rights reserved. 22Public© SAP 2014 | 22
SERVICE INNOVATION

22.
Freedom
Time
Resources
© 2014 SAP SE or an SAP affiliate company. All rights reserved. 23Public© 2014 SAP SE or an SAP affiliate company. All rights reserved. 23Public© SAP 2014 | 23
SERVICE INNOVATION

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© 2015 SAP AG. All rights reserved. 24© SAP 2015 | 24
ELEMENTS FOR (SERVICE) INNOVATION, CUSTOMER NEEDS
Internal and external triggers for an
Innovation Management Framework

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© 2015 SAP AG. All rights reserved. 25© SAP 2015 | 25
MULTI-DIMENSIONAL VIEW

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© 2015 SAP AG. All rights reserved. 26© SAP 2015 | 26
INNOVATION MANAGEMENT FRAMEWORK
Processes &
Methodologies
People &
Networks
Enterprise &
Strategy
Orchestration & Governance
Innovation taxonomy
setup

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© 2015 SAP AG. All rights reserved. 27© SAP 2015 | 27
ENTERPRISE AND STRATEGY
Processes &
Methodologies
People &
Networks
Enterprise &
Strategy
Orchestration & Governance
Innovation taxonomy
setup
 Innovation Strategy
 Business Model Innovation
 Business Process Innovation
 Solution Innovation
 Technology Innovation
 Competency Innovation
Enterprise &
Strategy

27.
© 2015 SAP AG. All rights reserved. 28© SAP 2015 | 28
PROCESSES AND METHODOLOGIES
Processes &
Methodologies
People &
Networks
Enterprise &
Strategy
Orchestration & Governance
Innovation taxonomy
setup
Processes &
Methodologies
 Research
 Ideation and Creative Methodologies
 Collaborative Idea Management
 Design Thinking
 Knowledge Management
 IP Management
 New Solution Development
 Commercialization
 Innovation Project Management

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© 2015 SAP AG. All rights reserved. 29© SAP 2015 | 29
PEOPLE AND NETWORKS
Processes &
Methodologies
People &
Networks
Enterprise &
Strategy
Orchestration & Governance
Innovation taxonomy
setup
People &
Networks
 Organizational elements and climate
 Innovation profiles
 Innovation leadership
 Employee enablement and motivation
 User-driven innovation (Customer co-
innovation, Lead Users, Living Labs)
 Partner ecosystem co-innovation
 University alliances
 Crowdsourcing

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© 2015 SAP AG. All rights reserved. 30© SAP 2015 | 30
ORCHESTRATION AND GOVERNANCE
Processes &
Methodologies
People &
Networks
Enterprise &
Strategy
Orchestration & Governance
Innovation taxonomy
setup
Orchestration &
Governance
 Innovation Management Strategy
 Innovation Governance Roles
 Portfolio and Venture Management
 Maturity Model
 IM repository
 Innovation Measurement

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© 2015 SAP AG. All rights reserved. 31© SAP 2015 | 31
EXECUTION MODEL
Execution model
 Organizational scope
 Mandate type
 Timeline
 Characteristics of the company
 Goals type
 Approach (design vs.
experiments)
 Key elements’ scope
setup

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© 2015 SAP AG. All rights reserved. 32© SAP 2015 | 32
DESIGNING AND DEVELOPING INNOVATION ARCHITECTURES

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© 2015 SAP AG. All rights reserved. 33© SAP 2015 | 33
E.G., SAP INNOVATION MANAGEMENT SOLUTION
Research with customers Low-fidelity prototype High-fidelity prototype Final product
Co-design of product and services

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Thank You !
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