SAP as standard software vendor for large corporations started a long journey five years ago: lean management and agile software development were supposed to make the development organization faster and deliveries more predictable. In addition the SAP needed a way to innovate more reliably. The session highlights the major insights gained on this journey so far and provides some background on the methods and approach applied in practice.

1. SAP’S ROAD TO INNOVATION
DESIGN THINKING AND LEAN DEVELOPMENT IN PRACTICE
DR. TOBIAS HILDENBRAND | SAP AG | 3 FEBRUARY 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)
© SAP 2013 | 2

3. WHAT DOES SAP DO?
© SAP 2013 | 3

4. HANA
Applications
Cloud
Mobile
Analytics
67k
© SAP 2013 | 4
A LOT MORE THAN 40 YEARS AGO WHEN WE STARTED

5. WHERE DO WE
COME FROM?
© SAP 2013 | 5

6. Source: SAP
© SAP 2013 | 6
40 YEARS OF SAP, ALMOST 40 YEARS OF WATERFALL

7. The Principles of
Product
Development FLOW
Second Generation Lean
Product Development
Donald G. Reinertsen
1.
2.
3.
4.
5.
6.
Take an Economic View
Actively Manage Queues
Exploit Variability
Reduce Batch Size
Apply WIP Constraints
Control Flow: Cadence and
Synchronization
7. Apply Fast Feedback
8. Decentralize Control
Source: Donald G. Reinertsen (2009) – Lean Product Development Flow
© SAP 2013 | 7
WE COULDN‘T WAIT ANOTHER 40 YEARS

8.  Limited team size
 Iteration cycles,
 Limited WIP*
 Iterative feedback
 Empirical process
control
 Velocity understood
*) WIP = work-in-progress
© SAP 2013 | 8
SCRUM IMPLEMENTS MOST PRINCIPLES OF LEAN

9. Value-driven (agile)
Plan-driven (traditional)
Requirements
Resources
Release Date
fixed
estimated
Resources
© SAP 2013 | 9
Release Date
Requirements
WE MANAGE OUR REQUIREMENTS THE AGILE WAY

10. AGILE = “QUICK AND WELL-COORDINATED”
© SAP 2013 | 10

11. Scrum
Teams
Chief Product
product
team
backlog
release
backlog
sprint
backlog
© SAP 2013 | 11
OUR DELIVERY IS MORE RELIABLE AND EFFICIENT TODAY

12. WHAT DID WE
LEARN FROM LEAN?
© SAP 2013 | 12

13. Split organization
into teams
Split work
Split time
Deliver more
frequently
© SAP 2013 | 13
Risk
Risk
Conduct regular
Retrospectives
SCRUM REDUCES PRODUCT RISKS DRAMATICALLY

14. Improve ratio of
planning and
execution
Incorporate
feedback
early
Build quality into
products from
the inside out.
Build Coaches
within the
organization
© SAP 2013 | 14
WITH LEAN, WE LEARNED HOW TO CHANGE AND SCALE

15. © SAP 2013 | 15
WE LEARNED TO DELIVER MORE RELIABLY AND PREDICTABLY

16. WHAT ABOUT
INNOVATION?
© SAP 2013 | 16

17. Desirability
Feasibility
Viability
© 2012 SAP 17
© SAP 2013 |AG. All rights reserved.
WHAT IS INNOVATION?
17

18. ?
HOW TO HIT THE “SWEET SPOT” OF INNOVATION?
© 2012 SAP 18
© SAP 2013 |AG. All rights reserved.
18

19. ?
© 2012 SAP 19
© SAP 2013 |AG. All rights reserved.
YOU START WITH YOUR END USERS
19

20. © 2012 SAP 20
© SAP 2013 |AG. All rights reserved.
PUT YOURSELVES IN THEIR SHOES
20

21. ‘‘A DEVELOPER NEEDS TO BE CURIOUS AND
ALSO DEVELOP EMPATHY FOR END USERS“
Source: interview with SAP co-founder Hasso Plattner (2012)
© SAP 2013 | 21

22. YOU NEED A DIVERSE, MULTI-DISCIPLINARY TEAM
© 2012 SAP 22
© SAP 2013 |AG. All rights reserved.
22

23. © 2012 SAP 23
© SAP 2013 |AG. All rights reserved.
YOU ALSO NEED SPACE FOR INNOVATION
23

24. © 2012 SAP 25
© SAP 2013 |AG. All rights reserved.
THE SIX BASIC STEPS OF DESIGN THINKING
25

25. “There
Are No Facts Inside
Your Building, So Get
Outside.” – Steve Blank
© SAP 2013 | 26

26. © 2012 SAP 27
© SAP 2013 |AG. All rights reserved.
DESIGN THINKING IN THE PROBLEM SPACE
27

27. © 2012 SAP 28
© SAP 2013 |AG. All rights reserved.
DESIGN THINKING IN THE SOLUTION SPACE
28

28. “Building
something nobody
wants is the ultimate form of
waste.” – Eric Ries
© SAP 2013 | 29

29. Focus on
Customer
Value
Short Iterations
Small Cross-Functional Teams
© SAP 2013 | 30
Continuous
Improvement
Incremental
Delivery and
Fast Feedback
DESIGN THINKING INCORPORATES AGILE VALUES, TOO

30. Product Backlog
© SAP 2013 | 31
PROJECT EXAMPLE 1: DESIGN THINKING & SCRUM

31. Common Roadmap
© SAP 2013 | 32
PROJECT EXAMPLE 2: CO-INNOVATION SETUP

32. CONCLUSION
© SAP 2013 | 33

33. Innovation and Effectiveness,
i.e. building the right things

First-hand empathy for end users

Creative solution finding (ideation)

Validation of assumptions and
prototypes with end users
Efficiciency and Delivery
i.e. building things right

Retrospectives and
continuous improvement

Process framework and
engineering practices

Agile planning and estimation
(backlog management)
= Building the Right Things Right
© 2012 SAP 34
© SAP 2013 |AG. All rights reserved.
DESIGN THINKING AND LEAN COMPLEMENT EACH OTHER
34

34. Customer
Development
Agile Software
Development
Team with
Intrapreneurship
Attitude
Business Model Design
© SAP 2013 | 35
OUTLOOK: INNOVATION IN LARGE ORGANIZATIONS

35. Thank You!
Dr. Tobias Hildenbrand
SAP AG
Dietmar-Hopp-Allee 16
69190 Walldorf
tobias.hildenbrand@sap.com