Update: SAP's Road to Customer-Centered Product Innovation

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

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)

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

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

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

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