In 2009, SAP decided to implement Lean and Agile Software Engineering practices within its global development organization. Lean management and agile practices like Scrum helped us to become more efficient and predictable in delivering software. However, that did not solve the “Innovator’s Dilemma” which almost any big company faces after many years of success. Hence, we had to explore new ways and approaches to come up with innovative product ideas and business models for the ever faster changing and evolving enterprise software market. In this talk, Dr. Tobias Hildenbrand and Sumeet Shetty will give an overview of this innovation journey and provide insights on applying Agile, Design Thinking and Business Model Innovation practices in a large-scale and distributed development organization. The session also includes an example of a recent project (SAP SportsOne).

1. Sumeet Shetty, Development Manager, Dev Tools
Dr. Tobias Hildenbrand, Chief Expert, DT & BMI
Products& Innovation, SAP SE

2. © 2016 SAP SE or an SAP affiliate company. All rights reserved.
SAP’s Innovation Journey

3. © 2016 SAP SE or an SAP affiliate company. All rights reserved.

4. © SAP 2016 | 4 ALMOST 40 YEARS OF WATERFALL…
Source: SAP

5. © 2016 SAP SE. All rights reserved. 5
“Back to the Roots”
Where do we want to go?

6. © 2016 SAP SE. All rights reserved. 6
Challenge: Customer-Centered Innovation on an Enterprise Scale
Approach:
Customer-
Centered
Goal: Innovation

7. © 2015 SAP SE. All rights reserved. 7
Conduct regular
Retrospectives
Split organization
into teams
Split work
Split time
Deliver more
frequently
Deliver more
reliably and
predictably
Step 1: Large-Scale Lean & Agile Development
Risk
Risk

8. © 2015 SAP SE. All rights reserved. 8
However, Agile Development starts with a Product Vision …
?

9. © 2016 SAP SE. All rights reserved. 9
… and we’re developing standard software for enterprise users

10. © SAP 2016 | 10
‘‘A developer needs to be curious
and develop empathy for end users”

11. © 2016 SAP SE. All rights reserved. 11
Step 2: Intertwining Agile Development and Design Thinking

12. © 2016 SAP SE. All rights reserved. 12
Finally, how do we Convert Product Ideas into Money?

13. © 2016 SAP SE or an SAP affiliate company. All rights reserved.
Why Worry about Business Models?

14. © 2016 SAP SE. All rights reserved. 14
Often, it‘s not about the product, but the business model

15. © 2016 SAP SE. All rights reserved. 15
Why worry about Business Models?
Same product, but #1 business model Attract many users, then leverage user data
Commercialize overcapacity à Web Services Disrupt an established market with new GTM

16. © 2016 SAP SE. All rights reserved. 16
Why should SAP Development worry about Business Models?
Industry Clouds
Business Networks Platform-as-a-Service
Internet of Things

17. © 2015 SAP SE or an SAP affiliate company. All rights reserved. 17
Product Design and Business Model Design happen in parallel

18. © 2016 SAP SE or an SAP affiliate company. All rights reserved.
What is a Business Model for us?

19. © 2016 SAP SE. All rights reserved. 19
Describe your Business Model Baseline
Network & Enterprise View

20. © 2016 SAP SE. All rights reserved. 20
SAP’s Classic Business Model – On Premise Business Suite

21. © 2016 SAP SE. All rights reserved. 21

22. © 2016 SAP SE. All rights reserved. 22
SAP’s Classic Business Model – On Premise Business Suite

23. © 2016 SAP SE or an SAP affiliate company. All rights reserved.
How does Business Model
Innovation work at SAP?

24. © 2016 SAP SE. All rights reserved. 24
Business Model Innovations at SAP – Some Recent Examples
Organizational Setup Requires Business Model
Innovations to be Managed Across Board Areas

25. © 2016 SAP SE. All rights reserved. 25
Business Model Innovation Lifecycle
“Business Model Library”

26. © 2016 SAP SE. All rights reserved. 26
Business Model Development & Innovation (BMDI™) Approach
Baseline
Appropriate
Business Model
Version n Version n+1

27. © 2016 SAP SE. All rights reserved. 27
Analyze &
Improve
Challenge
& Change
Test & Verify
with MVPs
Evaluate
& Decide
w/ Business Case
Enterprise View = Business Model Canvas
Business Model Network View
Iterative Business Model Design with BMDI™

28. © 2016 SAP SE. All rights reserved. 28
How do Business Model Design & Design Thinking come together?
Bottom-up
Innovation
Top-down
Innovation

29. © 2016 SAP SE or an SAP affiliate company. All rights reserved.
Project Example: SAP Sports One

30. © 2016 SAP SE or an SAP affiliate company. All rights reserved.
Project Example: SAP Sports One

31. 31© 2015 SAP SE or an SAP affiliate company. All rights reserved.

32. 32© 2015 SAP SE or an SAP affiliate company. All rights reserved.

33. 33© 2015 SAP SE or an SAP affiliate company. All rights reserved.

34. 34© 2015 SAP SE or an SAP affiliate company. All rights reserved.

35. 35© 2015 SAP SE or an SAP affiliate company. All rights reserved.

36. © 2016 SAP SE or an SAP affiliate company. All rights reserved.
Conclusion

37. © 2016 SAP SE. All rights reserved. 37
Lean/Agile, DT and BMI Share a Common Set of Basic Values

38. © 2016 SAP SE. All rights reserved. 38
Conclusion – Innovation Culture Mix at SAP
Framework: William E. Schneider