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SAP’s Golden Opportunity to use Co-Innovation to Make better Software

While many of you are familiar with SAP’s core On-Premise offering they are currently building several Line of Business (LoB) solutions using a Multi-Tenancy Software as a Service (SaaS) deployment model.  SAP released Sales OnDemand and Sourcing OnDemand earlier this year to strong reviews and will release Travel Expense and Career OnDemand in early 2012. The SAP OnDemand teams are using co-innovation to partner with customers as well as industry experts and tightly integrate them within all facets of the development cycle.  Sven Denecken who is the Vice President and Head of Co-Innovation OnDemand Solutions wrote a great article a few month ago called Co-Innovation 2.0 at SAP – A User Centric Approach with Lean Thinking to meet Customer Needs that I would highly recommend reading as it goes into a lot of depth on the topic.

I have been fortunate enough to be part of the co-innovation program for Career OnDemand for the past 8 months and see it from both the SAP customer perspective from one of my large clients as well as from a thought leader perspective and am extremely impressed on a number of levels. I wanted to use this article to discuss the golden opportunity that SAP has to incorporate the co-innovation methodology to all their software development. Outlined below are 3 major groups engaged in the co-innovation process and some background and insights for each.

Customers – The SAP Career OnDemand team has been working with about 20 global customers across many industries using the co-innovation methodology. They actively engage these customers looking for feedback, insight, and knowledge during the inspiration, ideation, customer proof, and go-to-market portions of the development process. These customers get the benefit of being able to partner with the SAP product team to make sure their core needs are being met, ensure the product has the necessary functionality and usability, get early access to test drive the system and make important long term networking relationships within SAP. It is important to realize the trust and goodwill SAP is building throughout this process and I have no doubt several of these customers will be early adopters for a product they helped build.

SAP – Co-Innovation benefits SAP as they are able to better understand the full breadth of customer requirements, able to prioritize features and functionality, have quicker development cycles and ensure they build a product that their customers want versus a product they “think” their customer wants. We have all seen instances where SAP has released a mediocre product and spent the next several years enhancing it as they get harsh feedback via lack of sales or adoption within their customer base. The bottom line is SAP will achieve quick and early market success if they pay close attention to their customers during the development of their software.

Thought Leaders – SAP has been extremely open showing the Career OnDemand product to thought leaders within the HR technology space such as Bill Kutik and Naomi Bloom as well as industry heavyweights such as Jon Reed, Vijay Vijayasankar and the SAP Mentors to get their feedback. This process has allowed SAP to get valuable insight as well as garner some of the most positive feedback I have ever seen for a new SAP HCM product. A recent article The Hottest Trends in HR Technology by Bill Kutik does a great job of summing up the general “buzz” around Career OnDemand.

I think SAP has a golden opportunity to take the learning’s from the SAP OnDemand teams and make it the standard as to how software is developed across the entire organization and platform of products. Many within SAP will tell you they always listen and incorporate their customer requirements and insight during the development cycle but unfortunately that is not the truth. The key question is does senior management have an appreciation of the long term benefits and value of building software truly partnered with their customers using a lean and design thinking approach. Dennis Howlett recently wrote a great article called Inside the Mind of SAP and make no mistake rolling out co-innovation to the entire organization would be a big change for SAP but there is no doubt in my mind the building software for the customer WITH the customer is the right long-term strategy.

Special Kudos to Kevin Nix, Sven Denecken, Tobias Dosch along with SAP management for empowering Prashanth Padmanabhan, Eduardo Salamanca de Diego,  Enric Gili Fort, Joachim Foerderer, Bertram Wiest  and the rest of the Career OnDemand team to truly partner with their customers in building what is the best new offering I have seen in my 13 years of working with SAP Human Capital Management. For those of you that are interested in seeing Career OnDemand it will be presented by David Ludlow at the upcoming HR Technology Conference and I plan to write a lot more about it in 2012.

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  • Hi Jarret,

    A great article. It is important for SAP to stay cutting edge and the best way is to create functionaltiy the customer wants. And how best to find out about this functionality? From the horses mouth: the customers themselves.

    I think SAP partner's (SIs) who deal with customers regularly should also provide input. A lot of senior consultants at SIs have vast experience from customers who might not share their needs and wonts with SAP, so this is another channel SAP should go down.

    Best regards,


    • Thanks Luke for the kind words and will be interested to get your thoughts on the product when it is released next year. 

      On a side note it wouldn't surprise me to see an OnDemand product built for Talent Management down the road as it is one of the next logical areas for SAP to pursue.

  • This is a great initiative by SAP towards sustainable competitive advantage. SAP is taking all right steps by involving SAP experts, stressing on SaaS and making it more user-friendly. I am glad I am connected to SAP and it will be interesting to see the future growth of SAP. Thanks once again Jerret for such an informative post.


    Akshay Patki