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Author's profile photo Phillips Hofmann

A License to Innovate

Eric Verniaut and Carsten Linz convey the benefits of a new generation of services designed to accelerate adoption of SAP solutions and technologies with Our Customers.

By Phillips Hofmann

The Next-Generation Services (NGS) organization was created to focus on being an “incubator” for new services designed to accelerate market adoption of new SAP solutions and technologies. Eric Verniaut, head of North America Services and interim global head of NGS, and Carsten Linz, Business Development Officer SAP Services, spoke with SAP News about the organization’s role as a services business incubator.

Q: Next-Generation Services (NGS) is focused on incubating innovation. Can you explain what the organization is about and what the incubation element means?

Eric Verniaut: We launched NGS with a mandate to collaborate with the regions and support the introduction and innovation growth within their markets.  When you run a region, you have so many priorities,  so many demands that you get distracted from innovating your future, which is what a sustainable business is about  – and I know this firsthand from my new role in North America. You’re focusing on delivering each quarter and keeping your eyes on the horizon, and innovating for the future at the same time is difficult. That’s where NGS is helping – providing resources, skills and a consistent approach to the regions in order to accelerate customer adoption, allowing them to play the market maker role. 

We need to improve our ability to co-innovate with our customers, to engage with them in a different way to help them make sense to our greatly enhanced portfolio, of our innovations. Services, and specifically NGS, plays a strategic role in developing the vision to value for our customers. Our services help to make and grow the market for SAP innovations, making SAP more competitive and valuable for the customer while accelerating customer adoption of innovations.  

Year to date, the model  has already demonstrated it works  for the services businesses NGS is incubating – the Data & Technology Services, HANA Services, Mobile Services, and Performance & Insight Optimization Services organizations. An important component, besides the growth acceleration, besides the market maker role and driving customer adoption – is scouting out and identifying new services opportunities that meet the customer requirements of tomorrow. In that respect, Carsten Linz is leading a small team focused in identifying and evaluating new services and business models. This team is acting like a venture capitalist.

Carsten: The services incubator is tasked to drive new services ventures from opportunity-to-launch-to-scale in an accelerated fashion.  We introduce new offerings to the market and bring them to the point of top-line organizational maturity and scalability. It’s a “launch pad” for new services businesses.

Incubators have been around awhile, but not for services businesses – this is new and unique.  Services businesses can quickly provide customer proof in early phases, and don’t require major R&D investments upfront like in the case of products. What makes it challenging is that scalability is tied to people enablement –productizing and distributing knowledge and experience for replication. The strategic intent for our model is to introduce new, innovative services which differentiate us from existing commodity offerings.

Our services incubator has a three-fold approach. First, we scout promising new business opportunities and pursue those that offer innovative new value propositions and or new business models. Second is the incubation part, the core of our systematic approach – we set up the business as a full-fledged mini-enterprise including go-to-market, portfolio and delivery capacity, testing the offering and engagement model with pilot customers. This approach is taking off across all regions, and helps us build a performing business that can scale. Then, once a venture has reached a level of topline and organizational maturity, we hand it over to the Integrated Global Service Delivery organization.

Q: How successful have you been your incubator approach?

Carsten: Our first incubated service, which we launched in May before SAPPHIRE – the Cloud-based Quick Start for RDS – we brought from idea to market in six weeks. Already we have more than 60 customer requests and ten projects underway, demonstrating that our incubation model works.  We have major new service offerings planned to launch in October at TechEd and in November we plan to launch another. Meanwhile we’re screening 37 viable new business opportunities for our Incubator.

Eric: The Cloud-based Quick Start for RDS introduces the ability to deploy customer projects in the cloud before their infrastructure is in place. We get the system running in the SAP cloud with the customer’s data, and when they’re ready to go live, the system is transported to where they want it – a public cloud like Amazon, or on-premise. It’s a simple, agile way to jumpstart projects, lowering the complexity since there’s no infrastructure readiness to worry about.

This cloud approach saves significant time in the content loading, testing process – it’s an accelerator, and coupled with RDS we provide a tremendous benefit for the customer. I believe that within the next six months, this deployment option will become mainstream – the new norm for deploying projects.

Q:  How will you maintain an entrepreneurial approach within a large, mature company such as SAP? Don’t entrepreneurs typically seek to work outside the constraints that exist within established corporate structures?

Carsten: In my view, entrepreneurial leadership is about exploiting unseen opportunities by creating novel combinations – taking initiative to pursue them regardless of the resources controlled, while energizing and empowering people. One skill that successful disruptive innovators share is “associating” –making unexpected connections between things that have been previously regarded as disparate pieces of information. Most people can do that or learn how to, and get better at it with practice. The good thing is that entrepreneurs are not born but can be developed!

The difference between a company like SAP and a startup I’d say is a 99:1 ratio – 99% professionalism and ability to scale, with 1% room for error and failure. A startup tends to have that ratio reversed but can connect the dots in new combinations to launch/push innovative use cases.  Failure is an important part of the entrepreneurial and innovation process. I like how Thomas Edison coined it: “I have not failed. I’ve just found 10.000 ways that won’t work.” We address this with fast cycles to explore new ideas and adjust the course based on customer feedback.  We also apply an agile project management approach and design-based thinking.  In the services incubator we combine the best of the start-up and corporate worlds.

Eric: I would add that the customer’s agenda needs to be top of mind. You have to be close to the market, to what the customers are facing, and work backwards to address their needs. Our customers want new solutions, exhibiting breakthrough, disruptive technology.

SAP employees are smart, creative people who have great ideas, and aren’t shy to point out a bad idea. We have people who challenge the status quo – you see that at meetings when people stand up and ask questions. This doesn’t mean they disagree with the company – it shows they have passion and want to be a part of SAP’s success. 

Carsten: Harnessing these peoples’ passion, putting their ideas to work for our customers – that’s what NGS is doing, and we’re introducing an entrepreneurs@sap community to generate discussion and new ideas we can bring to market. It’s really exciting to build-up something like this to allow our employees to state: “ I want to be an entrepreneur; I am already in the right environment!”

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