Digital Transformation and the Successful Management of Innovation
By Fred Isbell, Senior Marketing Director – SAP HEC & Digital Business Services Marketing, SAP
We have been recently covering the topic of innovation, specifically focusing on the concept of innovation accelerators. As part of our research, I met with Klaus Weber, the Executive Vice President and Global Head of Custom Development at SAP. In case you are not familiar with this team, it provides tailor-made solutions that apply either to one organization or multiple companies in a targeted industry space. These innovations are typically business-critical and enable organizations to push the boundaries of digital business transformation.
We discussed the need for driving innovation, managing a journey through innovation and an outcomes-first approach, and accelerating it all in an era of unprecedented and widespread transformation. Here is an excerpt of that insightful discussion.
Klaus, what are the major trends you see relating to successful innovation?
It’s all about innovation adoption and three main factors to consider:
- The diffusion of the innovations curve: Early cloud adopters moved to the cloud to test the water, and have realized initial successes. They are now expanding their scope to take advantage of the cloud for more individualized, mission-critical processes.
- Business disruption: This second trend emerges when early adopters envision how they can be more disruptive in their business approach to gain or maintain a competitive advantage. As they explore the possibilities for disruption, they require new and highly specialized software solutions to support their new direction.
- Business involvement: Although innovation projects are predominantly run by IT, there is greater involvement and ownership by the business. End-user interaction – from start to finish – is at a different scale and dominates how opportunities are uncovered and how challenges are solved.
You mentioned that businesses are using innovation to be more disruptive. Do you have any examples?
Disruption comes in many flavors. Three impressive customer examples come to mind:
- Cirque du Soleil: When we go to a theater performance, we are all familiar with being told to turn off our mobile phones, so we do not interfere with the performance. Cirque du Soleil wanted to turn that notion upside down and find ways to use mobile devices as a way to engage the audience during a live performance. To that end, we helped them build a solution based on an in-memory computing platform that is now an interactive part of every performance of TORUK – The First Flight.
- TrenItalia: If you are not careful, Big Data can be nothing more than a buzzword. TrenItalia has turned all of that information into a big success in their operation of approximately 200 high-speed trains. It uses the information to determine when trains should be removed from the line for repair and maintenance work. We built an in-memory computing solution that leverages sensor data from its fleet of trains to proactively predict when maintenance is needed, reducing maintenance costs by 8%–10%.
- CancerLinQ: The fight against cancer is top of mind around the world. We are working with CancerLinQ, a wholly-owned nonprofit subsidiary of the American Society of Clinical Oncology. With a powerful platform that contains a growing amount of real-world cancer information, cancer providers are improving the quality and value of care. They are now analyzing millions of cancer patient medical records, uncovering patterns and trends, and measuring their care against that of their peers and recommended guidelines.
Does your team have any best practices that businesses should consider themselves?
Building a tailor-made solution– especially when it touches the mission-critical needs of the business – requires close collaboration between the enterprise and the team building the solution. With the speed of disruption taking place in the marketplace, it is important that businesses move fast to maintain or achieve competitive advantage. Agile methodologies, like scrum, can help our customers rapidly evolve the solution. But just being fast is often not enough. We have enhanced the scrum methodology with an innovative approach called design-driven development.
What are the major characteristics of design-driven development, and how does this support an outcomes-based solutions approach?
Design-driven development emphasizes visibility to uncover issues early and avoid rework. Constant feedback and communication promote adaptability throughout development, and scope prioritization focuses on the features that deliver the highest business value. It also includes proven techniques for requirements engineering. By gaining a clear understanding of the user’s needs, the company not only reduces rework and user errors, but it can also create strategies for managing project scope to align with budget and time frames. And by placing the end user at the center of the solution, the approach delivers an optimum user experience.
In the spirit of outcomes-based solutions, the benefits of design-driven development include faster project completion, rapid end-user adoption, improved alignment with end-user needs, increased efficiency, and more effective solutions deployment.
How does design thinking complement the design-driven development approach?
Design thinking is an innovative approach to problem identification and resolution. It can be used at a very high level to help companies think differently about their business, address known pain points, explore the unknown and innovate.
We work closely with the Design and Co-Innovation Center organization at SAP to explore businesses from a different perspective and discover the needs, goals, and desires of customers and stakeholders through design-driven techniques. Together, we unlock provocative insights, reframe existing problems, and generate ideas in response to what was discovered. We come up with visualizations of the future such as storyboards and videos and create rapid prototypes, action plans, and road maps.
Two great customer use cases bring this to life:
- Mercedes-AMG: The sports-car brand of Mercedes-Benz built an IT solution that supports cross-functional competency teams. By applying the principles of design thinking and agile software development, the solution, which is based on an in-memory computing platform, provides access to relevant data in a holistic way to enable seamless team collaboration and better strategies and organizational structure.
- Heidelberg University Hospital: Then there is the inspiring work done in collaboration with Heidelberg University Hospital. It is using technology to significantly accelerate and simplify cervical cancer screening in fragile infrastructures. Cervical cancer is the second most common cancer in women living in less developed regions but in Kenya it is the most common cause of deaths from cancer. This innovation is proving to be life-changing.
Klaus, let’s fast-forward to 2020. What are the major changes we will have seen in the marketplace? What will be the ultimate impact on business and technology – and even society?
We are going to see change across so many different areas. There are two major things that come to mind.
There is a lot of buzz around application intelligence, where machine learning enables computers to learn from large amounts of data without being explicitly programmed. This is something that everyone expects to take off, and we are already gearing our team up to prepare for this next wave of innovation.
We also see growing interest in achieving significant value across industry-specific business networks. For example, we are currently delivering projects around a network focused on the pharmaceutical industry that tracks and traces serialized products throughout the entire manufacturing, distribution, and sales chain.
Let’s talk more later this year when those networks materialize into solutions that are more concrete!
Be sure to explore more on this topic by consulting www.sap.com/customdev
About Klaus Weber
Klaus Weber is Executive Vice President and Global Head of SAP Custom Development. He oversees the development of tailored, mission-critical solutions that enable customers to become best-run digital businesses. Weber has more than 25 years of SAP experience in developing innovative products and leading organizations that deliver high-quality customer-focused solutions that translate business needs into solutions that real business value.