Circelligence by BCG: Innovate in the circular economy on SAP BTP
Since June 2022, an SAP POC team has been collaborating with developers from the Boston Consulting Group, one of the world’s leading management consulting firms, supporting the platform innovation behind the development of a SaaS sustainability tool: Circelligence by BCG, on SAP BTP. Circelligence is a tool that can tangibly measure and evaluate the circularity of a business. Uwe Klasing (Chief Solution Expert at SAP), Alexander Meyer zum Felde (Partner & Associate Director at BCG), and Jörg Wulftange (Managing Director at BCG Platinion) discussed the process behind developing the tool and the solution it provides.
Uwe Klasing: How active is BCG on the topic of sustainability?
Alexander Meyer zum Felde: Sustainability is one of the most pressing challenges of our time, but it also provides significant growth opportunities. Unsurprisingly, climate change, sustainability and circular economy topics are top of mind for most of the business leaders with whom we talk. We at BCG look to lead change by supporting our clients as they create sustainable business value. Therefore, our sustainability work is extensive, and a stronghold of BCG, from climate technology and business innovation to energy transition and overall sustainability strategy and transformation. For our clients to sustain their performance while preserving resources, they must derive more value from fewer material inputs, which leads us to the topic of the circular economy and the concept of ‘circularity’.
What is the circular economy? Essentially, it is moving away from the traditional take-make-waste business models with which we are all familiar, and toward applying regenerative design principles to product and business models focusing on recovering, reusing, and recycling resources and eliminating waste. Essentially: doing more with less.
To help our clients on their journey to becoming more circular we developed the Circelligence methodology to drive insight into current circularity performance and assess the impact of actionable strategies to improve that performance.
UK: What is Circelligence and how does it work?
AMzF: Circelligence is a unique methodology developed by BCG to holistically evaluate a company’s circularity performance along its full value chain – or as I like to call it value circles – and on overarching business dimensions. We have been using and refining the methodology through our project work with clients to define their circularity starting point, develop impactful initiatives to drive circularity in their business, derive business cases for those initiatives, and prioritize capital investments, all of which form the foundation of a value-creating circularity strategy.
Based on company performance data, Circelligence evaluates the proportion of a business that is circular. In addition, we assess an organization’s readiness for circularity improvements, focusing on the governance, structures, and tools in place. This forms the baseline from which a company begins its circularity journey.
As part of our partnership with SAP, we have packaged this methodology into a standalone SaaS tool soon to be available on the SAP Store. Our industry collaborator in the initial development of the Circelligence methodology was Hilti, a prominent power tools producer and circular pioneer. Hilti joined us again to codevelop and pilot Circelligence as a stand-alone tool. As a tool, Circelligence will continue to be used by BCG case teams. It will also be offered to clients as a SaaS solution to use independently in-house, to expand access to sophisticated circularity assessment in the market.
UK: This partnership is interesting. Why does it make sense for a global software champion and technology provider and a leading global advisory firm to join forces on sustainability?
AMzF: We’ve observed that most companies fall behind on achieving, or even defining, their sustainability ambitions due to a lack of transparency into their own performance and the value to their business of sustainability action.
To address this, the partnership leverages BCG’s sustainability leadership and expertise, and SAP’s data infrastructure experience to support our clients by improving transparency with actionable data and strategic guidance. The resulting data-driven insights will allow us to accelerate our clients’ sustainability performance and transformations.
Furthermore, while there are certain sustainability standards evolving, for example in the carbon space, circularity is even more complex and holistic. Developing a solid decision-making foundation on the topic is even more complicated since it touches on all aspects of business and can unfold its full value only if well linked to core enterprise processes. Therefore, finding and realizing the value in this inherent complexity is facilitated by the deep business data expertise of SAP and the strategic mindset of BCG.
UK: So Jörg, getting down to the practicalities, why did BCG choose to develop Circelligence on SAP Business Technology Platform?
Jörg Wulftange: An increasing number of our clients are on SAP BTP. And most clients use SAP systems for storing key data required in the Circelligence assessment. We need to meet our clients where they are, especially to optimize data integration potential between our clients’ SAP systems and Circelligence. SAP BTP has the additional benefits of being enterprise-ready and designed to accelerate business-oriented cloud-native application development.
More broadly, SAP BTP addressed a number of our design requirements, as it allows application providers to own, deploy, and operate tenant-aware applications for multiple consumers.
UK: What specific requirements did you have for Circelligence? What important technical design decisions did you make?
JW: A number of requirements were defined by the team. Firstly, we wanted to deliver a SaaS solution for several reasons. Circularity is a topic that is evolving very quickly. We needed a solution that we could easily update with our evolving and improving circularity expertise, an approach that would save time and maintain service when we rolled out new features and updates. So we needed an approach that allows incremental, and for consumers, seamless, evolution of the solution instead of pushing the burden of upgrades to the consumer in an on-premise solution.
Similarly, we needed a solution that catered to the growing customer demand and offered fully flexible integration and customization capabilities. Having Circelligence as a SaaS solution means it’s much easier for customers to onboard the application, and to scale and grow with the solution’s evolution. For us as a service provider, it reduces customer acquisition costs, and enable us to scale faster.
We also made use of the multi-tenancy capability to allow us to share resources and code base across all clients. The SAP BTP infrastructure supports here to manage the complexity, for example: unique user environment; data security and separation; and client identification via use of unique URLs.
Security is, of course, paramount, specifically to ensure secure client data separation. As you can imagine, running a circularity assessment on companies is a data-heavy operation requiring around 1,500 data points for a single assessment.
Our solution also needed to offer service in multiple regions to give choice and flexibility to our clients and to comply with data protection.
JW: Now, I have some more technical questions to ask you Uwe. Why did you do a POC in the context of the Circelligence SaaS solution development?
UK: When we first got in contact with BCG and the Circelligence team we could immediately see an interesting opportunity. What the BCG Circelligence team wanted to do: build a SaaS application in the area of sustainability on SAP BTP using the latest developments of SAP’s CAP (Cloud Application Programming Model) is of interest to many other partners and customers. So, we started the collaboration.
We are always curious about what customers and partners want to build and accomplish with SAP BTP. Based on these valuable insights we start building prototypes with SAP BTP tools and services. We document our approach and try to identify best practices that can help other customers and partners solve similar challenges. The results are usually open source and put on public sharing platforms like GitHub.
On the other hand, building a PoC instead of working on the actual product helped to protect the intellectual property of BCG, as the SAP POC team did not have access to the source code of Circelligence, so we could not see any of the advanced code and algorithms that make Circelligence a unique solution. Instead, we were working on the PoC demo application resulting in open-source code and documentation. Everyone can find and use it on GitHub.
JW: Tell us a bit about your experience composing the joint POC development team from SAP and BCG and how the team members all worked together.
UK: It always starts with trying to get on the same page. In the beginning, we (the SAP Platform Adoption & Advisory Team) were invited to some calls to give an overview about SAP BTP to a select group of BCG team members. In contrast to usual conversations with existing SAP customers and partners, the participants did not have an SAP ERP background, which offered some new opportunities for the “exploration of the unknown” for SAP and BCG.
We soon figured out that a theoretical discussion about features and functionalities would not be too useful. Instead, the idea of a common POC was born, incorporating some specific requirements the BCG Circelligence team had in mind for the project.
The project started with a small team. On the BCG side there were two talented developers, Gaurav Joshi and Muhammed Guelaydin joining from BCG’s IT consulting branch, BCG Platinion, and Miriam Semmel from the BCG Circelligence team doing project management. On the SAP side there were Alper Dedeoglu and Martin Frick, two experts in SAP BTP development and me, Uwe Klasing. The collaboration mainly happened online using tools like MS Teams and Zoom, but during the three months of development, we also managed to have three onsite meetings in Hamburg and Berlin, which helped a lot with getting up to speed and finally having some fun without a computer in front of us.
First, we did some investigation about the technical and non-functional requirements of Circelligence and mapped them to the available technologies and services in the SAP Business Technology Platform to get a common understanding of the solution architecture and discuss the pros and cons of different approaches. Then those of us from the SAP Platform Adoption and Advisory team started building a dummy POC app, while constantly validating decisions and the code with Gaurav und Muhammed to see if they could use it in their own Circelligence app.
The result: BCG is ready to publish version 1.0 of their Circelligence App on the SAP Store, and in parallel we have a working example of a multitenant SaaS application on GitHub accessible to everyone from the outside world who wants to learn the concepts and/or develop their own SaaS application on the SAP Business Technology Platform.
A fun side fact: We had an empty SaaS PoC app and we wanted some useful and not too technical content that we could use to showcase the PoC. Miriam from the Circelligence team helped us come up with a circular economy demo scenario based on the SAP Enterprise Procurement Model (EPM) that is well known from many SAP tutorials. However, the data should not be taken too seriously, it is just to get the idea and to have some content for the otherwise empty PoC application scaffold.
So BCG has not only been validating our source code and development approach, but even contributed some business content to the open-source example on GitHub.
JW: I talked about the Circelligence requirements earlier, how they have impacted the solution architecture?
UK: The main difference between a specific solution for a single customer like an extension for the corporate ERP system and a Software-as-a-Service application, is that you want to share code and IT resources among all your subscribers (tenants) to decrease the total development and runtime cost. On the other side you need to make sure that the data of the different customers, aka “tenants,” is isolated from the others so everyone can only access their own data.
JW: What were the key outcomes of the project for you?
UK: This POC has been a great experiment for some important areas, providing valuable insights.
- An opinionated best-practice development approach based on SAP Business Technology Platform (SAP BTP) and the SAP Cloud Application Programming Model has a lot of potential to increase development quality and speed for business-focused SaaS applications.
- Using code examples and shared repos on code-sharing platforms is a great enabler and the perfect method for collaborating with the developer ecosystem.
- Speaking of the developer ecosystem: Developers with non-SAP background like Gaurav and Muhammed from BCG Platinion are a great gain for the SAP BTP developer community, a different mindset and feedback can help validate from a different perspective. For Non-SAP developers SAP Business Technology Platform is a great chance to apply their development skills in a wide area of new opportunities.
If you’re interested in more technical details, please visit Martin’s and Alper’s blog posts and check out the example code on GitHub.
Thanks again for the great collaboration and all the valuable feedback we've gained during this small journey. Can't wait to see Circelligence in action.