The word innovation often conjures an image of a “eureka” moment — a specific point in time when something is invented or discovered. But innovation is much more than that.
More than a decade ago, technology visionary and pundit Bob Metcalfe commented: “Invention is a flower. Innovation is a weed.” His comments still ring true. Innovation has been a crucial part of corporate success since before the industrial age, but it does not come from the ivory tower — it emerges from the day-to-day application of new ideas across the entire enterprise to enable a faster pace of change.
Winning at innovation requires mastering day-to-day execution to push new ideas into action. Innovation has to be pervasive, without crippling an organization. It needs to be the lifeblood of a company and provide the resolve to challenge the status quo.
Today’s most innovative companies are moving toward co-innovation, leveraging ideas and input from suppliers, customers, academic institutions, industry experts, and sometimes even competitors.
Innovate or Stagnate
Today, the pace of innovation needs to be faster than ever before, for three primary reasons. First, customers demand it. On average, 50% of the profits of major global companies comes from products launched in the last 10 years.1 Companies — especially technology companies — need to continuously innovate and provide the new solutions that customers are seeking in order to become and remain successful.
Second, there are competitive reasons to innovate. In short, if you don’t innovate, someone else will. Market incumbents such as Procter & Gamble and 3M are prime examples of firms that constantly seek competitive advantage through innovation by actively promoting the development of new ideas from across their organization — and even beyond it — to ensure that they stay ahead.
Third, and perhaps most important, are the internal benefits that come from a culture of innovation. Truly pervasive innovation across a company can reduce overall operating costs, speed time-to-market, increase customer reach, and improve competitive levels. It literally changes the way people think and act on a daily basis.
Leading with Co-Innovation
The spring of innovation does not flow endlessly from a single source. Today’s most innovative companies are moving toward collaborative innovation (co-innovation), leveraging a broader set of ideas and input from trusted partners, including suppliers, customers, academic institutions, industry experts, and sometimes even competitors. The end result is a more rapid and deeper form of innovation, with ideas and input coming from a variety of perspectives.
With its customers’ success as an overarching goal, SAP has committed to this level and nature of co-innovation by harnessing the value of its ecosystem; co-innovation is woven into the very fabric of SAP’s product development process. Through the ecosystem’s infrastructure, SAP’s co-innovation efforts can quickly move from idea, to solution, to tangible customer results. Some of SAP’s recent game-changing innovations are, in fact, direct results of co-innovation efforts across the ecosystem. SAP In-Memory Appliance (SAP HANA), for example, has been brought to market as a product of co-innovation. Combining in-memory computing with an integrated database and calculation layer, SAP HANA allows companies to work with large quantities of data in real time. To develop this cutting-edge solution, SAP worked hand-in-hand with partners, collaborating with engineers and architects from several organizations. Customers also played an integral role from the beginning to guide and test the overall effort to ensure the application addressed specific needs.
Plus, recent improvements to the SAP Business All-in-One interface emerged from co-innovation among SAP and eight partners. Together, we delivered an easy-to-use, role-based user interface that companies can customize to meet specific needs. It’s a great example of how SAP fuses co-innovation into its day-to-day business approach to look beyond the boundaries of our own company and deliver exceptional customer value.
This fundamental business approach is also at the core of the SAP on-demand strategy. SAP is opening up SAP Business ByDesign as a platform for channel partners and customers to address specific needs. Customers and partners can build on top of the platform’s foundational capabilities, and by working through the SAP Business ByDesign studio (the visual studio .NET-based development environment), there is a huge opportunity to engage a wide set of developers in a familiar environment. This approach is critical: It establishes a new level of collaborative innovation driven by the creativity of customers and developers.
And SAP’s “Apollo” project illustrates how we collaboratively innovated in the mobile space. This project resulted in a mobile application that allows consumers to be notified of coupons and promotions from stores and manufacturers while shopping. A consumer can download a list of ingredients and be alerted to any promotions or coupons for a product or a substitute product. The application ties into a vendor’s customer relationship management (CRM) system to collect point-of-sale (POS) data on specific products to help track the effectiveness of promotions. A multi-faceted solution like this could not have been developed without the input of our customers — the application was created in collaboration with a grocery chain and a cosmetics company.2
Co-Innovation Grows in the Ecosystem
SAP customers don’t just benefit from our co-innovation work through our end products. There are many ways that customers can leverage our tools and initiatives to develop game-changing innovations of their own.
SAP Community Network
Co-innovation is, at its core, about sharing information. And, for SAP customers, the most immediate way to reach out and share information with the SAP ecosystem is through SAP Community Network, the online hub for much of the ecosystem’s activity. Members of SAP Community Network include customers, partners, consultants, experts, and SAP employees. Tapping into this network instantly provides a wealth of co-innovation opportunities.3 Companies can find answers to pressing questions and benefit from the expertise of other community members as they develop their own products. You can join the conversation at www.sdn.sap.com/irj/scn. Access additional information by visiting SAP EcoHub, an online marketplace for ecosystem-produced innovation, at http://ecohub.sdn.sap.com.
With SAP Community Network as a jumping-off point, SAP recently launched Idea Place, which takes co-innovation to the next level. Idea Place is an open online forum for customers and ecosystem partners to connect and provide feedback on new developments from SAP. Visit http://ideas.sap.com to learn more.
Another way to foster collaborative innovation is to gather members from different departments of various organizations and form a project team. For example, the SAP Co-Innovation Lab facilitates co-innovation with community members, providing a hands-on environment where SAP experts, independent software vendors, system integrators, and technology providers work together with customers to develop innovative business solutions. As one example, SAP Japan invited a leading Japanese total office support company to the SAP Co-Innovation Lab in Tokyo so it could use and validate the new features of the latest release of the SAP BusinessObjects business intelligence solutions. The experience helped the company solidify its execution plan for next-day delivery of office supplies and services to its customers. To find out more, visit www.sdn.sap.com/irj/sdn/coil.
Industry Value Networks
One of the reasons SAP’s solution teams are so effective is their ability to collaborate with customers and partners to address specific needs, in both a formal and informal manner. One way of facilitating this collaboration is with Industry Value Networks (IVNs), where leading-edge SAP customers and partners are invited to discuss specific issues and solve targeted problems. By truly understanding customers’ biggest pain points, we can bring together other parts of the ecosystem to solve real-world problems that go far beyond technology challenges. For example:
- SAP partner Capgemini joined the SAP Public Security IVN, which stimulated collaboration around safety and security globally. This effort provided a solid foundation that was leveraged successfully by a major US police force for its system to track property evidence.
- SAP worked with Daon, Cisco, Capgemini, Itelligence and other partners on an initiative for safer, more sustainable cities. This project aimed to provide demonstrable ways in which we could improve safety and security in a city.
Spread Co-Innovation in Your Enterprise
The common thread through all of SAP’s co-innovation efforts is increased customer value. Customers are encouraged to co-innovate with ecosystem members to drive technological change (see sidebar for more opportunities). To thrive, customers should also foster a culture of innovation across the enterprise. Consider these points:
- Develop a new way of thinking about innovation. Co-innovation requires a different way of thinking as a business. The rules of the game have changed — companies need to step away from the past and become more open to collaboration both internally and externally.
- Create your own ecosystem. While SAP’s ecosystem provides a wealth of opportunities for co-innovation, your company likely has its own “ecosystem” of suppliers, customers, and partners. Developing a more collaborative atmosphere with your most trusted partners is a positive step toward co-innovation. It’s wise to evaluate partners for your ecosystem based not on product or price (if they are suppliers) or on volume (if they are customers), but on the level of knowledge and capability they bring to the table. Your ecosystem should be the best of the best for your unique needs.
- Tap into online communities. Social business should be part of your business plan because it facilitates collaboration. SAP Community Network and SAP EcoHub are co-innovation engines waiting for a test drive. They provide effective ways to find and network with SAP customers and partners that can offer ideas and best practices for existing processes.
For SAP, co-innovation is more than a set of initiatives; it’s a culture. The initiatives help customers engage, but a culture focused on co-innovation is what truly makes a difference. We encourage customers to interact with the SAP ecosystem to experience the power of co-innovation within your own organization.
Steve Graham (firstname.lastname@example.org) is Vice President of Global Ecosystem Marketing at SAP AG. Prior to joining SAP, Steve led IDC’s Global Software Business Strategies practice. He has published research and delivered presentations on topics including technology ecosystems, partner-to-partner networks, software industry globalization, shifting technology industry business models, and intellectual property trends in the software industry.
1 S. J. Towner, “Four Ways to Accelerate New Product Development,” Long Range Planning (April 1994), p. 57. [back]
2 To learn more, visit http://blog.nrf.com/2011/01/11/groupe-casino-showcases-how-precise-retailing-can-be. [back]
3 For more details, see the article by Mark Yolton in this April-June 2011 issue of SAPinsider. [back]