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SAP’S ROAD TO INNOVATION

DESIGN THINKING AND LEAN DEVELOPMENT IN PRACTICE
DR. TOBIAS HILDENBRAND | SAP AG | 3 FEBRUARY 2014
“Ich wollte Mitarbeiter so motivieren, dass sie mehr leisten
als der Durchschnitt. Freie Entfaltung und Kreativität, ohne

bürokratische Zwänge und Regeln. Dazu passt auch keine
Stempeluhr, die mir immer zuwider war.”

Dietmar Hopp (one of the founders of SAP)

© SAP 2013 | 2
WHAT DOES SAP DO?
© SAP 2013 | 3
HANA
Applications

Cloud
Mobile

Analytics
67k

© SAP 2013 | 4

A LOT MORE THAN 40 YEARS AGO WHEN WE STARTED
WHERE DO WE
COME FROM?
© SAP 2013 | 5
Source: SAP
© SAP 2013 | 6

40 YEARS OF SAP, ALMOST 40 YEARS OF WATERFALL
The Principles of
Product
Development FLOW
Second Generation Lean
Product Development
Donald G. Reinertsen

1.
2.
3.
4.
5.
6.

Take an Economic View
Actively Manage Queues
Exploit Variability
Reduce Batch Size
Apply WIP Constraints
Control Flow: Cadence and
Synchronization
7. Apply Fast Feedback
8. Decentralize Control

Source: Donald G. Reinertsen (2009) – Lean Product Development Flow

© SAP 2013 | 7

WE COULDN‘T WAIT ANOTHER 40 YEARS
 Limited team size
 Iteration cycles,
 Limited WIP*

 Iterative feedback
 Empirical process
control
 Velocity understood

*) WIP = work-in-progress

© SAP 2013 | 8

SCRUM IMPLEMENTS MOST PRINCIPLES OF LEAN
Value-driven (agile)

Plan-driven (traditional)
Requirements

Resources

Release Date

fixed
estimated

Resources

© SAP 2013 | 9

Release Date

Requirements

WE MANAGE OUR REQUIREMENTS THE AGILE WAY
AGILE = “QUICK AND WELL-COORDINATED”

© SAP 2013 | 10
Scrum
Teams

Chief Product
product
team

backlog

release
backlog
sprint
backlog

© SAP 2013 | 11

OUR DELIVERY IS MORE RELIABLE AND EFFICIENT TODAY
WHAT DID WE
LEARN FROM LEAN?
© SAP 2013 | 12
Split organization
into teams

Split work

Split time

Deliver more
frequently
© SAP 2013 | 13

Risk
Risk

Conduct regular
Retrospectives

SCRUM REDUCES PRODUCT RISKS DRAMATICALLY
Improve ratio of
planning and
execution

Incorporate
feedback
early

Build quality into
products from
the inside out.

Build Coaches
within the
organization

© SAP 2013 | 14

WITH LEAN, WE LEARNED HOW TO CHANGE AND SCALE
© SAP 2013 | 15

WE LEARNED TO DELIVER MORE RELIABLY AND PREDICTABLY
WHAT ABOUT
INNOVATION?
© SAP 2013 | 16
Desirability
Feasibility

Viability
© 2012 SAP 17
© SAP 2013 |AG. All rights reserved.

WHAT IS INNOVATION?
17
?
HOW TO HIT THE “SWEET SPOT” OF INNOVATION?

© 2012 SAP 18
© SAP 2013 |AG. All rights reserved.

18
?
© 2012 SAP 19
© SAP 2013 |AG. All rights reserved.

YOU START WITH YOUR END USERS
19
© 2012 SAP 20
© SAP 2013 |AG. All rights reserved.

PUT YOURSELVES IN THEIR SHOES
20
‘‘A DEVELOPER NEEDS TO BE CURIOUS AND
ALSO DEVELOP EMPATHY FOR END USERS“

Source: interview with SAP co-founder Hasso Plattner (2012)

© SAP 2013 | 21
YOU NEED A DIVERSE, MULTI-DISCIPLINARY TEAM

© 2012 SAP 22
© SAP 2013 |AG. All rights reserved.

22
© 2012 SAP 23
© SAP 2013 |AG. All rights reserved.

YOU ALSO NEED SPACE FOR INNOVATION
23
© 2012 SAP 25
© SAP 2013 |AG. All rights reserved.

THE SIX BASIC STEPS OF DESIGN THINKING
25
“There

Are No Facts Inside
Your Building, So Get
Outside.” – Steve Blank

© SAP 2013 | 26
© 2012 SAP 27
© SAP 2013 |AG. All rights reserved.

DESIGN THINKING IN THE PROBLEM SPACE
27
© 2012 SAP 28
© SAP 2013 |AG. All rights reserved.

DESIGN THINKING IN THE SOLUTION SPACE
28
“Building

something nobody
wants is the ultimate form of
waste.” – Eric Ries

© SAP 2013 | 29
Focus on
Customer
Value

Short Iterations

Small Cross-Functional Teams
© SAP 2013 | 30

Continuous
Improvement

Incremental
Delivery and
Fast Feedback

DESIGN THINKING INCORPORATES AGILE VALUES, TOO
Product Backlog

© SAP 2013 | 31

PROJECT EXAMPLE 1: DESIGN THINKING & SCRUM
Common Roadmap

© SAP 2013 | 32

PROJECT EXAMPLE 2: CO-INNOVATION SETUP
CONCLUSION
© SAP 2013 | 33
Innovation and Effectiveness,
i.e. building the right things


First-hand empathy for end users



Creative solution finding (ideation)



Validation of assumptions and
prototypes with end users

Efficiciency and Delivery
i.e. building things right


Retrospectives and
continuous improvement



Process framework and
engineering practices



Agile planning and estimation
(backlog management)

= Building the Right Things Right

© 2012 SAP 34
© SAP 2013 |AG. All rights reserved.

DESIGN THINKING AND LEAN COMPLEMENT EACH OTHER
34
Customer
Development

Agile Software
Development
Team with
Intrapreneurship
Attitude

Business Model Design
© SAP 2013 | 35

OUTLOOK: INNOVATION IN LARGE ORGANIZATIONS
Thank You!

Dr. Tobias Hildenbrand
SAP AG
Dietmar-Hopp-Allee 16
69190 Walldorf

tobias.hildenbrand@sap.com

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