A group of technology executives from all types of organizations across the U.S. and Canada gathered in the shadow of Camelback Mountain in Phoenix for the ASUG Executive Exchange National Summit in February 2020. The topic that brought them together? Innovation and how to execute it via their people, processes, and technologies—whether through SAP or non-SAP solutions.

Innovation Requires More than Just Ideas

Innovation sits at the top of the list of priorities at most organizations, regardless of their business or industry. Yet how many of those organizations are truly effective at introducing real innovations? We found in the ASUG Pulse of the SAP Customer 2020 study that organizations are spending more than twice as much time executing on current strategies than on planning for the future (70% executing and 30% planning). And only 7% of ASUG members say they belong to organizations that spend more time innovating than executing on current strategies.

That number shouldn’t be so low. By a show of hands, about half the attendees in the room indicated that they’ll be introducing new products and services in 2020. Most organizations don’t suffer from a lack of ideas—they struggle with how to process those ideas into real projects that add value to their organizations. At the heart of that struggle is how to prioritize what to pursue, how to evaluate whether those projects are successful, and what to do when you discover they’re not.

What Exactly Is Innovation?

Perhaps the most interesting discussions of the week centered around the definition of innovation itself. ASUG CEO Geoff Scott asked this question in his opening keynote, “The Innovation Imperative: What, Me Worry?” “I think the word ‘innovation’ trips us up sometimes,” he said. “Are we talking about ‘capital-I Innovation’ or ‘little-i’ innovation? When these become big projects, sometimes they turn into lots of meetings, complex processes, and big budgets—all while the actual ideas slowly die on the vine. Meanwhile, we could be adding incremental innovations.”

Conversations with attendees throughout the week revealed that these executives all have slightly different views of what defines innovation. Some leaned toward the “little-i innovation” definition that Geoff offered, where innovation is about making continuous improvement to all types of processes and technologies. Others defined innovation as using IT teams and technology to deliver value to the business, through both large and small projects. Several executives agreed that new advances often come from putting existing things together in different ways—citing the example of Uber and Airbnb, neither of which invented any of the technologies they used to build their empires. A few others focused on the importance of the mindset to try new things, stay curious, learn from failures, and celebrate when you achieve successes.

Creating a Culture of Innovation

In his keynote, ASUG CEO Geoff Scott underscored the importance of the innovation mindset, both at the individual and at the leadership level. “You need to create a culture of innovation,” he explained. “If risk is not rewarded and failure is not an option, then those at your organization are going to think to themselves, ‘I’m not even going to try.’ You need to be conscious of your role as a leader and what you’re doing to create the right environment for innovation.”

ASUG saw data to back this up in our 2019 study of SAP customers. More than half of customers (51%) told us that the level of innovation at their organization affects their job satisfaction and 44% said it affects how long they’ll stay with an employer. Attendees echoed this as they discussed the importance of giving their teams permission to set aside time away from their day-to-day work fighting fires and handling support requests. Those who do this said that it energizes their teams and drives satisfaction.

One of the presenters shared how his team is charged with helping SAP become a more innovative organization. SAP Chief Innovation Officer Max Wessel asked the crowd, “Who thinks SAP is on the bleeding edge of technology?” When just a few hands went up, he responded with, “My job is dealing with that.”

Finding Innovation in the Cloud

One of the topics covered over the two days of programming was the importance of having a cloud mindset to support innovation. Rob Enslin, former SAP executive and president of cloud sales at Google Cloud Platform (GCP), presented on innovation in the cloud with a focus on why enterprise innovation is lagging consumer innovation.

Despite SAP’s connections with Microsoft through Project Embrace, GCP is making heavy investments to support SAP environments—many of which are already deployed or in development. Enslin laid out the key reasons why SAP customers should consider moving to GCP as the intersection of infrastructure, integration, and analytics. “The process of adopting the cloud can happen in a matter of weeks, not years,” Enslin said as he gave an overview of the steps Google takes SAP customers through to help them build a cloud strategy, prototype, architectural blueprint, migration sequence, and phased rollouts.

Using the Cloud to Keep the Core Clean

Edy Sardilli of Google spoke about the opportunity to augment SAP Cloud Platform with Google technology, decoupling innovation from your core business processes and keeping them in the cloud. He cautioned, “There are two silos in organizations: Those doing SAP cloud development and a separate team working on cloud development. You don’t want a situation where your SAP teams just ship data to the other teams so they can build apps.”

Colleen Speer, senior VP of SAP Cloud Platform North America, echoed the “keep your core clean” message and reinforced the importance of making rapid changes with the SAP Cloud Platform. “That way you can build in the cloud without disrupting anything else,” she explained. 

SAP Customers Take on the Cloud

While the cloud may look like it’s an answer for innovation, customers in the room expressed some frustrations about the level of change fatigue it causes within their organizations. They explained that it has become difficult for the business to absorb and apply these innovations as fast as they enter their technology landscapes.

ERP industry analyst and principal at Enterprise Applications Consulting Joshua Greenbaum tipped his hat to ASUG’s role as support group as he introduced himself, “My name is Josh and I have an innovation problem. The reality is that most customers are in a similar place and simply want to have the same cool toys as their competitors.” He shared his assessment of where many SAP customers are in their cloud journeys in his presentation, “Hybrid in the Cloud: A New Hope or a New Headache?” He sees the necessity for cross-pollination between SAP and non-SAP systems, given that the majority of customers are working in best-of-breed, multicloud, hybrid environments. Greenbaum wants the hyperscalers to help solve this for customers. “If the reality is heterogeneous, someone has to support the customer,” Greenbaum said. “Being able to deliver innovation on top of the platforms is critical. Who can own the business relationship and who can orchestrate the process?”

Where Emerging Technologies Fit In

David Judge, VP, SAP Intelligent Enterprise Solutions, presented on how to succeed with the top-of-mind emerging technologies: artificial intelligence (AI), machine learning, and automation. He ran through the many reasons why AI and machine learning are having difficulty living up to the hype around them.

“There’s a huge shortage of engineers and data scientists who can do this work. But do we even need these resources?” Judge asked. “And when we have them, are we using them properly?” Yet he warned organizations that are not looking to better understand AI that this functionality may be creeping into their tech stacks through Lines-of-Business, which could threaten their success. He left the group with a different take on the statement when he said, “AI won’t replace managers, but managers who use AI will replace those who don’t.”

Hands-On Innovation in Action

During the week, the executives took part in a hands-on innovation culture workshop run by Sally Lawler Kennedy and Tina Tuan who are part of the SAP AppHaus team at SAP that can help you address innovation at your own company. They shared SAP’s answer to what defines innovation as practices that optimize, extend, and transform, as well as its innovation formula: Innovation = Creativity x Execution. The SAP methodology sees five enablers to innovation: people, process, place, leadership, and technology.

Attendees broke into small teams for the two-hour workshop, collaborating on post-it exercises to identify the biggest challenges to innovation their organizations face and then what they could do to solve those challenges. At the workshop’s conclusion, the executives shared what they would take back to their organizations and the value they saw in the process. Several participants expressed that it felt good to know their organizations were not alone as they discovered others faced many of the same hurdles. A few commented that they realized the importance of having a plan for innovation and that no single department can own innovation, which comes in many shapes and forms.

What’s Working to Drive Innovation

Despite the struggles the attendees discussed, many in the room also reported progress in their efforts to innovate at their organizations. One executive described how a recent organizational restructure around the customer experience was making a big difference. Others talked about how they were incentivizing not only their teams, but also their third-party partners based on how they’re contributing to innovation. All agreed on the importance of the synergy between IT and the business throughout the innovation journey.

People Are Your Innovators

One SAP customer that has successfully broken down the barriers between IT and the rest of the business, New England Biolabs, shared their story during the panel discussion “How Does Your Organization View Innovation?” Sharon Kaiser, ASUG board member and CIO of New England Biolabs, and Maurice Southworth, executive director of production, explained how they broke down barriers while going through the process of moving from a business driven by scientific tribal knowledge to digitally enabled processes supported by SAP ERP. “We had a big change management issue,” Kaiser said. “We have scientists who have been working with us since the 1970s. I had to convince them to adopt SAP when they kept telling me, ‘I hate SAP.’”

For New England Biolabs, the focus is on the people. Southworth mentioned the importance of the hiring process. “We’re looking for people who want to get embedded into our culture, not just come in and do their jobs and go home,” he said. “Don’t hire quickly. We find it’s easy to find skilled people but harder to find people with passion who are a good fit.”

Innovation proved to be a rich topic to explore at the 2020 ASUG Executive Exchange National Summit. Expect to hear more about this topic through the regional Executive Exchange events planned throughout the year. ASUG members can log in and add Executive Exchange to their profiles to follow future events. 

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