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Ever since SAP introduced SAP Leonardo, questions have been asked about what it really is. At first, it was described as a platform for IoT-related applications, but this soon came to include a host of next-generation technologies like machine learning, artificial intelligence, big data and additive manufacturing. However, SAP maintains that SAP Leonardo is more than the sum of the various technologies, and is a system of innovation that can help businesses drive digital transformation projects.
In this Q&A, conducted at SAP TechEd 2017, Mike Flannagan, senior vice president of SAP Analytics and SAP Leonardo, discusses SAP Leonardo and how design thinking methodology drives it as a vehicle for innovation and digital business transformation.
SAP Leonardo seems to be evolving as we speak. How do you describe Leonardo to customers now?
Mike Flannagan: The way that we are explaining what Leonardo is meant to accomplish is evolving, and the design thinking methodology is in the center of the conversation.
Mike Flannagansenior vice president of SAP Analytics and SAP Leonardo
It's about how you engage differently with a customer to help identify high-value problems that are really worth solving. How you go through the design thinking and design doing process of creating prototypes to very quickly iterate on those ideas for solving a problem. It's having an integration blueprint so you really understand how to take that innovation and connect it back to those systems that run your core business so that you can scale them and get the full benefit, and then incorporating all that into a business case to make sure that it's really a strong ROI before you get started.
That idea is that, if it's a great idea, let's do it at scale. But if it turns out that it's not a great idea, let's fail fast before we spend a bunch of money. So that methodology sits at the core of Leonardo much more than the technologies.
Do you think that people are grasping that methodology description of Leonardo?
Flannagan: Yes, I think so. The underpinning technologies are available from lots of different people, so it's really more about how those technologies come together around a business problem. And, I think, as we have more industry accelerators that are available with preintegrated solution elements, we can demonstrate in a very tangible way the reduction in implementation time, then it becomes a bit more real for people.
A lot of the elements of Leonardo have been in our product portfolio for a while, so the product of Leonardo is how we preintegrate those around a very specific business problem to very quickly implement and produce that time to value.
So the focus is not just on the technologies, but on the design and problem-solving part?
Flannagan: Yes, because I think the biggest concern that a lot of our customers have is that digital transformation, or business transformation, is this big, boil-the-ocean kind of concept. They worry that they're going to spend millions of dollars doing something, and then realize they have very little to show for it. The design thinking methodology and approach takes a lot of that risk out.
How does that design thinking process work?
Flannagan: It starts with those explorer workshops that we do to start that design thinking process of helping to identify a problem that really is high value.
We have design thinking methodology experts and people who are experts in the underlying technology components and overall enterprise architecture to make sure that, when a customer identifies a problem that's worth solving, there's somebody there who can help build the right architecture. You then build that integration blueprint [so] what you're innovating connects to all the things that you already have.
We also bring in a mix of internal and external people, who are experts in Leonardo, around the business case development to make sure that we tie that back very clearly to the estimated business return based on the inputs from us and the customer. So bringing those resources and making that investment is a presales kind of investment, and it's not until the customer says, 'Yes, that's a prototype that my users can get behind, and a business case that my board can get behind' that it starts becoming a fully paid engagement.
How do the industry accelerators work?
Flannagan: Today, there are about 15 industry accelerators that we've built. We'll have an architect in the room who understands how to put together what we might build with what you already have, and we want them to understand the why. What are you trying to solve? Why is it important for you? So it's not just an architecture as an abstracted item, but we want to make sure that it ties back into the business objectives.
We'll also have an industry expert in the room; for example, if you're in retail, we'll have a retail expert in the room. They understand your business area and the specific problems that you have, and we really understand the elements of the SAP portfolio, like the technical integration parts. The intersection of that is a really good understanding of what the problem is that's really worth solving, and which problems are repeatable across customers where we might want to build an accelerator, versus what problems are very specific to you as a customer where you may need a more open or customized solution.
What do customers ask about costs, and do you build that into the design thinking?
Flannagan: Of course everybody wants to know what it's going to cost, but the element of how much it's going cost if it's a huge success is not that relevant. The question is how much is it going cost if I try to do this and it doesn't work?
So the accelerators are important because customers need to have fixed costs. They couldn't come in and ask how much this would cost [because] we'd say, 'We're not really sure, it will depend on this or that.' The accelerators have a fixed price tag, which includes all the services engagement. So building a functional prototype for your environment is included at a fixed price.
How collaborative is the design thinking process?
Flannagan: The business case is definitely the intersection of data that we provide, and data that they have to provide. So we can talk about what the actual integration cost will be for this innovation with your core systems. Our architects understand what those integrations are: the complexity, the effort involved, how many hours we think it would require. So that's a cost input that SAP can provide.
One of the things that the customers have to provide is their intelligence to help us understand how much that it would actually improve their sales. There's some things we can do to help facilitate the process of getting to that, but some data has to come from the customer, so the business case becomes a joint build between us and the customer so that everybody feels really bought into it at the end.
How long does a design thinking process typically take?
Flannagan: It starts with an explore workshop, which is typically an hour or two. That explore workshop turns into a design thinking workshop, which is typically one day, but it could be two days.
From there, if the customer says, 'Thumbs up, let's go,' it's usually six to eight weeks until you have a functional prototype. So, from start to finish, you're talking about six to eight weeks, roughly.
So, really, the fail fast part of it, if that doesn't work, you're out relatively quickly.
Flannagan: That's the idea. You know upfront that it's going cost me X to figure out whether this is a home run, a base hit or a foul ball.
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