SAP is a 40-year-old German company that is one of the leaders for enterprise systems for business operations. SAP has its headquarter in Germany but has locations worldwide. SAP is a large company that found it challenging to innovate and so, a division of SAP called SAP.io was created in 2016. SAP.io is an incubator where SAP employees and people without direct connections to SAP get support and resources to execute on their innovative ideas. SAP.io provides both funding and mentoring for projects as well as access to a large network of people. SAP.io has been named as one of Europe’s best start-up enterprise partners. At SAP.io we met with Ram Jambunathan, senior vice president and managing director of SAP.io.
SAP.io focuses its innovation on intelligent enterprises, because SAP believes that every business will use some sort of intelligence within a few years. Before an innovative project is started or funded, the question of how relevant a product is for customers is always asked. Ram Jambunathan believes that sustainable innovation should be the biggest focus for companies and that is usually achieved by incremental innovation, which enhance core capabilities. Disruptive innovation takes time due to users having to be trained for the new process. Therefore, Ram Jambunathan always tries to execute disruptive ideas as incremental as possible.
SAP.io is working as an incubator for innovation not only for employees at SAP but also for external parties. SAP.io will fund innovative ideas, provide valuable data, and provide a network of connections. In return, SAP gets to learn from new start-ups that might change the way customers will work with SAP.
SAP.IO is also training SAP employees in innovation by working with a concept called “Intrepreneurship”. The goal of this concept is to make every employee in SAP help to contribute to future innovations. Multiple times a year, SAP is holding a boot camp where employees can work on their innovative ideas and the winners of this competition will get resources from SAP to work on the innovation project full time for a couple of months. Three key success factors for SAP.io are the executive mandate, the patient capital and the creative structure that the incubator provides.
- Will the final product provide value for SAPs customers?
- Does SAP get helpful knowledge from the project?
- Will the people in the project become more skilled to be able to enter a leadership role?
The Cluster Advantage
SAP is working with universities to learn about new concepts in the industry. One example that Ram Jambunathan was mentioning is the close relationship with Stanford University’s Design School. The latest trend in software development is the design concept and by working with Stanford University SAP is able to leverage better knowledge reading it. Ram Jambunathan also believes that co-operation is important for companies today. IBM is a big competitor for SAP but is also helping SAP with the installation of the software. In other words, SAP and IBM are competing in some areas but helping each other in others. The reason why SAP.io has an office in Silicon Valley is also the strong network between start-ups and investors that exists there. In other words, Silicon Valley brings a unique environment that enables learning.
76% of every transaction worldwide touches an SAP system.
“Netflix is able to produce original content, because they know who is going to watch it.” Ram Jambunathan, senior vice president and managing director of SAP.io