SAP: Bringing Economic Viability to the Front End of Innovation

Abstract

According to pioneers of design thinking, innovations should satisfy three perspectives: human desirability, technical feasibility, and economic viability. Analyses of SAP's innovation projects indicate that design thinking has effectively addressed both technical feasibility and desirability, but not economic viability. Hence, SAP has developed an innovation approach that focuses on economic viability and is compatible with design thinking via business model innovation (BMI). Addressing economic viability within innovation projects by calculating business cases early on and by creating detailed business plans at a later stage is not enough. It requires an approach like BMI that puts economic viability to the very core of innovation throughout the entire process. The focus on the business model forces the team members involved to center their thoughts and ideas on value creation for the identified customer groups and even more on value capture throughout the entire process from analysis to implementation. The investigation of a possible combination of design thinking and SAP's BMI approach indicates that both approaches have many similarities that facilitate close integration, and that both approaches can benefit from each other when fitting elements from one are integrated into the other.