All comments posted on this blog do not reflect the opinions of any organization that I am affiliated with. These are my personal perspectives only.

Wednesday, September 17, 2008

SAP & InnoCentive

Jevon at Socialwrite recently wrote about SAP's partnership with InnoCentive. My my, how things have changed. It wasn't too long ago that I was sitting down with SAP and listening to their philosophy on business practices which was the furthest thing away from crowdsource thinking like InnoCentive.

SAP had traditionally been about "best practices". According to SAP, companies stand to gain from SAP's global customer base and taking what is context for others and making it core for them. For example, what large scale operation would "build" their own inventory management system or human resource management system instead of buying it? You would spend much more effort and dollars to accomplish only a fraction of what a company like SAP has already been able to do. In addition, you benefit from their global R&D and refinement of best practices.

To fully reap the value of leveraging pre-packaged best practices however often requires you to minimize customization. Over customization would diminish the value of having a set best-practice to start with. Hence companies that just adopt the SAP practices would tend to benefit from higher levels of efficiencies. Or so goes the philosophy...

As I've written previously, the challenge with this thinking is that it limits innovation. Sure, you could argue innovation only matters around what is "core" to your business. But that line of distinction can be a bit fuzzy, and strong delineation could mean missed opportunities of taking what was "context" and transforming into "core". For example, if your core was manufacturing PC's and distribution was really context for you, you may miss out on creating a competitive differentiator by drastically changing the distribution practices.

For me it's been quite interesting to see how SAP has been on a road to "re-inventing" itself. The focus on SOA & BPM over the last few years and this most recent partnership with InnoCentive to crowdsource innovation could be a sign of things to come for all enterprises. If the world's biggest enterprise software giant whose core is around best-practices is now crowdsourcing for new practices... What are the implications to your organization?

Or perhaps it's just hoopla and SAP may not really be all that serious around crowdsourcing and is just doing this for appearances. Jevon ends his post by quoting Mark Yolton, Senior VP of the SAP community network, “We will only be posting problems which are not core to our business”. I hope not. As Clay Shirky stated, the old thinking was to focus on 80% gain for 20% effort but the new thinking is, why give up that last 20% of gain? Thoughts?

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