There was a time when business operational processes weren’t enabled by as much as limited by what technology could and couldn’t do. That certainly was true in the days of “batch vs. online ” processing – the obvious example being that if the online system didn’t come up until 8 AM, there wasn’t a thing you could do about it except go get another cup of coffee… It seems so anachronistic now.

All of that started to change when technology was able to be more adaptive to what the user wanted to do – we take this for granted now, but there were profound design implications to the idea of “interrupt driven ” computer program code design rather than “waterfall ” design. The thing that’s interesting about this change is that it wasn’t all that long ago that it happened (and admit it, retailers, there are lots of programs in your IT portfolio now that can’t make the claim!).

When it comes to software giant SAP, all the work done to transform the big ERP to a SOA ( “services oriented architecture “) design concept happened in the 2000’s. Here’s how the company’s website describes “SOA “:

“Service oriented architecture (SOA) is a business-driven software architecture that increases adaptability, flexibility, openness, and cost-efficiency. With SOA, organizations can:

• Compose applications and enable business processes rapidly using enterprise services
• Improve the reuse of software to become more agile in responding to change “

And here’s what the website says is the benefit:

“Today, your IT department must adapt as fast as business can, if not faster, and even anticipate change. By deploying a standards-based service-oriented architecture (SOA), you can increase flexibility and control your costs. SOA goes beyond the common concept of Web services and provides an enterprise infrastructure and approach that achieves optimal business results within heterogeneous landscapes. “

A Move to ‘Design Thinking’

All that is well and good, if a little Polyannish. Getting the IT department in a position to respond more quickly to business demands for change can’t be anything but good. But to me, the real benefit of the modern architectural principles is that they theoretically allow us to stop talking about tech. And that has posed a problem for engineering-driven companies like SAP, because they are so all about the quality of their software.

And so it was really interesting to hear at last week’s SAP Analyst Base Camp, held at the SAP facilities just outside of Philadelphia, that the company is diving headlong into what founder and technology guru Hasso Plattner describes as “design thinking “. Plattner has been expounding the virtues of design thinking at at the Hasso Plattner Institute of Design at Stanford University in Palo Alto, CA. Perusing the Institute’s website, I came across an “introduction to Design Thinking In One Hour ” workbook that describes the process for a project to “redesign the gift-giving process for your partner “. Here’s the process:

• Gain empathy, by interviewing your partner, and then digging deeper
• Generate alternatives to test, by sketching out at least 5 radical ways to meet your user’s needs, sharing those solutions, and capturing feedback
• Reflect and generate a new solution
• Build and test that solution
• Share it and get more feedback
• Do it again (the “virtuous cycle “)

This may sound on the surface a lot like “reiterative design “, “JAD ” ( “joint application development “), “prototyping “, or any of a similar array of methodologies that have been tried and often discarded. But there are some key differences from the past, as Mark Ledbetter, SAP’s Global Vice President, Retail Strategy, pointed out. Design thinking software development is enabled by, a consistent data model, a consistent user interface (UI), consistent application interfaces & architectures, and “openness ” (i.e. the IT portfolio follows standards).

That’s a LOT, and sadly it doesn’t describe more retailers’ IT portfolios. But to SOA (and HANA) enabled SAP, it’s a good thing – an obvious revenue opportunity for the big software provider. In theory, software assets (those that are designed according to SOA principles, anyway) can be organized around a design process in the way that best suits the need. SAP is “eating their own dog food ” – they are using just such a design process to develop many of their new mobile capabilities.

Something New

The notion of “design thinking ” also represents something challenging and new for SAP, and that is that they are engaging with retailers and other companies in efforts to redesign their internal operations without necessarily expecting to sell them software as a result. That gets to the issue of “organizational change ” that technology can trigger.

Although “rules of thumb ” are no more than what they are (i.e. they not “budgetable ” numbers), in my CIO days I used to have a rule of thumb that any so-called “transformative ” technology would require as much capital on the organization development side as it did on the technology side, i.e. if we were planning on spending $10M to implement package X, then we’d better budget another $10M on changing the organization to get the best out of the technology investment. But RSR frankly doesn’t (typically) see that in retail. Instead we see a lot of a “leftover ” attitude that people will figure out what the new system will and won’t let them do, and that’s that. No wonder so many businesses complain about not getting the full value of their tech investments!

SAP has historically stayed out of the business of providing process and organizational guidance to businesses that want to “transform ” with technology. Instead, they have depended on a big and deep network of companies such as Cap Gemini, IBM Global Business Services, Accenture, and others to take that part of the effort on (so if you accept my old rule of thumb, they might have been walking away from up to 50% of the revenue potential of the project). But with Hasso Plattner pushing the company towards leading with “design thinking “, they are getting into it now. And that’s new and noteworthy.

As Sethu M, newly promoted SAP Chief Technology Advisor, GCO and Products, said at the Base Camp event, “SAP is a business process company, not a technology company “. While it may have always been implied that SAP technologies are (obviously) used to automate business processes to help make them more efficient, this statement is a change for the software giant.

And it’s all because of design thinking, which in turn is made possible because of a decade of investment in transforming the SAP portfolio according to SOA principles. SAP hasn’t always been rewarded (by the investment community, at least) for taking the long road, but the benefits of such dedication to a vision are showing up now. And SAP wants the retail industry to be the beneficiary.