Business Report: Innovation Requirements for SAP SE in 2020 and Beyond

This report provides an in-depth analysis of the innovation process within SAP SE, a leading software development company specializing in ERP systems. The report explores the future of the software industry, highlighting the importance of innovation for business sustainability and growth. It examines SAP SE's innovation requirements, focusing on product, process, paradigm, and position innovations, and discusses how the company leverages technologies like digital transformation, machine learning, cloud computing, and artificial intelligence to enhance its ERP software, particularly S/4HANA. Furthermore, the report outlines the building of future innovation capabilities within SAP SE, emphasizing the shift towards cloud-based services and the integration of emerging technologies to meet evolving customer needs and maintain a competitive edge in the market. The report underscores the significance of aligning innovation strategies with market trends and customer expectations to ensure long-term success.

Running head: INNOVATION PROCESS IN SAP SE
Innovation process in SAP SE
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1INNOVATION PROCESS IN SAP SE
Executive Summary
Innovation is defined as new idea and device for gaining the expectations of the customers.
Innovation is required in each of the business industry, especially software industry for
maintaining sustainability of the business. This paper is focused on describing future
innovation in the software industry, SAP SE. It is found that the software industry is
achieving amount of growth in 2020, and it is expected that the company should develop its
ERP applications in 2020 and beyond it. Various software industry is continued to invest due
to doing a huge innovation in the industry. In this report, there is defining of necessary
requirements of SAP SE for innovation. There is also discussion of future innovation of the
company with its innovation capabilities. SAP ERP system is a useful application as it is an
innovative solution for the business organization. In order to understand SAP ERP, it is
required to know how ERP is sold when SAP became a well-known service provider. SAP
business suite is to be implemented properly as well as it is deployed by means of reliable
platform. In the software industry, innovation is required due to continuous change in the
expectations ads well as needs of the customers. Therefore, innovative is required in the
business to attract the customers towards their technical services.
The innovation in SAP SE is conducted through efficient products, processes as well as
service technologies available in the market. By means of using advanced technologies such
as digital transformation, machine learning, big data, internet of things, cloud computing,
blockchain as well as artificial intelligence, a better quality of ERP software is being
implemented. SAP SE is introduced with S/4HANA for providing the organizations to serve
and retain the customers in proper way. The implementation of this software system will help
the business to suit with the customer’s needs and develop offerings for the client in the
market to sustain the market for long time in future. SAP SE becomes ineffectual into the
market research. By means of using the digital technologies, the software form can gain an

2INNOVATION PROCESS IN SAP SE
attention in the market. There is setting of communication with potential clients. Usage of the
artificial intelligence in the human resources is easier, and IoT becomes a trend to provide
edge to the software development. By the year 2020, almost 80% of the ERP software will
change the current business model of SAP SE from the traditional license model to the
subscription business solution.

3INNOVATION PROCESS IN SAP SE
Table of Contents
Introduction, purpose of the report and structure.......................................................................4
The future of the industry 2020 and beyond..............................................................................4
The Organizations innovation requirements 2020 and beyond..................................................6
Building the future innovation capabilities for the organization...............................................8
Conclusion................................................................................................................................14
References................................................................................................................................16

4INNOVATION PROCESS IN SAP SE
Introduction, purpose of the report and structure
Kosalge and Ritz (2017) mentioned that innovation is considered as critical aspects
for the business organization as it is provided with new edge to the business organization.
Huge competition in IT industry is created an increasing requirements for the innovation
process in SAP SE. The technological changes in IT industry are growing to a higher extent.
The report is focused on innovation process in the business operations of SAP SE, it is a
market leading software development company famous for its ERP software (Draijer, 2020).
In the corporation, there is innovation in four types- product, process, paradigm and position.
The purpose of this study is to define the future innovations in the organizational
processes 2020 and beyond. The innovation capabilities of SAP SE is also determined in this
paper based on four selected types of innovation. Innovation is required into the IT industry
for achieving a competitive advantage in the market. The software manufacturer has wide
customer base to own its innovative as well as exclusive approach towards development of
software.
The structure of the study is to introduce the title to the reader and determine the
future of the industry 2020 and beyond. There is also discussion on innovation requirements
2020 besides beyond with building the future innovation competences for the organization.
The future of the industry 2020 and beyond
The software industry is progressing into advancing the IT infrastructure as well as
services for helping the companies to accelerate the adoption of cloud for the business
transformation. The applications are evolved to leverage the native abilities. In the year 2020,
the enterprise applications will go to the cloud native. The cloud native tools as well as
technologies will be mainstream (Davis and Comeau 2020). SAP us going to run ERP
applications like a service with a new native cloud abilities. Based on the technological trends

5INNOVATION PROCESS IN SAP SE
it will drive the adoption of cloud with ERP applications as well as shape cloud computing
marketplace in the year 2020. In wake of the move towards the cloud technology, SAP SE
will offer cloud based services via the subscription and old licensed based models in the
future (Zhao, Bandyopadhyay and Barnes 2020). SAP SE is working to make its idea of the
intelligent enterprise as a truth for the customers.
SAP is planned to deliver its out-of-box version of S/4HANA which is an integrated
human resource application, SAP analytics cloud as well as digital marketing tools. It will
help the software industry to compete in the European market. Innovation growth of the
software industry is accomplished to raise tough competition between successful other
leading corporations (Kosalge and Ritz 2017). Innovation of the software industry as well as
their success in leading software industry will result to be at higher position in the market.
Therefore, SAP SE is required to attend with comparative associations to become successful
in addition incorporate their innovation in the future 2020 and beyond it. The application will
cover vendor management, performance of sales, and procurement along with marketing
functions which will integrate in next year (Zelentsova and Tikhonov 2020). SAP S/4HANA
is serious portion of the digital core which can initiative the digital transformation besides
carry immediate business values.
SAP S/4HANA is the market leading intelligent ERP application which is leveraged
with advanced in-memory SAP technology for providing unparalleled business agility. It will
enable the company to exceed into the expectations of customers as well as direct the active
market (Parashar and Singh 2005). In this regard, it is seen that the software firm should
come up with a new software and technology to cater with needs as well as demand of the
project client, therefore it gains a high level of satisfaction from the project client as well as
customers (Wollschlaeger, Sauter and Jasperneite 2017). SAP SE is used of digital
transformation, machine learning, big data, internet of things, cloud computing, blockchain as

6INNOVATION PROCESS IN SAP SE
well as artificial intelligence for developing its high quality of ERP software. It helps the
software corporation to sustain in the software market for long time in the future context. The
management of the software corporation is implemented the software to develop with a
flawless experiences for people. SAP SE is a market leader of the e-business software
solutions which are integrating the business processes in various companies. It becomes third
software provider across entire world.
The Organizations innovation requirements 2020 and beyond
SAP innovation requirements are based on four types of innovation. In the product
innovation, SAP SE came up with a RM system for purchasing as well as inventory
management of the invoices (Lawson and Samson 2001). It helped the company to establish a
positive brand image in the mind of the clients and in the market. SAP business suite 7
software is developed to optimize the performance of business as well as lessen IT costs, it is
process innovation (Davis and Comeau 2020). The management of SAP SE is positioning of
the innovation as well as aligning its applications to facilitate shift into the target market from
the large scale to SME leads to position innovation. Finally, in the paradigm innovation, SAP
SE acquired with Hybris provided the organization with next generation e-commerce
platform with an alternative of the on premise and cloud deployment.
SAP SE will drive the adoption of cloud with ERP applications as well as shape the
cloud computing marketplace in the year 2020. ERP is the business process management app
which can able the organization to use of the system for managing their business processing
and automating various function related to the human resources, IT services as well as
technology (Haroon et al. 2020). Increased in adoption of ERP application required usage of
the advanced technologies like IoT as well as big data analytics to surge the ERP market
growth. Integration of ERP application with IoT devices will allow SAP SE to identify as

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well as remove unnecessary assets. IoT powered automation will keep their business
operations running on time without require to have human intervention. The proposed future
app will integrate all business functions and processes with a synchronized reporting along
with automation. It includes development of product, planning, marketing, manufacturing as
well as sales in single database application along with user interface (Bytniewski et al. 2020).
By means of the wearable technology, it will provide benefits like real time transmission of
data, minimization of errors as well as real time access to data along with faster making of
decisions.
Figure 1: Cloud tracks to continuous innovation
(Source: Iddris, Awuah and Gebrekidans 2016, pp-134)
The base of the new product is main significance for success, therefore SAP SE is
spending more time to form for several perspectives and aspect for various opinions-
diversity besides reviews with the external stakeholders are being vital. SAP SE is trying to
acquire ideas with minimum viable product for innovation. In order to get technology with
services such as SAP cloud platform, the company can form their minimum viable product
easily and create mock up as well as test functionality at earlier phase (Iddris, Awuah and
Gebrekidans 2016). It helps them to keep the innovation time low as well as launch new
product in six months to the software market.
The company is already using various combinations of cloud models such as public,
private as well as hybrid cloud (Parashar and Singh 2005). By the next year, the cloud

8INNOVATION PROCESS IN SAP SE
infrastructure layers such as software as a service, platform as a service, and infrastructure as
service will develop as less siloes. It permits the workloads to be moveable as well as data
streams to develop more mobile through whole stack. The strategic technology trend for the
company by the year 2020 is distributed cloud (Adamides and Karacapilidis 2018). There is
supply of the public cloud services towards the locations external of the cloud provider’s
physical data center. The cloud provider is delivering cloud service architecture, operations
governance as well as delivery. The distributed cloud is allowed to personalize the cloud
strategy (Lawson and Samson 2001). In the year 2020, SAP SE will go beyond to capture the
operational data as well as infuse the intelligence in the core operations to be agile along with
productive.
Building the future innovation capabilities for the organization
SAP SE is evolving by moving towards the client server architecture, revolutionized
the data management with SAP HANA and connected experiences with the business
operations. SAP SE will provide with IT infrastructure will help the world to run in better
way as well as improve over lives of people. The future of enterprise IT is simple as the
software is hyper personalized as well as provision outcome based commercial models. SAP
is created a distinction between new stream as well as mainstream elements of the SAP SE
(Wang and Dass 2017). New stream of SAP ES is fundamental to the business, therefore it
maintains a technical superiority in the technical field by developing SAP S/4HANA.
The IT innovation solutions will deliver the profitable business with an approach to
balance people and technology. The innovation approach is customer centric as well as agile.
The future innovation capabilities of SAP SE is to improve over customer experiences as well
as productivity of employee (Henningsson, Kude and Popp 2016). There is establishment of
culture of the innovation across the company. The cloud computing will play a key role to

9INNOVATION PROCESS IN SAP SE
bring the operational data as well as achieve better product by gaining of workshop
experiences.
SAP SE is focused on open innovation for its new product in the market as they are
opening its modernisation beyond the borders of the company to rise its innovation possible
throughout strategic usage of environment. The open innovation uses high cost for use of
their licenses. SAP SE is focused on innovating their business models with the external
collaborators. Through collaboration, the company is about sharing knowledge about the ERP
solutions, sharing market as well as business model related data. SAP SE uses SAP.iO brand
for describing its designed initiatives to early stage of the software innovations. The company
says to SAP.iO for building new innovations inside of its own platform as well as tools stack
(Lingam 2018). They are working for the external enterprises for building products and
finding new customer channels in the technical world. SAP.iO venture studio launched new
ventures which can tap in SAP’s data, relation with customers as well as technologies.
Through SAP.iO fund, the company takes funds to work in start-ups to get their promising
technologies (asug.com, 2019). SAP.iO foundries are designed to encourage people in
sharing ideas and building products in collaborative environment.
SAP SE is seen as adaptive systems which can take part into process of selection as
well as adaption of the sourcing strategies to grow stronger player. SAP is deriving most of
their business revenue from installed customer base (Kosalge and Ritz 2017). The
competitive advantage of SAP is to do it into single platform into the cloud, therefore E2E
processes besides new business network is analyzed besides optimized on trusted set of the
data.

10INNOVATION PROCESS IN SAP SE
Digital Core
SAP HANA platform
Collaboration business network
Internet of things (IoT)
Workforce engagement
Digital Innovation System
Analytics
Big data
IoT
Artificial intelligence
Blockchain
Machine learning
SAP HANA SAP cloud platform
Figure 2: SAP SE full innovation capability
(Source: Wang and Dass 2017, pp-133)
The above diagram shows the organization’s full innovation capability with showing
how digital core as well as digital innovation system is created together to support the digital
transformation (Welz and Rosenberg 2018). The digital core is provided SAP implementation
services to quickly adopt best practices for the app and digital innovation system involves
decision thinking services to help the company in reimagining future and experiment towards
success of the system. SAP digital innovation system is being designed based on three
principles. One is innovate ERP software quickly, second is integrating new innovations in
the business and third is scaling innovations to increase in business values (Eleftheriadis,
Mumovic and Greening 2017). SAP cloud platform is secret sauce when it is coming to the
innovation as it is provided with three distinct innovation capabilities:
Development platform: The development platform of SAP SE is providing
comprehensive set of the services as well as abilities to support the programming languages

11INNOVATION PROCESS IN SAP SE
used to develop ERP application (Uhl and Gollenia 2016). Strategy used to open standards as
well as open sources across stack helps in leveraging the current skills as well as properties to
barriers to entrance along with total cost for development as low.
Integration as well as run time of the platform: The run time platform of ERP
application helps in minimizing complexity to provide the services linked with the enterprise
cloud applications. The cloud applications are higher availability, disaster recovery, security
as well as cloud scale. It enables the companies to focus on innovation as well as business
logic. Value of the business application is developed rather than the technical complexity
(Wong et al. 2019). SAP based cloud platform is productive for the client as it helps in
solving business related problems.
Distribution and commercialisation of the platform: SAP cloud platform with SAP
app centre is the delivery channel, addressing into distribution as well as commercial
requirements of the platform. It is providing access to the SAP ecosystem. For the business
partners, it has potential to sell installed base of less than 365,000 customers, which is a
benefit for the cloud platform of SAP (Daithankar 2016).
SAP SE is focused on the customers as well as partners to accomplish with the IT
platform. SAP is provided machine learning technology and applications in SAP S/4HANA
like reconciliation of the cash, invoicing, incorporates the machine learning as part of the
SAP SE. it is bringing the new technologies as well as services to help the business in
powering the digital transformation (Iddris, Awuah and Gebrekidans 2016). In the supply
chain as well as logistics, IoT processes across SAP S/4HANA along with Hybris permits to
observe goods as well as assets. IoT enabled processes into SAP solutions will enable in
maximizing value of the products and merging real time sensor data with the business data