SAP

Contents
1. WHY DID SAP DECIDE TO IMPLEMENT AN ECOSYSTEM AND HOW DID THEY REALIZE IT? WHAT WAS
CRUCIAL FOR ITS SUCCESS?

2

2. BESIDES NEW SOFTWARE PRODUCTS, WHICH OTHER KEY OUTCOMES AND BENEFITS ARISE FOR SAP
BY USING THE ECOSYSTEM?

3

WHAT WOULD BE YOUR RECOMMENDATION FOR SAP WITH REGARD TO NAKISA?

4

BUILT IT YOURSELF

4

BY

5

PARTNER

5

CONCLUSION

5

REFERANSELISTE

7

Side 1

1. Why did SAP decide to implement an ecosystem and how did they realize it? What was crucial for its success?
The ecosystem realization was more or less due to internet startup firms that challenged the SAP business model, companies like IBM and Microsoft pushed open protocols and web services to
IT customers, witch again could manage a fully integrated system based on open source with
“best of breed” suppliers. In that they also recognized that the overall IT knowledge also increased due to younger and better trained IT departments/persons inside companies. It was important that SAP are in the lead of the change, due to the first mover and also that they have a high knowledge regarding IT programing. In the book “The innovator´s solution” by
Christensen and Raynor (2003) there is mentioned disruptive innovation, in this context we could say that the new entrants of open based programing is a huge threat and could possibly in the future change the industry. As we can se in figure 1 the new marked disruption is a possible threat for existing industry. If you are trying to be the first mover it is also crucial that “getting it right“ as mentioned in the book are taken care of.
The success factors was fore SAP: Key costumers, Costumers vs partners vs internal organization. How to manage the information flow in-between these stakeholders in the ecosystem. The mindset and understanding as

Figur 1 Disruptive innovation "The innovators solution"
Christensen and Ryanor (2003)

well as organizational structure had to be carefully trimmed and organized in a functionally way. Groups like SAP Developer network
(SDN), Business Process Experts (BPX), and Enterprise service (ES). Al of these groups did take care of the information flow and was carefully managed by SAP. They even divided companies in 3 levels, and managed the Intellectual Properties rights (IPR) with contracts to make sure that
SAP was the owner. But thee was also possibility for company to use information (agreed) for mutual use.

Side 2

2. Besides new software products, which other key outcomes and benefits arise for SAP by using the ecosystem?
When you are working closely with suppliers, developers, costumers, industries, institutions and partners there are information flowing back and forth, SAP is the only one that actually has the complete overview. By using these information right new products, new understanding could give a huge benefit to competitors now and in the future.
The understanding of existing/new industries that could give a completely new platform in the
SAP world. New partners could be contacted due to the “Big data” analyzes is showing gaps in the exiting platform this could emerge in joint technology development that mutually benefits the parties. When you have created a successful eco system it is hard work for competitors to make an entrance, du to the complexity and contracts/culture in-between an ecosystem. Another benefit is that SAP now have a good start for a performance engine for further development internal usage of information. The performance engine (The Innovators Solution, 2003) are described in 4 steps. First one is start before you need, this is to use the time necessary and not push things to fast due too errors, get it right the first time. We could discuss if they are to late regarding the
Internet solution but I would say they are quite open-minded and on track regarding to the thinking of Yusuf in this SAP case. The second is a senior manager in charge to monitor the resources/allocation and information. The third is An expert team of movers and Shapers, use the information and shape that into disruptive growth. The fourth and last is Train the troops,
Engineers, sales and in this case tier 1 and tier 2 costumers and agents. How to outperform the competitors ore threats to the ecosystem. The tier 1 and 2 also have to be closely watched due to the nature of break out or do it yourself in a later stage.

Side 3

What would be your recommendation for SAP with regard to Nakisa?
Yusuf have 3 decision to make by for the Nakisa company, built it yourself, by or partner up.
In the beginning of the paper there is some reflection of the changes of the platform and threats from the internet. SAP have already chosen a platform strategy to meet the threats from the internet. In that SAP has realized the need to connect the best of breed to be able to compete in the future. At this point the Nakisa company are the leader in the “talent management” C-level hereafter HR, due to Nakisa is the supplier to SAP internally for the HR department. In the further discussion I´m reassuming that SAP has done a research of who would be the best fit/supplier for the usage in HR segment.
Naksia wishes to be a Tier partner the 1 or 2 steps after the certification “powered by
NetWeaver” in 2007 and are working to get the road map from SAP. And also get all the information regarding customers to SAP to increase the customer platform and also be able to sell the system as SAP certification du to demands from customers and also the possibility to sell the system to new customers as certified.
The Tier 1 partners are SAP actually selling there’s system, with means SAP are not taking the cases lightly, the low number on the Tier 1 is a strategy from SAP that these are chosen for
“costumer value and industry relevance” Costumers are expecting quality due to the missioncritical application.

Built it yourself
Yusuf has realized that “do it yourself” Is probably not the way to go due to the nature of the new platform and the lack of internal competence in HR development and understanding.
Regarding the need of HR solutions SAP has realized the same thing, as Nakisa that the HR is fast growing and the need for are solution is crucial. SAP would probably not bee able to turn around and solve this case fast enough. And if they did there would be complication with the already agreement with Nakisa and others if Sap suddenly starts to develop there own system after knowhow from partners.

Side 4

By
If SAP choose to by Nakisa, it will have to discuss are Nakisa willing to sell, if not will they stop working with SAP and be a big competitor in this segment. As discussed in the paper from
Reitzig, (2011) there is a case regarding cooperation in-between parties in a company, if SAP choose to by and for the discussion Nakisa is willing to sell, SAP will meet considerable issues to solve in the nearby future, due to culture SAP (German) and Nakisa (Canadian, Montreal the
French part), Reitzig are discussing the adjustment of the funnel there the Country Bias is a part of the cooperation, managers and employees may have fewer miscommunication if they are from the same country, in this case Germany and Canada. Further on the country specific background is also a issue due to relevance of ideas, who make the decisions and at last the “homophily” effect managers like there one countrymen better, for reasons that are unrelated to the case.
And then we have the site bias, managers choose ideas far more often from the same site actually between 10% to 50% more often, this is a group feeling and tends to work against the possibility to by Nakisa. There will be to many issues to solve and the culture/distance difference is probably to high. Contract of the IPR right’s and Joint venture seems to bee a better solution.
Partner
The partner solution seems to be the right solution, there is already established a connection inbetween SAP and Nakisa, the implementation of the system was a success. Furhter on the company Nakisa and SAP seems too be working well together due to the success of the implementation, the culture as mentioned before will therefore be a small issue in this solution due to that the Canadian Nakisa will work as is, without changes. In “putting it together: how to succeed in distributed product development”. (2011) The management of the cooperation process are a crucial for a success especially the Spanning mechanism 5 points: Align incentives,
Specify requirements, Share information, Empower the “integrators” and Create governance.
If this is done right, the companies will thrive in the cooperation but they need to observe “mind the gap” and double confirm the understanding in each company to minimize misunderstanding due to language, culture, geography, time zones, contact points etc.
Both companies need to adapt and understand the need of rules and boundaries in-between the companies. Conclusion
Due to the complexity of the programing and understanding of needs in the different segments and the new platform strategy that SAP already had decided, I would recommend a Partnership as a solution, and carefully managed this by contracts, IPR right’s to make a clear boundary fore
Side 5

competitors, and even a description of formal training in both companies, this is regarding to how to cooperate and work with and the understanding of different culture. Rules have to be common understood and taken into considerations. Nakisa would thrive and develop better solution fore the better god and probably “be best of breed” as a solely unit in the long therm.

Side 6

Referanseliste
Amaral, Jason; Anderson Jr, Edward G; Parker, Geoffrey G. 2011 "Putting it together:
How to succeed in disrupted product development"
MITSloan Management Review, Vol. 52 NO. 2
Christensen, Clayton M; Rayanor, Michael E. 2003 "The Innovator’s solution"
Boston: Harvard Business School Publishing Corperation.
Reitzig, Markus 2011 "Is Your Company Choosing the Best Innovation Ideas?"
MITSloan Management Review, Vol. 52 NO. 4

Side 7