How SAP Seeds Innovation

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SAP awards points for diverse contributions to its community forums, and these points ultimately qualify participants for prizes. More recently, participants can make donations to the UN World Food Program and gain a listing on a prominent Top Contributors Web page.

Robust ecosystems are helpful to individuals, not just institutions
SAP's networks of partners mobilize firms to contribute specialized expertise in the ecosystem, but the forums where much of this value is delivered engage individuals and help make individuals more successful in their jobs. By providing ways for individuals to get their jobs done faster and become more productive in their work, SAP ensures that participation in these forums is sustained over time. If this is important in enterprise software, it is likely to be even more important in consumer product and service businesses—particularly where significant opportunity exists to engage individual consumers by connecting them with others sharing their interests.

Robust ecosystems require mobilizing large numbers of specialized third parties, not just the vendor and its customers
Troll through discussion forums organized by SAP, and you will find lots of examples of employees at one customer helping out employees of other customers. Part of the richness of these forums is that they bring together not just the experience and expertise of SAP and its clients, but the depth and breadth of thousands of highly specialized business partners. This is perhaps obvious in a complex product business, such as enterprise software, but it also can be important in a broader range of businesses. The value of relatively simple products can often be enhanced by grasping the broader context in which they are used. For example, a maker of office products might add a lot of value to filing devices by bringing together advice on office productivity techniques.

Ecosystems at the edge bleed into the core of the enterprise
Discussion forums provide an opportunity for employees to reach beyond the edge of their own enterprise to access expertise in a diverse ecosystem of other companies. The support they receive provides an opportunity to improve internal business processes and the economic performance of their companies. But the full benefits will not be realized unless executives design ways to disseminate this learning within their organizations.

Ecosystems are not just about connecting to existing resources—they help provide platforms for distributed innovation and learning
Many executives tend to view ecosystems in static terms: diverse resources can be accessed and mobilized through ecosystems. At the same time, these ecosystems can become fertile ground for the innovation of new products or services and, in the process, help all participants get better faster. As one example, SAP formed an Industry Value Network to engage a group of banks and technology partners to define new enterprise services to support activities through the life cycle of a loan, from initial marketing to ultimate repayment. Sustained collaboration by diverse participants generated significant new insights into how software can enhance bank-loan performance.

John Hagel and John Seely Brown are co-chairman and independent co-chairman, respectively, of Deloitte LLP's Center for Edge Innovation. John Hagel writes a blog at Edge Perspectives. Their monthly column, Innovation on the Edge, explores what executives can learn from innovation emerging on various forms of edges, including the edges of institutions, markets, geographies and generations. Sign up here for an RSS feed.