Illuminating the Path to Procurement Innovation

How often do we hear that a new product or service will answer all our needs? That it will help us to make better decisions, procure smarter, deliver products faster, live healthier and safer, run more efficient workplaces, and even adapt to change better – but only if we use that particular offering?

All too often, the hype eventually fades as soon as a newer, better, more affordable alternative emerges.

This classic experience is what I call “big bang” innovation. When a new good or service enters the market, it rarely generates the momentum needed to grow adoption and revenue sustainably – no matter the price point, feature, or challenge addressed. Even if demand initially outpaces supply, the novelty of the offering eventually wears off and customers begin to question the value of that purchase. They begin to look elsewhere.

The way some businesses pursue innovation is mere tinkering. Their products aim to disrupt the marketplace and create noise, but they lack a north star for sustained enhancements necessary to stay ahead of shifting customer requirements. A north star sets a common direction that inspires customers to achieve outcomes reflecting their objectives. When setting a course, product developers must evaluate whether their activities draw them closer to the north star or further away from it.

Without a clear vision for the long term, product developers may be able to create today’s shiny new object – and sufficient buzz to promote it – but only for a while. When customer demand begins to fade, today’s shiny, new object can swiftly become tomorrow’s rusted memento.

Real Meaning of Innovation: Value and Substance, Never Hype

True innovation sifts through the noise and replaces it with actionable outcomes and enduring customer value. Yet some in the industry seem to be generating much of the dissonance and hype these days – especially when it comes to business-to-business (B2B) procurement networks.

At SAP, innovation is treated as a team effort. We draw on people with different kinds of expertise, experiences, and work styles, leaning on each other, exchanging ideas, and collaborating to shape a shared vision. Once an idea takes shape, we nurture the concept bit by bit over time, adding customer feedback, experimentation, and real-time market insights to guide the project toward a final deliverable.

Innovation happens all the time and excludes no one. Everyone – executives, product managers, engineers, salespeople, consultants, partners, and customers – has a stake in how well we deliver offerings that are reliable and relevant to the current business needs of today’s buyers and suppliers. Seeking and following through on their feedback keeps us inspired to innovate new capabilities, stronger security features, and better processes that complement, augment, and improve our users’ experiences. How may we consistently exceed our customers’ expectations? I always ask my team: what is the “wow factor” in everything you do?

Take, for example, the procurement experience from the buyer and supplier perspective. Most procurement solution vendors focus on one or the other. But at SAP, we understand that both sides of every procurement transaction are inextricably linked and dependent on each other.

By continuously engaging in well-rounded, honest discussions with customers who are buyers, suppliers, or both, we step into their world with open eyes, hearts, and minds. We observe and empathize with their business challenges, understand their needs, pinpoint potential gaps in processes, and navigate paths to resolve them.

Our innovation approach evolves our technology portfolio – across direct and indirect goods and services; the contingent workforce; maintenance, repair, and operations (MRO); and operational procurement – to deliver concrete, measurable, and, importantly, integrated solutions to our customers in their efforts to strengthen agility and extend competitive advantage.

For example, Spend Matters noted recently that the launch of SAP Fieldglass External Talent Marketplace represents a “one-of-a-kind solution” and an “innovative one that an organization can start to use immediately. Its creation and launch represent a significant degree of business agility and innovativeness on the part of SAP Fieldglass. And it is also an experiment in cooperation and demand-aggregation for some staffing suppliers.”

Gaining customer trust and industry attention is not something we take lightly. We aim to deliver innovations that consistently enhance today’s offerings and turn our customers’ buying and selling experiences into meaningful and mutual growth opportunities. Their success, particularly in these uncertain times, guides our innovation efforts at SAP as we help to shape the future of procurement for both buyers and suppliers.

Innovation is a continuous process. Innovative products, services, experiences, and business models should build up the value that new and existing customers expect. Even if an existing offering is a success right now, true innovators always have another update or a complementary offering ready to be introduced as soon as demand shifts.


Salvatore Lombardo is the senior vice president and chief product officer for Procurement at SAP.
This story originally appeared on LinkedIn.