A Digital System of Innovation
The current version of SAP Leonardo made its debut at SapphireNow 2017. On the main stage, SAP CEO Bill McDermott called it a “digital system of innovation” – a catchy description which doesn’t really tell you what it is. In all fairness to Mr. McDermott, this is technically a relaunch, so perhaps he assumed a level of knowledge that proved not to be universal. Previously Leonardo was SAP’s brand for IoT, but the re-launch positions it much more broadly.
So what is SAP Leonardo? It is essentially a toolbox of digital technologies, including machine learning, block chain, big data, data intelligence, IoT, analytics, and more. SAP will not only market and sell these tools individually and collectively but it will also package them with design thinking and services to deliver innovation to solve specific business problems. Yes, it is a brand, but it is not a suite. A suite implies integrated components working towards a single (perhaps broad) purpose. Yes the different components can and do work together, but they also can stand alone. Even calling it a “system” is a bit misleading. Think of it more as a set or a collection.
Once you understand that these are digital tools that will essentially deliver innovation, referring to SAP Leonardo as a digital system of innovation actually makes a lot of sense.
SAP Leonardo is apparently named after the Italian Renaissance man, Leonardo di ser Piero da Vinci, more commonly known as Leonardo da Vinci or simply Leonardo. Leonardo was an Italian polymath. A polymath (Greek: πολυμαθής, polymathēs, “having learned much”) is a person whose expertise spans a wide variety of different subject areas, enabling him or her to draw on complex bodies of knowledge to solve specific problems. According to art historian Helen Gardner, the scope and depth of Leonardo’s interests were without precedent in history, and “his mind and personality seem to us superhuman, while the man himself mysterious and remote.”
The digital technologies included under the SAP Leonardo brand also span a wide range of subject areas, and can indeed solve specific problems. And when technologies such as machine learning and artificial intelligence are combined with data, big and small, the result could be viewed as remarkable – almost superhuman. To all but the true technologist, they do appear to be mysterious.
Our research shows these types of technologies are indeed not widely used or understood. In fact our 2017 Mint Jutras Enterprise Solution Study asked survey participants to rate their level of understanding of some of the technologies included/referenced in SAP Leonardo (Table 1).
Table 1: What level of familiarity do you have with these digital technologies?
Source: Mint Jutras 2017 Enterprise Solution Study
Predictive analytics, which is an important element, particularly when used in conjunction with these other technologies, is the most widely valued and used. Otherwise, fewer than 20% of our survey participants have deployed or are in the midst of deploying the remainder. While another 15% to 32% understand the technologies well and perceive value, this leaves more than half either lacking familiarity or feeling they have no applicability to their business. So SAP must help take some of the mystery out.
That’s what makes the services side of SAP Leonardo so important – this and the fact that digital transformation isn’t necessarily the goal, even though it is often presented as such. The goal is to enable growth, interoperability, communication and collaboration. The goal is to innovate. To this end, SAP intends to marry design thinking with these technologies. Design thinking is an iterative approach that identifies real issues and problems to solve. It avoids the trap of inventing and implementing elegant technology in search of a problem.
SAP Industry Accelerators
In addition, building on experience implementing solutions for other customers, SAP has packaged SAP Leonardo with “Industry Accelerators.” Industries might include retail, consumer goods, manufacturing, sports and entertainment, or any other industry that requires innovation services. These are fixed price bundles of expertise, data and software integrated to solve a specific and common business problem. Plus they include services to get started and deliver business value quickly, helping to jumpstart a digital transformation journey.
There is a design thinking component included, which is intended to validate that the package will address the customer’s business problem. They also include a fixed amount of services to implement a working prototype. SAP envisions the Industry Accelerators to be priced to be accessible to a wide range of companies, not just very large enterprises with large and highly skilled IT staffs.
These fixed price Industry Accelerators can be implemented with SAP technology, but SAP technology is not required. SAP Leonardo can ingest data from any source and combine it with data from applications like ERP, both SAP and non-SAP. So customers do not have to make a significant investment in new applications, database or other infrastructure in order to address a business challenge.
Of course, if a customer’s business challenge is unique or not a good fit for the Industry Accelerators then customers can leverage the components of SAP Leonardo for a custom implementation.
While SAP Leonardo targets a wide range of companies, many smaller companies operate with minimal IT staffs. Any kind of separate price tag for a tool set may make these technologies remote (like Leonardo himself) – out of reach for small companies. So it would behoove SAP to look for ways to connect, or even embed these technologies in the enterprise solutions that target smaller companies. These include SAP Business ByDesign and SAP Business One (in addition to SAP S/4HANA) and some of the surrounding “line of business” applications that extend these solutions.
To this end, SAP has been working hard on refactoring the underlying code of its products to take better advantage of new digital tools and technologies. Mint Jutras recently outlined this platform approach in a report, SAP Business One: The Next 20 Years.
From Systems of Record to Systems of Intelligence
The ultimate goal is to transform all these systems of record into systems of intelligence. Whether addressing the needs of large enterprise, small companies, or anything in between, it has always been a lot easier to get data into a system of record than it is to get information and insights out. SAP Leonardo, the digital system of innovation, tackles this problem directly with the goal of transforming business transactions into intelligent insights, in a never-ending continuum, thus enabling digital transformation and innovation.
 Gardner, Helen (1970). Art through the Ages. pp. 450–456.