The following article shows SAP’s technology scouting process The outlined perspective differs from most other related articles, as it also addresses some critical aspects by looking at past emerging technology hypes and the technology scouting assessment at the time.
But, most importantly, technology scouting and innovations do not necessarily go hand in hand! Let’s see what SAP’s approach to emerging technologies looks like.
Technology Scouting Definition
Before looking into the actual technology scouting process or methodology, let’s first get an understanding of what “Tech scouting” means. It might look obvious, but there is no strictly scientific definition. However, many people have a certain perception/ understanding when talking about technology scouting. The following characteristics are common sense to most people:
structured process on the assessment
assessing new and/or future technologies and their potential
early emerging technologies trend detection
In a nutshell, “Technology Scouting” defines a process to assess the “impact” of a specific technology (or an IT Trend) in the future. Looking closer at this definition, the term “impact” is key fora successful tech scouting process. The challenge is that the impact should meet YOUR needs – not someone else’s. At SAP, impact means the way in which certain technologies support our corporate vision and strategy. Therefore, we cannot simply adopt any tech scouting reports from analysts or research institutes such as Gartner, Forrester Research or MIT. Their assessment will always differ from yours because they are only assessing the overall impact rather than factoring in specific elements that vary from company to company.
Research institutes and analysts usually provide assessments for all consumers. Of course, these assessments can also be projected into our definition of “impact”. This could also mean that the opposite is true for your company.
Thus, it is crucial to read these reports carefully. Sometimes you cannot compare the assessments of different analysts, because the terminology used is not aligned. Especially when it comes to IT trends, analysts sometimes come up with new terms, even if another term existed before or was coined by another analyst. If this is not considered, we might end up comparing different entities – the proverbial apples and oranges - with each other
Emerging Technologies are like waves
To get a better understanding of how emerging technologies and technology scouting are related, it might be helpful with an analogy. Examples from nature are often particularly intuitive.
Different types of emerging technology waves
New IT trends and technologies are popping up all the time. However, only very few are having the potential to change existing businesses. It’s almost like standing on the beach and watching the waves: Constantly, waves are washing onto the beach. Most of them are rather small and you can “have fun” with them. But be aware that there are also other types of waves that are having a severe impact like a “Tsunami” or “big waves”! Their power can be so tremendous, that a human being cannot escape it. Analyzing those waves is a key discipline to adjusting their impact. And knowing the science behind the scenes can turn our “fear” into “respect”. The difference is that “respect” let’s us still do things to handle those situations, whereas “fear” paralyzes our actions.
Monitor technology and IT trends carefully and get ready to surf them
The same pattern is true for technology trends! Most of them will not have the potential to change business – like the small wave. But from time-to-time, bigger waves are coming up. How do you adjust the size and power of a wave? Well, by analyzing previous ones and knowing the science behind it, which will help you understand the indicators that something big is coming up. This also happens with IT trends. Regardless of how mature your business was before, being hit by those “game changer” technologies will put your existing business at risk. Therefore, it is very critical to assess the impact in relation to your own needs and where your company is standing. It is like surfing: Take the wave that is within your reach and don’t run after every wave. Be patient; sometimes the next wave is more promising than just catching the first one 😉
Technology trend prediction is complex – as past examples show
Here’s one concrete example that shows how complex the prediction of trends is: Looking at some of the Gartner Hype Cycles of the last 20 years and re-checking of them, gives you a good indicator of how few trends had really had a groundbreaking impact. For instance, do you remember Palm OS and the associated handheld devices at the end of the 90s? Well, the original business model to have handheld devices is still on. But today we don’t call them handheld – smartphones have taken over this space. In our example, this means that you have to adjust what emerging technology can already do for your business NOW. You do not know whether there is a successor that makes some of your investigations obsolete as technology has changed.
Technology Scouting vs. Innovation Scouting
At first glance, it seems obvious that technology will drive innovations. However, this is only partly right. Technologies are just “enablers” for driving business. In this context, for many companies, an emerging technology trend is not equal to an innovation that generates business value. But why is that the case?
The diagram demonstrates the challenge. Typically, you cannot take a technology and shape everything around it. The technology must fit in a bigger context, which is presented here as the puzzle. Even though the technology would nicely fit into the overall context, the business value might still be zero. It is just a technical replacement and does not add any business value on top. Of course, this is very simplified, and it might reduce operation costs, which is a business benefit. The point we are making here is that the technology scouting must also evaluate the environment in which the technology trend shall be applied to. Just because it works company A does not automatically mean that it generates business value for company B.
Common Pitfalls while running technology foresight
The perception that technologies are equal to innovations. This is a classic technology mistake, as people think that technology will generate business on its own. Even Steve Jobs mentioned this when he said that “you have got to start with Customer experience and work backward to the technologies” [Source: „A Lesson on Customer Experience in Response to an Insult“ https://youtu.be/MhUawMt1NjY].
Be patient. When reading analyst reports, IT decisionmakers often feel pressured if they haven’t yet addressed the hypes. However, it is the job of analysts to identify new trends year by year. Therefore, it is crucial to really understand their motivation and the impact of the technology in the context of your company.
Our Technology Foresight Approach: SAP Technology Radar
Bridging the gap between different perspectives on assessing emerging technologies
As previously outlined, technologies need to be assessed in an overall context of SAP and its different perspectives. The SAP Technology Radar assesses a technology in relationship to other influencing parameters, such as business trends and a specific innovation strategy. As all the different entities are related to each other, they are linked within the tool.
Linked entities within the SAP Technology Radar
Hence, a user can start the search from various entry points. They can start digging into the tool starting from business trends, technologies, or innovation projects along SAP strategy. As in real life, everything relates to each other and lives in symbiosis. With respect to technology, this means that a technology that does not support any upcoming business trend or SAP’s strategy will not make it into the “inner circle” of the watchlist!
By doing so, people will get answers to the following sample questions:
Which business trends is particularly technology supporting?
To enable a business trend, what technologies are required?
Do we address the right innovation projects according to business trends?
Foster collaboration and establish an innovation community
One cornerstone of our technology foresight approach is the involvement of a lively community. It starts with an initial assessment per technology, innovation, or business trend from our experts. The rating is then visible to the community, and they will get the opportunity to provide feedback – either by providing their own community rating or leaving comments, as you can see in the picture below.
Itonics: Community Rating
Itonics: Community Comments
This kind of collaboration brings us a unique perspective on a topic. The “crowd knowledge” approach brings valuable insights on aspects that the experts have not thought about. As outlined earlier, bringing emerging technology into a company is not sufficient. It must fit the overall context of your company.
6 important learnings from internal trend scouting
Tech Scouting on its own does not brings innovation into a company
Technologies are enablers and need to fit into a coherent vision/ bigger picture. Therefore, it is even more important to capture business trends together with concrete projects. Afterwards, you can link associated technologies to it. In the real world, it is mostly executed in parallel, and the process can be described as “meet in the middle”. To be very clear, avoid giving technological advice before backing it up with concrete business/ customer needs!
Factoring in multiple perspective on a technology assessment
The larger your company will be, the more likely it will be that many other people (or even teams) will work on cutting-edge technologies at the same time. Envolve them by collaboration features within the tech scout process. To be a success, many factettes within a company need to fit – from development, operations to selling and maintaining.
Contextualize an analyst assessment to your objectives
Any analyst assessment needs to be reworked and adjusted according to your individual strategy and vision. This means tech scouting is mandatory for any company. Additionally, analysts from research institutes are often defining terms slightly differently, which makes it harder to compare assessments with each other.
Learn from past trends and technologies!
No hype trend is entirely new. Most of the trends and technologies have existed before and failed for specific reasons. Don’t hesitate to play the “devil’s advocate” and challenge the new (technology) trends!
IT people often overestimate the people attitude to adopt new technologies
Make sure to factor human and social aspects into your assessment. The closer the applied technology is visible for the end user, the less likely their willingness to adopt – unless there is a clear business benefit or the customer/ end user. There might be also some resistance within companies who want to adopt the new technology. Typically, the adoption process is much slower than analyst expect – for various reasons, many of them not being related to technology.
Criticality of business impact is real driver for adopting technology trends
To forecast the future of technology is great. But technology on its own does not bring value to your company. The impact of those technologies on existing business models is much more critical. We identified two outcomes:
The media forecast a bright future of a technology due to its high potential. However, the real business value is not yet in place and the community is looking for the one “killer use case” to increase the adoption. In the past, this happens occasionally.
Ann emerging technology is not mature enough, but the target business opportunity is of value. Hence, there will be certainly a follow-up technology that solves the issues technically more efficiently and still serves the new business opportunity. Be careful about dismissing a technology from the “watchlist”. The underlying business case might still be relevant. Therefore, separate business trends from new technologies.
Technology Foresight Conclusion
Technology Scouting is a critical discipline for any company. However, just doing tech scouting is not sufficient to generate business value. To assess the impact of an emerging technology, multiple aspects must be considered. Analyst reports can be a starting point, but you will need to contextualize it according to your company needs. Therefore, there is still some homework to do!
Also, technology hypes are coming and going all the time. The biggest challenge is to not rush into investments just because someone said so. You should not make large investments without doing your own analysis first (which also considers previous approaches). What are your learnings from past cutting-edge technologies and their relevance for your business? Are you running a structured technology foresight process? And how can you benefit from your company's culture to reflect the different perspectives towards an emerging trend such as operations, sales, and scalability? These kinds of questions need to be considered when setting up a technology foresight approach. Otherwise, you might end up creating an information repository with zero to little internal adoption!
Questions about technology foresight?
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Want to see how other’s do it?
Here you can read about how other big tech companies deal with technology foresight:
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