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There is a lot of buzz in the market about SAP Fioneer as SAP is expanding its Financial Services practice by partnering with Dediq GmbH to help boost SAP’s efforts to gain more traction in the FS sector by supplying innovative applications for end to end banking and insurance processes.

In this blog, I want to express my views on why this move from SAP will help to attract more FSI customers and may sway FSI customers away from buying low-cost FinTech products from niche vendors. I will then discuss a sample idea that covers the banking and insurance sector to demonstrate how Fioneer can plug such gaps in the market by sharing data between multiple consumers.

Innovators Dilemma

While SAP has a compelling ERP scale Technology proposition than many fintech vendors even without the joint venture, they haven't penetrated deeply into the market due to upfront costs and pricing that needs to be incurred by FSI customers. SAP can't sell products at a lower cost due to the current operating and cost structures as it is a large company.

Unless big companies have a cost structure like start-up operating units, they always fall into innovator's dilemma trap:

"The things that make well-managed companies successful are the same things that eventually stop them to reach new markets. These organizations can maximize achievement over a long period of time, but their success inherently becomes focused on shorter-term metrics. These metrics make it nearly impossible to take big risks, invest in longer-term ideas, and react to potentially disruptive new technology or business models. These businesses become a victim of their own success as they fall into the trap of you get what you measure. " -Clay Christensen’s

Disruptive technologies have fluid futures, as in, it is impossible to know what they will disrupt once matured and is impossible to chase these markets for large companies as they are emerging markets i.e not established markets.

The only way large companies can find the blue oceans is by spinning up autonomous organizations or joint ventures that can be rewarded with small wins and small customer sets with disruptive technologies.

SAP exactly did this by venturing with Dediq and this gives SAP the ability to develop disruptive technology with the 'right' customers and not necessarily their current customer set and agility to deliver these disruptive technologies with different sales, delivery, and pricing model via Dediq.

This allows Fioneer to build a viable value innovation business model that will help the customers benefit from the blue ocean.

Value innovation is the cornerstone of tapping uncontested market as companies will make the competition irrelevant by creating a leap in value for buyers and their company, thereby opening up new and uncontested market space instead of focusing on beating the competition! - W Chan Kim"

Case Study

Here, I am just playing back an idea on how companies like Fioneer can help common people by building consumer-centric products for banks and insurance companies.

I am sure many customers who want to buy a house in UK or Europe will agree that the process for buying a home takes many months and is ridiculously complex with zero transparency.

As a house-buying consumer, I want a unified experience to buy a house by using a product that connects house buyers, banks, insurance providers, lawyers, property owners, agents, valuation, surveyors, and house sellers, builders, house interior designers and provides clear progress of the application stage.

  1. Buyer  browses the internet for buying the property

  2. Buyer arranges an appointment with letting agent

  3. The buyer views and likes the property and makes the offer

  4. Letting Agent accepts the offer subject to a mortgage application

  5. The Buyer sends the offer letter acceptance to Solicitor

  6. The solicitor then triggers their background legal checks

  7. The buyer can optionally buy house buyers insurance to avoid gazumping losses

  8. The buyer creates a mortgage application

  9. The buyer chooses the best mortgage provider based on his requirements

  10. The bank receives mortgage application

  11. The bank checks the payslips and customer credit

  12. The bank initiates house valuation survey

  13. The house valuation agent will value the house and provides his recommendation

  14. The bank approves the mortgage application and sends the copy to the solicitor and buyer

  15. The buyer is then provided with options to book a detailed valuation survey

  16. Subject to the outcome of solicitor legal checks and detailed valuation survey results, The buyers and sellers solicitor then gets their contracts ready and issues them to each other with help of the seller and buyer

  17. The contract is signed and completion date is agreed and an initial deposit is made to the seller

  18. The consumer will then be able to buy the home insurance

  19. The remaining deposit amount is then paid on the completion date and the buyer gets the keys

  20. The mortgage payment is active from the date.

  21. The buyer contacts interior designers or builders for a quote to redecorate their house if necessary

  22. The builders or interior designers provide a quote

  23. The buyer accepts the quote and the consumer story continues till they moves in.


I shared my thoughts on SAP Fioneer with you and would love to hear your thoughts too!
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