"Innovation is where the future source of revenue will be"

Friday, July 29, 2011

Latin America is increasingly becoming an early adopter of technology, presenting new opportunities and challenges for many companies present throughout the region, including SAP.

In response, SAP decided to open a “virtual” innovation center to bring its global innovations to the region and accelerate their adoption. But what exactly does a virtual innovation center mean? Will there be physical locations as well?

BNamericas spoke to Marcelo Kaucher, SAP's newly appointed director of the Latin American innovation center, to find out more about this center and the company's plans for the region.

BNamericas: Would it be correct to say that SAP is changing its business strategy?

Kaucher: Well, last year we started rethinking the company's strategy, with a special focus on innovation, especially in our on-device, on-demand and in-memory services. These changes are the key to our growth. These three categories have shown strong demand from our customers, and that's the reason why in Q2 this year the company decided to create a group in Latin America that focuses on innovation. We believe the company's future has to do with the new technologies that we are using.

BNamericas: An innovation center?

Kaucher: Yes, because we see the company's future growth potential as very much related to the adoption of these new solutions.

BNamericas: And how is this center going to operate?

Kaucher: These centers are going to have two main focuses. One has to do with bringing from outside the region everything related to strategic planning and the management of different geographical strategies in Latin America. On the other hand, this is also an internal move, related to innovation management. There's a small group of senior professionals who will work according to the needs of the company to assure the adoption of new technology in the fastest possible way.

BNamericas: Are you planning on creating products here?

Kaucher: The aim of the innovation sector is not to deliver new innovations here, but to bring those innovations that SAP is providing globally in the fastest way we can to accelerate the adoption of this technology. We did it because we wanted to have a better understanding of future trends that are coming in the region. That's why we decided to open an innovation center in Latin America to help other operational areas of the company.

BNamericas: How will the innovation center work?

Kaucher: There will be two groups. One will focus on everything related to strategy and managing Latin America operations, working together with the company's different subsidiaries in the region. For each of the subsidiaries in Spanish-speaking South America, we need to make sure that we have a plan to transform in the next couple of years that will help us reach the growth levels that we expect for the region.

One part of the team will focus on managing the strategic plan and transforming the subsidiaries, and then we have a smaller group - no more than five people - that will concentrate on managing the development of each new SAP innovation sector. This group's role will be the internal leading group that generates the changes about how we operate. They're going to work with the different sectors of the company to make sure we're adopting the new technologies and also with our partners and channels, to make sure they're in line with the new technology.

BNamericas: Is it a "virtual" center?

Kaucher: Well, it's going to be a group of people that will make sure we have a clear working agenda in terms of innovation and that we stick to it. But we plan to build two of these centers - one in Mexico and one in Brazil -during the second half of 2011. But it's more like a demo center that allows customers to see progress in the application of SAP's new products in more real time.

BNamericas: Why in Mexico and Brazil?

Kaucher: They're the biggest markets in Latin America for SAP, so the centers will be used mainly to show customers the results of applied innovation in all SAP products. But this doesn't mean that we're going to change the way we're currently presenting technology in the region. If someone from Chile wants to see a product, of course we will make sure they can have a presentation.

BNamericas: How much will SAP be investing in this new area?

Kaucher: Every year we make a 3-5 year projection. As a company, we can see that from now until 2015, a big part of the revenue will have to do with innovation, which makes the decision of investing in this area obvious. It's a significant investment, with different activities. The company believes that investment in innovation is where the future source of revenue will be.

BNamericas: And how about the clients, are they adopting the new technology faster than before?

Kaucher: What we see is a high adoption of technology from our clients, and rapidly as well. For example, our In Memory solution has a tremendous level of adoption within our customers. Our solutions have the advantage that they can be adopted quickly.

BNamericas: And how's the adoption process?

Kaucher: We have an initial phase, the early adopters, where customers like to adopt technology as soon as it comes out, even before they see the market references. And after that we have the late adopters. The idea is that in the first stage of adoption, our innovation office works with local teams to ensure they get initial feedback from the product. To achieve this, we're going to work with local subsidiaries and global ones.

About Marcelo Kaucher

Marcelo Kaucher has been senior VP of field services at SAP Latin America and the Caribbean since 2003, and is currently responsible for all education and consulting initiatives in the region. He has worked at SAP since 1994, when the company launched its operations in the region, and has held various posts in the services area as consultant, project manager and services director. He has also served in the software area, where he acted as sales director before being promoted to his current position.

Prior to joining SAP, Kaucher worked for IBM Argentina. He studied systems engineering at Universidad CAECE, and has an MBA from Buenos Aires' UCEMA.