Wolfgang Faisst and Johann Freilinger, creators and founders of SAP Exchange Media (SAP XM), have been named finalists for the Hasso Plattner Founders’ Award in the Products & Innovation Board Area.
Since 2013, Faiss and Freilinger have been pursuing their novel business idea with diligence, dedication, and plenty of support from their colleagues and managers at SAP, not to mention their customers and partners. They now head up an 80-member team that has turned that idea into a revenue-generating product.
Meanwhile, the two founders of SAP XM concede that the path to realizing groundbreaking ideas at a company as large as SAP isn’t without its stumbling blocks. It often requires new processes and ways of thinking that challenge all those involved to broaden their horizons.
Company Within a Company
What began as a mere concept in late 2013 crystallized into a business plan. Faisst and Freilinger presented to Wieland Schreiner, executive vice president for SAP S/4HANA, the following year. In the six months leading up to that point, the two had devoted time outside of their normal jobs to the project, which resulted in some long evenings and short weekends. It all turned out to be worth it.
“It’s not that we’re these geniuses,” Freilinger admits. “You just identify a problem customers are having that you can solve in a way that ultimately means new business for the company and its customers.”
SAP XM shows the great potential opened up by tapping into new business areas
While free-enterprise innovators with a solution like this typically set about searching for venture capital, those employed by companies go looking for budget resources. The mechanisms of each process, however, are the same: Entrepreneurs need to convince investors and other supporters that their ideas are both promising and feasible. The financial risks individuals have to bear may be smaller for those at a company within a company, but Freilinger and Faisst still feel a particular obligation to their investors – especially their colleagues and supervisors, but also to their partners and customers. Luckily, they already have several milestones to celebrate: The two evaluated their idea along with customers back in 2015 and brought SAP XM to market just in time for SAPPHIRE NOW in 2016.
Bernd Leukert, member of the Executive Board of SAP SE responsible for Products & Innovation, said that SAP needs to constantly renew its passion for new ideas: “SAP XM shows the great potential opened up by tapping into new business areas. It is precisely this type of innovative spirit that will make us successful in the long term.”
The Hasso Plattner Founders’ Award is the highest employee recognition at SAP, awarded annually by the CEO to an individual or a team.
Finalist Fast Facts
- Team: 80 SAP employees (core and extended development personnel)
- Customers*: Beiersdorf, DHL, EY, SAP
- Partners: SinnerSchrader, BlackwoodSeven, Pilot, JungvonMatt, EY
- Publishers*: Gruner + Jahr, Pubmatic, Rubicon
- Revenues in 2016: Approximately €1 million, with €3-20 million planned for 2017
- Global market potential: Approximately U.S.$540 billion
- Technology: A new online media network based on SAP HANA Cloud Platform and enhanced by big data technologies, including SAP HANA Vora; interfaces with other open-source-based big data technologies, including Apache Spark, Cassandra, and Hadoop
The Idea, The Resulting Product
Based on SAP HANA Cloud Platform, SAP XM brings together buyers and sellers of advertising space in digital media on an online platform. This enables customers to purchase digital ad space, assess the direct efficacy of ad campaigns, and optimize them in near-real time. In that sense, SAP XM is essentially a digital media business network in the cloud.
While today’s agencies buy ad space and then plan, implement, and evaluate ad campaigns for their customers, this network now makes it quick and easy for companies to plan their campaigns themselves, tailor them to their own clients, and monitor their success up to the second from start to finish. Such arrangements are a matter of trust: At present, just 40 percent of media budgets turns into actual advertising space. The remaining 60 percent evaporates in the value chain between the advertiser and publisher. In concrete terms, that’s as much as U.S.$170 billion currently being invested in digital ads.
The fully integrated digital media network SAP XM provides uses the insights offered by big data, learns from users’ preferences, and makes it possible to place suitable ads in locations that are relevant to the target audience in question. One of the network’s goals is to make advertising meaningful again in the face of rising spending on digital ad-blocking solutions, which grew by 41 percent globally in 2015. Most recently, this trend has resulted in more than U.S.$14 billion in losses for the advertising industry and providers of digital ad space. Ads that get back to offering relevant information to individuals present a great deal of potential for all of the parties involved. This is also ultimately about trust: After all, consumers respond more favorably to content tailored to their needs than they do to catch-all advertising campaigns.
When Freilinger and Faisst began assembling their team, they knew they would need to recruit colleagues from a wide variety of areas to turn their idea into reality. A multidisciplinary team with enthusiasm and a sense of responsibility for their common goal would be essential to their success. This meant bringing together not just a range of skillsets, but also new members with in-depth knowledge of the advertising industry.
Today, the team comprises veteran colleagues from SAP and experts from the field of marketing. It also embodies diversity in its combination of young and more experienced members. Development is based in Walldorf, while sales and marketing are headquartered in Hamburg and New York. They all share that same objective: making advertising relevant again.
The SAP XM team has built up a lengthy customer pipeline in 2016, but plenty of work remains. Their product needs to grow faster in order to increase the chances of its business potential playing a role in SAP’s long-term financial success.
Christiane Kubach is internal communications lead for Products & Innovation in Global Corporate Affairs at SAP.
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