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Colgate starts Wal*Mart style Co-Innovation Model At SAP

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Dan McWeeney and Ed Hermann are two really smart guys from Colgate-Palmolive who recently built an app that got a lot of media attention and blogosphere link love – it enabled a Nintendo Wii as a navigation mechanism for SAP business applications. Not quite Minority Report style UI gorgeousness, but a very interesting idea nonetheless, nicely show and telled.

Dorks use modified game console technology to navigate business application. What happened next?

Some employers might have thought: let’s fire these guys, they are goofing off. Not Colgate. On the contrary the company saw an opportunity to take its SAP collaboration to another level. Colgate and its peers wrote the book on collaborative supply chain innovation with Wal*Mart. So what now? Ed and Dan have been seconded to SAP Palo Alto as part of an imagineering group. Dan says:

“For this particular engagement, we will be focusing on increasing BI utilization at Colgate and working to make Identity Management in the enterprise easier and more flexible. These topics areas are of high importance to Colgate’s long-term application strategy and will help us get the most out of our existing SAP installations. I would also hazard a guess that these topics are of importance to any enterprise with a mature SAP install base and a big BI instance.”

Some commentators have seen the SAP Our/ThWii project as purely bottom up. But to my mind what makes the story so compelling is the bridging of bottom up and top down, triangulated across two Fortune 500 corporations. This is “collaborative innovation”, the kind that IBM is also pitching. The theme of SAP’s major events this year is “co-innovation” and SAP is actually doing it.

It should not be forgotten that this stuff is business as usual in fast moving consumer goods (FMCG) though.

So that’s the upside. What about the potential downside, and the macro questions of governance? Downside: as we all know Wal*Mart drives a very hard bargain. The hard bargain is its modus operandi. But throttling suppliers is not the key to collaborative innovation. Leaving something on the table, on the other hand, is. I have spoken to the idea of the cheap technology officer before and as commenters made clear negotiations must be worthwhile for both sides. From what I can see the imagineering partnership is an example of same. But some other crucial questions emerge, which at the moment I have no answers to.

Who owns co-created intellectual property, patents, code and potentially even trademarks?

What are the differences between Colgate and SAP’s IT governance policies (can both organisations use open source?

Is modifying a Wii a potential indemnification risk.

What vacations do Ed and Dan get now?

Can they blog about it?

One area that is undercooked at companies like IBM, Siemens, Cap Gemini, Procter & Gamble, and SAP as they all talk to collaborative innovation is joint IP. IP law as it currently stands is still generally based on the 20th century’s feudal and confrontational system. Thus Microsoft forcefully argues it needs cross-licensing of patents to enable interoperability with suppliers. The music and film industries are still hoping they can raise the drawbridges and ignore the new marketplaces.

Markets used to be inside the castle walls, but now they are outside, down on the plains. That’s where the cluetrain comes in. More importantly that’s where open source comes in. Open source is a fundamental building block for collaborative innovation, because its designed for community, rather than walled castle, ownership. Open source licensing and law becomes ever more important with time precisely because it underpins collaborative innovation. And thats going to be true whether you’re selling software or toothpaste.

disclosure: IBM is a patron. Microsoft is a client. SAP: I am still working on it.


  1. SAP supplies nearly all mission critical software to Colgate so, in the case of this fellowship Colgate would love to see any products(IP) incorporated back into SAP solutions; although, no one is under any obligation to do that.

    With regards to the “governance” issue; SAP has almost always relied on home grown systems. They have even gone to the pains of writing their own Java VM for their app server! From a customer perspective if the system came branded and supported by SAP I could easily see customers accept it.

    The Wii stuff was kind of a random side project which was done after the Imagineering stuff was already setup and is totally unrelated ( although really cool and in the spirit of Imagineering/Innovation ). Actually, Rick Bullotta (SAP Research) is working on some Wii stuff in the manufacturing arena.

    Still regular American length vacation…. boooo.

    We can blog about the program; however, we are not able to speak specifically about what we are working on at this time.

  2. We are thrilled to have Ed and Dan collaborating with our group. They are in the next office to me. We have had other customers work with us in the past, but this is the first time we have “embedded” co-innovators, where the real focus is on co-innovation, and where we do not have a specific statement-of-work or project plan — we have general topics we will explore, and we know great stuff will come out of it. We hope these are the first of many such co-innovators to spend time with us — others interested can contact me through SDN.

  3. […] though the SAP Colgate story undoubtedly is (and I don’t mean the Wii), there are many other customers doing fabulous […]

  4. Evolving Excellence has been discussing how Wal-Mart’s long supply chain has been impacting Wal-Mart… and how that then comes back to “bite” China. That long supply chain makes it especially difficult for the company to deal with fickle fashion consumers.


    They’ve also been taking SAP to task quite a bit lately!


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