In our latest ASUG Asks the Authors feature, we sit down with Nitin Singh, a senior principal and director of the Industry Value Advisory team at SAP America, and Gerry McCool, a value advisor with SAP.
Co-authors of the recent SAP Press “E-Bite” publication “Introducing Business Process Transformation with SAP Signavio,” Singh and McCool provide their readers with an overview of the SAP Signavio portfolio and dive into each tool. Guiding readers through SAP Signavio's business process intelligence, process mining and analysis, and SAP S/4HANA integration capabilities, their publication represents one of the first SAP official guides to the business process management platform, which SAP acquired in March 2021.
Below, in the first half of our conversation, Singh and McCool define business process transformation and discuss the critical role SAP Signavio can play in enabling it for customers. You can read the second half of our conversation here.
This conversation has been edited and condensed.
ASUG: Tell me about your careers in SAP and what led you to this project.
Nitin Singh: I’ve been with SAP for 17 years, always in process transformation. Our roles currently involve orchestrating the benefits that technological improvements have on process improvements for customers. The integration of technology and process always fascinated me, whether on the shop floor, for our SAP customers working in customer sales, or our SAP customers in financial billing departments. How can technology simplify their life and give them more time on their hands so that they can focus on strategy?
I connected with like-minded thought leaders, and we came together to drive a process transformation mindset across our teams. Eventually, we decided to share what we learned on the ground with a broader audience, to leverage our insights from the field and create a simply structured guide that could be easily consumed by our customers, partners, and colleagues.
Gerry McCool: Coming from the industry side, with a background in manufacturing and supply chain, I found myself thrust into a world of improvement and transformation and was fortunate to lead a number of transformations.
Being a part of those, both on the industry and consulting sides, was a natural flow for me into the world of value advisory at SAP. Along with Nitin and several of our other colleagues, writing this guide provided a natural extension of the [work] that we do, with a community behind it and the right enablement for it.
ASUG: We’ve all heard the term “business process transformation,” but I’d ask for you to define it and discuss its mission-critical role in an enterprise's success or failure.
McCool: At a basic level, it’s about how companies are aligning their business process and their performance to provide the required cost, quality, speed, safety, and environmental outcomes. It’s about having an operating model that aligns to the business model they want, that they want to go to market with and touch customers with.
When you talk about transformation, it’s about how you move to ever-higher levels of sustained performance. It’s not just hitting it once. It’s being able to routinely, repeatedly achieve that level of performance.
Singh: We refer to SAP Signavio as a “transformation journey partner,” but one tool is not enough to bring about process transformation. It is always about people, processes, and technology. The term “business process transformation” has many connotations.
ASUG: Can you provide an example of what you’re talking about?
Singh: A few weeks back, I was working with a customer at a $5 billion company that was struggling to stock the right inventory in the right place. Either they had too much inventory in one place, or they had too little in another place. When they were shipping goods to their customers, those customers weren't happy, as they were receiving products they didn’t want, the wrong products were shipped, or deadlines were not met. Even if you have inventory in your system, you need to place that inventory correctly.
We started by tracing that problem back through their system and found that it was not only about inventory issues at particular points in time. It was connected to sourcing strategies: who the customer was sourcing with, where those suppliers were based, where the customer was placing sourced materials, to what degree they were effectively forecasting demand, and how quickly they could pivot if market dynamics changed.
All of these interconnected, cascading pieces speak to how connected the world is, and to the fact that all of these processes need to come together at the same time. If one process isn't efficient, that impact will cascade and impact customer experience. We see this day in and day out.
Businesses need a tool that can identify the weakest link in their operations, a tool that can do the root cause analysis and figure out where processes or capabilities aren't working. Once you know the root cause, you can implement new technology or improve a process. How do you close the gap and also measure what impact it had? It's about a journey of transformation: identifying the root cause, fixing the problem, measuring the problem, and governing the problem end to end.
ASUG: How does SAP Signavio specifically address common challenges encountered in the process of business transformation?
McCool: Quite often, when you see a transformation in motion, it’s lacking key ingredients. There are a lot of moving pieces to transformation, and you need to have them all in place. You need to be able to analyze your processes and understand what's going on: how the process performs, and to what level. You need to be able to map, model, and manage processes, so that you know what they look like, have a common understanding of their flows, and so on.
You need to manage change and govern processes, so that change can happen in a controlled manner. You need to be able to implement, view, and improve smart automations along the way. Lastly, you need to be able to do this in a collaborative way, because large enterprises operate across geographies, divisions, and businesses. Change at scale doesn’t happen in a vacuum; it happens with large groups of people. It’s important that people collaborate on change. I’m bullish about SAP Signavio, because it’s not only a complete, comprehensive approach and solution to a vexing problem, but it brings together these considerations in a collaborative, holistic manner.
Singh: We want to simplify the customer’s journey. “Simple can be harder than complex,” Steve Jobs said. He also spoke about marrying technology to the humanities and said that doing so “yields us the results that makes our hearts sing.”
Technology has advanced in demonstrable ways: machine learning, RPA, AI. You can scale out and scale down cloud capabilities but, at the ground level, what does that technology provide for our customers? How do you know which technology to invest in, to fulfill value?
Our answer is that it’s about how you apply technological improvements to execute your operating model. It’s a combination of technical advancement, operating models, and day-in-the-life utility. The people who operate these operations require assistance. Cloud transformation is not only about taking data loads and moving them to the cloud; it’s not only about technology or about total cost of ownership. It’s about the value you unlock and the outcomes you achieve.
That’s why SAP Signavio is becoming crucial to SAP’s RISE and GROW strategies; when we ask our customers to leverage cloud, it’s not only about technology and infrastructure but about more effective business outcomes. And how do you create those business outcomes? By prioritizing the right opportunities and being able to execute on them, being able to measure and govern those opportunities.
Recently, I was walking around the shop floor of a multi-billion-dollar manufacturing company that makes large industrial machinery. I noticed quite a few large components in one staging area, several hundred million dollars of inventory, and asked why they were waiting there. I learned that all these pieces of large machinery were waiting for a single part, for the weakest link in their value chain.
They had been waiting for a week because they missed their MRP run, the sourcing strategy was late, and the company couldn’t find an appropriate supplier. By the time they found the right product, it caused a multi-week delay and added $700 million worth of work-in-progress inventory in their books. On top of that, they had to do expedited shipment, investing more money to ship to the customers.
ASUG: How would SAP Signavio solutions have helped solve that value chain issue?
Singh: Finding those process breaks early and connecting dots all the way from strategy to operations to process capabilities can help determine areas that perform sub-optimally.
Signavio Process Explorer provides industry-standard capabilities, giving you point-of-reference capability models and help to know what other companies are adopting. Using Signavio Process Intelligence and Signavio Process Insights, you can then determine where your processes are not being executed correctly and where process performance is lagging against your peers, as per industry benchmarks.
After identifying those areas, you can perform a root cause analysis using Signavio Process Intelligence, to determine how each step is executed and which is a bottleneck. You can also simulate potential solutions.
Then, with Signavio Process Manager, you can adopt a best-practices process map and use Signavio Process Insights to realize value. It’s a prescribed set of steps we provide as part of the RISE with SAP journey, so that customers can measure their business health, identify gaps, and understand how to improve in a continuous manner. We call it a “continuous improvement mindset,” and it;s also an outcome-based mindset: in other words, a growth mindset we want our customers to adopt while they adopt Signavio end-to-end.