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. 

“Intro­duc­ing Busi­ness Process Trans­for­ma­tion with SAP Sig­navio” is now avail­able from SAP Press.

For more on SAP Sig­navio, explore our curat­ed insights and check out our Busi­ness Trans­for­ma­tion Man­age­ment and SAP Sig­navio con­tent col­lec­tion.