Avantra CEO on why companies need to find a way through the ‘automation paradox’

Derek du Preez Profile picture for user ddpreez October 24, 2022 Audio mode
Summary:
John Appleby, CEO of Avantra, explains that automating SAP environments requires organizations to go through a talent transformation - where individuals shift from ‘operators’ to ‘automators’.

An image of Avantra CEO John Appleby
(Image sourced via Avantra)

Avantra has spoken at length about the benefits of automating SAP landscapes - where operations managers can shift their focus from keeping the lights on to enabling finance transformation for their organizations. Hyper automation can reduce complexity, save on costs and improve the quality of work that operations managers do on a daily basis. 

CEO of Avantra John Appleby has woven a compelling pitch together in recent years, where he argues that if companies don’t adopt hyper automation to deal with their ‘SAP islands’, they open themselves up to both security risks and face the prospect of missing out on the best people in the ongoing talent war. 

But with so much going on in the world, and with competing priorities in the enterprise when it comes to digital investments, it’s perhaps not surprising that the automation of ERP operations sometimes falls down the list. 

However, during the recent Avantra Summit we heard from Appleby that with increasingly complex hybrid environments, hyper automation is essential if buyers want to operate effectively. Appleby said that customers had been promised consolidation of assets since the early 1990s, when thousands of spreadsheets were migrated into single core ERPs. 

But, he added, things have only gotten more complicated as ERP suppliers have added supplier management, supply chain management, warehouse management, human capital management etc. And now, thirty years later, buyers are grappling with integrating Software-as-Service applications and infrastructure/platform services from the hyperscalers. In other words, complexity is still front of mind - perhaps even more so. 

And whilst this isn’t obviously an ERP operations managers’ problem, the complexity does impact their workload. Providing some examples, Appleby said: 

I was talking to a customer the other day and they were implementing purchasing - it was Coupa. They don't get additional headcount within IT operations to deal with that. And you could say, well, that’s a SaaS application, so it doesn't need IT operations. 

Well, sure, but how are you getting your master data that relates to vendors out into that application? Well you're doing it through an interface. Who's looking to see if that's working? 

Appleby provided a similar personal example of when he was working at a large company and needed access to some healthcare services. At the time he couldn’t make a call into the healthcare provider, because the master data connector that connected updates to information about birth dates had not been working for weeks and the company in question had no idea. He said: 

It wasn't until I opened a ticket in the HR system that then escalated to an IT ticket, where somebody did some root cause analysis and found out that that master data connector had failed two weeks prior. And that's the problem with the proliferation of hybrid, because there isn't any additional talent pool to manage all of that complexity.

And Appleby pointed out the cost of not thinking through how these environments are managed effectively. He explained: 

Another customer we're talking to…they're actually implementing Workday. And so they're doing human capital transformation. And as a result, they need up to date information about employees in a non-production environment, so that they can implement the software. 

It needs updating, ideally, every month - or every two weeks would be perfect. And it takes two weeks to do that update. So the impact of not having that information is quite extreme. But then think about the impact of taking that system down for two weeks - that means that you've lost two weeks of productivity. You've got a team of 100 people, and you're paying them $1,000 a day each, you're losing $100,000 for each day that that's out. 

The problem is today

Appleby explained that in order for companies to get to hyper automation adoption, and start to deal with some of these challenges effectively, they need to stop thinking about their organizations as a series of isolated, siloed processes - such as order to cash or procure to pay. Instead, businesses should be thinking about these processes as a collection that connects together, enabling shareholder value, revenue, profitability - the end goals for a company. He said: 

We're going to take an automation mindset to those. So we're going to change our way of thinking and we're going to see where across the business are the pain points, so that we can visualize where we need to invest in automation and make improvements. To think of it as one holistic environment. 

The moment we do that, and we take that mindset, we can open our minds towards hyper automation. And that shift in mindset from a static business process perspective, though to ‘I'm going to optimize shareholder value’, that's what hyper automation is all about.

Appleby said that Avantra is talking to many organizations that are staring down a “double barrel of a 2027 deadline” to get off of their SAP R3 or Business Suite systems, but are grappling with getting the attention of the business to make ERP transformation a priority. He added: 

The problem is today, it's not in two years. But I was talking to a large consumer products organization the other day, and they were saying they’re not quite sure how we're going to achieve this, because they brought the concept of finance transformation to the business, and they've got other stuff going on. 

They're much more worried about ensuring profitability than they are about finance transformation. 

To get the ball rolling, Appleby said that it requires a ‘talent transformation’ both at the leadership level and at the individual operator level. And whilst there may be some resistance to automation due fears of job displacement, Apply sees this as a misplaced concern because of the amount of work that needs doing. 

But here lies the ‘automation paradox’ - where automation will free up time for the business, but the people that need to implement the tools are too busy doing other things. Companies need to understand this, according to Appleby. He said: 

There is so much work to do, and not enough people to do it. So you need to be thinking about, instead of being operators, they’re automators. That is the talent transformation that has to happen in our industry. 

And this is what I call the automation paradox. This is the biggest challenge of automation, that your key resources that have all the knowledge of all the stuff that you want to automate, are the busiest people in the business. And the simple fact is you have to get over that. You have to get over the hump, because if you don’t, those people will never be freed up. They will be busy for the rest of their working lives. 

And there's no real easy way to say it, you just have to prioritize it. You just have to say to the business - ‘hey, you need to give us a little bit of space right now, we're going to put in some automation, and you're gonna get the benefits back off that 10 times over’.

Everything you automate is going to pay back to make those most critical assets less busy. So the simple simple thing is you have to suck it up.

My take

Plenty of food for thought from Appleby at the Avantra Summit (which can be viewed here). As I’ve said before, the key to buy-in when it comes to automation investment is focusing on the talent opportunity. The business needs its talent focused on high value work. And operators don’t want to spend their time doing high stress tasks that just, in essence, keep the lights on. Prioritizing in the current climate is difficult, but if you focus on how to achieve valuable outcomes, automation can certainly play a role. 

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