Why BPI, and why now? SAP Signavio's CEO on how process intelligence changes the enterprise - and how it reveals the true agenda of RISE with SAP
- There's been a lack of detail around SAP's Signavio integration plans, at least in the public domain. But the more intriguing question is how Signavio impacts RISE with SAP - and how it reveals SAP's deeper transformation agenda. Here's the Signavio CEO take - and my analysis.
In the last decade or so, SAP treated acquisitions like a trip to the all-you-can-eat buffet. Under CEO Christian Klein, SAP has (mostly) pushed away from that table, with a couple notable exceptions.
When I had the chance to interview Signavio co-founder and CEO Dr. Gero Decker, I grabbed it.
After all, Signavio is not a typical SAP acquisition. I'd argue Signavio is far more central to SAP's highest stakes bet: its own transformation. Signavio also holds big clues to the vast effort known as RISE with SAP, aka "business transformation as a service."
SAP has pushed the heck out of "BPI" (Business Process Intelligence) as a core part of RISE, but that has been a head-scratcher at times. How could RISE feature Signavio, when the RISE announcement was only days apart from the Signavio acquisition news in January? Surely it was too soon for any type of integrated Signavio/RISE offering? And yet, even at Sapphire Now in June, it was difficult to get specifics on whether SAP BPI and Signavio were converging. What new offerings were in the mix, and what does the timetable look like?
SAP Signavio post-acquisition news - the takeaways
I had a hunch Dr. Decker was my guy - and he did bring welcome specifics. Before I parse the details, how about the takeaways?
- SAP has offered Signavio as part of RISE with SAP from the beginning. How? By relying on Signavio's already-built process analysis for SAP ERP.
- The first new SAP-Signavio product - the fruits of the convergence, if you will - is SAP Process Insights, announced in June, now scheduled for GA release in September 2021.
- Though Signavio can analyze end-to-end processes across many vendors, there is an added benefit of out-of-the-box KPIs, benchmarks and "best practice" content with certain products, including SAP ERP. Decker says that's why Signavio has been a good fit with RISE.
- Decker says the SAP Signavio team is now bearing down on providing these enhanced BPI tools for the rest of the SAP product line - including the SaaS solutions. He told me the goal is to have this completed in the next two quarters.
- Obviously, Signavio will continue to independently offer BPI services for non-SAP customers as well. That's outside the scope of this article.
But why SAP BPI, and why now?
Hopefully that rundown satisfies the news junky element, because I want to step back and ask a fundamental question: why BPI, and why now? Enterprise customers have long memories They can remember SAP pushing "SAP BPM" as the solution to what ails us more than a decade ago.
SAP was hardly the only one to push business process analysis as the way forward. As a move away from tech-centric conversations, it had some logic (and, in my opinion, a groundbreaking SAP BPX community that never should have been shuttered, but that's a rant already made).
One enduring memory of the "BPM hype cycle" era is: using overly complex tools to map incredibly complex process landscapes - a geeky exercise that, in retrospect, did not result in widespread tools adoption. Nor, in my opinion, did it lead to fundamental improvements - or meaningful ROI. So, I think it's fair to ask Dr. Decker, what's different with BPI this time around? His response:
When we founded the company 12 years ago, I would tell my friends or colleagues, they would say, "You know, process is solved. It's done. 'Why are you even spending your time on this? Why are you not building a social network for pets, or something more timely?' But I was always personally very interested.
Decker isn't backing away from his process obsession:
Being an engineer by heart, process management is the discipline that gives you insight into how organizations work. And it's a super-powerful tool to change those organizations for the better.
As for "Why BPI now?" Decker points to today's advanced enterprise technology - all useless without a process context.
There is a fascination for technology and automation like never before. People see it's possible to apply a lot of cool technology in an organization. But you can't just plug it in; you need to understand things. First, you need to simplify things... You need to have a different and much more educated view of your own business operations.
The external focus on customer experience shook things up:
The second piece of why process management is so hot these days is that it's not only about efficiency anymore, or compliance and standardization. There's a massive interest in customer experience and being super-agile, and developing with the requirements and the change in behavior of your customer.
Focus on CX if you want, but it's the tip of the process iceberg
My take on what Decker is saying here: the emphasis on CX and the internal focus on automation has exposed each other's weaknesses. In other words, you can't solve one without visibility into the other. As Decker put it:
What you see above the water line is the smallest piece of the iceberg. Typically, to provide a great experience, if you want to be the next Amazon or whatever, you need to have a massive handle on your operational model below, to be able to deliver this great experience at scale. So this is the second big driver for process management.
Decker didn't say this, but I will: today's BPI tools are a vast improvement. They've automated a lot of the arduous manual mapping chores that bogged things down. Whether today's tools deserve to be called "intelligent" yet is, in my view, open to question. But: to automatically map a diverse process landscape, and to provide an automated analysis of that landscape - well, that's a new opportunity. Decker also calls out the speed of business today. The classic approach to BPM wouldn't be able to keep up:
With the whole wave of process re-engineering in the '90s, SAP really went through the roof, right? But what we observe now is that it's not good enough anymore to just have good processes inside of your software. You need to achieve that agility as an organization - to continuously adapt and continuously change. To be able to do that, you need maximum transparency at any point in time.
You need a lingua franca throughout your organization, to be able to talk about process at any point in time. And you need a tool chain that allows you to go from ideas, from options from simulation - all the way to driving reconfiguration and change in your organization.
SAP's Signavio plans - what's next?
Which brings us to the present - and the emphasis on RISE with SAP, a dominant theme in SAP's quarterly earnings briefs. Enter Signavio:
It's evolving. The number of integrations, the depth of of integrations - this is something we're working on very heavily. This is is a top priority for us: to be the best option for any transformation path involving SAP products.
Flag that last quote - I'll return to it. Decker added:
There's some dimensions where we already have a good head start. For example, the out-of-the-box KPIs and benchmarks and recommendations in the SAP ERP space. Expanding that beyond ERP to other areas is something that is an evolution path for us... It will take some time to make Signavio the central place where you can explore, consume, and make your own recommendations that SAP has for all of the different processes that it supports, and different use cases and industries.
SAP has vast coverage, as you know, with our products. Our ambition is to be that one process acceleration layer for everything SAP, but it takes some time to turn that vision into a reality.
My take - Signavio changes how to think about RISE with SAP
I've been privy to plenty of backchannel hand-wringing amongst smaller SAP partners, as they attempt to make sense of RISE with SAP. This is understandable - RISE is not an easy offering to wrap your head around. SAP's partners intuitively grasp that they must take some kind of position. Do they categorically embrace RISE as the future, offer it as one option to their customers, or actively compete against it with their own transformation methods?
Grasping RISE with SAP is made more difficult by SAP's reluctance to publicly explain which customers can most benefit from RISE, and which can't. Obviously, the partners I hear from need to make sense of this, so they conduct this tricky exercise on their own. Here, I think they go astray. Example: I've heard from a couple well-informed partners who told me they believe the RISE with SAP sweet spot is in the mid-market, with companies that don't have sophisticated IT departments and elaborate pre-existing relationships with cloud hyperscalers. SAP could be the go-to-player for such arrangements.
In my discussions with SAP leadership, I've heard this mid-market fit confirmed - but also challenged. SAP believes, based on their RISE sales to date, that they can make hay in the large enterprise segment as well, even with companies that know how to deal with hyperscalers (You can see this narrative in Stuart's last quarterly numbers analysis, where Klein talks up large enterprise retailer Coop Switzerland's S/4HANA Cloud move with RISE). Either way, I don't believe it is accurate to simply reduce RISE to the management of cloud ERP workloads, S/4HANA or not.
Prior to his retirement from diginomica. my former colleague Den Howlett referred to a conversation with SAP CEO Christian Klein that SAP wants "a seat at the table" when it comes to transformation discussions (this podcast with Josh Greenbaum has some of that content). I believe that's the ultimate agenda with RISE - and why Signavio factors in heavily. Yes, RISE with SAP is certainly a competitive reaction to the hyperscalers, but: that's not limited to ERP workload management. SAP believes it can guide customers to a modern approach to ERP better than the hyperscalers can - that's why we hear so often from Klein and company on the path to ERP standardization. It's a crucial point - credit to SAP for emphasizing it: I don't doubt that SAP has a greater understanding of how a customer can get into trouble with over-customized software than a hyperscaler would. But SAP is well aware that the hyperscalers will push for more business-level discussions with customers as well. And yes, the hyperscalers will roll out more enterprise software functionality.
That's why RISE with SAP is not positioned as a cloud/hyperscaler discussion, or even a digital transformation discussion - it's a "business transformation" discussion. SAP wants to have that upstream conversation with customers. Now go back to Decker's quote: "We want to be the best option for any transformation path involving SAP products" - and the pieces fall of this strategy fall into place. Will it work?
Based on the feedback with SAP customers during my MASTERINGSAP Australia workshop on transformation models, I am more convinced than ever that SAP needs to pull back from leading with S/4HANA, or even the "Intelligent Enterprise," if they want to have that discussion. Instead, they need to draw on that sometimes-forgotten industry expert tradition, and fuse it with modern tools like Signavio to facilitate.
You won't be surprised to learn: Decker agrees with me on this aspect. To illustrate the point, he referred to the example used at Sapphire Now, of a solar panel company that wants to evolve its products and services into a subscription offering - a not-small business model shift. Via RISE, SAP wants to be part of those discussions. Decker thinks his team can help:
Is it the best option for every company to become a subscription-based company? Probably not... But if you choose to become one, there is a natural evolution path that you could go down. We can tell you: these are the three processes that you probably didn't have before that you might want to introduce. And these are the other five processes that heavily needs to be adapted, or optimized, or tuned in a completely different way than you thought about it before.
The more customers we see, we can start making those informed recommendations... These are the types of recommendations you can already get today.
Granted, this is a major twist - it makes RISE with SAP much harder to understand than if RISE is simply characterized/pitched as a way to simplify the management of SAP applications with hyperscalers. But I understand why SAP wants to make this push. It's about being a so-called "trusted advisor," rather than the legacy enterprise sales approach of pushing product, and auditing the usage of those products to apply pressure to buy more products. Now, some have argued that SAP does have a trusted advisor relationship with their customers. Yes, in some cases those relationships run deep. But often, those relationships were IT-centric, or about managing ERP workloads. Other times they included some industry advisory. But did they really include those top-level, "help us transform our business," conversations - with all technology options still on the table? Including SAP's competitors?
Clearly, Signavio gives SAP a powerful way to move from transformation talk to the process changes a business model shift would require. That's a far more strategic conversation than an S/4HANA TCO "global systems cleanup" type of upgrade. Obviously, this is a massive shift with far-reaching implications for SAP field sales, but there you have it. There is also an obvious tie-in between Signavio and SAP's sustainability products push. If Signavio were somehow tied into analyzing processes for sustainability exposure and optimization, would you have a unique enterprise offering?
Where I may differ with SAP: I believe there needs to be more of a free offering to open the door to these conversations. RISE offers some very interesting pricing, including packaged services and "full time equivalent" flexible user licenses, but it's hardly a free service. This is where my talk with Decker really took a turn. Light bulbs went off as I saw the potential for SAP to offer some aspects of Signavio's process analysis as a free service, perhaps bundled into pre-sales or a customer success program. SAP has no current plans to do anything like that, as far as I know, but that's where you really start to change the sales conversation.
Now you're having a process conversation with a customer that knows they will derive value - without buying anything. In my view, that type of offering gets you much closer to a transformation discussion not tied to products, but tied to which vendor delivers the most value. That vendor earns a seat at the table. Other salespeople can wait outside - including, perhaps, those pushing RISE as the cure-all.
Of course, when I shared this idea with SAP contacts inside user groups and consultancies, I heard the expected refrain: 'SAP field sales would have to change dramatically for that to happen, and don't count on that.' Well, isn't that what drinking your own transformation Koolaid is all about? (And: sharing IP to fuel buy-in during a sales/upsell process is hardly something I made up in a fever dream. I've had enterprise clients that utilized this to great effect, going back more than a decade). That's what I mean about Signavio provoking SAP's own internal change. Of course, SAP has to find its own way here; I'm just the peanut gallery in that respect. But give SAP Signavio this: they are provoking the right conversations. I look forward to more of them.
Updated, 5am UK time, Friday August 27th with the addition of context links in the "My take" section. I also expanded on a few points in this section only, to make sure that the argument was clear.