The pace of digital transformation is accelerating at organizations of all sizes and across all industries, as companies seek to implement operations more agile and responsive to a constantly changing landscape.
However, this wave of transformation has often come up empty-handed. Between 35-50% of the perceived value of a project falls through due to poor prioritization, inefficient execution, and lack of adoption and value tracking. It is therefore critical to have a clear marker for success prior to diving into an initiative and to build a governance structure with clear accountability to deliver quick time-to-value.
It is in this context that SAP's acquisition of Signavio in 2021 represents a natural evolution of our value proposition and our customers’ capabilities. SAP Signavio is an end-to-end process management solution that helps users:
- Identify process bottlenecks;
- Orchestrate processes in diverse ways
- Simulate the impact of changes;
- Govern processes to ensure changes and improvements are documented.
At the center of business process management is the organizations’ need to accurately see, understand, and dynamically manage the critical business processes underpinning enterprise operations, as well as to analyze those processes and improve them. Process improvement is an in-depth undertaking, and a full cycle requires technical skills in addition to business and IT collaboration to ensure sustainable and lasting change. It is important our customers know how to leverage SAP Signavio solutions one step at a time.
In that spirit, I recommend Process Discovery, a free analysis tool designed to help you get started with SAP Signavio and SAP S/4HANA, as a natural starting point. Before we know what to fix in our business processes, we must know our starting position, or baseline, and a relevant comparative set, or benchmarks.
It is important at this point to highlight that business process insights can be broadly categorized in two ways: as process performance indicators (PPIs) and as key performance indicators (KPIs). The former refers to technical indicators that are closely related to system performance, such as overdue and open finance accounts-payable (AP) items or delivery items shipped and not billed. The latter represents broad indicators that go beyond the system and often include strategic decisions embedded in the way an organization operates, such as cost of finance (as percentage of revenue) or days sales outstanding.
PPIs mostly represent partial value (15-30%) of overall value, but their tie-in with the larger system makes them easier to track and govern than other broad indicators. It is therefore critical that organizations consider baselining their performance on Signavio-generated PPIs and track them across the project lifetime to assess value realization.
By following a straightforward process of Download, Prioritize, and Contextualize, which I will outline below, we can identify meaningful improvement opportunities available to PPIs, which will move the needle within important KPIs for your respective organization.
Step 1 – Download
To begin, it is critical we can download a report to help customers ascertain the maturity of their processes for ECC and S/4. Process steps for extracting the reporting can be found here. Long-time SAP users can also identify these reports by searching for them under their previous name, Business Scenario Recommendations or Pathfinder. Process Discovery features a subset of the full universe of PPIs available with Signavio Process Insights. A few examples below illustrate this.
These reports have many other recommendations and analyses that make downloading them worthwhile. Even if you do not do much in the way of prioritizing and contextualizing, it will always be useful as you proceed along your SAP Signavio journey to make a habit of taking periodic snapshots.
Step 2 – Prioritize
Not all PPIs have inherent value to a company. You may have several open items in accounts payable (AP) or accounts receivable (AR) due to an instance that was subsequently decommissioned. In another scenario, a poorly performing PPI might reflect a strategic decision rather than an oversight. It is critical to carry out a systematic effort to speak to the owners of each instance.
This step requires a conversation with system and process owners to understand which PPIs reflect true pain points that are worth solving, and which are best left behind.
Step 3 – Contextualize
Through SAP Signavio solutions, we offer SAP customers the ability to highlight their PPIs in the context of relevant KPIs. In addition, we offer customers the opportunity to track a point-in-time snapshot, both at the PPI and KPI level, to monitor continuous improvement. As part of our Value Advisory offering, included in these capabilities are quantifications at both a PPI and KPI level, with guiding calculations for each. Here are some examples:
This level of information both helps provide a target to aim for and supports alignment between process and IT owners. Doing the same periodically can help ascertain improvements, whitespace, and next steps that are critical for continued success.
Understanding your current business process performance is a vital component of considering your overall digital transformation journey, and Process Discovery is one key analysis tool to assist you along that journey. If you are interested in learning more about the different modules of the Process Discovery solution and how they work, you can find more here.