Almost live from Sapphire 2023 in Orlando Florida...
"We're very excited to see the plug and gain approach because there's no reason in 2023 that you need 10,000 hours to build spreadsheets as part of an implementation, right? You can optimize the average technology in the age of generative AI and with that we need a moderate approach to transform. Plug and gain to us is the beginning of an essential ability to fix a leak in transformations."
Darwin Deano (Partner, McKinsey)
SAP Sapphire 2023 in Orlando was an event filled with enlightening showcases, keynotes and presentations that left a lasting impact on me. One of the standout moments was the SAP Signavio keynote delivered by Rouven Morato, Gero Decker and Darwin Deano from McKinsey. They delved into the power of Business Process transformations, announcing the joint launch of Value Bridge, a comprehensive McKinsey offering powered by SAP Signavio that empowers organizations to drive continuous value throughout their transformation journey. The bottom-line message: In today's rapidly evolving business landscape, organizations must embrace digital transformation and leverage intelligent technologies to stay competitive.
They emphasized the importance of process optimization and highlighted how SAP Signavio's plug and gain approach, including process analysis and mining capabilities, provides invaluable insights into a company's operations. By analyzing and visualizing the actual flow of business processes, SAP Signavio empowers organizations to identify bottlenecks, inefficiencies, and areas of improvement. This knowledge can then be utilized to streamline workflows, enhance productivity, and unlock innovation.
One of the key messages emphasized by Darwin was the critical role of data-driven decision-making in driving successful business process change. He highlighted how SAP Signavio's process mining capabilities, combined with advanced analytics and machine learning, can unlock insights from vast amounts of operational data. By harnessing these findings, organizations can make informed decisions, identify patterns, and optimize their processes for enhanced efficiency and performance.
Moreover, the speakers stressed the significance of agility and adaptability in business process transformation. They showcased how SAP Signavio's flexible modeling capabilities enable organizations to adapt their processes quickly and efficiently to any changing market dynamics. This approach to process management allows businesses to be nimble, responsive, and resilient in the face of disruptions, ultimately paving the path for long-term success.
Right after the keynote I had the chance to sit down with Darwin Deano and get his perspective on the launch of Value Bridge combined with the plug and gain approach by SAP Signavio and its impact on our customers.
Darwin, you talked about the value gap and the value bridge – can you tell us a little bit more about how you go from identifying the gap to finding a way to close the gap?
Well, what we do is a combination of top-down, outside-in, as well as data-driven analysis, and that is why SAP Signavio's capabilities are super important. These capabilities allow us to rapidly separate fact from fiction and identify opportunities, leverage corrective and innovation recommendations, as well as potential value. We now combine that with our outside-in perspective, leveraging our value library as well as our digital use case library, to compare, contrast and incorporate our understanding of the business strategy division and the operating model to arrive at the right answer. There's a lot of information, and to help clients understand where to focus and how to focus on the value potential, really requires both the strength of McKinsey and SAP.
You help customers to go away from gut feeling based decision making to a strictly data-based decision process. What are other common pitfalls you see for customers on this journey?
I think what’s interesting is nobody will be surprised that there is a value gap because there is an ecosystem incentivized today to deliver go-live and not deliver value. But what's interesting is we're seeing that businesses don't realize the knowledge gap, the knowledge that erodes over time.
So, when customers implemented ERP, as soon as they captured the design document, the solution manager and updated it through testing, and then had hypercare, they had years of continuous improvement, bug fixes, and projects, regression, etc. --- the knowledge erodes.
That's why we're very excited about Plug and gain because it tells you the reality, not just a happy path. Not just a perfect design, perfect data. It shows you all the different permutations and where you need to focus and put your effort on.
Excellent. I think you had an opportunity to preview some of our approaches with Pplug and gain with other partners or customers prior to our launch. What are you hearing from the market as kind of initial reactions?
I think the first reaction which was very interesting, and I completely agree with them, is a call to action, because if we are not careful plug and gain could be misinterpreted as biased towards the status quo. And nothing could be further from the truth! But what we can do is McKinsey is provide a counterweight to make sure that customers identify what based systems and data tell you what the opportunities are, and then contrast that with your vision, your business strategy, your operating models and leading practices. Basically, align what makes sense or not, where you need to set up the process differently. Just because it wasn't flagged doesn’t mean that there’s no opportunity there. So, call to action was the biggest reaction and the second important feedback is excitement. For up to a large part, SAP implementations are being done the same way they've been done for the last 15 years – and plug and gain completely disrupts that.
We're very excited to see that because there's no reason in 2023 that you need 10,000 hours to build spreadsheets as part of an implementation, right? You can optimize the average technology in the age of generative AI and with that we need a moderate approach to transform and plug and gain to us is the beginning of an essential ability to fix a leak in transformations.
It's very refreshing to hear that we have a a joint value proposition that is about compressed time to value opposed to someone's trying to prolong that in the past. We all are on the same mission, which is driving value more rapidly, more instantly with faster outcomes, setting the right path of the win-win equation. We are looking forward to changing the world of business transformation.
Value Bridge – in more detail
In the face of relentless disruptions and the need for sustainable growth, organizations are actively pursuing their digital transformation and innovation journeys. However, most organizations struggle to fully realize the potential value from these initiatives, resulting in a significant value gap. McKinsey research highlights that nearly 70% of large-scale transformations experience delays and fail to deliver expected benefits. Compounding these challenges are the opportunities and complexities presented by rapid technological advancements like generative AI, quantum computing, blockchain, and more. While these technologies offer immense potential, extracting maximum value requires careful guidance to avoid missed opportunities and increased vulnerability in the competitive landscape.
To bridge this value gap, it is essential to shift our perspective on value and view it as a continuous outcome, ingrained in the business operating model. This entails aligning strategy, operating model, processes, data, and technology with the evolving environment. Value Bridge, a comprehensive McKinsey offering powered by SAP Signavio, empowers organizations to drive continuous value throughout their transformation journey.
Value Bridge offers an end-to-end, modular approach that frames the value case upfront, assesses the ability to deliver value during the transformation, and enables continuous value realization. By leveraging McKinsey's objective leading practices for value and elite digital innovation, together with SAP Signavio's data-driven insights and process transformation capabilities, organizations can achieve desired outcomes and avoid the pitfalls of static value goals.
The Value bridge offering is fueled by the plug and gain approach with SAP Signavio. Read more about plug and gain here.