Cloud, AI and Rise optimize processes

E-3 Editor-in-Chief Peter Färbinger spoke with Matthias Lemenkühler, CEO of xSuite Group, about the upcoming challenges in the SAP community. "The digitization of business processes is a constant development in the company", explains Matthias Lemenkühler right at the start. "Especially in the age of rapid technology changes and innovations, such a process is subject to constant optimization. Equally important is a clear definition of what is to be achieved with digitization. The choice of delivery method is of secondary importance. Of course, the use of cloud services and S/4 Hana can provide ideal support here."

Many existing SAP customers are still searching for the right roadmap. SAP has given the community a little breathing room by adapting the ERP deadline to 2027/2030, but in real life, time does not stand still. Where can you find roadmaps, blueprints and references for your own digitization?

"In purchasing, for example, where studies show that two-thirds of German companies are already in the process of almost completely automating their operational purchasing processes."CEO Lemenkühler explains and specifies: "If we as xSuite now implement digital invoice verification and approval processes on top of this in customer projects, you already end up with end-to-end procure-to-pay processes. These can then serve as a blueprint for other departments."

In a top-down approach, the question is whether the upcoming digitization is a business, organizational, technical or, in the case of SAP in particular, a licensing challenge for the SAP community. Matthias Lemenkühler says that the digitization of enterprise applications is advancing more and more, especially with cloud-based solutions. SAP is not the only company pushing this.

"We also clearly see the cloud as the model of the future", defines the xSuite CEO. With cloud computing, flexible, usage-based pricing models will become more and more common, where the price for software use is based on the number of documents processed, for example, and not on how many workstations it is installed on.

"I therefore see fewer licensing issues in the future.", Lemenkuehler placates. "If anything, digitization is still more of a cultural-psychological challenge, at least in Germany. Business processes also have to be rethought in some cases in order to take full advantage of digitization. Standardization is just one buzzword here."

SAP CEO Christian Klein said earlier this year: "Companies that can quickly adapt their business processes are among the winners. SAP can help them succeed here. That's what Rise with SAP is all about: helping customers reimagine business processes in the cloud to stay ahead of the competition in their industry."

The Covid 19 pandemic has exposed many failures and accelerated many IT projects. Where does business in the German-speaking world stand with the achievement of digital processes? The fact that Germany is by no means one of the global pioneers when it comes to digitization is something you can read in the newspapers every day, and Matthias Lemenkühler has to take note of that as well.

"Of course, a lot of catching up has been done here in the past year and a half due to the pandemic, but that is also the case in other countries"He believes that the German government's "Shaping Digitization" implementation strategy is to be welcomed without reservation, but that the measures it contains must be put into practice quickly and unbureaucratically.

"If you look at how hesitantly the funds from the Digital Pact for Schools are being drawn down, if you consider the sometimes erratic resistance to 5G, while at the same time home office is not even possible in some structurally weak areas due to a lack of network coverage, then it is not surprising that Germany as a whole is not yet as far advanced as it could or should be", observes Lemenkühler.

And the important issue of data protection should also be reconsidered in some places in order to better support digitization. The xSuite CEO is convinced in an E-3 interview that it is important to provide assistance here and not to complicate or prevent IT projects.

"Geopolitical tensions, environmental challenges and the ongoing pandemic are forcing companies to deal with changes to their businesses faster than ever before", said SAP CEO Christian Klein during his presentation of Rise with SAP. SAP and the connected hyperscalers point the way to the cloud for SAP's existing customer.

For long-time users, the question of whether on-prem or cloud is not yet settled. So the question remains to be answered: What influence does the system architecture have on successful digital processes? How decisive is it whether cloud, hybrid systems or on-premises is used?

"Successful digital processes are those that make use of both cloud and on-premises technologies", answers Matthias Lemenkühler and adds: "The respective use case is always decisive here. AI approaches from the cloud, for example, with highly specific, industry-relevant systems in your own company: Such hybrid scenarios, so-called 2-tier strategies, often represent the ideal middle ground. The simultaneous use of cloud- and on-premises-operated systems should therefore be strived for as a target architecture so that digital processes are successful."

Cloud model selection: Private and public

The cloud question is critical to the SAP community right now, as the S/4 release switch is on the horizon and Rise with SAP is an option. "The different cloud models must be considered", says CEO Lemenkühler. In particular, the distinction between the private and the public multitenant cloud is important to Matthias Lemenkühler.

SAP currently offers different models for the cloud computing of its ERP system, whereby some certainly represent transitional technologies. These include the HEC (Hana Enterprise Cloud), the S/4 Hana Cloud Extended Edition and the S/4 Hana Cloud.

"The first two fall into the realm of the private cloud, while the latter represents a true public cloud in the multi-client area," explains Lemenkühler. Here, however, not all functions are yet available and the customer must be prepared to standardize processes. "So there is still some work to be done", notes the xSuite CEO.

Success criteria and appropriate tools

"As banal as it sounds, the right preparation is crucial," answers Matthias Lemenkühler when asked what the success criteria are for a successful cloud operation of S/4 and Hana.

Those who take a lot of measures in advance will have less work later on during the changeover, says Lemenkühler and explains: "SAP and also partner companies provide a broad set of tools for this purpose. It makes sense to use descriptions (What needs to be done?) and tools, such as Transformation Navigator or Readiness Check, and also to pay attention to master data cleansing and harmonization. There would certainly be a lot more to say. Interfaces to other systems also need to be looked at closely. Here, an early switch to cloud-based solutions can facilitate the changeover.."

Digital transformation and cloud computing

SAP's efforts to get the community excited about cloud computing also open up the discourse on whether digital transformation and cloud computing are mutually dependent. "Digitization is ideally supported by cloud computing", Matthias Lemenkühler answers spontaneously.

He specifies: "So can benefit quickly from rapid technology changes and new technology trends, as time-consuming update projects are no longer necessary. The possibility of further standardizing business processes is also accelerated and virtually demanded by cloud computing. The opportunity arises to rethink processes instead of always trying to map the old processes with new technologies."

SAP CFO Luka Mucic said on the occasion of SAP's acquisition of Berlin-based start-up Signavio: "Today's dynamic world requires all companies to be able to quickly adapt business processes to changing market conditions. I can only emphasize again and again: For companies, designing, evaluating, improving, and transforming business processes is constantly important. By combining Signavio's portfolio with our Business Process Intelligence solutions, we create a leading suite for end-to-end business process transformation, giving our customers a competitive advantage."

So how important is SAP software to ultimately succeed with digital processes? "Unlike many competing ERP products, SAP on the one hand offers an integrated system with very large expansion options. In addition, the products from Walldorf are maintained for many years or even decades. This means that they can be planned and have a good ROI. Therefore, I would say that SAP is a very good partner for success when it comes to establishing digital processes holistically across all departments in the entire company.", answers xSuite CEO Matthias Lemenkühler.

Acting in time means winning

Winners and losers from digitalization: Where does the SAP community win and where does it lose? If you take advantage of digital transformation, you win as a company, whether you use SAP or not, Matthias Lemenkühler is convinced and says in an E-3 interview:

"SAP supports digitization comprehensively and with numerous functions. In any case, SAP should pay more attention to the challenge of customers and their business processes. Here, it is important to deliver turnkey solutions that can be implemented easily and in a time-saving manner. Complex technologies should be simplified by the software manufacturer and presented in solution packages in a comprehensible way. SAP's portfolio is often somewhat bulky and technology-heavy, without focusing on the actual business process. There is still a lot of catching up to do here, especially with regard to user interfaces."

Start with digitization

And how do you get started? What should an ERP user do to localize digital processes and achieve success with their implementation? "In principle, the essential business processes in the respective company must first be described and structured", xSuite CEO Lemenkuehler answers in conclusion.

Here, the administrative activities, such as purchasing, the sales process or even personnel processes, are ideally suited. The next step is to simplify and standardize these processes where possible. Companies specializing in this area can provide ideal support. Then Matthias Lemenkühler goes on to say: "And at the very end, one thing is always important: simply start digitizing. The question is not whether, but how best to start." Thank you for the interview. (pmf]