Prepare the team. Digital transformation can be a quick path to improving employee engagement and supporting collaboration by reducing repetitive and tedious tasks. However, these benefits can only be realized if the entire team is onboard with the change and willing to adopt new ways of working. Addressing their concerns and feedback, and carefully explaining the anticipated benefits of the transformation can help them prepare for the new technology and shift in culture that follows.
As part of our series about “How To Use Digital Transformation To Take Your Company To The Next Level”, I had the pleasure of interviewing Juergen Mueller.
Juergen Mueller is a member of the Executive Board of SAP SE, leading the Technology and Innovation board area. As Chief Technology Officer (CTO), he is in charge of SAP’s overall platform and technology development, called SAP Business Technology Platform (SAP BTP). Moreover, Juergen orchestrates SAP’s overall innovation agenda.
Thank you so much for joining us in this interview series. Before we dive in, our readers would love to “get to know you” a bit better. Can you tell us a bit about your ‘backstory’ and how you got started?
On my 12th birthday I got my first computer: an Amiga 500. And at 17, I founded my first company, a software that helped photographers serve their customers. Growing up, I was also a very ambitious soccer player, and I actually earned my first money as a soccer referee. The teamwork and fairness I learned during those years are still very important values for me.
As part of my studies of information systems, I spent some time in China, before starting my PhD in IT Systems Engineering at the Hasso Plattner Institute in Potsdam, Germany. In 2013, I joined SAP as head of the Innovation Center and later became SAP’s first Chief Innovation Officer. In 2019 I was appointed to the Executive Board, leading the Technology & Innovation board area.
Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lessons or ‘take aways’ you learned from that?
Not sure if it’s super funny, but it was an honest mistake: A few years ago, I called my manager’s assistant by his family name for quite some time, thinking it was his first name. Luckily, a colleague told me after a while, so I changed that. Thankfully this wasn’t a big deal for the assistant, but I learned early on how important it is to remember names and get the basics right.
None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story?
It’s not a particular person, but rather my whole family, especially my parents. A social worker and a nurse, they separated when I was young. Both later remarried. My parents handled the new situation very well. I have a very close relationship with them and with my five half-siblings. You could say I grew up with the strength of two families instead of one.
Is there a particular book, podcast, or film that made a significant impact on you? Can you share a story or explain why it resonated with you so much?
I do not have a book that has been equally important to me throughout all the years, but “Thinking, Fast and Slow” by Daniel Kahneman has helped me to better understand how the human brain works. Additionally, a tiny book, but still impactful: “Fish” by Stephen Lundin et al. It taught me that we can choose our attitude every day: I choose to be positive.
Extensive research suggests that “purpose driven businesses” are more successful in many areas. When your company started, what was its vision, what was its purpose?
Let me call SAP a 49-year-old start up. Today, our vision and purpose at SAP is to help the world run better and improve people’s lives. We innovate to help our customers succeed. SAP is committed to that vision and purpose with a strong focus on enabling our customers with their digital transformation journey. We bring this to life by providing products and services that meet the sustainability challenges and opportunities of our customers, while also leading by example in our own sustainable business operations and practices. Imagine a future that looks greener, cleaner, and more equal than the world we live in today. A world of zero emissions, zero waste, and zero inequality.
This aspect wasn’t really on anybody’s agenda when the company was founded in 1972 but has significantly shifted since. However, one thing remained unchanged over the years: putting the customer at the center of everything we do and helping them be successful.
Today, we still help companies run at their best and this includes running in a sustainable way as well. Since 2012, SAP has issued our annual Integrated Report to present a holistic view of our business performance across environmental, social, and governance (ESG) metrics. Also, we want to be carbon neutral in our own operations by 2023.
Are you working on any new, exciting projects now? How do you think that might help people?
Right now, I’m really excited about the work my team is doing around SAP Business Technology Platform (BTP). We recently launched new SAP BTP capabilities to help customers surface insights from data and turn those into business value. In particular, these functions help customers link operational, financial and people data to gain new insights for better decision-making and automate tasks.
For instance, US-based Bourns, Inc.: The company manufactures and supplies circuit protection, power conversion, and sensing components, serving a broad range of markets, including industrial equipment, renewable energy, electric vehicles, and autonomous driving systems. In the past, Bourns’ pricing and quotations to its customers was a mostly manual, time-consuming effort. Utilizing SAP BTP, the company developed a customized machine learning model running millions of product line records to predict optimized market-rate pricing. With the help of SAP, Bourns now has a scalable and automated solution in place, meaning that pricing analysts can offer the best market-rate quote to Bourns’ customers.
I am also very proud of how we as a company have been helping, not only our customers, but the broader society get through this tough time. In Germany, we created the Corona-Warn-App together with T-Systems. It helps people stay safe while only requiring the absolute minimum of personal data. With 30 million downloads, it is one of the most successful Covid tracing apps globally. With its new features it is an important building block for the current, safe re-opening of the public life. Another example is the EU Digital Covid Certificate that helps Europeans to travel again — in a safe manner.
Thank you for all that. Let’s now turn to the main focus of our discussion about Digital Transformation. For the benefit of our readers, can you help explain what exactly Digital Transformation means? On a practical level what does it look like to engage in a Digital Transformation?
Digital transformation is the integration of digital technology into all areas of the business, improving or even fundamentally changing how a company operates and delivers value. It is as much a cultural and business transformation as it is a technological one because it ideally involves the rethinking of customer experiences, business models, and operations. Digital transformation is about finding new ways to drive innovation, deliver value, generate revenue, and improve efficiency — end to end, spanning across industries.
The opportunity that comes with it is huge: it gives people and organizations deep business insight and fosters collaboration that helps them stay ahead of their competition.
In my opinion, there are three key steps to successfully engage in a digital transformation journey. First, everything from analog documents to assets must be converted into digital data. This digital data will be essential to not only optimize but redesign business processes. This is an important step; if a process wasn’t working well in the analog world, it won’t necessarily be better, by just moving it into the digital one.
The second step is to include technologies and applications such as advanced analytics and artificial intelligence. Once incorporated into business processes, these technologies will power data analysis, real-time automation, and complex learning algorithms.
Rise with SAP, an offering we launched beginning of the year, enables our customers to transform their business in the cloud, independent of starting point or complexity. One key part of this is to enable technical migration.
Lastly, but in my opinion equally important, business must lead the cultural change that comes with digital transformation. People who have been used to working a certain way will need support to adapt their workflows and habits to understand the benefits and to make the most of them.
Which companies can most benefit from a Digital Transformation?
From retail to manufacturing to public sector, companies in all industries can be strong candidates for digital transformation, and SAP supports all industries on this journey. The companies that tend to benefit the most are those that have numerous manual processes that can be digitized, automated, and connected to other systems. This also includes companies that undergo a business model shift from selling products to selling products and services including highly flexible consumption and payment models for their customers, e.g., from selling products to selling products + subscriptions + including a pay-per-use part (use case for solution order or CPQ+BRIM).
For example, a retailer with a manual process for scheduling employees’ shifts — a labor intensive process — can bring this process online and automate many of the functions that a scheduling lead would handle, including matching the skillsets of employees with the needs required by the shift. This scheduling system could be connected to the retailer’s digital payroll system, and automation could ensure employees are accurately paid for the time that they work. With Internet of Things (IoT) sensors and powerful analytics layered into the mix, the retailer can also predict when and where issues may arise before they occur, such as when foot traffic will increase and demands more specialized sales staff on the shop floor. The greater the integration between systems, the deeper the insights the retailer will be able to draw from when making business decisions.
We’d love to hear about your experiences helping others with Digital Transformation. In your experience, how has Digital Transformation helped improve operations, processes, and customer experiences? We’d love to hear some stories if possible.
I’ve been fortunate to have had the opportunity to help many customers realize incredible value from digital transformations. One customer that immediately springs to mind is Uniper, an innovative energy company operating in 40 countries. SAP supported Uniper’s highly effective digital transformation, which included streamlining and digitalizing its operations across plants, the field, and the back office. As a result, Uniper saved 50% of the time it used on plant inspections and achieved 10-times faster data entries for job requisitions, giving the company an added competitive edge.
Has integrating Digital Transformation been a challenging process for some companies? What are the challenges? How do you help resolve them?
For many companies, the biggest challenge is not the technology involved, but the strategy. Without clear goals, priorities and communication, many companies get stalled on their digital transformation journey before they’ve even begun. And again, it’s the business model shift many companies are undergoing, that is important and challenging.
There are four key elements that companies should establish in their strategy to set themselves up for success:
- Determine the starting point by auditing all existing systems and assets. Which systems are already digitalized, which have a high operational priority, and which have the least complicated path to transformation.
- Define the biggest priorities. Digital transformations don’t need everything to happen all at once.
- Build the roadmap. Great transformation roadmaps allow for agility and growth but starting with a handful of clear, attainable goals can set the plan up for immediate success. Be sure to also include change management strategies into your plan — digital transformation is a human journey too.
- Prepare the team. Digital transformation can be a quick path to improving employee engagement and supporting collaboration by reducing repetitive and tedious tasks. However, these benefits can only be realized if the entire team is onboard with the change and willing to adopt new ways of working. Addressing their concerns and feedback, and carefully explaining the anticipated benefits of the transformation can help them prepare for the new technology and shift in culture that follows.
Ok. Thank you. Here is the primary question of our discussion. Based on your experience and success, what are “Four Ways a Company Can Use Digital Transformation To Take It To The Next Level”?
Companies are increasingly utilizing digital transformation to take their business to the next level. The four top ways I see SAP customers reaching new heights are:
- Enhanced customer experiences through personalization, omnichannel access, and customized service plans. With real-time access to data, companies can better deliver to customers’ unique expectations, while driving retention and loyalty.
- Increased resilience and greater agility that lets the company operate with high levels of confidence. Throughout the pandemic in particular, companies realized the importance of prioritizing resilience and the ability to quickly pivot when disruption strikes unexpectedly.
- Acceleration toward sustainability goals with technologies that capture and analyze complex data sets from all areas of global operations. With AI and modern business systems, companies can build business models that are predictive and resilient, and that become increasingly more sustainable over time.
- Developing a culture of data-driven decision making. With modern ERP and advanced analytics, companies can access real-time data and customize powerful analysis algorithms. This can drive a culture of decision-making rooted in deep data insights rather than simply relying on gut feeling or past experiences.
In your opinion, how can companies best create a “culture of innovation” in order to create new competitive advantages?
In my personal experience, I have found that driving a culture of innovation starts with empowering employees to question why things are done the way they are. Encouraging open dialogue between employees and managers, and an unbroken sense of curiosity can help unearth endless possibilities for innovation that might otherwise go unnoticed. The greatest ideas have been known to come from employees in some of the most unexpected departments.
Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?
“I know the price of success: dedication, hard work, and an unremitting devotion to the things you want to see happen.” — Frank Lloyd Wright
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Thank you so much for sharing these important insights. We wish you continued success and good health!