SAP + Signavio =

Can we solve this equation?

I first met Gero Decker, the CEO and founder of Signavio, back in 2013 at the bpmNEXT conference. He, along with several other folks from Europe flew halfway around the world to join a group of Americans in near Monterrey (Asilomar) to talk about the latest and greatest with Business Process Management.

That conference was the first time I saw process mining in action, and the first time I had seen several of the products demo’ed live - including Signavio. It was also the first time I met many of my favorite people in the industry in person. Several of them I knew already from Twitter.

Recently the news started to trickle out that Signavio was being purchased by SAP, with a tweet from Ray Wang referencing this Bloomberg article being the first that I heard of it. In this post, I’ll introduce three key articles on the topic, and then review some of my own conclusions:

The Straight News Take

VentureBeat’s take on the acquisition plans included some details about how SAP will take it to market:

The tools from Signavio first create a model of those processes. The model can then be compared to the way processes are actually being executed, using data collected from the customer, Morato said. A free version of Signavio will be included with the Rise with SAP service, with an option to upgrade to a more expansive and expensive option.

Armed with that data, SAP can then make a better case for employing SAP S/4 to replace a custom business process, like invoice processing.

The Process Specialist’s Take

Sandy Kemsley, who was also in attendance at bpmNEXT in 2013 (and nearly every rendition since, I trust), has been following Mr. Decker’s career even longer than I have. Sandy includes some additional insights about how Signavio will merge into the Business Process Intelligence Unit:

becoming part of SAP’s relatively new Business Process Intelligence unit, which is directly under the executive board. Since that unit previously contained about 100 people, the Signavio acquisition will swell those ranks considerably, and Gero will co-lead the unit with the existing GM, Rouven Morato.

She also dives into what is bound to be a bit of product collision between Signavio and Celonis in the Process Mining arena - as Sandy points out, Celonis arguably had the stronger partnership on that front, and a stronger product for process mining, while Signavio brings to the table better process modeling tools overall.

The Pioneer’s Take

Phil Fersht, of Horses for Sources and a pioneer in coverage of RPA, comes at the analysis from another angle, where process mining is a strong area of interest for the firm. His view is a bit more jaded vis-a-vis SAP itself, and questions whether anyone (SAP customers) will even care about the outcome of the acquisition.

But he also makes the case for why SAP felt they had to make an acquisition:

The two principal uses of process mining tools that significantly help enterprises with their SAP estates include:

1) Helping operations leaders make the most of their current ERP  and other source systems, find process bottlenecks and inefficiencies, and redesign processes such as order-to-cash and procurement

2) Helping IT teams with systems migration, such as a move to S4/HANA, where the mining technology can be used to map and monitor as-is and to-be processes, and user adoption over time.

Just with those two points, we can see why SAP’s partnerships in this space have gotten deeper in the last few years and got to a point where SAP felt the need to directly invest in a solution of its own. Hence its acquisition of Signavio.

Phil rightly questions how many clients will be weaned off of Celonis in favor of the combined SAP-Signavio option. I think the question SAP executives are asking is whether the SAP clients who currently don’t use Celonis can be persuaded to use the SAP-Signavio combination instead, and perhaps wondering how much value they’re giving up if they cede those client relationships. Phil gives Signavio high marks for their collaborative hub and process simulation capabilities, but marks them less well on the process intelligence capabilities that center around process mining.

A Few Thoughts from the Cheap Seats

I’m not a journalist nor a paid analyst, but I found the news surprising only in timing: I had no idea this deal was afoot in advance. I knew that Signavio and SAP were close partners for many years, so the fact of the acquisition is less surprising.

Signavio has been a brilliant play on having a laser focus on business processes, which has allowed the firm to then branch out in ways that enhance the value of those processes. The early focus on authoring and modeling processes then led to a focus on making it easier to “import” processes from other formats - whether that was a spreadsheet, a description, or a BPMN file. It then follows that if you want to enhance the value of having processes you focus on analyzing them to understand and show that value.

And it follows if you build value in the analysis, that you then want to bring processes from additional sources - and discovery them in an automated way - which leads to the interest in process mining.

To me, Signavio has felt like a company pulling a thread - and that focus has made them very resilient, and in my view may have well contributed to the acquisition logic here. Like Sandy Kemsley, I have a lot of respect for Gero Decker’s leadership and his team’s hard work over many years to build a great product and company.

Selfishly, from the perspective of the CEO chair at BP3, this acquisition means that for the first time, customers of SAP could really benefit from our process expertise, despite the fact that we are not experts in SAP. It opens up surface area to both expose SAP processes in Signavio in a way we can relate to, but also opens up surface area for us to help SAP clients better understand business processes through BPMN diagrams and how they will relate with the SAP implementation underneath.

For what it is worth, I think that Phil Fersht is right in that Celonis will fare just fine, thank you very much. And I am far from the best authority on what is best for SAP, but this is the first time I’ve felt like they had a business process product that I could expect to use and enjoy using, and that’s not a bad thing, in my book.

I’d love to hear your thoughts if you’re an SAP or Signavio client, or another practitioner in our space. Meanwhile, my sincere congratulations to Gero and team, and to SAP, who have brought into the fold a great team and product offering. Hopefully SAP + Signavio = Lots of New Opportunities.

A Recommendation

In every post, I’ll reserve a few thoughts to share - odds and ends if you will. Last post I shared a recommendation for a new podcast. In this post, I’d like to recommend you check out Steven Sinofsky’s new serialized book, being published chapter by chapter on Substack. It promises to be fascinating insights into everything Microsoft “back in the day” (a quick excerpt):

Start of 1989: PCs and software barely work, but the IBM PC powered by Intel processors along with Window’s ascent toward dominance is underway. It is the start of the modern PC era as PC sales (from all manufacturers for the year) exceed 20 million units worldwide, which is about half the worldwide sales of all computers to date. Looming, however, is platform competitor NeXT, though the dramatic extent to which it will alter the technology landscape is decades from revealing itself. While Apple’s Macintosh is a competitor, it is also the foundation for Microsoft’s Applications business. The group I was hired into was squarely in the middle of both the new and old Steve Jobs platforms.

Steven had me at “Looming, however, is platform competitor NeXT” - a platform I fell in love with using while I was in college, and as Steven points out, it’s surprise future impact would not reveal itself for many years..

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