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In this episode of Engati CX, we're exploring how to drive performance acceleration within the enterprise. So, we took a seat with Dr. Marcell Vollmer who's providing us with his exclusive insights.
Dr. Marcell is the Chief Innovation Officer of Celonis, where he focuses on supporting customers and partners to define and execute digital transformation strategies globally. In his previous role as Chief Digital Officer, he was a 'Digital Ambassador' by SAP's Digital Transformation Office to help SAP customers to define and drive digital transformation strategies in all industries globally. He has implemented a global category management organization, procurement shared services and a hybrid model with Ariba for goods, Fieldglass for professional services, and Concur for travel.
Interview with Dr. Marcell Vollmer
Basically, we all know how important it is to stay up to date with accounts, software solutions, getting insights across all the different IT systems and processes. And that's exactly what we do with our software. So, the short version of this is process mining. Basically, process analytics- what Dr. Marcell does at Celonis, is when they connect all the different systems and provide a visualization of an end-to-end process flow in procurement.
It starts the process acquisition, it goes down to the sourcing event, and then you get the goods and the invoice. Most invoices need to get. All of this can be visualized because all different systems, SEP, predominantly in the European enterprise planning space. But also, as our systems are connected, we show you how your process really is. And this is really important thing on you only can accelerate and go to the next level if you understand that your processes are flowing very seamlessly.
Therefore, machine learning and artificial intelligence-based accommodations are built in to enhance your processes to show you where you can really improve.
Example is if you are paying suppliers late, you will see where the process is stuck. Or when you have catalogue changes and something is not going so because of price change was indicated by a supplier; you will see that. And of course, what's really important is to monitor. To keep it really simple- process mining is basically the right software and operational layer as cloud solution to give you all insights, enhance your processes, and monitor them consistently.
With COVID-19, we’ve all seen how this is significantly changing the entire world. It's the first pandemic. What we see and what is important is that you get the full visibility and transparency about all the different steps and costs, of your supply chain. That's a starting point.
You need to fix the basics and have an overview.
When you do that, supply chain will basically exist in a more simplified way. Dr. Marcell describes it as four blocks.
So basically, that's a very simplified definition of a supply chain.
When you now look at the different components and build on the sourcing site, it is absolutely important that you think about
How can I really help my manufacturing processes? Or whatever I deliver as a company, or as a service, to my customers or my goods?
You need to think about innovative ways on how to make it better, how to make it easier for your production. What you can make, what you should try... It’s also where procurement will play a vital role in driving supply innovations.
It’s not only limited to humans of course! All the different parts of planning side will build the customer expectations, the customer experience. What is it? What customer wants? You can have the most beautiful products but if you're not selling them, we all know it will not help you. Because you’re not making the revenue.
And this is something also be you need to think about the customer experience. What are the right innovations? And how can you really help your business to continue to develop the product of the future, that will beat your competitors and will stay ahead of everything?
The core element in times of uncertainty is the resilience of your supply chain, and that means you need to have first off, have full insights in all the different suppliers. And in the case, what we have seen in the Wuhan, the entire area was impacted by COVID-19.
You need to find alternative suppliers. It's more or less on one day to another, so this means you need to have data insights, and you need to think about auto-innovative solutions. How can you make it? Is that something probably you can get from other suppliers? You need a system, and you need to understand which categories you can get from somewhere else in the world.
You need also understand if it’s available, because it doesn't matter. And if you'll find alternative, suppliers, we have also current problems to deliver. We have seen this. The mask, for example, that we all have to wear all over the world, there was a huge shortage.
So another innovative way is to think about coming up with alternatives. And we have seen that sales of companies producing the mask in a different way- some using machines, some reusing certain production capabilities they have to overcome the shortage.
And these are great examples for tiny innovations. What you can do based on the data of what you have. And this is exactly what we all need to deliver and help so that the world keeps rolling and that you can overcome any shortage. But also think about new innovations, what's coming up and to make it a great product for the future.
Dr. Marcell thinks all the companies are looking into the digital transformation and what core element is always the automation. Everyone wants to automate on operational, technical tasks, administrative tasks, because there are more value-adding activities for people to do.
And we’ll also see more or less on a daily basis that the machine learning and artificial intelligence capabilities are getting better and better. So, that's something that we can see. Starting with certain legalisms, and then experience the learning capabilities these algorithms have to enhance your machine learning.
What Dr. Marcell learnt at Celonis with process mining is that by using all the data and getting the wonderful overview about the end-to-end processes. It just helps us also to identify certain patterns to come up with better recommendations for their customers to help them. To automate and really benefit from the capabilities of machine learning and artificial intelligence. And that's really what they learnt.
But there are other ways in automating. So, we all know you can use chatbots, for example. We have certain IT systems integration have started even earlier, with EDI on the interfaces we have built connecting systems very expensive. Received this as networks, also has a capability by connecting the companies and exchanging information in an end-to-end electronic way. Unfortunately, as a German with a strong accent, living in Atlanta, Georgia, Dr. Marcell couldn’t leverage this technology!
But, basically, on what Dr. Marcell really learned is that you can think about on how to improve systems and really see that you invest in intelligent capabilities to go to the next level of automation and focus on what really adds value to drive innovations. It’s definitely a way to increase the value proposition of your organization for human department, your supply chain department and in the times of crisis is more important than you think about it in creative ways. It’s all about automation with a purpose.
We definitely have seen what process mining, using process analytics of data helped with. It has changed with getting end-to-end visibility and transparency. Only if you know every single step, you can meet the expectations off your customers. Transparency is a very important topic in this.
What transparency is about and how it really helps. We all know that sustainability is something we definitely want to include in our end-to-end supply chain. We also want to avoid the use of child labor in our product, in our sourcing, what we do and products we sell to our customers. A reason for that is really simple.
We only have one world and all the customers are now wondering who are the brands, and the companies they want to work with. What products do they really need, and if they can trust that these companies are selling sustainable products.
Therefore, you need to have end-to-end transparency and you only can have this if you really have the capabilities. And you use all the data along your supply chain from the planning on all the steps, to sourcing what you do to select the right suppliers- focusing on sustainability, corporate social responsibility, to continue then with your production processes. You control that if you manufacture by yourself. Or you need to monitor all the suppliers you’re working with to do the manufacturing for you. The providers you’re collaborating with and finally also logistics and therefore it is all connected. It gets better and better connected with connected devices. IoT what we see, and with that you have really full transparency and you're also enabled by that.
Then you can react in a case of an interruption that you have all the date to immediately define the risk mitigation for whatever’s happening in the global pandemic. It is really challenging for a lot of companies and Dr. Marcell has seen this with a lot of companies. He himself was a human officer by himself at SEP and he started back in 2011 in that role. What happened back in 2011, we all remember Fukushima, basically a huge disruption but it was very locally condensed in one area in Japan. But later in 2011, we’ve seen the flood in Thailand.
Dr. Marcell got educated by himself that the world's majority of hard disk production is performed out of Thailand. And we have now 70-75% of the hard disks getting produced, in Thailand. Then we need to think about what alternatives and therefore you need data. You need transparency and this is fundamentally changing.
Also, how you monitor and bring your supply chain into the next level by using artificial intelligence capabilities of course.
A question that often pops up when Dr. Marcell speaks at a conference for example is what the key driver of digital transformation is. Was it the CEO? Was it the Chief Digital Officer who achieve innovation? Or was it COVID-19?
And not a big surprise, but a lot of the resources pointed to COVID-19, which acted as an acceleration driver. This is now the new normal. People hopping videocalls to chat with each other. But it’s not an entirely new technology. But we’re seeing that now as people are working more and more from home, with social distancing happening because of the virus. It's a must-have for a lot of companies that we are jumping on the technology. Using Cloud solutions to collaborate, to work on one document or a business plan for example.
And we have some video conferences, and I think this is really a great example by the acceleration, what we can see right now. It is a new normal. Everyone would say,
Let's jump on the video conference, let’s connect!
As if it’s like a phone call in the past. And this is showing it is only one tiny example, because the magnitude of the change is much bigger when you look also in how companies are working now with the solution, with the backend systems. How fast they really made it happens that that with VPN connections, you can access the company servers in the secure way. That you can exchange information. That so you arrange meetings and do them in a virtual space. That you can basically also visit one of your customers or suppliers by using FaceTime video conferencing capabilities. By thinking about new ways of collaborating. And that's really something Where we see it, it's definitely an acceleration.
And I would even say that probably time we have known it before with all the travel, a lot of travel for short meetings- that might be history. We will get more and more used to looking into this virtual set up, in this virtual way. And he’s a big fan of that. Companies are definitely ready and need to work on redefining the future for the post COVID-19 era which will hopefully also bring us back on the economic side like before. The dip in the economy will hopefully be reshaped going upwards again so that all the people are benefitting from the next cycle. And hopefully it’ll be a long one, and no second wave from the coronavirus.
We have seen that a lot of companies marking now in the IT sector, the high-tech companies are definitely benefiting. We have seen a rocket star race for Zoom, for example, one off the video conferencing providers, but also Microsoft teams, and as our Skype solutions, Microsoft providers are really benefiting from that. Dr. Marcell also sees a lot of Cloud providers are also heavily investing and need to expand their capabilities. We see a lot of bandwidth requirements. It even led to a situation that Netflix had reduce their bandwidth, because the streaming went up after the COVID-19 crisis came up. And that's something also, where we see a lot of companies working at that space.
Key players for the digital transformation are definitely benefiting from that. When you look a little bit in a broader sense, as all the details of shops on the streets got impacted, got closed in a lot of countries, and we also see that the big players like Amazon, for example, heavily benefiting from that. So, the retail industry, the e-commerce players, are benefiting from that. Dr. Marcell wouldn’t say that all retail companies, because he sees they are heavily impacted by that. And there are a lot of other areas and industries where you see positive benefits.
So everyone who is basically focusing on the next new normal in the post COVID-19 era is basically now benefiting from that, and we will see also what's happening in the other industries. We still see players like Tesla overtaking large OEMs in the automotive sector, for example. So electric cars, self-driving capabilities, autonomous vehicles.
A lot is also impacting supply chains by their technologies. And the tech providers in general will benefit the most from the current situation of what we have.
Now is the time to drive digital transformation.
Dr. Marcell is absolutely a strong believer that this is needed. A lot of C-level executives are doing a lot of these transformations at a customer side, especially at Celonis where there is a lot of process mining. Providing solutions, providing this transparency you need. It’s now the right time- so start with the vision and focus a customer-centric process as the first element when you have the vision for the overall company in place.
Then select the right IT systems carefully to help continue to drive thinking about that virtual collaboration, and network collaboration definitely be more intense. And it will be the future time.
With all of that- let's not forget your people because there's a lead asset of your organization. You can have the most beautiful technology, but if you don't know what people are doing, you might be not successful and does that.
It's time to act now. It is difficult to make predictions, especially about the future. We can’t assume, but what we all can do is define our future now, and I think that's exactly what we should do. The time is right to be successful.