IT Transformation with Business Process Management

Heraclitus already knew that nothing is as constant as change. The market environment is also in a constant state of upheaval, driven by technological advances and digital innovations. As a result, companies are facing enormous challenges: In order to stay ahead of the competition, they must remain efficient, flexible and innovative. This often means completely changing their IT systems and processes - for example by switching to a new SAP system (SAP transformation). To ensure that such an IT transformation runs smoothly, there are a few steps to consider. But what exactly does an IT transformation involve?

IT transformation" refers to reorganizing a company's IT and process landscape. Existing IT systems, applications, and processes are optimized, updated, or completely replaced. The aims of IT transformation include streamlining the IT landscape, reducing costs, simplifying the provision of resources, and facilitating the introduction of new technologies. Tools and applications are also tested, as there is often additional potential for improvement at this level.

The benefits of an IT transformation are clear: companies equipped with modern systems are more resilient and can react more quickly to new market requirements and customer demands. In addition, companies have the opportunity to rethink their business models and processes and create a solid foundation for sustainable success. Above all, however, IT transformation secures a long-term competitive advantage through advanced technologies such as highly integrated and intelligently automated systems, paving the way for future growth. Companies benefit in particular from these aspects of IT transformation:

• Adaptability and expandability: A modern IT landscape promotes growth and innovation and makes companies future-proof.
• Increased efficiency: The renewal of IT systems accompanying the IT transformation allows processes to be automated and optimized. This relieves the burden on staff, who can now focus on strategic activities.
• Flexibility: Modern IT structures can be adapted more quickly to new market requirements.
• Supporting innovation: Through a more advanced IT environment, IT transformation promotes the use of new technologies, such as AI, to develop innovative products and services.
• Increased security: With the introduction of the latest technologies, IT transformation ensures updated security standards and better protection against cyber threats.
• Cost efficiency: Increased efficiency and cloud usage reduce costs and optimize the use of resources.

As beneficial as an IT transformation is, it presents many challenges and often fails due to its own complexity. Common reasons for such crash landings are a lack of specialist knowledge and inadequate planning. Whether in production, merchandise management, HR, or accounting, the introduction of a new system impacts the entire company, so a well-thought-out strategy and comprehensive preparation are a must.

Suppose there is also a lack of practical experience, such as transforming to an entirely new SAP system. In that case, it is unsurprising that such a major IT project fails despite high investment costs. A prominent example of this is the SAP transformation project at Lidl. 2011, the discounter planned to introduce a globally standardized merchandise management system. More than one hundred IT specialists were tasked with developing the new system. The result: after almost seven years and an investment of nearly half a billion euros, the project was stopped because the original goals could not be achieved "at a reasonable cost". The new system was not suitable for high-turnover countries.

These areas of IT transformation are particularly tricky and require careful preparation:

1. Complexity of the systems

   IT transformations, such as the transformation to a new SAP system, often involve many modules and configuration options that make the system complex.

2. Project management and coordination

   Project complexity requires collaboration between different teams and stakeholders. Effective planning, coordination, and monitoring of processes and resources are essential, but they can be challenging.

3. Training and familiarization of the workforce

   Introducing new systems as part of an IT transformation requires staff training to use the latest systems effectively. Although this costs time and resources, it is still cheaper than if employees do not use the system effectively due to poor training.

4. Adaptation of business processes

   Adapting existing business processes as part of the IT transformations is also necessary to maximize the functionality and benefits of the newly introduced solution. Identifying and implementing these adaptations can be challenging.

Many companies are still reluctant to implement IT transformations, not least because of the many challenges they face. However, this is precisely where Business Process Management (BPM) can be helpful. It helps to define, analyze, and optimize business processes, making IT transformation more efficient and successful.

An even higher level of efficiency and error prevention can be achieved by combining BPM with Enterprise Architecture Management (EAM). While a BPM tool such as BIC or Signavio ensures transparency about company processes, EAM tools such as LeanIX create transparency in the IT landscape. EAM also ensures that all of a company's IT components and systems work together seamlessly and interact optimally with each other.

But how exactly does a successful IT transformation work? What needs to be considered in order to achieve the goals set? In particular, the following five steps will help a company to implement its IT transformation in an efficient and targeted manner:

Step 1: Requirements definition and planning

A successful IT transformation requires precise knowledge of operational processes. With Business Process Management - ideally in combination with Enterprise Architecture Management - the business processes, applications, data, stakeholders, etc., that need to be considered during the IT transformation can be determined. Business process management then makes it possible to optimize, restructure, or redesign these accordingly.

Step 2: Process definition

If a company plans to switch to a current system, it must first know whether it wants to set it up entirely from scratch (greenfield approach) or whether the processes should be adopted first (brownfield approach). Accordingly, there are two different scenarios and technologies for implementation:

Process modeling (greenfield approach)

Process modeling is particularly suitable for the greenfield approach, which is used when old processes are inefficient or no longer meet current business requirements. As process modeling provides a visual representation of business processes, it primarily ensures transparency and process understanding. It shows how processes should look in the best-practice version and whether this fits the company. Transparency regarding dependencies between the various processes, applications, and systems is an important prerequisite for process analysis.

Process mining (brownfield approach)

A brownfield approach is particularly useful when existing processes are already well established but require improvement. Tools such as BIC Process Mining and Signavio Process Intelligence reconstruct the digital "footprints" of IT systems and help extract and evaluate existing processes to make targeted optimizations.

A hybrid combination of both scenarios is also possible (bluefield approach).

The business process management department or the process management team identifies best practice processes and models target processes. These managers also coordinate the various steps during the IT transformation, thus ensuring a smooth implementation.

Step 3: Process analysis

Once the processes have been defined, the next step is to analyze existing workflows. Business process management technologies such as BIC Process Mining and SAP Signavio Process Insights and Process Intelligence are used here. Process Insights monitors and analyzes standard processes and immediately identifies potential for improvement. SAP Process Intelligence and BIC Process Mining (for process mining) read the digital "footprints" of the IT systems, reconstruct and evaluate processes, and use ready-made models for end-to-end processes such as order-to-cash and purchase-to-pay. The process analysis makes it possible to identify weak points and provides a sound - as it is data-based - basis for decision-making for a successful IT transformation. EAM tools such as LeanIX offer valuable insights and promote transparency across the entire IT landscape.

Step 4: Target process modeling

The next step is process modeling, for example, with SAP Signavio Process Manager or BIC Process Design from GBTEC. Such a tool plays a central role in IT transformation, as it helps with process mapping and subsequent analysis and optimization. BPM tools such as BIC and Signavio support the intuitive modeling and management of these processes. They can also be used to carry out and document adjustments efficiently. Integrating EAM tools such as SAP Solution Manager and LeanIX ensures a comprehensive overview of the entire enterprise architecture and simplified access to master data.

Step 5: IT process automation

The IT Process Automation also plays a decisive role in IT transformation - especially in the low-code/no-code area. Because Low-code/no-code platforms make it possible to automate processes with minimal or no programming effort, which considerably simplifies and accelerates implementation. IT process automation serves companies as a powerful tool with which they can increase their competitiveness and profitability. Tools such as SAP Business Process Automation or BIC Process Execution can be used for this purpose.

If a company follows these five steps - from requirements definition to implementation and process automation - and uses Business Process Management and Enterprise Architecture Management in an integrated manner, it is ideally equipped to successfully master the challenges of its IT transformation and realize sustainable benefits.

Overall, the collaboration between EAM systems such as LeanIX and BPM tools such as BIC and Signavio enables a comprehensive view of the enterprise architecture that includes both the technological and process levels. This enables companies to make agile and strategically sound decisions that increase their competitiveness and operational efficiency.