PODCAST -
#14 Automation Talk

The Process Driven Approach and its Benefits for your Company

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The Process Driven Approach and its Benefits for your Company

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Guest
Dr. Volker Stiehl
Professor at Ingolstadt University of Technology
University of Technology
Louise Kühns
MODERATOR
Louise Kühns
Program Manager
Bots & People

Read the Summary

In today's episode of the Autoation Talk Louise talks to Volker Stiehl, Professor for business information technology and development of (process-driven) business applications, at the Univeryity of Ingolstadt.

Volker shares his extensive experience from his many years working for large technology companies such as SAP or his many years researching business processes at the University of Ingolstadt.

Together with Louise, he descends deep into the Process Driven Approach methodology he developed and how it can help solve the many challenges faced by companies and start ups.

Enjoy listening!

Read the Transcript

Louise
Hello and good morning. A warm welcome to you Volker. I'm really happy to have you on our podcast today. Please let's start by you telling our listeners a little bit about yourself and what your occupation is.

Volker
Yes, first of all, thank you very much for the invitation. It's really a great pleasure for me to be here today. And about my focus, well, I'm responsible for business informatics and enterprise application development, and I'm working at the University of Applied Sciences in Ingolstadt, and here especially for the development of large business software systems that actually keep a company running.

Louise
Right, okay. And how did you get to this point? So what brought you the inspiration to start in this field and what motivates you to work there?

Volker
Well, so I'm a native computer scientist and I studied computer science from 1983 to 88 with a minor in business administration. And due to this minor subject, business administration, I was right from the beginning, sensitized, so to say, to the topic of It systems. And then I went to Siemens, and there I got right in the middle of the implementation of processes through software.

And that was, of course, reinforced by my change to SAP. So I was with Siemens and SAP, two big players, and I went to SAP in 2004 and well, in both, while working for Siemens and SAP, I noticed again and again that the software projects for implementing processes delivered extremely bad results.

Volker
Why is that so? Too slow, too expensive, too error prone, too difficult to maintain up to the point where software becomes unmaintainable. You know the saying, never change a running system. So obviously the question came up, can this be done better?

And as an answer to this question, the process driven approach emerged as an innovative solution proposal. And we will certainly come back to PDA later. And I used the abbreviation PDA because it's sometimes too long to repeat that term.

Louise
Yeah, we'll definitely jump into that in a minute. Before we do, however, I would like to know a little bit more about what you do right now. So, as you said, you're at the university and you're Lecturing, you also have a lot of practical insights.

First of all, what is your key focus right now in your work? And also, what would you say makes being a lecturer special to you?

Volker
Okay, so the key focus, as I mentioned already, is on the development of really huge applications based on processes. So that is my main topic. And the work with people is so inspiring. So this exchange with young people who are not yet too influenced by their career or prejudiced by their past and other companies, that's where I take a lot of fun. This always generates new ideas during discussions. And as I said, it's simply a lot of fun.

Louise
Okay, without any further ado, then, let's jump into your approach that you've mentioned. And as you said, you've coined the term process driven approach in your research and your practice.

But before we jump into that, I would like to start from the beginning and kind of set the groundwork so we're all on the same page in terms of terminology. So maybe you can start by giving us your definitions of the term digitisation and digital transformation and explain where to draw the line between the two.

Volker
Well, actually, these are in fact, two very important terms for me. I always start my presentations by explaining the two terms simply to avoid misunderstandings. So it's really good to start with the two terms. Let's start with digitization briefly explained. It's about substitution by technology. For example, the change from long playing records to CDs or from paper to PDF forms or to web forms. Essential is that the business models and the processes remain virtually unchanged. The CD was certainly a major advance technologically. But in terms of the business model, companies continue to sell sound carriers.

Now let's come to digital transformation. Is completely different. We define it as a redefinition achieved through the creativity of people. So people play a very important role. And to stay in the music industry, the disruptive change was streaming. No more selling of soundcarrier. New business models implemented through new processes. What both digitization and digital transformation have in common is that you have to be able to talk about processes. Defining the terms is one side of the coin, but much more important are the consequences that result from these terms. So why is this distinction so important?

Because the digital transformation in particular is placing completely new demands on companies to survive in this new world. It's a new, really great challenge. And what are these challenges? They can be summarized in one simple sentence, and it is develop innovative processes quickly yourself. It's just a simple sentence, but it comprises many problems. So let's walk through that sentence step by step. Problem number one, you cannot buy innovation, so you have to develop it yourself. However, selfdevelopment is a huge challenge for many companies. They fear it.

Problem number two. It's about the implementation of processes. Many companies are simply not able to talk about processes in a reasonable way. So a first indicator and a quick test for our audience. Let's check that. Are you, our audience? Are you using BPMN to communicate your processes? And if so, are you using, really, the full range of symbols that BPMN 2.0 offers? So this is a simple question, and I'm using BPMN. What is BPMN? BPMN stands for Business Process Model and Notation and is a graphical notation for the representation of processes. So that's problem number two. And there is another problem.

Problem number three.The speed at which change must occur. You cannot afford in these stormy times, you cannot afford long development cycle in this digital world. Directly linked to problem number three, is another important characteristic of the digital transformation. The development of new business models. However, we actually don't know in advance whether a new business model will work or not. Only the reaction of the market will show that. So one consequence of the digital transformation is that we have to experiment. In other words, experimenting with processes is essential in the age of digital transformation.

At this point, at the latest, it should be clear to everyone that we can no longer get anywhere with the old way of implementing processes because it's simply too slow. These companies cannot survive at all in such a rapidly changing environment. That brings me to my personal conclusion. Companies are in no way prepared to deal with these problems and are therefore extremely vulnerable to disruption. The PDA is a very important answer to these challenges. And to be honest, for me, it's the only convincing answer. So you see that the distinction between these two terms, digitisation and digital transformation, is essential if one also knows the consequences.

Okay, did I keep my point clear?

Louise
I think so. I'm definitely I felt a little bit, let's say, found out when you were saying BPMN. We do use it. Do we use the full range? I'd have to check. So I definitely think you caught on to something there. And I also think this is a very important point that you're making, because the buzzword digital transformation is so all around, and we probably use it in the wrong way a lot of times.

Volker
Absolutely.

Louise
What would you say right now, you said in the age of digital transformation, but would you say that we are in the age of digital transformation, or are we rather still clinging on to digitizing, the old way of doing things? So I'd love to hear a little bit what you think is the status quo, let's say in Europe at least.

Volker
Well, I think it's not only in Europe, but really worldwide. And primarily it's digitization. Why? Let me explain that. Because the focus is still on point solutions. So the first wave of disruption was all about the platform business.

We all know the Amazon's and Facebook's and Apple. Let's stick to apple. Apple, for example, connected products like the ipod with software. And software becomes more and more important, more important than hardware these days. Let's take another example airbnb. It solved the problem of accommodation while traveling, although Airbnb itself does not own any real estate.

Uber solved the transportation problem without owning the vehicle themselves. They were disruptive in their respective industry, but they are still point solutions. In the future, it will be interesting to see what happens if we solve composite problems by combining such point solutions. For example, handling an entire trip from the planning, the booking accompanying the trip itself, including the creation of the photo book after the trip. So this is a combined or composite problem that you can solve.

And this is achieved how it is achieved through innovative processes. And I don't think that we are there yet.

Louise
Okay, so let's look a little bit into the PDA and how it fits into this topic of digital transformation. Can you describe a little bit what it means to have a process driven approach and how this is linked to the topic of digital transformation?

Volker
Well, to be able to answer these questions, we first need to describe in more detail what the PDA actually is. Now we come to the core. The approach is a project management and implementation methodology. So unfortunately you can't buy it.

The methodology is based on BPMN process models and is being used for digital transformation projects to implement any innovative process. So, concluding from this definition, we are right in the middle of software and IT. We are actually at the root of software development for process systems. In essence, the PDA is about a new way of implementing processes in software.

So let us compare the old with the new world. Maybe we understand that much better. So in the old world, we are programming processes with all its disadvantages, inefficient error prone, difficult to maintain, inflexible, not transparent at all, and the dependency on programmers. If the programmers leave your company, you're in big trouble. In the fastmoving world mentioned above, we simply can't afford that anymore. This is how I call it Stone Age informatics and completely unsuitable for the age of digital transformation. Now let's turn to the new world. It is based on graphical process models and they can be executed as originally planned.

Plus a fitting software architecture. So it's not only BPMN, it also comes with a solid software architecture. The advantages are you get higher quality software, higher efficiency, it is sustainable, higher flexibility and higher transparency. Because you see everything, you see where you are, you see what the next steps will be. And this gives you a lot of advantages because if you program something, it is carved in code and you don't see that.

So with a new approach, you never get into the state of a never change or running system situation. No matter how complex the software ultimately becomes, the approach accompanies software development from the very 1st second of the project until the point when the software is discouraged. It in essence, it disrupts the It industry to some extent because the approach requires a completely different way of thinking.

Louise
Okay, this is, I think, rather complex to grasp immediately. Let's maybe try to dig a little bit deeper in there. So when you say it requires a new way of thinking, what kind of thinking does it require and how can we get there?

Volker
Yeah, it requires the thinking in processes. And unfortunately you don't learn that typically in classical university curricula. You don't have process management as part of the curriculum. And that's a big problem. You learn how to program, you learn new software engineering techniques and so forth and so forth. But at the heart of the digital transformation are the processes. How to talk about processes, how to evolve processes over time, how to implement, to run them, to maintain them until the end, until you discard them. And this is what we don't learn actually.

Louise
Right. And do you have an idea for how we can learn it better? So it would be to teach process management from an early stage onwards. What else do you think?

Volker
Yeah. Okay. Process management is just one part. What we have to learn over and over again is the methodology of the process driven approach. It comprises the notation BPMN, it comprises process engine, something we most probably will talk about later. And it comprises integration of software into an existing It landscape. So it's a bundle that you have to learn.

Louise
OK, well, you've worked on this approach for a long time now and you've probably also evolved how you speak about it. But I would be interested in is there anything surprising to you about this approach along the journey of you thinking about it and working with it?

Volker
Yes, I also want to touch a positive side and a negative side. Maybe quite interesting to the audience. So on the positive side, you really enjoy the enthusiasm that the approach generates when you live it in practice. It is so inspiring. It's just a joy to see how the little gears that make up the PDA, and I mentioned them briefly, when there's little gears that make up the PDA mesh together.

There are goosebumps moments when you see entire teams eagerly tweaking their models processes and then executing them in exactly the way they were originally planned. That's the kind of revolution if you know process management and how to build processes. A long time ago they said, okay, you plan the process models, you model them, but if it comes to execution, you have to change them because they are not exactly executable as you model them at the beginning. And that's not true. With a process driven approach you can achieve that.

So employees see directly their personal influence on what happens in the company. That's just right. But also at a later point in time, when changes need to be incorporated into the processes.

It is so important for the companies to see how easy it is to do this. This productivity gains in all areas of the software life cycle is probably a particular strength of the PDA. So I said that I also want to touch a negative side. And to be honest, what surprised me negatively actually, is the resistance to progress. Actually, I was already aware that people feel new developments with a certain amount of skepticism. That's just fair. But I really didn't expect such resistance.

In some cases, it takes on bizarre characteristics. It's hard to argue against the PDA because it has so many advantages. In the end, it's only a question of will and intention. And that's where the IT departments of many companies are lacking. The main excuse, of course, is that their current work takes their breath away. But they don't understand that the PDA helps exactly at this point and gives the IT departments back exactly this ability to act, which was taken away from them over time by the growth of their IT landscape. So you will find procrastinators and doubters that you so often read about in books about the digital transformation.

Volker
And I must say, they really do exist. And that surprised me in a negative way.

Louise
Yes, I can imagine that this is something that most of the guests that come on here to talk about with the resistance to change. And as you would say, it's not just change, it's progress. And it's often solutions to the problems, but it's really hard sometimes to embrace that change. So I'm wondering, as you said, you've met sort of enthusiasm, but you've met resistance. But when we look at the enthusiasm, has there been sort of a pioneer or someone that has really adopted the approach and that has been successful? And how did that go? Maybe you can give us a concrete example of how that works.

Volker
Yes, there is one pioneer, and fortunately, I can talk about it, and it is great. And I can talk openly about the project here because we have already published the Use case in the book. So I mentioned that I left SAP in 2016 and I moved to the University of Ingolstadt and before I left SAP, we did another major project that still gives me goosebumps when I talk about it. What was it about?

Well, most probably you can well imagine that a lot of text that is created at SAP that has to be translated into different languages, screen labels, annual reports, marketing materials, videos, podcasts, you name it. So SAP does not do the translation itself. This is done by native speakers in the respective countries. However, the translation projects, those projects, they are managed by SAP. So SAP had established processes for managing translation projects. Now let's just stay with the translation of SAP software user screens. The change from the old SAP business model, which was about providing software in the data centers of the respective companies. You know it on premise software. They changed it to the new business model, providing the software in the cloud.

Louise
Right.

Volker
It's easy to understand, but this change was accompanied by another fundamental change. The time to provide a new software version was reduced drastically on premise. We are talking about round about two years, unless a new version comes out in the cloud. This is on a monthly basis.

Now, just imagine what a customer would have said, that the new software version had been implemented, but they cannot use it because the translation of the screen has not been finished. That's unpredictable.

Louise
Right.

Volker
But it was also clear from that project, with the old translation processes, the managing of the translation project, these time targets were impossible to meet. So what to do? What do companies do if they are facing such a problem?

First attempt: buy the software that solves the problem, perfect. They did an intensive analysis of the market, but it turned out that no such software for handling translation projects was available for purchase. So second intent, build it yourself by programming. But it was clear right from the beginning that it is impossible within the given time to achieve that. So there was only one alternative left. It was the PDA. At that point in time, it was certainly a risky decision as there was no such large PDA project at the time available.

Long story short, we actually did it after nine months. We had implemented 65 nontrivial processes. So if you know BPMN, you know the nesting of subprocesses, and we had a nesting level of about eight or nine. So that it's really deep, just to give an impression of how huge those processes were. And we implemented 65 of those within the given time frame from April 2015 to going live in January 2016.

And even today, the project participants rave about the productivity and transparency that the PDA delivers estimated time savings for implementation of and comparing it to programming. So the estimated time savings were 75%. And these are incredible from my point of view really impressive numbers. And just to close this question, one more important note. Even though I'm talking about a large scale project here, the PDA is for sure suitable for any industry and for any size of company. So there are no restrictions.

Louise
Okay, that's interesting. So, first of all, great use case there and a great success story with a large company. Which brings me to my next question. So you mentioned SAP, but if we look at the general landscape of legacy firms that, as you said, have this kind of old way of doing things, of programming processes, what do you think the approach means for them and how is it perceived? I mean, you've already touched upon it in a way. But let's still talk about what does PDA mean for legacy firms?

Volker
Good question. Well, one thing what it gives the old companies are a very valuable commodity in these stormy times and it is certainty and thus security. Certainty in the sense that they have set up their It in such a modern way that they are prepared for all eventualities that may arise on the IT side in the future. With PDA, you can further expand your ITs ability to act. They can react quickly to new markets and new competitors.

They can experiment with new business models on the market and adapt them as needed and so on. This simply gives a good feeling in these VUCA terms. You most probably have heard this abbreviation VUCA over and over again. It stands for Volatility uncertainty, Complexity and ambiguity. And if they know that their setup based on PDA will bring them through these VUCA times, that is what I mean. Certainty and security. And it is precisely for this VUCA times that the companies need to prepare for. And the answer is PDA.

Louise
Okay, yeah. This kind of reminds me of an article that I read about the quest for resilience and how especially large firms nowadays are sort of at risk of actually also failing if they do not adapt business models and if they do not manage to be adaptive to the market changes that are, as you said, as volatile and as fast as we've never seen them before. So I think this is a great sort of, as you say, you're giving a tool to them to give them certainty and a way forward.

However, not everyone is embracing this and also there are certain reasons why they are not. So let's talk about some of the mistakes that firms have made or are making, in your opinion, and why they are not sort of ready for the VUCA world.

Volker
That's a good point, definitely. And one mistake that I unfortunately observe over and over again is the two uncritical examination of new technological It trends. That sounds a bit strange because I'm also setting a new trend in the It industry. But there is a difference. It's a difference between following a trend because everyone is doing it like lemmings, and following a trend because it makes a lot of sense and the advantages clearly outweigh the disadvantages. Let me give you an example. We all know robotic process automation, RPA, and this is one of those technologies where I think the cons outweigh the pros event based microservices.

Now, we are very technical, I know, but anyway, eventbased microservices are another example. Other technologies, such as process mining or no code, low code platforms, are vastly overrated, at least from my point of view. OK. Others have different point of view. Very often the use of such solutions makes the situation in It departments even worse, which is of course counterproductive in the age of the digital transformation, where we need flexibility, where we need speed, where we want to experiment. And of course, companies should also critically scrutinize the PDA.

Volker
However, they will then realize that the advantages clearly outweigh the disadvantages here.

Louise
And do you think for such firms that are, let's say they have a lot of past dependencies and that have been doing things a certain way for a long time, do you think they are able to change everything and to overcome this resistance and adopt this approach? Do you see it as realistic or do you think that the need is too high not to do it?

Volker
The need is so high to do it. Yes, they are facing the challenges every day and the good thing is they don't have to change everything and everything at once. They can have a stepwise approach and it's no problem to move into the process driven application world step by step and that is the good message. It's easy to walk into the process driven world step by step and yes, they can contact me if they are eager to learn how to achieve that right, okay.

Louise
And now we've been talking a lot about legacy firms, but let's look also into sort of the green playing field of startups and what it means for them that can basically start from scratch to build their organization, to build their IT. What would you say the PDA means for startups and would you recommend it also to startup founders?

Volker
In my opinion, what should I say? The PDA is highly relevant, especially for startups because regardless of whether the startup produces a new product or launches new services on the market, both products and services are always accompanied by processes that are optimally suited to them. I would like to illustrate how relevant this topic is with a comparison. Let's assume we have a startup A and it programs the processes.

Then this startup A can easily be disrupted immediately by a new startup. We call it Startup B and startup B just copies exactly the same business model but relies on the PDA to implement the processes. This is Startup B, an unfair competitive advantage that startup A can never achieve if it continues to rely on programming. Remember the 75% that you can save. So you see that or you see what far reaching consequences the use of the PDA can have.

Louise
Okay, let's dive into that a little bit more. So as you said, it's a stepwise approach as well. So you can start gradually. What would you say is best to start with? So what should you equate your organization with in order to best benefit from the PDA? Also in terms of competences, maybe?

Volker
The best way is really to think about the strategy of the company. From the strategy, you have to think about the processes that support the strategy best. And then you build a working group consisting of business people and IT people, they work closely together, and they craft the process models. They talk about that intensively until they reached a point where they say, okay, that's exactly the best process that we can think about. And you have modeled it together on a BPMN basis, so you have always something visual you can talk about. It avoids misunderstandings right from the beginning. And do you know what? These BPM models can then immediately execute it.

So this is how it begins. And to start with, you only need a good BPMN course. You ask for the skills that are necessary. So BPMN is at the heart. And then at the beginning, you need a coach that accompanies the team so that they get directed how to discuss the process models, to come up with a reasonable process model. And from that point on, it's a daily routine to put that into execution. So this is how it looks like and where they can begin.

Louise
Okay, thank you. And you said it's going to require, of course, a good knowledge of the BPMN language and also sort of coaching in order to direct the working together. But what would you say our competence is that the people need to bring? So, as you said, It's business and IT department kind of working hand in hand. This requires a certain understanding of one another as well I imagine. Even if you have that visual representation that you shared sort of work on, it's still probably a different way of working than if you're just working in a more homogeneous business group or an It group. What would you say are maybe also soft skills that you need to bring into this?

Volker
Yes, I think the key skill is the will to collaborate and to allow new ideas and to discuss them openly without any prejudices and to continuously work and try to improve the process models day by day until we have a common agreement. I think this is really something that evolves over time and where the willingness is there that we have one common goal to bring the company forward, to improve our business models, and at the end, to succeed. Okay, these are the driving forces behind.

Louise
So I would like to kind of summarize this a little bit, because we've been talking a lot about the benefits and about what is needed. Let's look at what would you say are the key best practices if you had to summarize it in a few points, especially to building an organization now from scratch.

Volker
For me, as you can imagine, the future clearly lies in the digital transformation. That's why it was so important to introduce the terms at the beginning. And it lies and we fulfill the digital transformation by innovative digital business models. These new digital business models will be represented in software through processes in the digital transformation undoubtedly requires IT that is capable of action for this. This ability to act is not guaranteed with the current way in which processes are implemented, namely through programming, we cannot continue in this way.

To put it bluntly, this is a dead end. And no eventbased microservices, no RPA, no process mining, and so forth will help. In doing so, we are only repeating the mistakes that have brought today's IT departments into the precarious situation of being unable to act. Therefore, the new enterprises consequently need a new methodology that banishes the danger of their inability to act. And this is exactly what the PDA is. Hence, we need new companies that are basically based on the PDA. The PDA should be part of their DNA of these new companies. If they don't, they run the risk of being disrupted by startups that use the PDA.

That's my core message to future companies. Get it right from the start. It's a big opportunity for startups with digital business models to shape the future of the digital transformation. And the opportunity is now.

Louise
thank you very much. Great call to action. And thank you. Very inspiring approach. Thank you so much. Before we close, we always have this little fast fire questions, so you can just answer what comes to the top of your head and give me a really quick answer. So if your life were a book, what would the title be of the book?

Volker
That's a really difficult question. Well, I must say I'm referring here to my professional life, and I'm consciously leaving out my private life.

Louise
Okay, that's fine.

Volker
That's important to me. Then I would probably tie to the book the PDA. So the processdriven approach how a new methodology shaped the digital transformation era.

Louise
Very nice. I think that's a great reference to what we've been speaking about. We've been talking about digital transformation. So if you could banish one myth about, let's say, the buzzword digital transformation or the topic itself forever, which of the myths that are around there would it be?

Volker
Well, one thing that immediately comes to my mind is that companies can't buy the digital transformation because companies can't buy creativity. And the myth that I as a company have already done enough by using technologies and solutions such as RPA, process mining, microservices, artificial intelligence, big data, cloud, you name it, to succeed in the digital transformation.

This is simply not true. You can't buy it, or by buying the stuff that I just mentioned, you can't fulfill the challenges that the digital transformation brings to the table. And as long as the companies haven't landed on the PDA, they are still miles away from the digital transformation.

Louise
Right? I think that's a great sort of note to end on. I want to thank you very much for coming on to the podcast today. It's been hugely inspiring and great to listen to. Thank you so much for explaining with such detail your approach, and let's hope that this inspires some of the listeners to learn more about it and to start thinking in a process a driven way. So yeah, many thanks and have a great day.

Volker
Yes, thank you also from my side and I hope it's really inspiring and thanks for the invitation and giving me the possibility to talk to your audience.

Louise
It was a pleasure. Thank you.

Louise
Thank you very much for your time. We hope you enjoyed today's episode and that you were able to take away a lot of interesting information and insights from our guests. For even more insider knowledge freshly coming from the core of the automation industry, feel free to listen to our other podcast format called Automation Insider. This is hosted by Nico Bitzer and Andreas Zehent, or if you prefer to read, subscribe to our biweekly Automation Magazine. If this has intrigued you to learn more in the area of process automation and this is also interesting for your company, then feel free to visit our Automation academy and get advice on Upskilling. You can find all the necessary links in the description. See you next time. Your Bots & People team.

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