PODCAST -
#17 Automation Talk

Driving change instead of being driven out by it

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Driving change instead of being driven out by it

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Guest
Andreas Schmelzer
Head of Digital Transformation and Services
Porsche Holding
Louise Kühns
MODERATOR
Louise Kühns
Program Manager
Bots & People

Read the Summary

In today's episode, Louise welcomes Andreas Schmelzer, Head of Digital Transformation & Services at Porsche Holding Austria.

Topics of this podcast:

  • Tasks of Head of Digital Transformation,
  • What has changed in the Automation Market,
  • Why Operation Excellence is so important,
  • what the biggest challenges for companies regarding Digital Transformation are,
  • why Change Management is inevitable to reduce fear of change,
  • how to measure the real success of Process Automation,
  • why a proper Automation Culture is necessary

and much more!

Enjoy listening!

Read the Transcript

Louise
Hello and a warm welcome to the Automation Talk, your bi weekly podcast where you get to listen to real automation and digital transformation specialist straight from the field. My name is Luis and I'm delighted to be your host

Louise
In today's episode I welcome Andreas Schmelzer, Head of Digital Transformation and Services at Porsche Holding. Andreas gave us a realworld insight into his life as the largest European automotive distributor, with all the highs and lows. Topics included how the automation market is changing, why process excellence in CI-CD are so important, what the real challenges of digital transformation are to him, and why a lived automation culture is critical to the success of change and much more. And now, I hope you enjoyed this episode.

Louise
Hello Andreas and a warm welcome back on our podcast. Last time you were here, you were talking to our CEO, Nico and back then you were also still Head of Hyper Automation at Bitpanda. So maybe now to our new listeners you can briefly introduce or reintroduce yourself and to everyone else maybe let us talk about what you are doing now at the Porsche Holding.

Andreas
Yeah, well, basically, as you already mentioned, now I'm at the Porsche Holding leading there the digital transformation and services, meaning basically driving the one thing I'm capable of, meaning process automation and getting a little bit more of a data driven approach to the company. And I'm also a lecturer at FH Burgenland, basically teaching robotic process automation or just process automation because I do like to drop the robot.

Louise
Alright, nice. And so, as you said, your title right now is set of Digital Transformation. This is a rather large field, let's say. So what would you say do you currently focus on and what are your core activities at the moment?

Andreas
Well, the very first one is getting some kind of operational excellence into the organization. But not really on the execution, rather on how to approach operational excellence and business processes or workflows, because I always do like to start at the very end, what is the result and not starting with the current process. And that's definitely a change. But if you are part of the digital transformation, you need to encounter and enable many people and by doing them, you have to discuss with them what do they expect in the future, what is the result you want to get in the future and not where you are today. So I think that's one of the challenges when it comes to digital information and operational excellence.

The other thing is getting a datadriven or impact driven, data focused strategy and business cases into the organization. So meaning in my department there's also the Business Intelligence Center focusing in the past more on their reporting, so looking basically what happened in the past, because it's reporting, but as the data models are really, really good nowadays and actually validated, we can also start the prediction and we're already on the road, let's say like that, to get more into data driven and not just reporting but more in forecasting prediction.

Andreas
And the other thing is really leveraging the huge business processes when it comes for instance to accounts receivable, accounts payable and stuff like that, where it actually makes sense. With this size we are having in the organization to have specific tools, for instance for these use cases and there we are operating and servicing the software service approaches as well as driving the process automation in an automation hub.

And we are not forgetting that we have to transform really the different businesses as we are in quite a few countries and having quite a few entities in Porsche Holding. Meaning we also have dedicated transformation and business consultants to really enable all the different people to work with the new solutions because just putting a new solution in place is not going to help pretty much. You also have to show them how to use it, what to expect and actually how this is going to affect your future role, for instance.

Louise
Okay. Wow. So this is a rather, as we said, large field. You do a lot of things there. I think we're definitely going to come back to a lot of the things that you just touched upon. But maybe we can start by looking at your organization first. Maybe you can present a little bit about what you do for anyone that doesn't know and then we will advance to the content that you just touched on.

Andreas
Sure. What kind of organization would you like to start with or what kind of section because I can really go large and big or make it a little bit more detailed. How would you like to have it?

Louise
I think maybe a high level of a brief introduction could be great just so that we have the right picture when we talk about sort of the activities that you do.

Andreas
Okay, so as always said, my department or the whole group is basically the counterpart when you're talking about future automations and process automation. So we really have to understand what we want to do in the future, how the process should look like and not start with the current ones. Once we know how the solution is looking like, then we're deciding where to solve it and with what kind of tool, because we also have our own IT provider.

And it does not make sense to make all, for instance with RAP or BPMS or how you call the technology it can make sense, for instance, to include it in SAP and there is no need to develop stuff, for instance. Or there is even the best process automation, you simply get rid of the process. So actually you avoid the whole process because for instance, you don't need it in the future anymore or there was some occurrence in the past which happened a few times maybe and you don't need this anymore in the future, for instance. So really trying to get rid at least of parts of the process, then we can talk about the process automation or the data driven approaches.

Andreas
So we're actually, for instance, developing data models, making reporting when it comes to power BI for instance, or delivering RPA processes with various RPA tools. And as I said at the very end, and I think this is the biggest benefit I have to provide, or I can provide on one hand making operational support so you can really get rid of your process and we're taking care of it. And the other thing is that we are treating everyone as good as possible that they are able to help themselves with automation tools because digital transformation is not just by including new technology and solving the problems for all others. It's also about that they are able to help themselves to some certain limits, obviously, but nevertheless, don't be the central bottleneck. Try to get as decentralized as possible.

Louise
Right, okay. And what would you say is your favorite thing about your job?

Andreas
The future and driving the change. So I'm really not good at just executing. Yes, obviously I also do like to execute but really having the discussion without the business knowledge because that's basically the biggest benefit I'm having. I just know process automation, I don't know the business and I also don't pretend that I know the business, I'm just asking many stupid questions because I don't know the business.

And this means I can actually question stuff that happened for ages, for instance, or you simply used to do it in a way because someone told you or has shown you in the past and that's the biggest thing. And at the very end, having the smiles on the faces when they see that they don't have to do it anymore on their own again because we have solved it. So that's the second part. What I really do like but actually really delivering the impact and not just talking about it.

Louise
Right, okay, yeah, that sounds great. And maybe before we get really started, what would you say is one thing that you wish you had known ten years ago that might have helped you along the career?

Andreas
I think, or I would say an agile mindset. It's not necessarily just about sprinting or stuff like that. It's really about being customer driven and output driven and not necessarily fixing on timelines or goals or whatever. It's okay that goals are changing over time. And I think that's definitely a huge benefit of, let's say, the younger generations that they have always the freedom to just do it, learn on the way, and then basically put it in place and not trying to have the solution at the very beginning and the answers to every question without making, really, the first step into production. I think that's the biggest one. And I do really like the new ways of working.

Louise
Yeah, I think that makes a lot of sense also with what you are doing and that is definitely needed much more. Alright, so as you've already mentioned, you've been around the automation block for a while now. If you look at the market also for process automation, let's say in the DACH region, what are kind of your observations, what is your assessment? Especially maybe also now given the current economic climate? Where do you see automation sort of in that situation and what do you think is happening in that space that you observe?

Andreas
Well, first of all, it's now really about process automation and not RPA anymore even though there are still plenty of companies which have not even discovered RPA and what they could do with it. But nevertheless, I think all in all we're talking really about process automation and combining different tools. So basic tools meaning for instance RPA tools, BPMs tools, DMN tools, it could be some kind of machine learning stuff in whatever kind of environment you are and combining it depending on the use case. So not trying to put one technology on every problem. I think that was for some time maybe also valid approach, I don't know, but it was an approach and I see it's always going more and more into the direction of hyper automation. That's one thing.

The other part, it's not necessarily about decentralizing everything but as much as possible in a certain governance. So not just enabling everyone install the tool and let's go. Basically trying to leverage what you can and leveraging in terms of processor mission means pretty often the operation and support and the tools are now getting more and more open to either they are providing the platform by themselves or at least you can provide this kind of platforms when it comes for instance to see ICD topics really governing everything and being pretty sure that you don't add the development is done because then basically the fund begins and it's not over because then you are actually really delivering the kind of impact.

Andreas
And I do think there is also obviously a cleaning up exercise on the market so it's a little bit more these kind of tools or platforms are increasing. We are offering more than just one specific technology. So for instance, if you are just an RPA vendor I think you will be facing now even tougher times and challenges. That's one thing. And the other thing is also that those kind of platforms are also having huge communities in the back and that's one of the biggest benefits you're having right now.

That you can basically really build everything when it comes to hyper automation, process automation, depending on the use case to some certain limits with existing communities, you don't have to get all the professional services in there but it makes sense. And obviously they are getting easier and easier over time so that you can really enable the different business users and a different level of business users. So some are not so experienced, others are very experienced and there is the right possibility within the same platform at the same time for different user groups. And I think that's something happening on the whole market and it's getting more to the workflow kind of approach for process automation.

Andreas
It's not anymore as technology driven as it was in the past even though I think it's still too much technology driven and not enough impact or use case driven. But I think the way is pretty amazing. Also enabling or having more of a gray area between the automation part and the data part. Those are going to be interlocked or interfacing more and more and more to get really the most painful bucket.

Louise
Okay, well, I think based on that observation and what you've been saying before, we are going to give the listeners a little bit more of a holistic picture, let's say end to end, focusing on the one end, which is before you choose a technology, even if you even have to choose one, and what the solution can be for your use. Case. And then also looking at what happens after the solution or the bot is live. And so considering those two parts that maybe sometimes don't get the attention that they deserve and need and I know that it's a kind of a passion, a topic of yours. So maybe we can jump in and talk about sort of the importance of operational excellence in general, maybe even like the mindset and how you would recommend going about process automation and the step that goes before automating.

Andreas
I think that the two steps before, the one step before and the one step after the automation itself. So developing those are the most important ones. So let me start basically at the end meaning if you're talking about automation and developing it, I think nowadays you have to follow some kind of ops approach. So at any certain time or at any given time you have to know who has done what, who are the main stakeholders, where can again get back basically if I have questions, where is the business? Because we're having simply in process automation or business process automation, the business process itself. So having the business user, we have the technology and the interfaces between all the various systems. An automation developer or even an ops guy can't know everything but they have to know who approved it, who tested it, what have been the test cases. And I think also to some certain level make sure that you have some kind of test automation in place as well. So that hopefully you're already experiencing the error in the staging environment and not in the production error when there's already the new version for instance.

Andreas
But nevertheless, I think the whole delivery process has to be some kind of Ops. So you can call whatever you want, you can call it DevOps, ML ops, model ops depending if you're more into the data part basically or if you're more into the automation part. But I think ops is definitely one of the most necessary approaches. Because there you actually win or lose with process automation. Because either you can keep your automation in production and actually really generating a benefit if you're having too much maintenance efforts, your approach is not working.

If you're just having too many maintenance issues or you have to stop automations and people have to work either not anymore on the process because they simply don't want to and saying no, I wait for the fixed or they are working the old stupid process. So maybe really shifting or copying data from left to right they are not going to be too happy. It's great if you develop fast then you will get a clip on the shoulder. But if you failing fast, the clap most likely is not going to be on the shoulder. So I think the operational pipeline and the operational point of view is really the most important one and the third step I think and I think that's also I know that's always funny but nevertheless I think the best automated process is the process who is not even existing anymore.

Andreas
Because you don't have to automate everything that's there right now. You have to think about what is the need for the future, how to get it basically there and where is the minimum interaction in front of the computer and not the maximum or the today interaction? Because in front of the computer we just want to add value and not basically getting or just clicking a window because it's there or a button because it's there. So really having the possibility to drive the change and showing the people they can drive the transformation on their own as well.

So because if you're having the ops and keeping the people basically informed, how is it running, having the measuring and stuff like that so transparent what's happening in the impact and on the other hand discussing what is the impact your awaiting, what is the business process, what is the output. There, you have the biggest possibilities. And this in my point of view means operational excellence. So deciding what is the leanest process possible and then automate it if you really need it in the future. So that's one and the other one is the continuous improvement.

Andreas
And that's also from my point of view, part of the operation, not just running, it also continuously measuring it. And then for instance, if you're talking about RPA maybe or some kind of process automation and there is always the gray area. So working, not working and in between there is the business exception. I love this term. So it's a defined error, let's call it like that. But maybe getting rid of those business exceptions where they have to get in manually again and reducing this gray area as good as possible. So improving your process over time because transformation is not just beating new stuff and getting rid of the old. It's also improving the stuff you're having. And that's in my point of view, operational excellence. So it's transparent, it's measurable and you have both things in terms of generating new stuff as well as maintaining and developing existing stuff.

Louise
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Louise
Right. Okay. So this sounds really like a best practice approach. This is what we always preach improve your process before you automate it. Don't automate something that is bad because it will be bad once it's automated. What do you think is holding companies back in adopting this approach that is actually really logical on a first sight and it makes sense. What do you think are the biggest challenges companies are facing in that digital transformation journey?

Andreas
Letting things go? That's pretty easy because you are just used to it. If you're running from A to B on the same way day after day, you don't see left and right. And that's one of the reasons why there is really a huge benefit to talking or getting people into these kind of discussions without business knowledge. They are asking stupid questions because they don't understand why is it done like this? Isn't there an easier way, for instance, can't you do C and not B for instance and stuff like that? And I think that's really hard if you have been doing things over and over again to just make it new.

You can't expect someone who is, let's say, I don't know, in accounting, purchasing, I don't know you call it, but basically heavily utilized processes on one hand and also having many stakeholders in the process, you can't expect them. First of all, they just want to get through because there is a huge workload. And the other thing and now be creative because that simply is basically too much for them. And I think the other thing is that people don't believe that it's possible because they haven't seen it.

Andreas
They haven't felt that it's possible because it's not working "because of" and it can't work because I don't know, I don't have the skills, I don't have the people, I can't afford it. There are always so many excuses and excuses are easier than changing stuff. At least as long as you can afford it at some point it might get tougher and you're most likely just going to be driven to automate right now you can drive transformation for instance and you can decide where is the best way to start it and slice it down, make the first steps, learn and grow.

But I think there's a huge mindset change and that's also one of the reasons I know people tend to they don't want to hear with the culture thing and it's not an IT project, it's about culture change, stuff like but nevertheless it is like that. This is the most important stuff. I know you don't want to hear it because it's hard to measure, you have to talk. Maybe you don't even see a concrete output because there is not a figure or whatever. But nevertheless driving the culture is absolutely necessary and don't expect just by ordering it top down that everything is going to be done basically or executed as you'd like to.

Andreas
Simple as that. I would say even though small sentences, huge pains in between the last basically yeah, definitely.

Louise
When you say simple as that, I'm sure that a lot of people will feel that it's not so simple but I think it's a great summary of how resistance to change is holding back organizations in making the transformation that is necessary.

Andreas
I don't think it's easy to be honest, but it's really necessary to be open, communicate and as transparent as possible. And whatever the expectations are, name them because fear is basically just getting rid of expert knowledge. Because if people are feared they are not going to put in their knowledge. Because if there is fear and if you're feeling you're not really part of it then don't expect that the people are putting their knowledge in or also the workforce to the fullest. Not saying that they're always just pushing back but that's a natural experience. I would say that people tend to go back if they are pushed too hard.

Louise
Definitely, yeah. And the motivation goes down as you said, if they don't feel like they're a part of it. So definitely. And I think also there the agile mindset that you were talking about comes in again when it comes to embracing that change. One more thing I wanted to ask you about is because last time I saw you we were in the state of process automation webinar and there you mentioned sort of the topic of ROI calculations and when it makes sense in the course of an automation initiative to look at actual financial returns on investment.

And you were saying before that once you really have an overview of your maintenance effort and when you really know what the process or the automation as a whole including the maintenance and will cost you is, when you know what your return will be. So maybe you can elaborate a little bit more on that. What are your best practices there or when does it make sense to start really measuring the ROI?

Andreas
I don't think that it makes sense to measure the ROI, to be honest, or it can make sense, but I think it's absolutely necessary from the very beginning to measure the output or the impact you're generating. It's not necessarily just ROI. ROI is always just what is basically the cost benefit. But nevertheless, by making transparent how many customer transactions, for instance, how many support tickets have been developed or can be achieved by this automation and not by user agents anymore, for instance, stuff like that.

So measuring from the very, very, very beginning, how long does it take to build stuff, how often is it in maintenance business, et cetera. So measuring pretty clearly what you expect. So the kind of impact you're trying to generate with process automation, that's exactly what you have to measure from the very beginning. ROI could be a valid indicator, but I really don't like the ROI indicator because most likely you will never achieve the return on investment in terms of you would have to get rid of people to really have the benefit of the ROI. Yes, you can calculate an ROI not getting rid of people. But why do I measure it then?

Andreas
I'm not sure if I need it. And actually, until now, I have not seen one company putting process automation in place and getting because of the process automation rid of people. Actually, it's really the change because you're always getting new services, new products, whatever, into your organization and keep track on that. How is the business growth going? For instance, you can have an ABTR ratio, you name it, whatever it is. But when it comes to measuring each process automation for its own, then measure the output and the impact it's generating, and basically not the ROI, because just focusing on the cost is like just limiting yourself, basically.

And yes, ROI is necessary to some certain level and calculate it if you want to, but really measure the impact you're doing with process automation. And as we've said at the very beginning, it's really a people driven approach. It's a culture change. How to measure this and how to put this into a ROI, hard to tell, because if you're not doing it, I think you don't need to calculate an ROI anymore, because at some point, you might not be too relevant anymore on the market because others are just faster than you and getting past you less than right.

Andreas
Yes, you can still measure ROI, but let's see how well this is working.

Louise
Well, thank you for that. An operation. Because I think it's really important actually to highlight this, since a lot of times this is an indicator that is being asked as something, a number that wants to be known. But in the end, does it make sense, as you've explained? Not really. And I think what it also does is it creates fear because as you said, if you have to get rid of people to achieve that return, then that fear in the people is always going to diminish your motivation amongst the workforce. I think it's really important what you said there, that you have to measure the outcome and what you want to achieve with it, especially given the intense workload that you mentioned before. There's only more being added to that. And if you manage to deal with that with the people that you have, plus automation, then you can already be, I guess, quite happy with that reality.

Andreas
Absolutely. And I think process automation gives you really the edge when it comes to putting more onto your workforce first without driving them into a burn out. So your workforce has a tremendous knowledge when it comes to business knowledge. They know what they are doing, they know the market, for instance. They know the customers, your products, you name it, whatever it is, it would be really not the best idea to get rid of the people because of process automation. That's exactly the opposite you're trying to achieve.

You want to use their knowledge and their experience for the better and not getting rid of it. And I think that's one of the reasons why I really don't like to measure ROI. But I do understand that everyone is asking for it because you can compare different technologies. But once again, driving process automation, yes, you can always go back to the things you're familiar with. It's about technology and I would say no it's not. It's really about people and driving the change and driving things forward and questioning your business models and being able to really make it into a digital transformation by generating new business models.

Andreas
But you might need people for that right now. Your people sitting in front of the computer copying data from left to right.

Louise
Yeah, I'm sure there's a better way to use their competences.

Andreas
For sure, I would say so as well.

Louise
I have another question for you, but I'm not sure you're going to like it because I was going to ask you which knowledge you think will play the most important role in the future. But then I'm afraid you'll say it's more about the outcomes that you want to achieve than the technology that you put on it. However, I'm still going to ask you, and I'm curious how you kind of see the future of automation, maybe in the next five years. Where do you think it's going? You've already teased a bit what kind of trends you're seeing, but maybe we can come back to that and look at how you see the future there.

Andreas
Yeah, absolutely. I don't think the technology is driving the change. It's really getting more on the impact and what is the business value or the core competence you are having and how to utilize it. And then you choose the right technology and that's absolutely use case of business. Model driven and this is really your edge, this is your advantage. The technology itself, everyone is using basically the same is SAP. Yes, it's a technology. Is it actually some kind of duration between the companies? No, I would not say so. Maybe it's really not about the technology, it's about what you're doing out of it or with it and how to utilize it and how well is this basically becoming part of your company DNA?

How can you drive those things? But I do think technology is absolutely an enabler, but it's really just the enabler, it's not the driver. And I think that's really important. And this is something what I really like about this whole hyper automation approach, even though I'm not sure if I like the term, but the hyperteration term is really about connecting the different technologies depending on the use case. And that's something we're going to see much more often, I think.

Andreas
Limited software as a service for some certain business use cases, for instance invoicing or stuff like that. I think they're getting a little bit reducing in the future and it's more about the general things, because you can teach, for instance, RPA for some specific vendors, for instance, you can teach basic technologies, and on that you can build basically everything. And I think that's something where we are going to develop, even though I also don't like this no code, low code discussions, but it's driving into the way in terms of nearly everyone should be or is going to be able to develop to some certain limits, obviously, but nevertheless being able to develop and solve their problems.

And that's I think a development we are going to see and that's where most of the technologies, and you can name it, it's even an office tool nowadays that you see developing into this kind of things and into this direction that the people are really able to help themselves and it's getting easier and easier and easier. But I think the biggest possibilities is beside that. I think nowadays cloud and on premise is not a huge discussion anymore, unfortunately, thanks to Kobit.

Andreas
But I think as everyone learned, that you really want to work from everywhere and you want to access your systems most likely from everywhere. This I think has sped up a little, speed up the whole usage of gout and that's also a huge enabler because you can actually be in a dynamic setting when it comes to computing power, for instance, or the kind of resources you're having. And I think this is something that at the moment is a little bit unrepresented.

I think it will be growing in the future when it comes to green IT, not necessarily just putting everything in the cloud and always happy basically. When are your peaks of calculations, for instance, it could be what kind of region are you executing? Is there more renewable energy in this region, for instance, or stuff like that and I think that's some kind of possibility we are now having that we really can not just automate when we have the business need. We can also automate in terms of a little bit energy or greener tea driven. And also I think at some certain part you are not going to measure the return on investment.

Andreas
Maybe it's the CO2 reduction or whatever or the CO2 impact, I don't know. Because you're doing it whenever you'd like to or whenever you need to.

Louise
Yeah, that's a super fascinating aspect. I haven't actually heard that much about it yet, but I think we're going to be forced to think more along those lines and I think it sounds like a great thing since we have all the data available to make those calculations and decisions. Right. I think I'm just going to summarize quickly what are the key takeaways are and you can add on to that if I forgot anything. But I think one thing that we don't want to talk about too much, but we still believe in culture and taking the people on board and enabling them through other communities through knowledge and giving them the opportunity to drive the change rather than being driven out by the change. More or less. Another thing is having a mindset that is open to questioning the state of quote constantly.

That may change so especially when it comes to solutions that are possible. Also processes that you have been holding on to for a long time. Take the risk to let them go if you don't need them anymore or think about how you can automate them with the minimum manual effort and then looking at the other end of the stream, let's say after a solution has gone live.

Louise
Documentation is key, maintenance is key in trying to make this one a really smooth run for everyone involved by just focusing on, as you said, documentation and the shared knowledge of what the solution is supposed to bring and making sure that you are constantly working for that same goal absolutely correctly. I really appreciate you coming on and sharing your insights, Andreas. I have something I like to do with every guest at the end, which is our question vending machine. And I'm just going to give you three quick prior questions and you answer what comes top of mind. So the first one is if you could have an unlimited supply of one thing, what would that thing be?

Andreas
Ideas.

Louise
Ideas. Okay. I love that. That's a great idea. And secondly, what is your favorite season?

Andreas
Summer.

Louise
Summer, okay, we'll have to wait a little bit until that comes up. And the last one is name of person who inspires you?

Andreas
Actually there too. My twins son.

Louise
Wow, okay. That is nice. And a really great episode is being concluded. Thank you so much for coming on today, Andreas. Really appreciate your insights, your thoughts on everything. And yeah, it was a pleasure to talk to you.

Andreas
Thanks for having me and all the best to Nico.

Louise
I will say, thank you. Goodbye.

Andreas
Bye.

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 and People team.

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