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Episode 01 at CX Human Lab Conversation Transcript:
Transforming the digital Customer Experience in Procurement, with Dr. Marcell Vollmer
Dr. Vollmer:
‘’Run simple. This is how we need to run business today’’.
Introduction: Today, we have with the amazing Dr. Marcell Vollmer, the Chief Innovation Officer at Celonis, a company that is turning processes into extraordinary friction-less experiences through process mining. Dr. Vollmer arrived in Celonis in the middle of 2018, coming from SAP, where he served during 14 years as Ariba Chief Operational Officer, then Chief of Procurement Officer at SAP, and finally, as a Chief of Digital Officer of the Cloud Group, where he helped SAP customers to define and drive digital transformation strategies globally. Dr. Vollmer is sensitive to complexities and challenges surrounding the intersection of technology compliance and supplier networks that today procurement leader’s face. During his career, he continuously tried to eliminate customer complexities through simple, smart and open solutions. Besides all those great achievements, Dr. Marcell Vollmer is a global influencer and speaker and one evangelist for emerging technologies and process mining. This interview took place in the first semester of 2018 when he was in SAP still. Let’s welcome together Dr. Marcell Vollmer.
Ricardo: My question for you first one is to know you as a person, not as executive that you are, we all know that. So tell us about you. What you want to share first about your family, you, what you are doing sports, your hobbies, what you like to read.
Dr Vollmer: Ricardo, first of all, many things. I’m really excited being here today with you. And it’s amazing having this podcast together with you. I can tell you a couple of things about me besides my role and all the professional life that you probably introduced already perfectly. So therefore, I think it is probably first to know and understand, I’m back now here in Frankfurt, Germany after two and a half years in the United States. I lived in Atlanta, Georgia, and I can tell you, it was fantastic. It was so amazing. My wife, Natalie and I, we are a big fan of the United States. And it is also amazing seeing a little bit how immense the United States all ideas in so many aspects, especially when it comes to the digitalization compared here to Europe, which is really… Yeah, you might have heard the saying, “Good old Germany,” and the old piece is really something which needs to be renewed in a certain way. But I think we’ll come to that a little bit later. Let me also tell probably that what keeps me going, definitely coffee in the morning. I love coffee, the sugar free version. And basically then, I have a little bit coffee in the entire day, because I’m traveling so much and different time zones. So that’s really what I like. And I’m addicted to chocolate. I love chocolate.
Ricardo: Which sports are you doing?
Dr. Vollmer: So due to all my travel, I’m literally not doing any any sports. So that’s really something. I listen all the time to do more sports. But basically, I think as long as I’m in a kind of good shape, I try not really to do it. And I heard a little bit about some study sayings that basically is a time to invest in sports. It’s not necessarily the same time you will live longer. So I’m not sure if this is true, and I will definitely not give any advice not doing sports. But basically, yeah, I’m not really fitting this into my schedule right now.
Ricardo: How Ariba procurement network and Cloud-based solutions is helping to develop new practical customer experience enhancing the future of work?
Dr. Vollmer: Ricardo, basically, Ariba network is the largest B2B, business-to-business network in the world. We have currently around 3.2 million business partners on the network, transacting about $1.6 trillion. And I’m really amazed about the size of the network. By the way, this is more than double of what Amazon, Alibaba, eBay and doing combined. It is not so surprisingly, because when you look at a global GDP, which is around $80 trillion, so the B2B side is about $65 trillion. So B2B is definitely a much larger space. The B2C side is around $15 trillion. So it’s really excited in seeing all these disruptive trends in technology and business network is one of them. So you might have heard and seen that Microsoft has acquired LinkedIn, the largest business network. And I think what we are doing is kind of comparable to LinkedIn. You could also use Facebook as an example. We see ourselves basically as learning in Facebook compared with marketplace capabilities. And here we are, the largest player in the B2B market.
Ricardo: Ariba is much more focused in supplier and demand. So I think it’s much more prepared also than LinkedIn. LinkedIn is somehow… I can touch base with everyone there in B2B, but it’s not exactly prepared to supply and demand all the time and sales all the time.
Dr. Vollmer: Correct. Yeah. So LinkedIn is more basically to keep your information updated. I love LinkedIn, also, the other social media platforms due to the fact that basically, you have the most recent and updated information on the network available anytime. So basically, you know exactly the people you’re doing business with. And then this needs to be enhanced by the marketplace document exchange automation capabilities. And this is exactly what the Ariba network does. And you mentioned in your question also the topic about the user experience. I think today, we need really to ensure that we have for all the applications, what we do, doesn’t matter if it’s on the private side, so B2C side, or the business side, so B2B side. So basically, you can say it needs to be Apple-easy, and Google-fast. So simple. When you get your new smartphone, you don’t get a manual. Why? You don’t need it, because it’s intuitive. When you log on into a website, basically with a modern shop where you see all the products and the goods, you don’t need a manual or instruction. Why should this be different on the B2B side? There is no reason for that. And this is exactly also what we bring into our DNA right now with our software solutions. I know not all the SAP solutions are necessarily seen as intuitive. And we as Ariba, we have the most complete set of source to pay solutions in the Cloud. And therefore, the user experience, this is absolutely key for us that we have the latest greatest user experience for all our solutions available in the future.
Ricardo: Some of the applications from SAP are perceived as very complex. And that’s actually what was the initiative when, Bill, the new CEO took over, he spoke about. He understood that very clearly and he builds a division Berlin exactly to decomplicate, to avoid complication to make things easier.
Dr. Vollmer: Bill McDermott, he’s such a smart man. He likes to keep saying simple and therefore, he simply says, “Run Simple.” This is how we need to run business today.
Ricardo: Even your competitors, Oracle, Microsoft and Salesforce, they are not focusing in simplying. They don’t have yet at least what I know are divisions focusing simplification. What are your thoughts about possibilities with Ariba with SAP procurement and other solutions will be if the technology, IoT and augmented reality will take over also those solutions? Because IoT, I think, fits super well for procurement, and augmented reality is, the future. We are not going to be using fonts, but we are going to be using most probably glasses. What’s your take on that?
Dr. Vollmer: So basically, Ricardo, there is a big bunch of emerging technologies, or already established technologies, what we what we see, you mentioned already, a bunch of them. I think definitely machine learning, artificial intelligence; this will entirely change the way how we live and how we work in the future. We see also robots coming more and more, now being part of supply chains of production. We see a lot of videos on YouTube out with companies, great companies really doing a lot of experiments. What can you do? We see drones, and not only drone for delivery, we see also drones basically for passenger transportation, so another big disruption. So in the future, I believe, and Virtual Reality Augmented Reality, what you just said, that’s a perfect example what you what have and what you will include into your supply chain. Because, for example, when you think about that salesman is signing a contract, on the future, a contract will be signed, basically in an entirely electronic way using technologies like DocuSign, where you just need to click and basically the contract is signed, and then it gets processed, in that moment, basically, you can already start in a warehouse checking inventory for the production on what you have sold. You can already start the warehousing, doing the ordering in an highly automated way. You can also connect now the different devices, and you mentioned Internet of Things, that basically now, you know exactly where your goods, products, are and material, what you need. And this is really what I see is absolutely exciting. We have a lot of these technologies. We don’t know exactly what really will be the leading technology or which standard will be also leading standard in the future. But what we definitely can see is that supply chains are heavily impacted by all aspects of these technologies.
Ricardo: How are you helping existing and new customers to transform the sales to the companies of the future? And I’m connecting that with one interview that you gave in the past that you helped the customers to define you. You don’t say label and to define, you understand how they are working, define the strategy that will best fit them using Ariba. So I wanna… if you can elaborate a bit on that.
Dr. Vollmer: So basically, what we want to do as SAP is basically helping customers to have an end-to-end integrated experience and coverage of all aspects of the software, what they need. Starting, when you want to take it simple, you would start with a HANA database as a foundation. You would put an S/4HANA system as your leading ERP on top of that, and then basically, you would connect the Ariba solutions with the other cloud solutions you want to use. And you mentioned the Ariba network. I think for a customer, it’s also very important not only to buy, but also to sell. We’re now focusing also on the commerce side, the customer relationship management side to cover all aspects here. But basically, you need also to see not only on the goods and services, you might also have contingent labor. So when you now look on the total spend side, Alibaba is one aspect for that. But basically, SAP Vclass is another component where we offer the leading Cloud solutions here for temp labor. And when you have so many people, doesn’t matter if they are temp or your own people, you need also to think about how do they travel. So therefore, you need to have a solution available. And this is what we do with SAP Concur, basically then that you can book your trip, that you can book your flight, rental car, hotel, whatever you need. And basically, all the information are already getting processed in the system. You only need to make a picture from your receipts, and basically, that’s all what is done. And this is exactly how we see it and how we define now our roadmap going forward, half the strong foundation with S/4HANA, and then the different Cloud solutions to manage the customer, your internal workforce, also with our HR solutions, SAP success factors, and then the total spent management so that you can really run your business end-to-end and you will basically enhance it by solutions like Internet of Things, artificial intelligence, machine learning, blockchain, whatever the areas are relevant for your business, because we cover 26 industries as SAP and this is what we have put together under the umbrella of SAP Leonardo.
Ricardo: And one thing that I see in the market, there was a time where we have one-stop shop. Then there was a time, maybe 15 to 10 years ago before the crisis of 2008, was a kind of a curse to say a one-stop shop, because I don’t want to be dependent on one company.
Dr. Vollmer: One-stop shop definitely makes sense. We had also some tendencies to go for best of breed. But basically, I think you need to you need really to think about the integration. And in the future, we definitely will see more and more end-to-end integrated solutions, because all the interfaces, this is exactly what drives your total cost of ownership, and basically, it’s also driving the complexity, what you mentioned before. Run simple, have one end-to-end solution available, and this is exactly what we do. And keep in mind, the user experience, that it’s really Apple-easy and Google-fast, how you can run and access all the different applications, what you have to run your end-to-end business.
Ricardo: Where are the touch points and the challenges right now in the procurement to decrease friction and to have more adoption, because that’s one thing that we take care a lot in customer experience, to make adoption easier?
Dr. Vollmer: On the one side, we see a lot of technologies basically automating the end-to-end source to pay processes, basically to remove and get rid of all the transactional administrative bureaucratic task. I think everybody will appreciate that. We have still a lot of people in chat services sitting in front of two screens. On the left screens, there is a scanned invoice, on the right screen, there is an SAP system, and they need to manually enter information in them. I think that’s definitely what we see and it will become history really, really soon. But with that, the procurement function itself is currently changing. The function needs to define a clear value proposition, how to generate value for the company. So because the operational tactical task is no longer the differentiating factor and something you need to bundle, bring together because the automation can cover that. So therefore, what is left is a strategic function. And strategic functions, I would define as basically three core elements. Number one is the supply innovation. This is really what keeps your business going. And number two, risk management. You need to ensure that you are prepared for risk whatever happens. We have seen catastrophic events like Fukushima, so flattened Thailand. So there are much more what I could mention impacting your supply chain, your capabilities to produce your goods, and also deliver everything to your customers. This is what we call procurement with purpose to ensure that you have a sustainable supply chain. Consumers want to know, where are the products from? Where are the ingredients from the products come from? So called provenance. What you need to ensure is to have full transparency in your supply chain. Technologies like blockchain might be here, beautiful, to really help not only to understand tier one, tier two or tier three suppliers, but also to understand from which field do you get certain ingredients for your products like palm oil as an example. And since this is a large transformation of what’s currently going on, and the procurement will play a key role also in the future by creating value and focusing on the strategic tasks to really drive impact for your organization.
Ricardo: Customer experiencing services is something that SAP in general outstands globally, and in Germany, I think is another level, okay? I think in employee experience, SAP stands everywhere in the world, and also Mercedes here in Germany. What is your take and thoughts about the lack of good services and customer experience in Europe in general and here in Germany?
Dr. Vollmer: Yeah, absolutely, Ricardo. So the customer experience and taking customer serious is definitely something, and it’s a different understanding of how you want to treat and interact with your customers. This is different a little bit from country to country. But I think it’s very important also that you make it easy for your customers to really get access to whatever they need, because you don’t want to treat your customers badly. You don’t want to make it complex. You simply want to make business. And you only can do business in a successful way when you can also offer an easy-to-use system access to whatever is needed. And therefore, I believe investing in the user experience is absolutely key. And with the automation and artificial intelligence as an example, you have so many, many options now to automate cumbersome, complex processes that they can run basically in a kind of light-hearted way and you don’t need to interfere to interact anymore. Nobody wants to print an invoice, put it in an envelope, give it to mail and then the postal service is delivering it and basically, you need to open it, you need to scan the information, you need to type in missing information. I think that’s for me a beautiful example to really make it easy on the processing side, and that’s absolutely something we are committed as SAP.
Ricardo: B2B for sure is different than B2C, that’s obvious. But do you see any difference in terms of human side of that?
Dr. Vollmer: Ricardo, let’s look at the success of the iPhone. So everybody loves it, because it really is making your life easier. There are great products like Google. Why do we like it? Because it is so simple to access and you’ll find everything because it is the leading search engine in the internet globally. And this is really something where you see also how important it is. And I’m saying that basically is a B2B and B2C side, there are differences, the differences and the quantity. You have one coffee cup or tea, whatever you are drinking right now, and on the consumer side, you are definitely only consuming several of them.
Ricardo: Green tea. ;-)
Dr. Vollmer: Green tea, excellent, Ricardo, very healthy. And you consume this now and you buy this for your personal purpose. And on the B2B side, of course, the quantities are much, much larger when you buy hundreds of kilos, tons of coffee, green tea, whatever you have. But the experience itself can definitely be fairly similar.
Ricardo: What is the state of employee today in SAP? SAP just I think received a prize or was listed in the best employers in world, around the top, I think, Top 10, if I’m not wrong. Because, employee is what delivers the experience. You cannot deliver experience without a happy employee. That’s the obvious thing.
Dr. Vollmer: Ricardo, when you look on our business model, we are a software company. Basically, our people are the most important asset. So therefore, we need to take care of our people. And I think we are very proud that we are the employer of choice, that we are moving our way up in the different rankings. It depends on which one you look. In North America, in Europe, globally, you are perfectly right. We are definitely, we’re one place to be in our industry, but also as a company in general, because we really take care of our people. You can only be successful if you have a great team, great highly motivated, passionate people in driving whatever you want to do. Thank you, Ricardo. I think you have had really a very broad set of questions. I highly appreciate that. Many thanks for your time. I hope it’s insightful also for the audience to listen to it. And yeah, highly appreciate the time and wish you a great day. Thank you.
Ricardo: Thank you very much for coming to listening or to watching our videos. Stay in touch with us on social media. Thank you very much, and stay safe.
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