Welcome to Forward Focused brought to you by Pypestream Digital Labs, a thought series on customer experience, artificial intelligence, and enterprise automation. I’m Evan Kohn from Pypestream and I’m talking with Dr. Marcell Vollmer.
Marcell is Chief Innovation Officer at Celonis. He’s an expert on digital transformation, procurement, and process mining. Marcell previously served as Chief Digital Officer and Chief Procurement Officer at SAP advancing the Ariba and Concur product lines there.
Marcell, great to have you with us!
Thanks for having me! It’s a great pleasure being on this podcast today.
Now you’re our first guest based in Germany, Marcell, I know you spend a lot of time traveling the world so a special danke schön for coming on, Marcell.
Excellent. Vielen Dank und eine große Freude. A great pleasure being on that and appreciate your German.
Well, unfortunately, that’s the extent of it. But excited to ask you about some of your recent work here, Marcell. Now after a fourteen year stint at SAP, you recently joined Celonis, the process mining software company based in Munich and here in New York. The company has hit unicorn status with a one billion valuation so the team there is certainly doing something right. And you took on the role of Chief Innovation Officer, which is perhaps not a common role these days – at least yet. So tell us, what does a Chief Innovation Officer do?
Again, that’s a great question and you’re perfectly right. So team is really doing an amazing job and I think Celonis is one of the few examples of what we’ve seen in the industry where technology gets developed, process analytics, process mining technology gets developed out of Germany. It started all in Munich, 2011 and it’s basically now going to the United States and all over in the world. So I think that’s definitely one great innovation what we can see and amazing success getting the unicorn status. So we at Celonis are very proud to see Celonis, Bastian, Alex, and Martin; what they have developed is really amazing.
So as a Chief Innovation Officer, it’s a great honor and a great pleasure joining Celonis and I started August 1st. It’s a fantastic start so far. I got asked basically to focus on three areas.
Number one is on the innovation side, getting feedback and input from the customers. What are the innovations they are looking for, how to better transform their businesses, drive digital transformation, use innovations to focus on outcomes and value for the enterprise business processes and that’s exactly what I try to achieve in my role.
Another component is also by looking into the insights, what customers are already doing, with Celonis process mining solution and it’s amazing seeing that some customers are using it to optimize the standard processes like procure-to-pay, like order-to-cash, record-to-report, hire-to-retire recruiting processes. But some are also using Celonis to optimize their productions, their manufacturing, their supply chain. So it’s just really a different use of what companies are doing with our software solution suite. We call it intelligent business cloud suite and that’s something also what I want to make available as industry best practice solution also for our customers to access it.
Another element is continuing driving thought leadership content. You mentioned some areas like finance, procurement, supply chain where I worked the majority of my time at. Fifteen years at HL, fourteen years at SAP to keep it really simple. So now you can estimate how old I am, but basically also sharing content on the transformation, what’s going on.
Finally, I also want to help to connect with customers leveraging the network in seeing, in helping our business, our people to connect to the right level in the different industries on the customer side. So basically, this is in a nutshell what I’m doing and how I try to help Celonis now in my role as Chief Innovation Officer.
Perhaps you can share with our listeners what exactly process mining is and how do large enterprises use it. There are also lots of economic factors in play across the US and Europe. So in today’s business environment, to what do you attest the growth and demand for process mining solutions?
Yeah, absolutely and it’s a very fair question. I think the more common terms: business process, reengineering of process analysis. Basically, what’s Celonis does is helping you to get the full visibility for all your business processes, what you have. And basically, what you do with the solution is you get a suite solution on top of your IT infrastructure; might be an SAP ERP system, might be different ERP, or different IT systems, what you have and what you get out of it is a very nice visualization of how your process flow goes, starting at the first level but going down to the multiple variances, what you might have. And it’s not a big surprise, some companies have six, seven, ten, twenty, even hundred levels, some even have much more than that due to the complexity. And what Celonis does is providing you really, a full overview about how all these processes are done and also, that the main portion of core solution, the action engine – that’s how we call it. Basically, a toolset giving you the right guidance, combined with machine learning, helping you so that you can really also tie the right actions in improving your processes so that you really can say, “Okay, wow. Yeah, I see there’s a bottleneck due to the fact that a supplier is changing a pipe, I better update the pipe in the master data” or “Here I see I have clearly wrong workflows in place and I started to pay suppliers in time” so you can adjust the workflows or you can also adjust payment terms dependent on which direction you want to go. But we are using, leveraging machine learning capabilities to enhance our solution on a regular basis and help you to enhance your processes so you conform the discoveries of visibility and then you enhance your processes, and on top of that, you have a dashboard, a cockpit, to monitor your entire business process performance, what you have in your organization.
So basically, from the functional side, from the business side – and I was a Procurement Officer, I was a Head of Shared Services in my previous roles, I get basically a toolset which I can use to see all the changes, all the improvement areas but also, can directly derive the right actions from it so that I can manage my end-to-end business processes based on outcome and value, and out of the Celonis solution. What we do on top of that is one innovation, what we recently announced is, we have added task mining or what I describe post-based on the IT data, the systems data, what we have available. But now, we have added also task mining. Basically, there are some processes you might do outside to typical IT systems. For example, if you search for best supplier for purchase requisition or if you are looking now for some details a customer was providing you, processes which might take a while, and you have not really transparency and an overview about this task because you simply can’t report that. And that’s exactly what task mining is doing, closing the gap, helping you that you get the process mining and task mining, really a full view on everything what’s happening in your end-to-end business process that you can focus on your outcome and driving more value for your organization.
I hope it was not too long, sorry for that.
No, no, that’s a great overview. Thank you, Marcell. And I’ve seen some unique ways that companies are tapping into the technological capabilities of process mining including sports analytics. What are some interesting ways that companies are using this type of technology today?
Absolutely. Wow, that’s a great question about using also process mining and the analytics for sports data like Formula 1 cars. You can use it to really see what are the different components, KPIs coming together, and how you can leverage it. Another area is definitely also that you go for manufacturing processes. When you see for example, that a leading Bavarian automotive company is using it for their coating factory to put the color on the car and really optimizing all of the processes around it. Or if you see that in the energy sector, one of the leading companies is using Celonis to optimize the maintenance processes for their production sites. And they’re even not only using it to improve their own processes, they’re also deriving a business model from that because they’ve gained so much experience that they now can offer that to other companies based on the practices, what they gained, by using the process mining capabilities from Celonis. So these are great examples also what you can do besides the pure functionality, what we have for the typical processes when you talk about in finance procurement, in sales, in supply chain, in logistics, in HR and so on.
You’ve spent much of your career as a leader in the procurement space. What are the most important trends in procurement today and how should executives factor these in as they make purchasing decisions for their organizations?
That’s another great question about the transformation, what’s going on in all business function but especially in procurement, it’s highly impacted as basically part of the overall supply chain. I like the definition coming from the supply chain area at DHL that I always say that basically a supply chain process is, in a very simple term, it is a plan, to source, to make, and to deliver portions. These are the four core elements, what you have for any supply chain, and you need to react and be fast in interacting with the different area starting with R&D, with your production manufacturing sites, with logistics, transportation, what you need to take into consideration. And we see all the changes, what we have. Political changes. We see now the trade war, what’s happening between US and China. We see on the other side, political impact of decisions like Brexit. What we see out there. On the other side, we see a lot of regulation which is coming in due to data protection is one example. We see also a shift in supplier market.
And in procurement, you need basically to factor this in not only for procurement but for your overall supply chain. And in procurement in particular, you’re currently seeing a clear trend: the procurement organization as we know it is basically adding more and more automated so less people are needed for operational and tactical processes. And procurement is focusing more and more on the strategic value generating activities and the top three activities, what we see is number one, driving supplier innovations; that’s a core element of what procurement is focusing on.
I’m currently having this conversation from a smartphone, so Gorilla Glass which has been invented when Tim Cook was the Chief Supply Chain Officer at Apple – today, he’s the CEO of Apple – he invented together with suppliers a new glass and this has powered the success of in the meantime, more than 2.3 billion sold iPhones on Apple. Seeing also that a large, large portion of smartphones is from other provider based on Android. But this is one example of what you can see.
Another element is risk management. We have seen that, and in the year, I became appointed as Chief Procurement Officer, 2011, I think we all are aware of what happened in Fukushima. It was a heavy, heavy impact on all supply chains and it was also very insightful being that wow, not everyone was aware about the magnitude of the impact by not knowing who are my tier two, tier three, tier four suppliers in my supply chain and that’s another element which is absolutely key in procurement.
And finally, of course, securing a sustainable supply chain because consumers today expect that you have full transparency about the products and the ingredients of those products you are producing and that you know that and can also ensure that you’ll have not any child labor in your processes, that you have sustainable products you are using, and also that you can prove that, I think these are the key trends, what I’m seeing. This is accompanied by really a large transformation on the technological side. I started with the automation and this gets at it with machine learning, artificial intelligence; what is used more and more in procurement but also automation basically in all the different areas. As well as business networks basically, a new way connecting businesses and also, driving the innovations, focusing on the risk, and also securing a sustainable supply chain to round out the story.
You’ve talked about a number of focus areas for large companies, I want to ask you about startups. So what is the environment like for startups in Europe and specifically, in Germany? What would you say to a startup in the US looking to serve clients in Europe or vice versa?
Oh, I think we definitely see most of the startups and most of the success stories look at the Fortune 500, look at the top ten companies eight of them are tech companies today and most are coming from the United States. We see huge investments happening in China right now. A lot of funding is provided here for areas like artificial intelligence and really focusing on new ideas, products, autonomous vehicles, Internet of Things, what you have or what is the automation, what you see currently. And Europe, I think is currently a little bit in between and a lot of companies try really to also bring the right regulations in place to make it a little bit easier for startups to start and really get into the business, but there is still a lot of bureaucracy and a lot of change, what is needed to really dive successfully to digital transformation.
We started our call a little bit later due to the fact that on the train, I was not able to a have a call. I’m not talking about 5G, I’m just talking about 1 or 2G by just getting a stable connection on your mobile. So there are some challenges, what you have. Nevertheless, Germany is doing currently a lot in providing support for startup companies and a lot of the already established companies also focus more and more in coming up with innovation centers, coming up with spin-offs where they want to provide a ground, more agile, more flexibility with the right funding and getting the right talent to really create a kind of startup culture.
Nevertheless, when you compare that with North America and now on my way to the Silicon Valley, to San Francisco I think the dynamic is much, much higher in the United States what we can see right now and there’s a lot currently what’s happening and Europe is not really leading. Some exceptions and I’m really proud also that I’ve now the opportunity to work at Celonis, at a startup, for process mining technology where we really see also the trend a little bit the other way around where having a technology developed or especially developed in a large scale go-to market approach what Celonis is doing. So we’re not very the first ones inventing process mining, but we’re the first ones really bringing it in a scalable way to the market and also going with that by more than hundred percent in the last year. And having now close to one thousand customers successfully implemented the Celonis solutions.
When you ask me what to do when you are a North American company and I think this is probably pretty similar also the other way around. North America is a fantastic market. I lived two and a half years in Atlanta, Georgia – so sorry, guys who are listening to this podcast. I have worked hard on my accent but you see I failed really getting rid of that. Please excuse. Nevertheless, the US market or North America including Canada, it’s an amazing market because it’s the largest economy in the world and if you start your business, you have access to the largest economy from day one. That’s not the case when you start in Europe. You will pass more than forty different countries with different regulations. European Union is doing a lot to standardize and simplify regulations, but it is still – they are still different standards and also language requirements, what you have when you want to be successful.
So therefore, what we see is currently that a company starting in North America very often focus first on United Kingdom, same language and as a starting point as a first bridge to Europe and then they assess the markets and I think Germany has the largest economy within Europe. It’s definitely one of the target markets number one, then following looking at France, at Italy, and Spain. Going down and into the different countries to also establish a business and also provide everything what is needed. Amazon is one example of doing this at a very fast pace, at a scalable model, what they are doing right now.
Well, a German or European company, I think the other way around what was also second part of your question. I think that’s a little bit more challenging because you need to have a starting point, where you want to go and the United States, it’s an unbelievable large country. You need to define what’s the best spot for you to start and Celonis decided to have the – to split the headquarter and establish the headquarter in New York and I’m saying that’s a great decision because you have really an amazing city, first of all but also, a city with access to the right talent in the tech industry and therefore, we also now opened an office in Silicon Valley in San Francisco so that we also can benefit here on the talent available in Silicon Valley. And I think that’s a good approach, doing that and I think it’s definitely a best practice in going this way around as well as what I just described the other way around in going to the different markets and establish a business model.
And of course, it’s not a big secret. You need to go fast and you need to be successful with your products, you need to have happy customers, highly motivated teams, and also see that you can drive all of that, that you have the cashflow available to finance your expansion. And I’m saying this all is key really to be successful in the future and I hope to see on both ends, more innovation, innovative companies, and also seeing lot of really beneficial technologies coming from the different areas in the road.
You’re active on social media, often sharing video content about technology trends. Curious, who are some technology leaders you like to follow?
Oh, I definitely like to follow Elon Musk. I have to say I admire his visionary thinking about the future. It’s unbelievable for me what he is doing at the same point in time. It’s not a big surprise. And I mentioned the iPhone already. I definitely admire also Steve Jobs, what he has done establishing or basically, the turnaround of Apple first inventing it. Going for the first success of Apple, we all know the story: Steve Jobs had to leave. Apple Newton was not so success at this point in time, but he was really successful continuing his career, coming back, and then basically bringing the iPod as the next product innovation to the market. And today, we see all what has been created: the iPod got developed in the iPhone and this is the start of the success of the smartphone, which everyone has today at least one, probably some have already two phones. These are definitely two great leaders what I see here in the industries.
And yes, I’m here a lot of time on social media. Feel free to follow me @mvollmer1. This is my Twitter handle or Marcell Vollmer, my LinkedIn name. And I try to share also video content because that’s really great content and people like more to have one, two-minute videos, probably three-minutes but not longer to get insights and latest technologies, disruptive trends. Also, some news, what’s happening, if something is currently changing or a new innovation is coming to the market. So that’s definitely also a great way; being part in the communication and I like the always-on mentality and also seeing and getting all the news and latest information. That’s definitely exciting for me and I also like to share all the content, what I read and that’s what basically I’m doing on a regular basis on social media.
Always-on is a theme that we’ve tracked and spoken about repeatedly on this show with a number of guests. And Marcell, I was recently at the Gartner IT Symposium in Orlando where Gartner released their top ten trends for 2020 and beyond including autonomous things and AI security. What do you think the leading technology growth stories will be in 2020?
I definitely see that as autonomous driving, autonomous vehicles are definitely going to the next level. We see huge improvement in the areas of machine learning as part of artificial intelligence and I definitely all also sees that sensor link is coming to the next level. IoT and Internet of Things, connecting the different technologies to get full transparency in your entire supply chain, in logistics. Where are your goods? What is needed for manufacturing? How to find your inventory? And I think there is huge potential what we see right now. We see a tremendous improvement in robotics. We see more and more robots coming here into the market; not only for industry, we see now also that you get more household usable robots starting with Roomba robot, which is still very basic technology, but really going to the next level. And I think these are definitely areas where I see lots of changes. For the autonomous vehicles, I also would include the drones, passenger transporting drones, and we see more and more also prototypes coming to the market.
And we see now that the business models are getting more and more established. We see really that more technology is also getting into the main areas in the industries and I think this time, it will definitely continue. So 2020 will be definitely exciting and we will see a lot of new innovations, but also more established current innovations, what’s happening and also how we really can use and become better by leveraging big data, the analytics, and process mining.
What Celonis is doing is one great example because I had – it is not that we had a shortage of data in the past, companies have loads of different data, but reading the data, deriving actions the data, what you have in the different systems, bringing it to one place, and making it actionable to create value and focus on outcomizing, this is exactly what is a key trend and where we see large investments going and also more and more companies adopting these technologies.
2020 will be another exciting year and I hope also on the overall economy development that we are not going in a recession, that we continue the whole story, and also can benefit from the innovations and technology which we will get access to it. And it’s also great news, a lot of people are concerned about technologies that just will reduce the number of jobs. The good news is as the World Economic Forum, last year it was already announced by the new technologies, in particular artificial intelligence, fifty-eight million more jobs will get created than made redundant and that’s really exciting seeing the magnitude of new jobs like drone pilots, robotics engineers, data scientists, data architects, and so on. I could continue here for a long while, but I think we all have seen of different jobs which didn’t exist five, ten, fifteen years back. This is an exciting area, what we see and hopefully, also will continue in providing more jobs for the people who want to have great jobs in the future.
We’ll leave it there for today. Dr, Marcell Vollmer, thank you for joining us. You mentioned your Twitter handle. Where else can our listeners find you?
So basically, you’ll definitely find me on LinkedIn and on YouTube. And it’s a great pleasure to connect with you and yeah, hopefully also that we have a very interactive communication and also feel free to share your thoughts. I look forward to that.
Thank you again, Marcell. Listeners, thank you for tuning in. You can access more Pypestream Digital Labs content at pypestream.com/insights. If you’re listening on Apple Podcasts and like what you’ve heard, please rate us, give us some stars. We always appreciate you taking a moment to help spread the word. Thank you to our editor, Kat Zink. We hope you join us for the next Forward Focused podcast.