SAP has acquired Signavio, a process mining software pioneer

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SAP has acquired Signavio, a process mining software pioneer.

The deal was announced as part of a virtual event for the launch of Rise with SAP, a new set of subscription services aimed at enabling SAP’s customers to transform into intelligent enterprises by shedding legacy technology and processes for cloud-based systems and cutting-edge tools. The goal is for companies to become more flexible, data-driven and resilient so that they can respond quickly to market changes. Terms of the deal were not disclosed.

Signavio’s process mining software will be embedded into Rise with SAP services. Most large SAP ERP systems have thousands of processes, many of which have become obsolete as the business requirements have changed over time. Signavio process mining software crawls through an organization’s enterprise systems and identifies where processes are inefficient, break down or are not needed.

The addition of Signavio’s software allows SAP customers to inject intelligence into their business processes on every level from design and analysis to automation with workflow AI or RPA, said SAP CEO Christian Klein during the virtual event’s keynote.

“We can now offer customers an end-to-end business process automation layer,” he said. “This is not just a one-time effort — something that you do when you migrate to S/4HANA — this is something that you do on a continuous basis because there are always new business demands coming in and you should never stop reinventing your business processes to stay ahead of the competition.”

Signavio helps drive business transformation

SAP wants to drive digital transformation for its customers rather than just sell enterprise software products; it saw Signavio’s process intelligence software as technology that could help facilitate this, said Gero Decker, Signavio CEO.

“The big driver for the Signavio acquisition was for SAP to be front and center in the business transformation conversation with their customers,” Decker said. “They want to be perceived not only as the technology vendor that comes in once you figure out what you need, but to be at the forefront of the conversation about how businesses need to change and how they need to change their operating models.”

Gero Decker

One of the key facets of Signavio is that it can work on any enterprise system, he said.

“Our value proposition so far has been that we go enterprise-wide — SAP, Salesforce, whatever. We care about operations and processes end-to-end, going beyond application or enterprise boundaries,” Decker said. “If you want to lead a digital business transformation discussion, you can’t just end at the border of an SAP system.”

Signavio’s 500 employees will be folded into SAP’s newly formed Business Process Intelligence unit, Decker said.

Based in Berlin, Signavio’s process mining software originated from research on enterprise process improvement at the Hasso Plattner Institute, a computer science research university in Potsdam, Germany, founded by SAP co-founder Hasso Plattner.

A growing market

Signavio is not the lone process mining software vendor. Celonis, which is based in Munich and has longstanding ties to SAP, has also helped lead the growing process mining and intelligence software market.

Reetika FlemingReetika Fleming

Both companies count SAP as customer and partner and have done well in creating process mining and intelligence tools that drill down to the root of processes and determine what to do with them, said Reetika Fleming, vice president of research at HFS Research, a global consultancy based in Cambridge, England, that focuses on emerging technologies.

This made Signavio and Celonis possible acquisition targets for SAP, but it appears Signavio was the better option, Fleming said.

“Signavio was a lot more affordable. Celonis has a high valuation and I wouldn’t expect them to be acquired anytime soon,” she said. “It was likely way too much investment for SAP to acquire Celonis.”

Cost aside, two use cases made the Signavio acquisition a “no-brainer” for SAP, according to Fleming.

“The first is looking at process inefficiencies within your ERP landscape, finding bottlenecks, redesigning processes such as order-to-cash and procurement,” she said. “The second is helping IT teams with systems migrations like for S/4HANA. Signavio helps IT see what the landscape looks like today with the processes as-is, and what they should look like in the new systems.”

Ray WangRay Wang

Signavio’s value in gaining a deep understanding of processes was echoed by Ray Wang, founder and principal analyst at Constellation Research.

Rise with SAP is all about helping customers understand why they need to become an intelligent enterprise, but in order to get there, they need to first evaluate their business processes landscape, Wang said.

It’s not just about understanding the process, it’s about improving that process and then automating that process,” he said, noting that Signavio’s approach utilizes AI and machine learning. “That’s what you want to do in a digital transformation. You don’t want to just automate every single process faster. It’s got to be better or you’re just making the bad processes faster — and that doesn’t help.”

‘The shackles are off’

SAP’s acquisition of Signavio may also help its rival Celonis in the growing process intelligence software market, Wang said.

The shackles are off Celonis.

Reetika FlemingVice president of research, HFS Research

“This makes Celonis like Switzerland,” he said. “They’ll have full range to go partner with all of Signavio’s previous partners. They don’t have to tiptoe around SAP anymore; they can go forward with everyone else.”

Fleming agreed, saying the acquisition frees Celonis to go its own way.

“The shackles are off Celonis, because their partnership with SAP has been deep and SAP has undeniably been a strong influence on Celonis’s product direction thus far,” she said. “But they have already started to prepare for life without SAP via partnerships with Oracle, ServiceNow and Salesforce. They have been getting their connectors and joint go-to-markets in place — that’s just going to accelerate now.”

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