Today SAP announced that it is to acquire process intelligence vendor Signavio for $1.2B. Considering Signavio’s revenues were around $100m, and it had raised almost $230m in funding, that’s a high price to pay. But is such a high price justified, and why would SAP contemplate paying so much in the first place?
There are a couple of critical factors to consider here; the first is that a tech sector boom is underway, despite and in part because of the pandemic. As organizations worldwide had found, their approach to hard coding IT practices didn’t work well when the world went virtual. So adapting, if not transforming to new normal realities, is the order of the day. Even cash-strapped and hard-hit industries are spending money on tech and projects to automate as much as they can, believing that it will make them more resilient to future change and save money in the short term. On the surface, it appears to be a perfect storm for enterprise software vendors. The second factor is that IT, in general, has become so fragmented with apps and processes running all over the place that few really know what is going on. Put those two factors together, and a toolset that can analyze the process and manage, real-world complexities, seems timely and maybe even essential.
At Deep Analysis, we have been researching the world of process mining and task analysis for some time, and though it holds great promise, it has proven to be a tough sell. To put it into practical terms, it’s great that I can now have insight into my spaghetti world of processes, tasks, and log activities, but what am I the buyer, supposed to do with that insight? Turn the clock back to the 1990s and the heyday of ERP. We saw armies of consultants laboring to understand the AS-IS situation through business analysis and spending at times years, to implement the TO-BE scenario with the software. Today, the same problems remain; process mining tools like Signavio, Abbyy Timeline, and FortressIQ, can certainly help automate the discovery of automation opportunities, but you still require human consulting expertise to execute on the promise. There are plenty of human consultants available, but there is little appetite in a pandemic or post-pandemic for that matter to launch massively expensive consulting-led digital transformation projects.
SAP now has a tool in their arsenal to move the needle a little, shorten the time span of major projects, and maybe even the cost of those projects. Signavio, with its processing mining and management capabilities, is not a silver bullet, but this kind of technology does help. So the price paid, though seemingly high, may prove to be justified with the weight of SAP and its sales force now behind the product.
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