Change is hard, and if you only try to force it from the top, you will not be able to build sustainable results. Many CIOs fall into a common trap when trying to drive their transformation projects – implementing too much too soon without getting enough support from their teams and line of business stakeholders. SAPinsider interviewed Lars Bolanca, Head of Corporate IT at Deutsche Börse Group, about the company’s multi-year project. The company – an international exchange organization and provider of market infrastructure – is prioritizing innovation within its core processes starting with basic functions such as purchasing and travel expense before moving to customer facing and more complex initiatives like Financial Core. Lars answers questions about the mix of SAP and other cloud-based solutions Deutsche Börse is relying on and how the company is planning a complete renovation of its existing infrastructure and process landscape. He also explains how turning innovation initiatives from push to pull has been key for Deutsche Börse to gain support for innovation, align user journeys with demand, and achieve process standardization across the business as part of its phased innovation strategy.   You mentioned that you’re responsible for the entire Corporate IT transformation journey at Deutsche Börse. Can you tell us about the organization’s SAP solution landscape? What solutions are you running and what parts of the business are supported by SAP? Most of our back-end group processes like finance, human resources (HR), and purchasing run on SAP. We also have several processes where SAP is very close to the core. On the billing and invoicing side, for example, it's directly connected to our trading and settlement platforms, which is one of the core elements of our business. We have treasury and intra-day liquidity management, where we are managing the whole treasury portfolio that we have in our books. And then of course also speaking about customer master data, it's not just about the typical core data that you have, but we fuel the entire value chain, so that means if our customer is a financial institution, their customers are part of our value chain, too.   You’re in the middle of a multi-year transformation project with SAP somewhat at the core of that. Can you talk a little bit about that? When we speak about Deutsche Börse’s transformation, it’s important to differentiate between the technology part, the process part, and then also the people and culture part. The easiest one to talk about is technology. Deutsche Börse is modernizing its entire SAP landscape. In 2018 we started looking at easier processes like purchasing, travel expenses, and standardized HR processes like recruiting or learning to gain some experiences and executing the SAP strategy to move everything into the cloud as Software-as-a-Service (SaaS). In 2020 we expanded into customer care processes, including Sales and Client Services, and we are now moving into SAP S/4HANA covering treasury, core finance, billing, contract management, and everything that is associated to it. As part of the transformation, we are also building a lot of reference points, both on the technology side, as well as on the process side looking into, for example, the second line of defense functions like Group Risk, Group Compliance, and Group Audit. We are building, together with SAP, a reference for the industry in the sense of not only managing the typical group processes, but also aligning closely with regulators and all the regulatory-relevant processes that you have to cover. On the process side we’ve started to replace the famous spreadsheets and all the manual processes with end-to-end driven processes, no-touch or low-touch. We are simplifying data and data models, and then also looking into how we can help the different corporate or business functions to also improve their service portfolio. Last but not least, it's all about people and educating colleagues about the changes. For all colleagues in the organization – IT and non-IT – there is a lot of learning associated with the transformation, e.g. how do you operate SaaS and how to integrate data and workflows. We’re also thinking a lot about user experience, and not only thinking about features and functions, but also thinking about what is the benefit for the user, what is your net promoter score and how do you make a journey out of it.   What is your leadership approach and how have you found success getting people to adopt a process-focused mindset? There is no playbook or checklist. I think a lot of this is tailored to your organization. So you should first understand how the organization works, its history, and thinking models of your employees, and then start with projects that are easy to translate, like travel expenses or, in the purchasing space, buying pencils and paper. These are things everyone can understand and relate to from day-to-day life. Once you have established pilots where people experience first-hand that suddenly things are working on mobile, or that they can buy things with one or two clicks as opposed to 20, they will begin to buy-in into the benefits. The more experiences that we are able to get into the organization in this way, the more people have started to like it and to ask for more. And we have seen demand for these pilots increase, especially in the customer care space around our service functions that are directly interacting with our clients, and on the post-trade side. Once these users saw the capabilities of SaaS, they immediately doubled and tripled the demand and the features they want to use. This is one situation where the company changed from a push into a pull from the organization and all the demand is being translated in these user journeys. On the IT side it’s more or less the same. You still have to do dedicated trainings, and also help your colleagues to understand what does it mean for their roles and for the day-to-day life. It’s important to always explain the “why are we doing this” and how does it really also create a benefit for the organization. There can never be enough communication, but it must be simple.   Can you dive a little further into why you started with travel expense and in some of the customer care areas? You want to start with something that people easily understand. Prior to COVID-19, almost everyone was submitting travel expenses so it was a commonly used process and also easy to explain. Additionally, making the process easier, paperless, and more accessible by transforming it into a mobile experience quickly gained buy-in. Secondly, Deutsche Börse is in a regulated space. We have four institutes that have banking licenses, so highly regulated under different jurisdictions. In these cases, you have to align your journey with the regulators and so it's easier to start with something which they also don't consider as being close to regulation or close to the banking core business. For example, you can run a bank without travel expenses. We also were able to give the regulator the opportunity to learn more about SaaS and how we do controls and apply information security standards. The third reason for starting where we did is complexity. When we speak about core finance and SAP S/4HANA then a lot of the things are much more complex in process. We are speaking accounting, consolidation, group reporting, treasury, where there is more complexity than you have in the travel expense space, so we gained experience with the least complex processes before moving on.   What were the macro drivers for this transformation? Why now? The first driver is the need to digitize. This is often used as a buzzword, but if you run 50 spreadsheets every day, then you’ll start to wonder whether that’s the right way of spending your time and if there are better ways, especially when it also comes to audit trails and reporting. The second driver is the need to serve as a role model for other companies. Deutsche Börse is a market infrastructure provider and a reference for the financial industry. So a lot of institutes are looking at us from the perspective of how we are operating in the cloud and regulatory spaces. We had a unique opportunity to combine the desire to change, the ability to also invest, and the opportunity to inspire others to participate in a similar journey.   Why is the cloud important for Deutsche Börse? What are some of the benefits that your organization will receive by moving to the cloud? Deutsche Börse runs a multi-cloud environment, so I would differentiate between the typical SaaS, and then the typical hyperscalers. We leverage SaaS for standardization and simplicity. To reiterate the example of travel expenses at Deutsche Börse, like for any other company travel expenses are mainly legal driven. There may be differences in workflow and approval compared to other companies but fundamentally the process is the same across businesses, so there is no reason to differentiate from other companies in this area. SaaS enables us to standardize the process, and the working assumption is that what is good for other companies is also good for us. This principle gives us a lot of power on the side of not having to reinvent the wheel, but focusing on where we are different, like spending more time thinking about how we engage with clients. Shifting gears into Infrastructure-as-a-Service and Platform-as-a-Service, our infrastructure is highly critical and considered as systemic relevant, which means we have to run at a 99.9x minimum in many areas. If you consider the investments of hyperscalers into information security, scalability, flexibility, and resilience – so speaking about how do you deal with unpredictable situations – they are always outperforming any on-premise data centers that you have. The same holds true if we speak about agility and innovation – building on the innovation happening in cloud allows us to offer market leading functionality and accelerate our innovation and growth journey. And this is why from the beginning Deutsche Börse has been working in a multi-cloud strategy, not just setting on one hyperscaler, but working with the individual strengths of the leading players.   We're seeing that data and analytics is a critical priority for a lot of companies right now. Is this also a priority for Deutsche Börse? I would first start with the very short answer – yes, it is a priority. We are sitting on hundreds of terabytes of data. Every transaction or deal that goes through our books somehow produces or changes data that we also share with the market as well as internally. I think a common challenge for any company in the market – not just unique to Deutsche Börse – is what do you do with all that data? There are some answers that are more obvious than others, such as utilizing the data to produce share prices, history, volumes, and recommendations. Deutsche Börse is heavily investing in data and analytics internally with dedicated teams working on big data analytics and how to commercialize that on one side, and on the other side, how to simplify data models, for example. Also, driven by recent acquisitions, the company is combining data that we have already today with data that we get from one of those acquisitions simply for the sake of bringing different data models together and bringing them to the next level. For us data and analytics is one of the strategic pillars to work on.   What are your priorities for 2021? What will make this year a success for the company? Deutsche Börse has experienced stable growth organically as well as inorganically despite these uncertain times. Of course, we have plans to continue this growth journey which is a big and important focus of the company. If we look into how this translates into an IT strategy, IT has to fuel this growth strategy and support this on one side with the flexibility to very quickly react to changing business demands, be it externally driven due to COVID-19 or changes in the market like Brexit or any other regulatory changes. In the end, it always comes down to IT helping and working hand in hand with the respective business functions. What does this mean for Deutsche Börse’s Corporate IT transformation journey? We will continue on our SAP S/4HANA journey as well as our SaaS offerings around customer care, experience management, and HR. We will also continue to focus on simple processes, user experience, mobile experience, but also resilience and information security for all of our data and processes. From a bigger picture perspective, we will be also looking into the core. The plan is to get the majority of our group core processes into the new landscape within the next 12 to 18 months, at least on the finance side. It will take another two or three years to fully implement SAP S/4HANA with all its associated sub-processes. We are also bringing this together with SAP and Google as a joint partnership, moving into a scenario on how you can operate such environments in a secure cloud environment that goes beyond the typical protection schemes of hyperscalers that are in place today. We will have more information about this in the second half of 2021. We’ll also continue to grow our expertise and capabilities around data, including processing and also making data-driven information available. Last but not least, investing into our teams and people will be a significant part of the roadmap of 2021, as it is our employees who design, implement and run our processes.