ProAlpha has grown steadily in recent years. The increasing level of digitalization among companies has certainly contributed to this. But how high is the level of digitalization of German and European companies in an international comparison?

An international comparison is difficult, as we would also have to differentiate between regions such as North and South America, Northern and Southern Europe. Germany is probably the world leader in the digitalization of production automation. Of course, we are benefiting here from the early initiatives that were strongly supported by the major factory automation manufacturers, but also by the German government together with the trade associations Bitkom, VDMA and ZVEI, which helped set up the future-oriented Industry 4.0 project.

If we look specifically at proAlpha customers, many are already well advanced in terms of digitalization. However, the focus of their digitalization and automation is more on back-office processes. Concepts such as smart production and smart services such as predictive maintenance, on the other hand, are at the back of the queue. Compared to China and the USA in particular, Europe is lagging behind when it comes to the digitalization of products, the development of new business models and the use of digital platforms or ecosystems

Can you give any reasons for this? Does it have something to do with the mentality?

I actually believe that the mentality has something to do with it. In the USA in particular, companies tend to be early adopters of new technologies. Certain countries in Asia are also very quick to adopt technology trends. In Europe, we wait until there are concrete use cases and success stories before we implement new technologies and offerings on a large scale.

What priorities do companies set in their digitalization strategy?

We see that German companies are very much involved in projects such as connected supply chain, quality assurance, MES and data acquisition. Upstream and downstream integration is also becoming increasingly important. And process optimization through RPA, i.e. robotic process automation with process mining, is becoming relevant in the back office in particular. We recently conducted a study with PAC. In it, 61% of the companies surveyed stated that they wanted to optimize their processes with artificial intelligence and RPA.

What impact has the coronavirus pandemic had on the speed of digital transformation in companies?

We differentiate here between short-term and long-term influences. In the short term, we are observing that companies are reacting very differently to the crisis. Some have been hit hard, are experiencing a sharp drop in sales and have therefore become more cautious with new investments and projects. Others, on the other hand, are using the time to accelerate their transformation process, as capacities are currently free and they want to be prepared for the time afterwards.

In the long term, the crisis will accelerate digitalization. Many have realized that the companies that have been able to react more flexibly are those that have been able to create transparency in their corporate performance. These companies are navigating the crisis much better. I like to compare it to a river: if it has little water, I can clearly recognize smaller and larger stones and can decide better where I want to cross the river. And it's the same with companies: the priority for digitalization has become crystal clear. That's why initiatives are being taken up and implemented in the long term. It's about flexibility in business models, resilience, transparency and visibility within the company. These are all topics that are invariably supported by digitalization.

According to the aforementioned PAC study, ERP software can help to optimize processes and increase employee productivity. How does this work?

The ERP is the digital backbone of a company, it is a data and process integration platform and truly supports all processes in the company. It creates a consistency of processes across all levels and ensures a uniform database. It helps to improve communication and interaction across departments, as well as with suppliers and customers, and to make them more efficient. At C-level, it enables quick decisions to be made in conjunction with business intelligence tools. An ERP also prevents human intervention in processes from leading to errors. In projects, repetitive tasks can be automated and value-adding processes can be systematically mapped.

There is also a point that will certainly gain in importance now and in the future: Sustainability, environmental protection and resource efficiency. An ERP system supports the intelligent and efficient use of resources of all kinds. It optimizes routes in logistics, the use of materials in production and helps to make processes more efficient through optimized planning.

What are the biggest mistakes that are made when digitizing processes and how can they be prevented?

Digitization is not the 1:1 transfer of existing processes into a digital format. Digitization is a fantastic opportunity to rethink processes and carry out process re-engineering. One mistake is to neglect this step. Another mistake is not to think in terms of end-to-end processes - order to cash, book to bill. Management support is extremely critical here: changing processes is a strategic decision that affects the entire company. And process changes are only possible with strong support from management!

Data quality is often underestimated: The database determines how well a process works. The best resources must also be provided and this is a challenge, especially in SMEs, where resources are very scarce. But every company must be aware of the relevance of digitalization for itself: it's about change - how is work done, how do processes work, how are decisions made? Digitalization must be accompanied by a change process and strong communication.

Companies should also make use of best practices; this significantly shortens the time to value and minimizes the risk during implementation. We as a company also strongly encourage this.

You mentioned the resources involved in implementing a digitalization strategy. How should a team be put together to make the project a success? There are employees in every company who are open to new ideas, while others are fundamentally opposed...

The focus must be on process design. Digitalization is also not a single project, but is made up of many smaller project teams. There must also be managers who keep an eye on this process view and drive it forward. They must also be empowered to make decisions across departments. And that's why I come back to the support of management. There are always people who are not immediately enthusiastic about change or who fundamentally reject it. I believe it's about creating the right governance model in the project structure, with specific work packages, specific deliverables and agreement within the team on how decisions are made and responsibility is taken. It is up to the project management to commit the team to the common goal.

What does everyday digital life look like at proAlpha?

As a technology company, we have a very high degree of automation and therefore found it very easy to switch to remote working during the lockdown, for example. We have the software, we have the hardware and the infrastructure that allowed us to switch over quickly in a relatively short time, so that collaboration with our customers continued virtually unaffected. Within a few days, 95% of the workforce was working remotely. However, we are always looking for ways to automate our processes in order to become more efficient - both internally and when working with our customers. For example, we are currently introducing a new project management tool that will help us to bring more transparency and efficiency to our projects. We are also working on a new customer portal to improve communication and exchange with our users. We are always looking for further ways to optimize internal or external processes - primarily with our software, of course, but we also use partner solutions wherever it makes sense.

In which areas do you rely on partners?

We have partners for various topics, for example in the HR area around HCM. This is the world we live in today: there is no monolithic system that can cover all aspects of a company. We have an ERP that is extremely feature-rich but cannot cover all requirements on its own, which is why we have to create an ecosystem with partners.

You have been CEO at proAlpha since the beginning of the year. What will be the focus of your work?

The basis for our success is the answers to two key questions: How do we remain innovative for our customers and our core markets - technologically and in our consulting expertise? And how can we best support our customers, how can we turn them into global champions?

We have launched several initiatives to answer these questions. For example, we will significantly shorten the release cycle of our software. We have developed a fast-track methodology for implementation at our customers so that they can convert their system within four to six months.

We will only grow in the market if we focus uncompromisingly on the needs of our customers. This is the success story of recent years, and we want to continue writing it. We see opportunities for growth in our core market, but also beyond this, for example in medical technology. And ultimately, we also want to grow through acquisitions, by taking over companies that complement our portfolio in a meaningful way.

In future, we will also operate more strongly as an integrated group internationally and offer our customers the same quality at all locations, for example with services such as 24/7 support.

How do you manage the shortened release cycle without compromising the quality of the software?

Our development now works in agile processes. We have small working groups that can react quickly. Quality assurance runs in parallel and not just at the end of software development. Thanks to the parallel processes, we have already significantly improved the quality of our software in terms of the number of errors.

ProAlpha also works with research institutes such as Fraunhofer and RWTH Aachen. What benefits do you derive as a company and for your customers from this collaboration?

In recent years, we have benefited enormously from these collaborations and continue to work with various institutes, for example in the area of our production planning and optimization tool. In the area of big data analytics, we have a development partnership with Fraunhofer. In cooperation with RWTH Aachen University, we were able to test process mining for the first time and prepare it for widespread use. As you can see, the exchange of experience with our cooperation partners is of great benefit to us. It gives us the opportunity to gain experience and to further develop and optimize our solutions, thereby offering our customers the greatest possible benefit.