Digital transformation is a cultural journey that requires process transparency and sometimes a board game. That was the message from Mark Klein, Chief Digital Officer of ERGO Group, at Celosphere 2022, Celonis’ annual user conference.
"Digital transformation at its core is cultural transformation,” said Klein during a fireside chat. “You need the whole organization to think digital and implement thousands of measures and optimize processes," he added.
Klein was a featured speaker at the event and also sat down with sat down with Tom Smith, an analyst for Acceleration Economy and Cloud Wars, for an interview. The pair discussed how ERGO is digitizing its business with process mining and execution management, the company’s overall digital transformation journey and the new strategic partnership ERGO and Celonis announced during the show.
READ: Celosphere 2022: Everything you need to know news, product, process mining best practices
The following is a transcript of the interview, edited for readability.
Tom Smith: Tell us a little bit about ERGO, it's not a company that I was familiar with. So I think we may have some viewers who don't know the company either, so maybe you could start out there.
Mark Klein: Yeah, sure. ERGO is an insurance company, a multi liner. So we are active in life, health and P&C [property and casualty] insurance. We are very active in Europe, and we are present in the growth markets of Asia, which is China, India and Thailand. We have a premium volume of 19 billion [euros], and we are a proud Munich Re company.
Tom Smith: Great. Thanks for that. One of the things I find interesting is your position, your title. You are Chief Digital Officer, and you're also Chairman of Digital Ventures for ERGO. Correct? And I'm just curious how Celonis fits into that or with your scope of responsibility, where Celonis fits in there. So maybe you could talk a little bit about your role.
Mark Klein: Maybe I just explain a bit about my role because it's so to say, I have a dual role. On the one hand, I'm responsible for the business that we do as an insurance together with partner. So with Amazon, with Volvo, or with TUI as a travel insurance, these are partners where they go to their customer base and we add an insurance to their offering to make it a better proposition for their customers.
READ: Celosphere 2022 notebook: Process wisdom from Celonis customers
On the other hand, as a Chief Digital Officer, I'm driving the digitalization of ERGO Group, implementing new technologies like robotics, artificial intelligence, phone bots. And here, we basically also did a proof of value together with Celonis already in 2021. And we have seen the power of that technology because it creates transparency of an end-to-end process. So we could see where are elements that we can still digitize, where are elements that we have to leave out, and where we have to change the process. And that really fits into the time, so this is helping us to drive digitalization and to drive customer focus throughout our processes.
Tom Smith: So really a larger digitalization perspective and process mining is a key element of that, along with the other technologies that you talked about.
Mark Klein: Yes. It creates a transparency where to implement robotics, artificial intelligence, or phone bots, so it's really helping us. It's so to say, the starting point of a digital transformation journey.
Tom Smith: Okay. And you mentioned that you did, I think you said proof of concept. Where did you start and can you give a sense of where you are today and number of either processes have the Celonis applied to or how extensively you have it deployed today?
Mark Klein: Yes, sure. We have already in 21, have identified two proof of value. Basically the operation of motor insurance and the claims of motor insurance. This is where we started from to see how does it work, how does it fit into our architecture? And there we have already seen the power of that tool.
Now, as you know, we are living in challenging times. So right now the customer demand is changing big times. They want faster response, faster reaction. So the customer of an insurance company is demanding for digitalization.
READ: Process Mining for ERGO - Welcome to ERGOPoly
And on top, we have the inflation going up. So we will come under pressure from the claim side, as well as from the cost side. That why we decided to drive a project we call digital at scale, where we really set up the whole companies towards more digital customer oriented processes.
At the moment, we have identified 28 processes where we will implement Celonis for the next one and a half years, but more and more are coming and we are aiming to get up to 60, 70 processes in order to really transform our business. And with that, we envision to become more customer centric, more lean, more simple and more cost efficient.
Tom Smith: That's an ambitious agenda. And also today, so you're a customer who's had success. You're expanding your use, and now you're also announced today that you've become a partner with Celonis. Can you talk more about that and the nature of the relationship and how it's evolving?
Mark Klein: Yes, sure. As you've seen, we were in very close contact that we jointly developed the projects together. And then we thought, okay, can we maybe combine our knowledge. We have the processes and the data in the insurance industry and Celonis has the great tools to basically bring that together. And so we decided that we also will develop and innovate together because it's an innovation partnership, we have the possibility to early on, tap into the new innovations that have been announced here at the Celosphere, like the Process Sphere, the business minor or task mining. And we would be early on in the process to implement them. And we basically open up the processes and show the effects it has. And this is a very good combination and I think a very pragmatic collaboration.
Also: Process Sphere™ is a capability of Celonis EMS built on a novel type of process mining technology called object-centric process mining (OCPM).
Tom Smith: And before we started the discussion here, you were sharing with Christine and I, your perspective that when you go to deploy new technology to automate processes and streamline the business, that it's not just about technology. There's a lot of culture at play there and that you have to be really both mindful of that and actively manage it. Can you share maybe a couple lessons you've learned in that way or what the overall thinking is on the importance of culture and having success at this?
Mark Klein: I'm very much convinced that digital transformation is mainly a cultural transformation because at the end, in digital transformation, you don't have the silver bullet, the one thing you do, and then it works. You have multiple initiatives and projects you have to drive. And here you are heavily depending off the know-how of each individual in your organization. You have to achieve that. You create not a push, but a pull from the organization to adopt digital technologies.
And we see that the first thing we have to achieve is that we create transparency. The understanding, what can technology or the technology do, and to demystify it, that people are not afraid, but they see, wow, that is really helping me. And we show and create the value. And here we had the challenge, how do you do that with process mining, with Celonis? So what we did, we developed a game.
We were on the group conference where the 150 top managers of ERGO came together in essence, and we developed ERGOPoly which you can play here on a Celosphere. It's a real board game and the task was to come from the location to the airport. You could hike, you could bike, you could take a taxi, you could take a car. And then we calculated what is your CO2 footprint, how much did you pay and how much time did you spend? And then with Celonis, we made transparent who was the fastest, who had the best CO2 footprint and with real names of our colleagues. And they were standing there saying, wow, I was the fastest, that was great.
And then suddenly we show the tools, what you can do, evaluate, and so on. And people at this session understood what process mining is all about. And they came back and said, well, if I would have the same transparency in my claims process, that would be awesome. And via that, we opened up the organization and we started playing it at the top. And we basically are playing it down the whole organization to show the impact of process mining in a very easy, joyful manner.
Tom Smith: I'm sure that's the first time for that, a customer that built a game around Celonis. Right. And Mark, here at Celosphere, there's obviously been a lot of product announcements. There's been a very big vision painted by Alex Rinke and the executive team. Curious for your feedback on Process Sphere. You mentioned them, but how do you see them fitting into your business? Do you see near-term opportunities?
Mark Klein: Well, first of all, I think the three technologies are really all working in a different manner. With the business minor, I like that the business themselves can use it easily, so you don't have to have the technical expertise. That enables our colleagues to basically play with their technology and explore new opportunities themselves. And that is a great asset and it might even drive even more adoption of the technology in our organizations.
Regarding the Process Sphere, you have to understand larger organizations still live in silos, even though we don't want it, but it comes natural. We have to separate, we have to have the structures as a large corporation, and the Process Sphere will basically overcome the silos because you can connect processes from different departments, different organization, and create a whole picture. How this will turn out in business value, we are going to see, but it has a huge impact in making that fully transparent and better understand that.
Tom Smith: It’s greater transparency across the business. Absolutely.
Mark Klein: Regarding task mining, I'm really expecting a lot of efficiency gains because specifically in areas like finance, the larger process is already pretty automated. You have an integrated ERP system, so a lot is there, but the single task where you copy out of your system into Excel, you start analyzing it, you copy it back, and so on and so forth. These are the things that we could see and really improve with the transparency it creates. So I'm very much looking forward to use our innovation partnership to even get more solutions like this and implement them.
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Editor’s note: This video was originally published on Acceleration Economy, Why Insurer ERGO Group is Co-Creating With Celonis.