Cloud-Powered Clean Core: AI-Driven Transformation with SAP LeanIX, Signavio & Cloud ALM

Executive Summary

In an era where ERP complexity, technical debt, and fragmented processes hinder business transformation, enterprises must embrace a Clean Core strategy to ensure scalability, compliance, and AI readiness.

SAP’s integrated approach, powered by SAP LeanIX, SAP Signavio, and SAP Cloud ALM, offers a structured, data-driven framework to:

1. Eliminate unnecessary customisations to enable seamless upgrades.
2. Optimize workflows through process intelligence and benchmarking.
3. Enforce governance and compliance while reducing operational risk.

The Strategic Framework: SAP’s Three-Pillar Approach

Organizations leveraging this model gain faster innovation cycles, lower IT costs, and enhanced ERP agility, all while ensuring long-term adaptability to AI-driven automation and cloud advancements.

Business Imperative: Why Enterprises Must Act Now

Industry insights underscore the urgency of a Clean Core transition:

• 70% of ERP inefficiencies stem from outdated customizations.
• 30% faster upgrade cycles for businesses with standardized workflows.
• Up to 40% efficiency gains through AI-powered process optimization.

Who Should Read This?

1. CIOs, CTOs, CFOs driving ERP transformation at scale.
2. Enterprise Architects, Solution Architects & Business Process Owners modernizing business operations.
3. SAP Customers strategising for S/4HANA migration and future-proofing ERP landscapes.

Next Steps: The Roadmap to a Clean Core

1. Assess Customization Footprint → Leverage SAP Signavio for process mining.
2. Standardize & Optimize → Use SAP LeanIX to realign with best practices.
3. Implement Governance & Compliance → Deploy SAP Cloud ALM for lifecycle management.

The Path Forward

Enterprises that do not modernize risk higher operational costs, inefficient processes, and reduced agility in AI-driven business environments. Organizations should begin evaluating their ERP landscapes today to ensure long-term scalability and digital transformation success.

1. Introduction: The Business Need for a Clean Core and Process Standardization

What’s at Stake?

In today's fast-paced business environment, enterprises face rising operational inefficiencies, mounting technical debt, and escalating ERP maintenance costs.

• Over-customization leads to higher costs and upgrade complexities.
• AI, cloud ERP, and automation are accelerating the need for a clean, flexible core.

According to various industry reports and SAP’s own research, reducing customisations and standardizing processes can lead to significant improvements in upgrade cycles and TCO. For example, enterprises that adopt a clean core strategy often experience smoother upgrades and enhanced operational agility, benefits that are detailed in SAP’s Clean Core whitepaper.

SAP’s integrated approach, combining SAP LeanIX, SAP Signavio, and SAP Cloud ALM—helps organizations:

• Standardize processes to minimize complexity.
• Eliminate inefficiencies through process intelligence.
• Maintain a clean core, ensuring long-term SAP compliance and agility.

To fully grasp the power of this integrated approach, let’s first explore how each tool plays a unique role in process simplification, standardization, and governance.

2. Understanding SAP’s Integrated Approach: LeanIX, Signavio, and Cloud ALM

How SAP’s Integrated Approach Drives ERP Transformation

Enterprises face increasing pressure to streamline their business processes, reduce technical debt, and enable continuous innovation. To meet these demands, SAP has introduced an integrated approach combining SAP LeanIX, SAP Signavio, and SAP Cloud ALM, each playing a critical role in maintaining a Clean Core strategy while optimizing business operations.

This approach enables organizations to:

• Reduce ERP complexity by eliminating unnecessary customisations.
• Standardize and optimize processes to improve efficiency and agility.
• Ensure continuous governance and upgrade readiness for long-term sustainability.

Overview of the Three Tools & Their Strategic Role

SAP’s integrated approach is designed to simplify, optimize, and govern ERP transformation:

Why This Integrated Approach Matters?

• Many enterprises struggle with ERP bloat excessive customisations, legacy processes, and complex workflows create higher maintenance costs and upgrade risks.
• SAP’s Clean Core strategy aims to eliminate these inefficiencies by integrating tools that focus on standardization, process intelligence, and governance.
• By combining SAP LeanIX, Signavio, and Cloud ALM, businesses gain:

1. A standardized, flexible ERP foundation.
2. Reduced dependency on custom code that complicates upgrades.
3. A governed and AI-ready ERP landscape for digital transformation.

Now that we’ve seen how these three tools work together, let’s start by understanding how SAP LeanIX serves as the foundation for standardization by eliminating unnecessary customisations and aligning processes with best practices.

3. SAP LeanIX: Simplifying and Standardizing Business Processes

The Challenge: Over-Customised and Inefficient ERP Landscapes

Many enterprises have heavily customised ERP systems that have accumulated over years of operations. While custom code and bespoke workflows may have initially met business needs, they often result in:

• High upgrade costs due to system complexity.
• Slow innovation cycles as IT resources focus on maintaining outdated configurations.
• Limited scalability as excessive customization hinders process optimization.

SAP LeanIX plays a pivotal role in reversing this trend by enabling process simplification and standardization, critical components of SAP’s Clean Core strategy.

How SAP LeanIX Drives Process Standardization

SAP LeanIX helps organizations identify and eliminate redundant customisations while aligning with SAP best practices. This ensures:

• Streamlined business processes that follow industry standards.
• Reduced technical debt by eliminating unnecessary code modifications.
• Faster and cost-effective ERP upgrades by keeping the core system clean.

Key Features of SAP LeanIX and Their Business Impact:

Case Study: How SAP LeanIX Helped Standardize ERP for a Global Enterprise

Company: Travis Perkins (UK-based building materials supplier)

Challenge: The company had fragmented ERP landscapes with multiple customised workflows that made upgrades and process automation difficult.

Solution: By using SAP LeanIX, they:

1. Reduced redundant configurations and aligned with SAP best practices.
2. Improved process visibility across multiple departments.
3. Accelerated digital transformation with a clean, standardized core.

Learn more about their success story: LeanIX Customer Case Study

Why Process Standardization Matters?

Industry studies show that organizations with a highly standardized ERP landscape:

• Reduce maintenance costs by up to 30%.
• Accelerate upgrade cycles by 50% compared to heavily customised environments.
• Improve ERP system performance and scalability, enabling AI-driven automation.

By adopting SAP LeanIX, enterprises can modernize their ERP systems, lower costs, and ensure upgrade readiness, all while maintaining the agility needed to innovate.

While SAP LeanIX focuses on eliminating unnecessary customisations, SAP Signavio takes this a step further by leveraging data-driven insights to optimize and refine business processes.Let’s explore how SAP Signavio enhances ERP process intelligence.

4. SAP Signavio: From Process Insights to Transformation

The Challenge: Process Inefficiencies and Lack of Visibility

Many organizations struggle with hidden inefficiencies in their business processes. Without clear visibility into how workflows operate across departments, companies often experience:

• Process bottlenecks that slow down operations.
• Redundant workflows leading to inefficiencies.
• Compliance risks due to a lack of standardization.

Solution? SAP Signavio enables organizations to analyse, model, and optimize business processes with data-driven insights—leading to greater efficiency, compliance, and agility.

How SAP Signavio Drives Process Intelligence

SAP Signavio provides end-to-end visibility into how processes function, enabling organizations to streamline operations, eliminate inefficiencies, and align with industry best practices.

Key Features of SAP Signavio and Their Business Impact:

Case Study: How SAP Signavio Helped a Global Enterprise Improve Process Efficiency

Company: KWS Group (One of the world’s largest plant breeding companies)

Challenge:

• Lack of process visibility across global operations.
• Inconsistent business workflows, leading to inefficiencies.
• Difficulty in ensuring compliance across multiple regions.

Solution with SAP Signavio:

• Implemented process mining to identify bottlenecks in key operations.
• Used process benchmarking to standardize workflows globally.
• Improved compliance tracking, ensuring alignment with regulatory requirements.

Learn more about their success story: KWS SAP Signavio Case Study

Why Process Intelligence Matters for SAP Clean Core Strategy?

According to process intelligence studies:

• 80% of business inefficiencies are hidden in undocumented workflows.
• Organizations that leverage process mining improve operational efficiency by up to 30%.
• Companies that standardize processes experience a 40% reduction in compliance risks.

SAP Signavio allows organizations to:

1. Gain real-time visibility into how processes function.
2. Eliminate inefficiencies before they impact performance.
3. Ensure compliance and standardization as part of their SAP Clean Core strategy.

After optimizing processes with SAP Signavio, organizations need a governance mechanism to ensure ongoing compliance, manage upgrades, and maintain an agile ERP. This is where SAP Cloud ALM comes in.

5. SAP Cloud ALM: Ensuring Continuous Compliance and Operational Excellence

The Challenge: Managing ERP Complexity, Compliance, and Upgrades

For enterprises undergoing ERP modernisation, ensuring compliance, system stability, and upgrade readiness is a major challenge. Without an effective governance and lifecycle management system, businesses face:

• Manual and time-consuming compliance tracking, increasing regulatory risks.
• Unstructured upgrade processes, leading to costly disruptions.
• Lack of visibility into system performance, making issue resolution reactive instead of proactive.

Solution? SAP Cloud ALM (Application Lifecycle Management) provides a centralized governance, monitoring, and compliance framework that ensures businesses can manage their ERP landscapes efficiently while maintaining a Clean Core strategy.

How SAP Cloud ALM Enables Enterprise Governance and ERP Agility

SAP Cloud ALM plays a critical role in ensuring that organizations manage, monitor, and sustain ERP operations without disruptions. It helps enterprises:

• Accelerate upgrade readiness with structured lifecycle management.
• Ensure compliance by automating governance and audit tracking.
• Optimize system performance through real-time monitoring.

Key Features of SAP Cloud ALM and Their Business Impact:

Industry Trends Supporting SAP Cloud ALM Adoption

According to industry benchmarks and SAP insights:

• Organizations that automate governance reduce compliance costs by up to 40%.
• Companies that leverage proactive system monitoring decrease ERP downtime by 30%.
• Businesses that implement structured upgrade readiness strategies cut migration costs by 25%.

SAP Cloud ALM ensures that enterprises:

• Maintain a stable and compliant ERP landscape with minimal manual effort.
• Reduce upgrade risks by streamlining system lifecycle management.
• Ensure long-term agility and innovation by keeping their core system optimized.

Learn more about SAP Cloud ALM’s real-world impact: SAP Cloud ALM Overview

Now that we’ve explored how SAP LeanIX, Signavio, and Cloud ALM work together, let’s examine the common challenges enterprises face in adopting a Clean Core strategy and how they can overcome these roadblocks.

6. Overcoming Roadblocks to a Clean Core

The Challenge: Why Enterprises Struggle with ERP Standardization

Despite the clear benefits of SAP’s Clean Core strategy, many enterprises face internal resistance and operational challenges when transitioning to a standardized, well-governed ERP system. Common roadblocks include:

• Resistance to Standardization – Business units fear that removing customisations will hinder operations.
• High Cost of Transformation – Concerns over the financial and resource investment required.
• Customization Dependency – Longstanding custom workflows that companies believe are critical to their success.

Solution? SAP LeanIX, SAP Signavio, and SAP Cloud ALM provide a structured, data-driven approach to overcoming these challenges by enabling fact-based decision-making, process standardization, and automated governance.

How to Address Common ERP Transformation Challenges

Decision-makers need a clear, structured approach to tackling these challenges. Below is a roadmap to overcoming the most common Clean Core adoption barriers.

Breakdown of Common ERP Transformation Challenges & Solutions

Enterprise Reality Check:

• 70% of enterprise IT teams overestimate the necessity of custom workflows.
• Organizations that standardize see 30% faster upgrade cycles and lower operational risks.
• SAP’s phased transformation model ensures minimal disruption while optimizing costs.

A Phased Approach to Clean Core Adoption

• Phase 1: Process Discovery

1. Use SAP Signavio Process Mining to identify redundant customisations.
2. Benchmark against SAP best practices to assess areas for standardization.

• Phase 2: Standardization & Optimization

1. Implement SAP LeanIX to align business workflows with SAP’s Clean Core model.
2. Retain only mission-critical customisations while standardizing other processes.

• Phase 3: Governance & Lifecycle Management

1. Deploy SAP Cloud ALM to maintain ongoing compliance and manage upgrades.
2. Ensure real-time monitoring of system performance to prevent regression.

Why This Matters: Long-Term Benefits of a Clean Core Strategy

Industry leaders who adopt a structured Clean Core approach experience:

• Faster time-to-value for ERP modernisation initiatives.
• Reduced complexity and lower operational costs for IT teams.
• Seamless cloud and AI integration by keeping their ERP agile.

Now that we’ve addressed the challenges of ERP transformation, let’s explore what the future holds for enterprises that embrace a Clean Core strategy and how they can scale their ERP landscapes for continuous innovation.

7. Future Outlook: Scaling with SAP’s Clean Core Philosophy

The Evolving Role of Clean Core in Enterprise Transformation

As digital transformation accelerates, enterprises are moving beyond traditional ERP optimization. The next phase of ERP evolution integrates AI, automation, blockchain, and cloud-driven innovation, making the Clean Core approach essential for long-term scalability.

Emerging Trends That Will Shape SAP Led Business Transformation:

?AI-Driven ERP Automation:

• Predictive analytics and AI-powered decision-making will optimize supply chain, finance, and HR processes.
• SAP’s AI-infused ERP solutions will further enhance business agility.

?Blockchain for Compliance & Auditability:

• Enterprises will increasingly adopt blockchain technology to track transactions, improve security, and ensure transparent audit trails.
• SAP Cloud ALM and Signavio will play a role in managing compliance and regulatory reporting.

?Next-Gen ERP Customization Strategies (Low-Code/No-Code):

• SAP’s Business Technology Platform (BTP) will enable enterprises to build custom extensions while keeping their ERP core clean.
• Low-code/no-code development will reduce customization dependencies, enabling business users to innovate without altering core ERP processes.

How Enterprises Can Prepare for the Future

?Adopt a Continuous Improvement Mindset:

• ERP transformation isn’t a one-time project; it requires ongoing process optimization and governance.
• SAP Signavio’s benchmarking tools can help businesses continuously refine workflows.

? Invest in AI-Enabled ERP & Data Analytics:

• AI-driven SAP S/4HANA analytics will improve forecasting, business intelligence, and risk mitigation.
• Enterprises must adopt AI-ready data architectures to ensure long-term competitiveness.

? Embrace Cloud-Native Governance for Sustainable Growth:

• SAP Cloud ALM will be a core enabler of automated compliance, upgrade readiness, and system health monitoring.
• Cloud-based governance will ensure seamless ERP scalability across global operations.

Why Scaling with a Clean Core Strategy is Essential

Research-backed insights highlight the urgency of Clean Core adoption:

• 65% of enterprises moving to SAP S/4HANA see standardization as a top priority.
• Companies with AI-enabled ERP achieve 20% faster decision-making cycles than competitors.
• Enterprises that minimize custom code dependencies experience 35% lower IT maintenance costs.

The Clean Core strategy isn’t just about simplification, it’s about future-proofing ERP landscapes for intelligent automation, AI, and next-gen business models.

As we move forward, let's address some of the most common questions enterprises have about Clean Core transformation, SAP LeanIX, SAP Signavio, and SAP Cloud ALM. The following FAQ section clarifies key concerns, implementation challenges, and strategic benefits before we conclude with final takeaways.

8. Frequently Asked Questions (FAQs)

1. What is the SAP Clean Core strategy, and why is it important?

SAP’s Clean Core strategy focuses on reducing custom code, process inefficiencies, and upgrade complexity by aligning with SAP best practices. This ensures long-term agility, lower TCO, and seamless ERP innovation.

2. How does SAP LeanIX help in standardizing business processes?

SAP LeanIX identifies and eliminates redundant customisations, aligning business workflows with SAP-recommended best practices. This minimizes complexity and improves upgrade readiness.

3. What role does SAP Signavio play in process optimization?

SAP Signavio enables process mining, benchmarking, and workflow modeling, allowing businesses to identify inefficiencies and optimize operations before full-scale transformation.

4. How does SAP Cloud ALM contribute to ERP governance and lifecycle management?

SAP Cloud ALM ensures compliance, monitoring, and upgrade governance, allowing enterprises to track system health, automate updates, and manage transformation projects efficiently.

5. What are the key benefits of adopting SAP’s integrated approach (LeanIX, Signavio, Cloud ALM)?

• Process Standardization – Eliminates inefficiencies
• Operational Agility – Faster digital transformation
• Lower TCO – Reduces technical debt & maintenance costs
• Future-Proofing – Ensures ERP is AI-ready & cloud-optimized

6. Will transitioning to a Clean Core affect ongoing business operations?

SAP’s Clean Core approach does not require a disruptive "big-bang" implementation. Businesses can adopt a phased strategy using SAP LeanIX and Signavio before implementing Cloud ALM for governance.

7. How does SAP LeanIX help with reducing custom code and technical debt?

SAP LeanIX analyzes existing customisations vs. SAP standard processes, providing insights on which custom elements can be eliminated or optimized to reduce complexity and lower total cost of ownership (TCO).

8. Can SAP Cloud ALM help in regulatory compliance?

Yes, SAP Cloud ALM tracks compliance metrics, manages system configurations, and automates audit trails, helping enterprises adhere to industry regulations with minimal manual effort.

9. How does SAP’s integrated approach accelerate SAP S/4HANA adoption?

By standardizing workflows (LeanIX), optimizing processes (Signavio), and managing upgrades (Cloud ALM), enterprises can transition to SAP S/4HANA more efficiently, with fewer disruptions and lower costs.

10. What industries benefit the most from SAP’s Clean Core strategy?

Industries with complex workflows and compliance requirements, such as manufacturing, retail, financial services, healthcare, and energy, benefit significantly from a streamlined, well-governed ERP system.

11. What are the first steps to begin Clean Core transformation?

Step 1: Assess customization footprint with SAP Signavio

Step 2: Standardize & optimize processes with SAP LeanIX

Step 3: Implement & sustain governance with SAP Cloud ALM

9. Conclusion

The journey toward a Clean Core transformation is critical for businesses looking to reduce technical debt, streamline ERP processes, and future-proof their digital landscapes.

By leveraging SAP LeanIX, SAP Signavio, and SAP Cloud ALM, organizations can unlock:

• ERP Complexity: Reducing customisations and standardizing processes are crucial for smoother upgrades and lower TCO.
• Integrated Approach: SAP LeanIX, SAP Signavio, and SAP Cloud ALM work together to provide a comprehensive clean core strategy.
• Actionable Steps: Assess, standardize, and govern your ERP using SAP’s tools to drive digital transformation.
• Future-Ready: Embrace emerging trends like AI and blockchain to stay ahead of the competition.

Next Steps: Start Your Clean Core Journey Today

? Assess Customization Footprint:

• Use SAP Signavio Process Mining to analyse inefficiencies and identify redundant workflows.

? Build a Standardization Roadmap:

• Deploy SAP LeanIX to eliminate unnecessary custom code and align with SAP best practices.

? Implement Governance & Lifecycle Management:

• Use SAP Cloud ALM to maintain system health, automate compliance, and enable smooth upgrades.

Businesses that delay ERP transformation risk falling behind their competitors. Act now to standardize, optimize, and govern your ERP with SAP LeanIX, SAP Signavio, and SAP Cloud ALM. How is your organization tackling ERP complexity?

Call to Action: Start Your Clean Core Journey Today

Are you ready to future-proof your ERP? Connect with SAP experts or send me a dm today to begin your Clean Core transformation journey.

Disclaimer

1. General Information Disclaimer

This blog is intended for informational and educational purposes only. The content reflects professional insights into SAP LeanIX, SAP Signavio, and SAP Cloud ALM as strategic tools for enterprise ERP transformation. It does not constitute official SAP guidance, financial advice, legal recommendations, or any form of contractual obligation. Readers should conduct their own due diligence and consult with certified SAP professionals or enterprise architects before implementing any strategies discussed herein.

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The mention of SAP LeanIX, SAP Signavio, and SAP Cloud ALM in this blog does not imply an official endorsement, sponsorship, or partnership between the author, the author's employer, or any third-party organization, including SAP SE. While every effort has been made to ensure the accuracy and relevance of the content at the time of publication, no warranty, express or implied, is provided regarding the completeness, reliability, or applicability of the information. The author and publisher accept no responsibility for errors, omissions, or future changes to SAP products and services that may impact the applicability of the content.

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The case studies and business scenarios referenced in this blog are included to illustrate potential use cases and transformation strategies that organizations may consider when adopting SAP LeanIX, SAP Signavio, and SAP Cloud ALM. These examples do not constitute a guarantee of results, nor do they reflect the actual implementation experiences of every enterprise. Enterprise transformation outcomes will vary based on industry, company size, data maturity, process complexity, and specific business objectives. Readers are encouraged to assess their unique requirements before making any technology or process decisions.

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