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BPM: The value of process mining

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Choosing a sequence

The potential for high-impact benefits means that organizations often want to mine a large number of processes when they start out. However, it’s better to be selective at first and then scale quickly, according to Sam Attias, director of product marketing at Celonis, which provides process mining and execution management software products. “The best approach is to align with key transformative initiatives such as shared services, or supply chain transformations,” he said. Hexion, a manufacturer of specialty chemicals, selected several that had dramatic results, including financial transactions and supply chain enhancements.

The first process the company deployed Celonis for was order-to-cash, a complex core process that begins with a customer order and ends with payment. Through process mining, Hexion discovered that its master data contained incorrect delivery routes. Once the master data was corrected, route changes were reduced by 45%, saving delivery time and costs. Another issue that previously did not have visibility was unearned cash discounts; i.e., discounts the customer was entitled to for paying invoices early. Once aware of the problem, Hexion began educating clients as to their payment terms, and in just six months, payouts for unearned cash discounts were reduced by 50%.

In the past, a consultancy would watch people at their desks, take notes, conduct interviews, and produce a large report, but all too often the recommendations were not implemented. “It took so long to conduct the evaluation, by the time it was done, circumstances had changed,” said Attias. Although insights can be gained by simple metrics such as comparing an organization’s throughput time for pro- curement to those of industry averages, this type of metric does not provide insights into the root cause of the delay. “Celonis looks at specific activities and at deviation around the standard process path,” continued Attias. “For example, there may be cases where ‘maverick buying’ occurs, where a person buys goods without going via procurement.”

The digital footprint obtained by analyzing event logs is objective, and obtained quickly. “Companies can get value within a matter of weeks,” Attias explained. After an issue is identified, Celonis can also make suggestions as to how to improve the process. “We have built a knowledge layer on top of the platform,” he noted, “which includes advanced intelligence and machine learning based on past experience so that the customer can quickly use a pre-built automation to make the improvement.” Celonis also takes advantage of other technologies such as process simulation, conformance checking, and benchmarking. The execution management system is designed to improve the process using a built-in automation capability. “We can let the organization know what the fix is, and then can proceed using automation to carry out that fix,” concluded Attias.

Process mining is powerful

Hexion now plans to use Celonis across all its processes, implementing it over time. Process mining also has provided greater insight into the impact of one change on adjacent processes. For example, the order management process also impacted production planning and procurement, but until Hexion began using Celonis, the company did not have visibility into these interdependencies. The next step for Hexion will be to predict possible adverse outcomes and correct them proactively.

Process mining is not considered a subset of the BPM market but rather an additional one. Market researchers differ dramatically on its current size, with some estimates being double the size of others. However, researchers are consistent in predicting annual growth rates of about 50% over the next 7 years, with market values reaching $6–$15 billion. Not only do organizations want to understand and improve their processes, but they also want to be able to document their processes for the purpose of audits and compliance. As enterprise applications and processes proliferate, the challenges of meeting these goals will only increase, and process mining is a powerful enabling technology.

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