Digital transformation is impossible unless you understand your business processes. Poorly designed or outdated business processes cost organizations money — in lost customers, missed opportunities and wasted time — daily. Historically, it’s been practically impossible to learn precisely how a business process is performing. It has been a matter of educated guesswork — a reading of the digital tea leaves to gather insights to act on.
As the pace of work increases and customer expectations rise, that’s no longer good enough. Over the past decade, a category of process automation tools has emerged that can provide real-time data and insights into how automated processes are performing. It’s called process mining.
Process mining allows companies to use their data to identify flaws and bottlenecks in their business processes and fix or remove them.
Process mining allows companies to use their data to identify flaws and bottlenecks in their business processes and fix or remove them.
What’s the Basic Problem? Understanding Old Workflows Is Difficult (at Least)
Many processes were designed over a decade ago. They are built on legacy products (sometimes home grown) and are breaking under the strain of customer experience expectations. Modernization is needed, but understanding old workflows is hindered by:
• Lack of documentation and/or the staff who developed them
• There’s limited (at best) visibility into how items flow
This means companies are flying blind as they attempt to optimize and modernize their processes. If you don’t know where you are, then it’s hard to navigate to where you want to be.
Understanding the “as-is” state of processes is, bluntly, a time-consuming, costly, error-prone pain. Generally, a small army of consultants will attempt to map existing processes from the outside looking in — interviewing users, reviewing process maps, etc.
Process mining provides an inside-out view of a company’s process data. By identifying and analyzing event data, companies no longer have to guess where their process bottlenecks are. The areas of process improvement enabled by this technology is any automated business process such as: purchase-to-pay, order-to-cash, customer service, accounts payable, accounts receivable, procurement, order management and inventory management.
What Are the Benefits?
Without knowing how processes are working, companies encounter process execution problems. Readers of DOCUMENT Strategy will be familiar with the need to automate manual processes with digitization tools. Yet as pointed out previously, roadblocks and bottlenecks continue to exist which create inefficiencies in these processes.
Let’s take one of the most commonly discussed “low-hanging fruits” for automating a manual process: accounts payable. Automating this business process continues to be a focus for many capture companies. Vendors such as Ephesoft, ABBYY, Kofax, Hyland and others have invoice processing solutions (often cloud-based) to simplify this process for companies.
Research from Celonis, a process mining software provider, places an estimated dollar amount on having an “average” process here. The 2021 State of Business Execution Benchmarks Report makes a few assumptions regarding the average size of a business:
• Revenue: $5B
• Average order price: $1,500
• Sales orders: 3,333,333
• Purchase orders: 3,000,000
• Total supplier spend: $2.4B
The research pointed to savings for other processes as well, but sticking to accounts payable: Eliminating the execution gap between days payable outstanding in benchmark companies (48.4 days) and top performing companies (74.5 days) would free up $171,616,438 in working capital. Obviously, these numbers are skewed towards Celonis’ target market. The benefits of process mining also scale down, so you don’t need to be a $5 billion company to benefit from process mining.
At Doculabs, we find that these five benefits can help any business, regardless of industry.
1. Diagnose the effectiveness of a process to determine whether to move a process “as-is” or re-engineer
a. How much variation do you have in your processes? Where are the dependencies? At what point do latencies occur? Are there unused nodes and queues?
2. Find identical or similar processes as candidates for consolidation
a. Look at a side-by-side comparison of item-type/sub-type processes in the content management system.
3. Auto-generate BPMN process maps for existing workflows
a. Visualize and understand the current state of workflows. For processes that can be migrated as-is, BPMN models can be imported into a target workflow system (such as Pega, Appian or Camunda) to generate executable code.
4. Compare old and new processes to determine the resulting impact on cost and value
a. By using standard rates for touches and tasks, business units can conduct comparisons of processes in both the old and new systems early in their migrations to assist with multi-year budget forecasting.
5. Accelerate compliance sign-off on migrated processes
a. Processes can be compared to standardized “templates” (within a prebuilt library) for conformance. With visual comparisons, compliance departments can more effectively sign-off on migrations.
Process Mining Vendors
The process mining marketing continues to grow with vendors entering the market from a number of directions. Celonis (Celonis Process Mining) is one of the first vendors to offer process mining and arguably pioneered the entire product category. RPA vendors like UiPath (UiPath Process Mining) have entered the market. Capture vendor ABBYY (Timeline) also has a process mining tool as the capture market and process market continue to slowly come together.
Forrester, Gartner and Everest Group each track the market via their respective quadrent, waves and peaks. All of them predict continued growth in the market and business benefits for companies that take advantage of this technology.
Don’t Wait – Act
For a technology that can deliver such wide-ranging benefits, getting started is fairly simple. Process mining tools sit on top of your existing processes and pull the data into a dashboard for viewing and analysis.
Companies already have the data, ready and available to be analyzed. A proof of concept nearly always points the way to process improvements that will improve customer service, save money or reveal other opportunities for more efficient business processes.
