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November 30, 2023

Transform Business Operations with Process Mining

Transform Business Operations with Process Mining

The most effective companies we interviewed use process mining to generate operational insights at scale, identify process inefficiencies, define targeted actions, and measure process improvements — all of which lead to value realization. It is often a major cultural change to fully embrace this level of process management. Leaders describe a cultural journey from a hero-focused company to a process-focused company. The goal is to establish efficient processes with consistent, smooth execution rather than relying upon local heroes to save the day.

Process mining has evolved from an academic concept (first published in 2001) to a popular software tool for analyzing, monitoring, and improving process performance. As we have described in a previous article and a book, process mining analyzes logs of enterprise transactional system events to create a detailed picture of the processes, thus providing a digital twin of actual process flows. It is quickly replacing previous observational and subjective approaches to understanding business processes.

Process mining began as a tool used to investigate process performance issues on an ad hoc basis, but has evolved into a platform for monitoring and improving operational process execution at scale to drive process efficiency and help realize business value. As an indisputable, fact-based visualization of de-facto process flows, it provides a unique source of truth to scale operational transformation.

Our research has focused on the business context and critical success factors behind the success of process mining in large organizations. We interviewed process mining leaders in eleven companies. One of us (Lars) has observed many other efforts to scale process mining using Celonis, a leading provider of the technology, in the course of his customer advisory role. There are now many vendors of process mining software, including established firms like Microsoft and SAP, and we have also interviewed customers of other vendors in this research.

The Context for Employing Process Mining

We found two alternative contexts in which companies were applying process mining to their businesses and scaling it over time. One involves companies that have broadly adopted a process orientation across their businesses; the other context is within firms that are attempting to become more process-focused, but have not yet fully done so. Process orientation became somewhat popular with process improvement and reengineering efforts over the last several decades, but many companies have not fully institutionalized a process view of their businesses. Process-oriented firms have clearly-defined end-to-end processes like order-to-cash and procure-to-pay, owners of those processes, and clear goals and performance metrics for them.

Those companies we interviewed with an established process orientation — primarily companies in central Europe — were using process mining to go beyond traditional business process modeling toward mining and improving the actual execution of process-based operations. They use it for generating operational insights at scale, identifying process inefficiencies, defining targeted actions and measuring process improvements — all leading ultimately to value realization.

Companies without a strong process orientation were using process mining to further inculcate the idea of end-to-end processes, motivate better process execution, and to push for less variation and complexity in process flows across the business. Both groups found the technology useful, although process mining leaders in companies without a strong process orientation had to spend more time evangelizing for the technology and recruiting business sponsorship. It is often a major cultural change to fully embrace process management, as evidenced by a large global shipping and logistics company we interviewed. Its process leaders described a cultural journey from a hero-focused company to a process company. The goal is to establish efficient processes with consistent, smooth process execution rather than relying upon local heroes to save the day.

Critical Success Factors for Scaling

There are a variety of possible factors that might drive success in scaling process mining initiatives. Some that we have identified include:

  • Executive buy-in to the idea of process mining and continuous support
  • Business ownership to drive projects within their domains
  • Creating a center of excellence (CoE) — a dedicated team to accelerating process mining
  • Change management, training, and community development of users
  • Connecting process mining to strategic objectives and internal programs
  • An emphasis on business value realization (value-first) from process mining
  • Real-time integration and data access, with connection to feeder systems
  • Operational process execution efforts embedded into ongoing management.

When we discussed these factors with the process mining leaders we interviewed, we asked which ones were most important in their own organizations. The most common response was executive buy-in — recruiting executives sponsors in the first place, securing their ongoing support, and driving adoption of new projects throughout the organization. At the consumer products company Reckitt, the process mining program has been supported right from the start by the CEO, CFO, and CIDO. They not only sponsor the program, but connect it to strategic priorities and managing transformation through measurable KPIs.

Business ownership is a lower-level version of executive buy-in that was also mentioned by several process mining leaders. Business stakeholders or process owners need to understand and support the idea of mining, analyzing, and acting on process performance data, or it will not happen at all or become established into daily practice.

At PepsiCo, business stakeholders view process mining as a key enabler on a mission to create a totally different company, as part of their digital transformation strategy. Merck has a well-defined process for engaging with new business areas with the goal of building ownership. It includes presentation of existing Merck examples as references and discussion of pain points, important pockets of resources, and improvement potentials for that business area.

Several process leaders also mentioned the importance of a strong emphasis on value. Process mining has costs — e.g. for software and organizational support — and it is important in most companies to ensure that the value derived from it is calculated, validated and realized.

Business value focus implies that the most valuable projects are prioritized, leading to a positive business case. At the healthcare company Cardinal Health, for example, there are stated goals for value from process mining each year. The process mining team reports true actual values for each project each month, and the finance organization and the business stakeholder must agree to them. Already in the second year, process mining efforts at Cardinal Health over-delivered on value goals by 2.5X.

Some process mining leaders — who generally head CoEs for the technology — acknowledged that such centers are critical to accelerate adoption. However, they would not be established in the first place without some degree of executive buy-in and a competent team. The candy and pet food giant Mars mentioned that its primary success factor was finding the right talent for process mining — people who are capable of connecting both technology and the business domain. The individuals need to be able to code, build data models, consult, understand requirements, deploy, and support improvement of processes. Not surprisingly, they are difficult to find.

To make process mining a strong driver for operational transformation, it always comes back to people. Change management is a key factor at a pharmaceutical giant in Europe. It has a dedicated process mining community program including bi-weekly all hands calls, internal training sessions for personal development, showcasing best practice success stories, and continuous community activities.

From Insights to Action

The process mining leaders we interviewed agreed that it is important to move beyond insights on how processes are performing — the original intent of process mining — to actions for sustainable improvements. From a software perspective, moving from insights to action involves targeted apps and problem areas for particular types of processes, such as preserving cash in accounts payable or improving cash flow in accounts receivable (both popular in recessionary economies), improving supplier reliability in procurement and building supply chain resilience, or optimizing inventory levels. Many companies also focus on identifying and speeding up slow or low-quality deliveries in order management processes.

From a management perspective, the companies we interviewed took various steps in order to translate insights into action. At the Nordic and Baltic telecom company, Telia Company, a combination of factors helped drive action. Its CoE focused on finding the right part of the business that was curious about process mining and open to trying it.

In many cases, the Telia Chief Operations Officer opened the doors for them. The center staff also worked to identify the right people in that business area to work with them and get them engaged in data-driven process improvement. They consulted with the internal client to identify a process problem they wanted to solve. The ultimate goal was to use the insights from process mining operationally and to drive value on a daily basis.

The Future of Process Mining

In addition to asking process mining leaders what made their organizations successful (and what was less helpful in that regard), we also asked about their future plans for process mining and operational transformation. Some of the companies were focused on using technological innovations; others on fleshing out the organizational infrastructure for process mining.

On the technology front, Mars is focused on determining how advances in automated analytics can make process mining easier to use and scalable across the organization. The goal is to enable a seamless generation of tailored insights and recommendations that drive business value. In a similar vein, several parties want AI to help users identify big improvement levers and support better process execution. BMW is focused on making process mining accessible to almost everyone in the organization, and is currently engaged in training 80,000 employees on digital skills that would enable process mining and other user-initiated activities. Cardinal Health wants to add a focus on task mining and execution management technologies to its basic process mining software. Merck is working on object-centric process mining to achieve a 3D perspective on processes and facilitate cross-silo improvements with a digital process twin.

In terms of organizational development of process mining, several organizations, including the filter manufacturer MANN+HUMMEL, wanted to expand both a user community for process mining as well as a process management organization that can help with improving processes. Ingka (an IKEA retailer) similarly wants to build a community of process mining practitioners and champions. Its process mining leaders envision that the global furniture retailer will eventually enable each country to have its own process mining sandbox to experiment with, and a federated set of process mining CoEs around the globe. Mars wants to establish a federated network of superusers, while Telia aims at enabling citizen developers for process automation. Cardinal Health, which works with a network of pharmaceutical and medical device companies, wants to extend process mining to optimize processes interorganizationally.

These companies provide evidence that process mining is a technology that is here to stay. Multiple vendors now offer it, big companies are building technical and organizational infrastructures to support it, and many companies are getting substantial value from it. Insights are being turned into action, ultimately delivering value in respect to the top, bottom and green line of organizations.

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