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Process mining, the key to next generation process improvement

Written by Rufus Udo Comments 0

Process mining, the key to next generation process improvement

Process mining is an area that not many people have heard of, but is about to hype massively in the next 12 months. Although the concept seems relatively new, some of my close colleagues have been working on this for the past 6 to 7 years. It was until quite recently that the tools supporting the analysis were quite difficult to implement and use. What has changed is that a new generation of tools, developed by software companies like QPR, Celonis, Software AG and others, is now available. Process mining tools currently on the market, are both easy to implement and easy to use, taking away the biggest barrier for companies to use process mining as the foundation of their process improvement efforts. The next couple of paragraphs provide a further explanation of the what, why and how in process mining.

Process mining, what it is

Process mining is in fact a very practical application of big data analytics. To put it in simple words, process mining tools allow to connect with source systems (ERP, CRM, eCommerce, other transaction based systems) and use the base transactional data to visualize business processes and analyze them down to the minutest detail.

Process mining, so what?

The benefits of applying process mining to business improvement efforts are enormous. Think about the following. What if you could:

  • … automatically visualize the process as it really is, instead of doing this in series of workshops, involving lots of people to get a view on what the process looks like in reality?
  • ….have all the facts related to process performance (steps, volumes, processing times, locations, people involved, ….) on the table and use these insights to perform a very detailed analysis?
  • ….instantly benchmark on business process performance comparing business units, countries, locations, products or customers on business process performance?
  • ….spot process bottlenecks and their root causes based on hard facts?
  • ….target and execute process improvements and identify the areas with the highest priority based on facts, without lengthy discussions involving lots of paper and sticky notes?
  • ….monitor the actual results of improvement initiatives (in real time if needed)?

The new generation of tools supports all the above. In fact, the list of “what ifs” could be made quite a lot longer. The summary is however, that process mining makes a lot of what you used to do in business process improvement initiatives obsolete. Moreover, it allows you to focus on the important stuff: defining business improvements and getting them implemented.

Situations where process mining comes into play

Process mining is not something that should stand on its own. Process mining is great if used as an integrated part of an approach to improve business processes. Looking at it this way, process mining can be applied in the following situations:

  • identifying improvement opportunities and gathering facts at the start of a process improvement initiative (including Lean Six Sigma initiatives) or organizational restructuring,
  • baseline measurement before the implementation of a new transactional system (ERP, CRM, ..),
  • validation of business processes (harmonization, compliance, segregation of duties, ..) after the implementation of transactional systems,
  • monitoring value realization after a system implementation, business improvement initiative or organizational restructuring,
  • understanding of improvement potential after a company acquisition.

Although this list is certainly not exhaustive, it gives a good idea of in which situations process mining can be applied successfully. In an era where companies spend significant time on identifying improvement potential and are in many cases in the dark about the ROI of their improvement initiatives, process mining allows you to make discussions concerning value potential or realized value fact based and unambiguous.

Putting process mining in practice

How to get started? Typically, the application of process mining follows these steps:

  1. Understand the purpose of applying process mining and how it fits in an integrated improvement approach
  2. Select the tooling to work with and train the team
  3. Connect tooling selected with backend systems and retrieve data (integrate using standard or custom built connectors or data dump)
  4. Pre-structure data, identify the keys that allow creation of event logs
  5. Preliminary analysis of results and definition of process improvement hypotheses
  6. Detailed analysis of results using selections (location, customer group, item category, order type, …..) to understand root causes
  7. Definition and implementation of process improvements
  8. Measure the effect of implemented process changes and make adjustments where necessary.

Although some of the steps included in this list seem complex, they are not in practice. Much of the technical groundwork is done for you by the tooling, based on selections the user makes. Typically, the process mining tooling can connect with backend systems in a matter of hours where standard connectors exist or days when a customer specific connector needs to be build. The actual analysis for a specific end-to-end process (e.g. Order-to-Cash) can be executed in a number of days, depending on the organizational complexity. The elapsed time and required effort increases when process improvements need to be defined, implemented and measured. The greatest win of applying process mining to business process improvement is that it allows focusing on the things that really matter. 

So can just anyone analyze and improve business processes now?

Analyzing and improving business processes still requires a sufficient level of expertise in e.g. technology (database!), specific business processes, process improvement, change & stakeholder management. Process mining tools do however make business process analysis a lot easier and much more accurate.

We see the following conditions for success:

  • Having the right team, trained to do this type of work,
  • Process mining should be part of an end-to-end business process improvement approach,
  • Process ownership should be clear, especially in larger and more complex organizations,
  • People executing the analysis and improvement initiatives should be mandated (by process owners) to do so,
  • Value measurement and adjusting the plan when necessary to accomplish the projected benefits.

 

Do you want to know more?

The objective of this article is to share some of the findings and experience gathered through years of doing process improvement initiatives and recent applications of process mining at our clients. Obviously, there is a lot more to tell about this. Send me or my colleague Carel Hoytema an email or give one of us a call if you want to know about process mining and how that works in practice.

 

Rufus Udo

Carel Hoytema

rufus.udo@dicitas.com

carel.hoytema@dicitas.com

+31 622.525.392

+31 654.350.673

 

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