What is process mining and how does it increase productivity and business outcomes
According to a study made by NTT DATA, more than $200 billion are lost every year at a global level due to process inefficiencies. Inefficiencies are caused by many reasons, from a lack of management to manual reviews which are timely, costly and susceptible to human error. Increasing the bottom-line is impossible without efficiently optimized business processes.
Such concerns can become a thing of the past. Process mining automatically maps out, reviews and optimizes processes, leaving no room for error. It does this through advanced algorithms that interpret the data collected from the day-to-day running of the business, transform it into a process map and improve upon it. So process mining systems can work alongside operational systems for constant monitoring and refining.
After a business’s operations are accurately mapped, automatically analyzed and actively improved, process costs can lower by up to 20%.
Why should companies invest in process mining?
To succeed in today’s market, businesses need to be in a constant state of improvement, always looking for new ways to increase efficiency and performance. Otherwise, they’ll be left behind. However, implementing the transformation required to improve processes can be challenging because there is often a lack of direction in terms of where to start, what to do and how to follow through to ensure a successful transformation. But can process mining fix this?
The problems with traditional methods
Process transformations are often undermined because there isn’t enough confidence to make clear decisions. Without specific expertise in enacting change in process transformation, uncertainty prevails. Often the focus is put incorrectly on the technology instead of empowering the people that the success of the whole organization relies on. Exacerbating the situation is that the wider organization struggles to buy into the changes being made because of the lack of confidence and clear direction.
While taking a non-digitized approach to reviewing processes is more familiar such as workshops and people-led reviews, this approach is no longer fit for purpose. These reviews don’t allow for the collection of real-time data insights which would in turn empower quick decision-making. Instead, reviewers report what they believe is happening, then explain and redefine processes as they feel the process is without basing their decisions on data, but rather on their beliefs. This oftentimes proves very wrong. Business processes aren’t executed “by the book” in reality, but as users see best. Therefore many times consultants redesign processes that do not really exist.
The potential of process mining
Digital transformation and operational success determined by process mining create a very different situation for organizations looking to achieve optimal outcomes. The whole review is conducted automatically for the accurate and up-to-date mapping of current processes, analysis, optimization and then monitoring and managing the results. This means that the business will be in a constant state of improvement thanks to technology-driven automation. Investment in improvement is essential to continued growth and success in a fast-paced environment. Therefore, process mining generates operational success.
Process mining solves the issues faced in process transformation previously. It creates a clear starting point for transformation based on informed insights. It calculates a clear direction for the organization which can be used as a guide for all to follow, encouraging collaboration that will bring the improved operations to life. The transformation can happen much quicker as it speeds up the generations of insights, recommendations, actions and improvements as well as accelerating action-taking through the integration of separate areas, systems and processes.
There is a lot more confidence in the transformations taking place within the business because there is centralized process knowledge that doesn’t rely on individuals and is consolidated across the board, creating harmonization and simplification. Such interconnectedness also equips the business for mergers and acquisitions.
Alongside general optimization of processes, process mining can also be used for targeted reviews and improvements. Process mining can be conducted to address particular process areas such as Procure to Pay (P2P), Order to Cash (O2C), manufacturing, replenishment of stores or customer service. It can also be used for the purpose of one or more of the following: customer excellence, cost reduction, automation of manual activities or governance, risk, and compliance.
The transformation can be implemented through SAP solutions, SAP S/4HANA and LoB, as a digital foundation for the end-to-end processes that take place across multiple systems.
Process mining in practice
As a Trusted Global Innovator and Platinum SAP partner, we have implemented S/4HANA to achieve process optimization for our clients. As a demonstration of the transformative potential of process mining, this is the success story of one of our clients.
The business we worked with in this case desperately needed process mining because of their extensive business operations. They needed advanced optimization capabilities as a global distribution company making 208+ billion in revenue across their 3 business divisions, processing 1.5 million transactions per day and generating 1.5 TB+ data growth per month. Finding the backlogs, blind spots and areas for improvement in such an extensive system of processes could only efficiently be achieved through an advanced tool like S/4HANA.
First, we needed to determine the current system of processes in the organization and capture the process flows and variants. After mapping the operations across the 3 business divisions, we could identify processes to harmonize and areas for optimization.
Our solution involved deploying tools for the analysis of 13,000+ customization objects. We performed disposition analysis and identified the path for custom objects by business process. Then we deployed a SAP compliant tool and built custom transformations for all the activities and developed process maps. After developing the process maps, we were able to identify similarities and dissimilarities across processes and come up with KPIs for process optimization to create the path for process harmonization.
Consequently, we set them up for continued operational success with S/4HANA. We identified areas for harmonization and optimization with KPIs to measure improvement and a roadmap for using S/4HANA to achieve their next level of success.
Businesses can’t afford to have their processes holding them back from operational efficiency and optimal performance in the highly competitive market of today. Instead, they need to engage in constantly refining what they are doing and how they are doing it. Such detailed and fast-paced analysis is best conducted through process mining powered by S/4HANA because it automatically measures, maps, analyzes and optimizes. NTT DATA helps you to forge your path to optimal processing and optimal results.
Sebastian Gueler, Vice President Global SAP Practice Leader