Alex Rinke, co-founder and co-CEO at Celonis, says that, “Companies are leaving 10-20% of their margin on the table due to inefficient processes,” but by using Process Mining, he says, companies can discover hidden issues most companies only learn if their customers tell them. Celonis offers this new sub-set category of Big Data Mining as a new kind of Big Data Analytics.
“We consider Process Mining a new category and consider ourselves a leader in it. That’s the mission we’re on now, educating the market,” he said.
According to the Celonis:
“The Celonis Proactive Insights Engine (Pi) acts as an automated advisor that gives full, unbiased visibility into all business processes and uncovers hidden inefficiencies while providing prescriptive recommendations on how to fix them in real time.”
What is Process Mining?
Process Mining examines the flow of work in any automated business process from beginning to end in order to find places where money can be saved or work can flow more efficiently. By adding Machine Learning and Predictive Analytics, Rinke says Celonis can predict how much you can save by becoming more efficient. It’s also possible to set a target and work backwards through your process to make that a reality.
Using a suite of four products, Celonis enhances the concept of Data Mining with Machine Learning and Predictive Analytics. Rinke says the process is flexible enough to work with about 60 existing enterprise IT systems as well as legacy systems, where they typically use a partner company for implementation. “The only requirement is that a customer is using IT systems to manage their business processes,” he said. “Our software goes out to the IT system and pulls the records – the footprints – for every step of the process,” allowing companies to shine a light on where things are working – and where they’re not – and that means profit, he said.
“A lot of people spend a lot of money on their Business Process Management tools and they build out Business Process Models, but they don’t actually measure the effectiveness of that business process in the real world where it’s actually running. They don’t validate that people are doing it correctly, or that everyone’s compliant with the process. That’s what we help do,” Rinke said.
When a company wants to analyze their business processes, they typically hire an outside consultant, he says, who talks with operations teams, collecting data and putting it into context for recommendations. Hiring a consultant can be costly, and lost time from operations teams can impact productivity.
Often the entire process takes months of analysis to provide recommendations, some of which are already outdated by the time they’re presented. Rinke said,
“What we do is different. We actually connect Celonis up to all your IT systems where your business processes run, and we discover the actual processes. We don’t take your word for it; we actually build the reality view, pulling the data from your various systems.”
Saving Time and Money
“Our automated analytics uncover insights that used to take several months and hundreds of thousands of dollars for consultants to uncover. And unlike traditional analytics, we explain why processes are broken and how to fix them.”
He likens it to giving corporate data “a full body scan and unbiased analysis” in real time, “to solve the problems customers did not even know they should be looking for, while traditional tools merely address the questions fed to them.”
Rinkeused an example of a manufacturing company wanting to understand and eliminate delays in shipping. Delays could be caused by vendor out-of-stocks, or it’s possible that, “You’re ordering parts too soon or too late, and creating bottlenecks and issues in the supply chain, which increases your inventory costs.” The cause could also be operational, he said, “due to people having to do a lot of unnecessary tasks.”
The analysis process can also be done in reverse, so that companies who want to guarantee a maximum turnaround time for orders for example, can understand what part of their process would have to change in order to make that guarantee – or if it is indeed possible at all.
“Process Mining is an incredibly powerful tool to be able to focus in on what your purchasing process should look like,” he said. “Decide the outcome you want and the mining process can tell you how it can be done.” If a company wants orders to arrive on time 99% of the time, Rinke said, “We can tell you what your ordering process should look like. We’re learning from the past and making recommendations for the future.”
Rinke introduced the four components that Celonis uses to expand on the concept of Process Mining:
- Pi Conformance compares actual operations to the ways that processes were designed to occur (conformance checking), automatically identifies the highest priority issues, and can then drill down to their root causes so users can take immediate action to address shortcomings in KPIs.
- pi Social provides a deep understanding of the human aspect of business operations and identifies which teams have the best outcomes, as well as which interactions result in lost time or bottlenecks. It also discovers where inefficiencies in an organization’s structure call for improvement, for example, highlighting which teams work best together, or if a manager is overloaded, and other staff are underutilized.
- Pi Companion identifies potential issues before they happen, and allows users to make the right decisions during process execution rather than after a problem arises. For example, Rinke said that it is possible to drill down into vendor on-time delivery records when creating a purchase order for parts, anticipate delays, or change vendors within the purchase order process to ensure on time conformance.
- Pi Machine makes predictions about an organization’s future so that processes can be adjusted to meet business KPIs by using historical data, with the understanding that a process that works today must evolve to keep up.
Seeing the factors that are affecting your outcome is a powerful tool, says Rinke. Rebecca Wettemann, Vice President of leading technology market research firm Nucleus Research concurs:
“Celonis is pioneering a sub-set category of Big Data mining – Process Mining, a new kind of Big Data Analytics that has the potential to be more impactful than anything we have seen to date in this sector. Enterprise customers are hungry for greater operational transparency so they can adapt processes to take advantage of new opportunities – but they don’t always have the time or resources to do a deep dive into their operations. By automating operational excellence, they eliminate a huge distraction and can focus on innovation to drive future growth.”
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