Business Execution

The Likely Rise of Execution Management

Blog Business Excellence

I have been observing the domains of process management, enterprise systems, analytics, and AI in business for more years than I care to admit. More recently, I’ve dabbled in process mining technology as well. Unfortunately, these different areas of my research have too often been siloed in different areas of my brain, and I too rarely make connections between them.

So I was pretty enthused to read and hear—in a briefing for their “ecosystem”—that Celonis is moving into the domain of “execution management” in such a way that combines my areas of interest. Celonis is the market leader in process mining, but there is increasing competition in that area, and as I have written, there is only some degree of interest among companies in knowing how badly your processes are performing. I am an advisor to Celonis, so I may be biased—but I do think it’s always a good idea for a company to move to a more ambitious marketspace rather than wait until its existing one becomes inundated with competition and commoditized.

Don’t get me wrong—process mining is a great idea, and it makes undeniable sense that a process-oriented company would use it to understand its “as is” processes based on log data from transactional systems. And Celonis says it will always maintain that capability. However, there simply aren’t enough process-oriented companies in the world. The proportion of them is higher in Europe (and particularly in Germany) than in the US, where companies have often sought heroic transformations rather than disciplined process improvements. Broadening the topic to “execution” probably opens the door to a broader set of customers.

So what does “execution management” actually mean? At a high level, it suggests that a company could use the system to improve its capacity to execute on key business objectives and processes. More tangibly, it means that a system would reach into a variety of transactional systems—ERP, CRM, SCM, HRM/HCM, etc.—and do the following:

  • Monitor how each business process is performing;

  • Identify benchmarks from other companies about how a process should be measured and executed;

  • Identify processes that are not performing at the desired level;

  • Identify problems and issues that are causing bottlenecks in processes;

  • Take actions necessary to close execution gaps—send alerts, assign tasks, connect to the relevant systems;

  • Automate those actions

  • Deliver results in terms of key performance metrics.

That’s a lot of useful capabilities. But why is execution management needed? The relevant problem it solves that has persisted throughout my professional career is that systems are fragmented, and it’s difficult to know how they—and the processes they support—are performing. When I began researching and writing about enterprise systems more than 20 years ago, there was an assumption that big, multi-function enterprise systems would eliminate the fragmentation. That hasn’t happened, however; businesses just keep adding more enterprise systems. So now a layer is needed on top of them to make sense of the data and do something about it.

There are, of course, a lot of different processes and systems to attend to in a big company. I think Celonis is also smart to not try to provide all the tools for execution management itself. It is encouraging its partners to build “execution instruments” that measure execution capacity and identify gaps, and “execution apps” that help decide what actions to take and then take automated actions. Even a rapidly-growing company like Celonis couldn’t build these quickly on its own, and no single company would have the needed domain expertise in every area. Opening up development could help to create an execution management standard.

Of course, a key issue for the execution management idea is whether companies adopt and benefit from it. There’s also an interesting question of where in the organization execution management will take hold. One appealing aspect of execution compared to process management is that execution presumably involves everyone in the company—not just the process leadership. However, at the moment it’s rare for any single executive to own execution; perhaps Chief Operations Officers will take on the responsibility. Companies that already have well-established process ownership will probably have an advantage in execution management.

It will also be interesting to see whether other vendors adopt the idea and if tech market research firms start to cover it. Who knows, maybe some academic will even write a book about it. In general, however, I am optimistic that this concept will take off. Who doesn’t want to improve their execution?

Tom Davenport
Tom Davenport
President's Distinguished Professor of Information Technology, Babson College

Tom Davenport is the President’s Distinguished Professor of Information Technology and Management at Babson College, the co-founder of the International Institute for Analytics, a Fellow of the MIT Initiative for the Digital Economy, and a Senior Advisor to Deloitte Analytics. He has written or edited twenty books and over 250 print or digital articles for Harvard Business Review (HBR), Sloan Management Review, the Financial Times, and many other publications. He earned his Ph.D from Harvard University and has taught at the Harvard Business School, the University of Chicago, the Tuck School of Business, Boston University, and the University of Texas at Austin.

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