How does process mining work?
Business processes are the lifeblood of a company. There’s a process behind everything an organization does: buying, selling, paying, collecting, shipping, and so on. When these processes run better, your business runs better.
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Why companies need process mining
More and more, industry leaders are realizing that superior processes are a competitive differentiator. So it’s no surprise that investments in process improvement tools and initiatives are skyrocketing. This is especially true for process mining technology, which has grown from a $90 million market in 2018 to a $340 million one in 2020, according to the Everest Group.
Process mining creates an “X-ray” of a business process that helps you gain visibility and identify inefficiencies in core operations. Process mining tools have quickly become the backbone of many companies’ efforts to streamline and optimize processes.
But how does process mining work?
Since the rise of databases and transactional systems like ERPs, companies have invested in digitizing processes and optimizing them to run more efficiently.
And yet, most companies’ processes aren’t performing to their full potential. Just look at the average process performance against best-in-class benchmarks:
These four processes are very different — as are the systems, data, and people behind them. But they have one thing in common: the way these processes are executed has a direct impact on critical business outcomes. When these processes run efficiently, goods get to customers on time, orders are processed faster, operational costs are minimized, and working capital gets freed up.
In most cases, companies have outlined the way that these processes should run in an ideal world. But the way they actually run in the real world... can be a very different story.
The problem is many organizations aren’t able to see and understand what’s happening in these processes on a day-to-day basis, so they can’t identify the difference between the process “as is” and “as expected.”
And as they say, you can’t fix what you can’t see.
Process mining step-by-step
Modern business processes are incredibly complex. They run across a variety of systems that use different types of data, have different users, and belong to different departments.
Most process mining tools provide a few different methods for getting this data from the underlying systems. In its most basic form, a user can simply export an event log from a system as a .csv and upload it to the process mining tool. But the most advanced organizations are using real-time data ingestion to continuously sync process data.
As individual business objects, or cases, within a process move through systems, they leave a trail of breadcrumbs — whether it’s an invoice making its way from “requested” to “paid,” or a customer service ticket going from “submitted” to “resolved.” Throughout the stages of the cycle, these cases leave behind digital footprints, which are called events.
Process mining technology picks up these breadcrumbs by ingesting system logs of these events, or event logs, and visually reconstructing what’s happening in the process.
These event logs contain, at a minimum, three key pieces of process data for every individual event:
- Case ID - A unique reference to each business object
- Activity - The stage of the process the case went through
- Timestamp - The time that that specific case went through that stage
Additional information can be added as well to increase context: think vendor details for an invoice, or priority level for a service ticket.
Now that we’ve gathered all of our data, the magic of process mining can start to happen.
Process mining uses those event logs to produce an end-to-end visualization of the process that superimposes every step that every case took as it moved through the cycle into one visualization. This is sometimes called a digital twin of the organization.
It’s a chronological sequence of events that shows all of the different paths that cases took to get from the beginning of the process to the end. Each unique path is called a variant, with variants that don’t follow a standard or accepted path being called deviations.
Process discovery allows you to explore this interactive process map and see all of the different variants.
You can zoom out and see all of the different variants, which often number in the hundreds or thousands — we affectionately refer to this as the “spaghetti” diagram.
Or, you can zoom in on the happy path, which is the way we would expect the process to look and, hopefully, the most common variant.
You can slice and dice the process anyway you’d like to see how it’s really running.
Process analytics allow you to understand the root causes of process inefficiencies, and to quantify their impact on your KPIs.
You can start to get the answers to questions about the causes of process inefficiencies:
- Where are the bottlenecks?
- Why are cases running late?
- Which resources are overloaded?
- Which activities are often skipped?
- Which resources create deviations?
Or about the impact of process variants:
- How does a certain variant affect a process KPI like operational cost?
- How does automation, or lack thereof, impact the process cycle time?
- How does a specific business action (e.g. customer credit block) impact a business KPI (e.g. on-time delivery rate)
- What percentage of cases are conforming to the established process?
If you have assumptions about the inefficiencies, you can verify them. There are views and components that allow you to filter, slice and dice, and drill down into the data.
Or you can explore the process as-is and allow Celonis to automatically surface the most impactful inefficiencies for you using AI and machine learning.
Process benchmarking allows you to compare process performance across two different dimensions.
You might want to look at the time it takes to process an invoice in two different countries, or the throughput time of a purchase order from one supplier versus another.
With process benchmarking, you can start to identify best practices and share them across geographies, business units, and teams.
Conformance checking gives you the ability to define your preferred path, and see where processes are deviating from it.
This is where the distance between the process “as defined” and “as is” becomes clear. You can understand the percentage of cases that conform to your desired process, and the percentage that don’t. You can know when steps are being skipped, executed in the wrong order, or taking longer than expected at a certain stage of the process.
As you make improvements, conformance checking helps you measure how many more cases are running through the process in the optimal way.
The next step: how to move from process mining to action
Now that you know how process mining works, it’s time to move from simply understanding processes to improving them.
Once you’ve used process mining to gain visibility into a process, you can start to ask questions like:
Where do we need to change activities or steps?
Which activities could potentially be automated?
How do we need to redesign the process?
Which actions will drive better outcomes?
You’ll get the most value out of process mining by using it as part of a larger set of tools and initiatives for improving overall business execution.
Measures of process efficiency:
Reduce time
Cut cost
Lower the amount of investment required to operate the process
Minimize waste
Reduce the amount of resources consumed by the process
Improve quality
Increase the total value delivered by a process
Ways to change processes:
Standardization
Reduce variations to ensure that processes are being executed in the same way across the organization
Streamlining
Reduce the number and complexity of the steps in a process
Optimization
Adjust the process to optimize it for a certain KPI
Automation
Reduce the amount of human effort by automating steps and actions within a process workflow
Ready to get started with process mining? Start with the Celonis free plan.
Ebook
Process Mining For Dummies
Here it is. Everything you need to know about process mining in a single book, written in the easy to understand, hard to forget style ‘For Dummies’ manage so effortlessly.
