This is a guest blogpost by Bastian Nominacher, co-founder and co-CEO, Celonis
Over the past decade, almost every industry has been overturned by digital disruptors. Same-day delivery, restaurant food on demand and mini cabs at the touch of a button are the norm: and this “Amazon effect” has transformed customer expectations across every sector.
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Most people now want more choice of product, cost effectiveness and convenience and full visibility from the moment they place an order. When something goes wrong, they expect the issue to be resolved quickly and as painlessly as possible and they don’t want to be passed from department to department having to explain the problem each time. In this culture of immediacy, businesses are under increased scrutiny and must look at their internal processes and the way their organisations operate if they’re to compete in a marketplace that is centred on technology, mobility and social media. While small deviations from standard processes may seem to only have a marginal effect, they can actually have a significant impact on a company’s efficiency.
Driving the need for optimisation
Of course, companies wanting to optimise their processes is nothing new – all businesses want to save time and money and work more efficiently; as this can give them the upper hand against competitors. However, with the increase in digitisation, more and more business processes are being driven by IT systems. While this facilitates communication both internally and externally, it makes it more difficult to control the increasingly complex processes within a company. At the same time, mountains of data are accumulating within companies. As a result, businesses are sitting on a goldmine of information but without the right tools in place, they don’t know how to make sense of this data.
Traditionally, organisations have brought in management consultants to help them understand and improve their core operations such as purchasing, logistics and production. While this practice can often uncover inefficiencies, such as a delayed invoice or a particularly expensive supplier, it is often lengthy and expensive to carry out. External consultants also typically rely heavily on the existing operations teams to collect data and provide context, often resulting in significant disruption to the organisation while the processes are being analysed.
Tracking digital footprints within the business
Identifying issues in core processes can be like finding a needle in a haystack. But technology has evolved to a point where the algorithms being developed are powerful enough to help even the largest of enterprises sift through the massive amounts of data being collected, uncover hidden patterns, correlations and customer preferences and make more informed decisions. One such approach is “Process Mining”, a new form of big data analytics software that helps businesses bring anomalies in the data to the surface and pinpoint inefficiencies within their core operations.
The technology uses the digital traces left behind by every IT-driven operation in a company and provides complete transparency into how business processes are operating in real life. It automatically reconstructs the as-is process from the raw data and provides a real-time visualisation of the entire organisation’s business processes. Using this insight, process owners, such as CFOs, logistics managers and heads of purchasing, can see how efficient (or inefficient) their core operations are and identify any causes of delays or bottlenecks. They can then make more informed decisions about where the most pressing opportunities to drive efficiencies are and identify the root causes.
Sourcing talent and ensuring accessibility
As the discipline is still a relatively new category within big data analytics, organisations are working to determine the best way to deploy it within their teams. The theory behind process mining is starting to be introduced to university courses to ensure that the next mathematicians and data scientists are equipped with the skills needed to take full advantage of the technology. With a need to understand how best to apply it to their processes, it’s important that business leaders look for solutions that are accessible to everyday users and not just those within IT teams.
The bottom line is that staying competitive in the digital age means adopting best operational practices, and best practices must be dictated by analysing data. Those organisations that take control of their processes now will be able to get better transparency into their business and gain a greater understanding of their existing operations. In turn, this will enable them to give their customers what they want, when they want, and truly capitalise on the promise of digital business transformation.