Do you know how your current business processes ACTUALLY work?

A fundamental challenge in business decision-making is to separate objective facts from perceptions. Decisions based on objective facts can be defended with ease. Those based on perceptions – on the other hand - technically equate to mere guesswork. Such decisions are hard to defend. The same goes for evaluating, and improving the efficiencies of any business process. The fundamental question is: Is our knowledge and understanding of our current business process(es) based on objective facts, or on perceptions?

In practice, “information” is often not valid and reliable at all. Most of the information on which we base our understanding of business processes is sourced from Information Technology (IT) systems that log various business activities such as placing orders, delivery, lean implementations, and so on.

But how reliable is such information for our understanding of the true nature of the business process itself?

Valid and reliable information When the business process itself has not been broken down into its concrete step “moments”, and the log recordings correlate with these “moments” 100%, the information is not valid and reliable. Very often, there is only a semblance of correlation between the business process steps and the logged data entries. This obscures our understanding greatly. Until recently, an understanding of the actual state of business processes was based on perceptions, or unreliable information (in the sense outlined above).

All of this changed with the advent of “process mining” – which essentially brings valid and reliable information to bear on business process engineering itself.

Steps in process mining:

Process mining specialists have their own preferences, but – broadly speaking – the following steps are employed in process mining (PAFnow):

• First of all, an event log is set up for the business process (e.g. order-to-cash, source-to-pay), and data fields are prepared (Case ID, Timestamp, Activity Name, for example). The data is now processed and transformed into specialised software.
• Visualization follows (also done automatically through specialised software). As a general rule, the visualization is customisable, and it is possible to drill down to different levels of the process.
• Analysis is next. Here you discover your true process – with all its inefficiencies and improvement possibilities. PAFnow summarizes the analysis phase: “You decide on the things you want to focus on. You can compare different days, facilities, vendors, etc., show relationships and dependencies in your process, or look at distributions (for example lead times for different cases) to find majorities, outliers, and problem areas”. PAFnow also explains that process mining can be expanded into a second generation, where areas such as benchmarking and compliance become involved. In this generation of process mining, one can even trigger workflows directly from process mining tools.

What practical problems does process mining solve?

According to Prof Thomas H. Davenport and Andrew Spanyi (Harvard Business Review), process mining solves two practical business process challenges that companies experience:

The first problem that it solves, is that of “process discovery”. Process discovery is similar to:

• putting your business process under an X-Ray machine to discover its true current functioning (based and valid and reliable information),
• with all of its fractures and imperfections (in the language of Fluxikon, a world-leading process mining company) clear to see. This insight is “critical to knowing whether it is worth investing in improvements, where performance problems exist, and how much variation there is in the process across the organization” (Davenport and Spanyi, Harvard Business Review).

The second problem that it solves, is the disconnect between enterprise IT systems and the business process.

Davenport and Spanyi (Harvard Business Review) point out that some enterprise IT systems such as SAP support business processes (like order-to-cash or procure-to-pay), but “there is rarely an easy way to understand how the process is being executed from the information system”. In a similar way, Visio supports process design, while Lean and Six Sigma support process improvement. None of these – as is the case with SAP – are primarily geared to help with process engineering itself (Davenport and Spanyi).

Process mining separates the secondary (largely irrelevant, in many cases) information from these sources, and utilizes only information relevant to the business process as a primary entity.

Benefits of process mining

As seen from a bird’s eye view (Fluxikon), process mining has three main benefits:

• It reduces cost and variation, becoming lean
• It puts you in control, and in a position to know what is going on (despite outsourcing)
• It improves quality by comparing processes beyond KPIs.

From a capacity point of view, process mining gives you a self-service analytics ability to strengthen decision-making (Davenport and Spanyi).

This includes the ability to analyze the state of the current process, improve areas, and improve results.

Process mining involves visually appealing – data-based - depictions with complete transparency, which makes it easy to get the understanding and buy-in of team members. Here one should take note of the exceptional process visualizations with astonishing functionalities developed by Fluxikon.

In the fourth industrial revolution environment, process mining partners well with robotic process automation (it can identify the best places to implement “bots”, and also provide the means to calculate the benefits of such interventions – Davenport and Spanyi).

Conclusions

In this article, the question was asked: “ Do you know how your current business processes ACTUALLY work?”

A point that was emphasized was that actual process data is critical for a true business process discovery, and for improvements based on such a discovery. Data that derive from enterprise support systems are not always valid or reliable for such an assessment.

Appropriate data – that is a true reflection of the business process as a primary entity - is generated in an activity log, represented visually, and analyzed. Apart from reflecting the true business process, process mining also bestows the ability to identify process improvement possibilities.

In essence, process mining is an analytic ability to strengthen decision-making. It is a clear and transparent process, which is meaningful where buy-in from teams needs to be generated. Its visual basis makes it easy to understand. Who should consider process mining? According to Davenport and Spanyi: “if your company uses enterprise systems to support key business processes – and that is almost every big firm these days – you should be exploring process mining”.

REFERENCES:

https://hbr.org/2019/04/what-process-mining-is-and-why-companies-should-do-it

https://fluxicon.com/

https://fluxicon.com/disco/

https://pafnow.com/blog/process-mining-101-goals-and-steps/