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Process Mining for Auditing and Compliance

In the constantly changing risk management landscape, we need to adapt quickly. Process mining does not only give you 100 percent coverage of your processes, but it can also picks up the unexpected event in the process, which traditional analytics cannot. In this blog post, I'll discuss how to achieve precise internal control, reactive approach to errors, identify and adapt to changes using QPR ProcessAnalyzer.

Read: What is Process Mining?


Blog contents:

Challenges for internal audit and risk management

1. Discover 100% as-is transactions

2. Analyze and produce audit findings with fact-based KPI reports

3. Mitigate risks

4. Engage business operations

Internal audit and risk management challenges

We are living in a time when the threat management landscape is constantly evolving along with disruption and transformation, global risks, digital threats, and regulatory complexity. More than ever, organizations now realize the importance of internal audit and risk management. In order to cope with those threats, companies need to ask themselves what is the as-is process situation and start planning a process evolution.

Better performance, lower costs, stronger connectivity to the outside world and regulatory solutions are among the most prominent goals of a process evolution. Where and how should your company start this evolution? As a process solution provider with over 200 projects with worldwide customers, QPR's suggest you take a look at your as-is processes. You should be able to find the bottlenecks and efficiency improvement areas, the unexpected deviations, the processes where you are over- or under-controlling, and last but not least, the security and fraud vulnerabilities.

It's certainly not an easy task. If you wish to make a change of such caliber, there isn't a better method than process mining. In the next section, I'll discuss a framework of Discover-Analyze-Mitigate-Engage using QPR ProcessAnalyzer to achieve precise internal control, reactive approach to errors, identify and adapt to changes in the risk management landscape.

challenges for internal audit and risk management


1. Discover 100% as-is transactions

This following graph shows the contrast among 3 common perceptions of process. The "textbook" process, covering about 20 percent of the real process, is used to demonstrate or explain the process in the simplest way. When you experience a real-life process yourself, you'd realize that the process includes many reworks, variations and exceptions. Since people have different ways of working, they are likely to only understand 40% of the big picture - all of the processes in the organization. In reality, when you do internal auditing projects with process mining, you'd have access to 100 percent coverage of all processes and transactions.

process expectations and reality

In order to accomplish process discovery, you can either work with a data scientist gradually or use a process mining tool. QPR ProcessAnalyzer is a tool that gives you a thorough, automatic analysis of your processes at once. Process mining as a methodology can result in an efficient, fact-based view of your processes, in contrast with traditional analytics, by removing the extensive inquiries and its inherent bias.

2. Analyze and produce audit findings

By using QPR ProcessAnalyzer, you can quickly analyze and make accurate findings based on your own data. This approach is much faster compared to personal inquiries, as everything you need is already recorded in your own system. In practice, our customers use QPR ProcessAnalyzer as soon as they close the month or quarter review period. Once the fresh data are in the system, the tool immediately shows you both standardized or customized analysis and findings.

An advantage of using QPR ProcessAnalyzer for internal audit is the ability to select target audit by any dimension such as using company codes, transaction types, or purchase and sales organizations. Once you've selected a target for the audit, you can use QPR ProcessAnalyzer to run a full analysis on that particular target. You have the options to analyze all of your data at once, or just slice and dice - it's totally up to your project goals.

3. Mitigate risks

QPR ProcessAnalyzer allows you to compare your as-is processes with the design model, then pinpoints the non-conforming cases automatically. It's easy to identify where these non-conforming cases are by using particular areas, or company codes, and even on personal level. Next, it's critical to analyze the root causes behind these non-conformance, as you need to know the reasons why something went wrong in order to fix it thoroughly. QPR ProcessAnalyzer does not only report these abnormalities in your processes, but also produces root cause analysis for you to work on the solutions.

Another significant benefit of process mining is risk estimation using fact-based data. Once you can see how much your organization and operators deviate from the original design, the tool can estimate potential risks for you to suggest the corrective actions to the business. Moreover, these suggestions can be validated by rerunning the conformance analysis after a period of improvements.

4. Engage business operations

With QPR process mining tool, you can publish live process KPI reports including the audit findings and present them to the business side of your organization. They can then see the problems in the processes, find out the root causes to these cases, and even rerun the analysis with data as they are improving their operations. This engagement with the business operations is critical in the success of your organization's process excellence. The internal auditors can now be on the same side as the business operators, both work towards the goals of process improvement together.

Last but not least, as QPR ProcessAnalyzer is a leading, AI-powered process mining tool in the market, it's also equipped with machine learning based predictions. This is a powerful feature to prevent problems for your open cases. Refer to the next section to see QPR ProcessAnalyzer in action!


process mining for auditing and compliance


It’s a good time to take a look at Process Mining if your company hasn’t already. The capabilities and usability of Process Mining software are improving rapidly, and the market is quickly becoming mature, although there’s still much work to be done. If you think your company is ready to step it up with the future of as-is process modeling and process efficiency maximization, the fastest way to get things moving is to follow these steps:

Written by

Yen Do

Marketing specialist in Process Mining at QPR Software.

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