When people hear the words data mining, they nowadays have an idea of what it means. We often define data mining as a process of analyzing data from several perspectives and summarizing it into useful information. With support from this information, we can then make decisions that affect the success of a company. However, even when data mining is familiar to people, process mining still seems to be a new topic for many. Very often, I encounter questions like, “What is process mining? How does it work?”.
Process Mining vs. Data Mining
On a general level, we aim to do the same with process mining as with data mining. The goal is to analyze data from different perspectives and summarize it into useful information for making business decisions.
Combining Business Process Management with Data Mining
But this time, the context is the business processes of an organization. In other words, business process mining is a combination of business process management and data mining. We take the data that exists in the information systems of a company and use that to visualize the real-life execution of the company’s processes. Almost all IT systems store data in databases and create logs. Process mining refers to these logs as "event data" required for process mining analysis.
The traditional methods of workshops, interviews, and manual documentation require a lot of efforts. But how else can you update the process documentation and make sure it actually describes the way things are really done? Process mining tools save you a lot of time and effort. Just take the data, and visualizations of your processes are already on their way. The best part: they are based on facts and are objective.
Process mining tools visualize what kind of process flows take place in your organizations and how different teams and units are performing. This empowers process professionals who are responsible for optimizing and improving operational performance with the means to find the best practices in use, who can then focus more on analyzing results and finding improvement points.
Process Improvement and Monitoring
Have you looked at processes from operations-driven or data-driven point-of-view? Business process improvement as a domain has been around for eons (well, for decades at least), but many companies are still doing it with traditional and subjective methods – workshops, interviews, manual documentation. If you work in one of these companies, you are overlooking the abundance of data in your own company’s IT systems and how you can use this data to conduct process mining to give a completely new angle to the improvement needs and actions of your organization.
To understand the differences and what to change, you need to be able to compare performance even on a very detailed level to dig out the real root causes. Process mining shows you a list of targets where to make changes, where the biggest need for improvement is, and most importantly, where the biggest and quickest benefits are to be achieved.
Once you identify the improvement needs and actions needed for your organizations based on the results, process mining also gives you the means to easily follow up on the impact of changes in business processes. Not only does QPR ProcessAnalyzer visualize the actual process flows, but it also offers a variety of process analyses for organizations to understand their business processes, as well as attributes affecting the processes much deeper, and to monitor how improvement actions are changing the processes. With the help of the process mining software, you can easily update where to target your improvement and development when new actions are required.
How much more efficient and in which areas? Do you know which units in your organization are doing best and why is that? Companies need to have all possible information and support at hand to target decisions correctly. Regular KPIs will get you started, but to get down to individual orders or even order lines and process-oriented facts, you need to do more. Process mining reveals the untapped potential available in the organization and to what level set targets.
If you recognized the need to increase process efficiency, you probably also acknowledge the importance of reducing process deviations. There might be trouble with lead times and automation degrees, for example. Customers aren’t getting what they requested when they requested, and you aren’t really sure why that is the case when individual KPIs show acceptable levels. And you think some actions are completely automated, but the company hasn’t really achieved the benefits expected through automation. There might still be plenty of hidden work done manually, such as changes to orders. With process mining, you can find out fact-based deviations that you can trust.
Why Process Mining?
Why not just stick to traditional BPM? To answer to the ever-growing pace of business transformation, you need to be able to react quickly and not build analyses that are outdated already before they are completed. The accumulation of data is making sure that your process analyses cannot be based on gut feelings, you need fact-based figures and evidence to back up your claims.
Saving Time and Releasing Working Capitals
Traditionally, managing and optimizing processes have been a very labor intensive area that requires a lot of time from experts in the organizations. The growing demands in being more efficient and showing results is also hitting BPM professionals. Very often, I’ve heard of them stating that when their situation analysis is ready, the data of which they are backing their assumptions with has already changed, rendering the analysis all but useless. How can we overcome this issue?
When optimizing processes, the most time-consuming part is often data collection. With process mining, you get a head start by automating this part. The basis for understanding the operational situation in an organization is to understand what is actually happening and being executed, and not what is assumed to be happening. This is what you find out using process mining.
Locating Process Bottlenecks
Process bottlenecks are hard to uncover by hosting BPM and process mapping workshops. People have a gut feeling of what could be wrong or inefficient, but they lack fact-based proof. They need the data to back their assumptions, and this is where process mining comes to the rescue.
Replacing Opinions with Facts
One of the main goals in process mining is to be able to see the big picture of a company’s business processes and still be able to drill down to the root causes of deviations, bottlenecks, or process variations. With process mining, we don’t have to settle for averages but dig out the reasons behind unwanted behavior. To bring this closer to organizations and industries, I’ll give a couple of examples.
Where can Process Mining be Applied?
Process mining is suitable for application in any industry and process, where the data required is available in the organization. Most companies that have an IT system supporting their businesses have this data.
Applying Process Mining to Specific Industries
In the manufacturing industry, timely and accurate delivery to a customer is the ultimate goal. If a company has several factories in different regions, there usually are differences between the reliability of deliveries. It’s quite easy to see that they exist but harder to understand exactly where or why they happen. Also, very often, people with the loudest voice gets the most attention regardless of whether their problems are the biggest. With process mining, we can compare the performance of different regions down to individual process steps, including duration, cost, the person performing the step, and many more. All event data available in the systems is suitable for use in process mining.
Banking and Financial
In the financial sector, it is crucial to follow the rules and regulations and to be able to prove you have done so. By using the event data from the systems, we can visualize even individual cases as a process flow. We can also show how often deviations and variations occur and what has been the reason causing this non-conformance. With process mining, we can both prove our actions but also pinpoint the improvement needs in the business processes.
Applying Process Mining to Specific Processes
Typically, people have some idea how the process is running - or how it is designed to run - but the reality revealed with data can prove out to be quite different.
Common findings are changes, for example, in order-to-cash and purchase-to-pay processes. For varied reasons, the cases go through several changes that affect efficiency. Often we find also several deliveries for a single order or several invoices.
Order-to-Cash (O2C) Process
In the order-to-cash process, end-to-end lead times or lead times between process steps deserve some scrutiny - check, for example, the lead time from delivery to invoice creation.
Purchase-to-Pay (P2P) Process
In the purchase-to-pay process, the challenges can start already at the beginning of the process when a PO is created without a purchase requisition or a frame agreement.
Only in 63% of the cases is a purchase requisition created. Why is that? Are there differences
between regions, for example?
Visualize Your Processes for Analyses and Improvements
To summarize: in process mining, we use the event data in the company's IT systems to bring insights into the company’s business operations. The insights are provided by visualizing the data in process context with process flowcharts and creating analyses that give information on needed improvements and deepen the understanding of what is going on in the business processes. We can show both the big picture as well as the detailed ground-floor view on process execution.
Get started with QPR's process mining tool QPR ProcessAnalyzer.