When people hear the words data mining, they nowadays have an idea what it means. With data mining, we often mean a process of analyzing data from several perspectives and summarizing it into useful information. With the 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?”.
Business 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 information that can be used when making business decisions.
Combining business process management with data mining.
But this time, the context is the business processes of an organization. We take the data that exists in the information systems of a company, and use that to visualize what is actually happening in the company’s processes and how they are executed in real life. Almost all IT systems store data in data bases and create logs that can be described in process mining terms as "event data". This is the basis for process mining and the analyses conducted.
Why Process Mining?
Process bottlenecks are often hidden. People have a gut feeling what could be wrong or inefficient but they lack proof. They don't have the data to back their assumptions. This is where process mining comes into the picture.
Replace 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. The only requirement is having data that can be used as a basis. Most companies that have an IT system supporting their businesses have this data.
Applying Process Mining to specific industries.
In manufacturing industry, a 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 actually are the biggest. With process mining, we can compare objectively the performance of different regions down to individual process steps, duration of a step, cost of a step, or the person performing the step and many more. Whatever event data is available in the systems, it can be used in process mining.
Banking and financial
In financial sector, it is crucial to follow 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 these 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 a number of changes that affect the efficiency. Often we find also several deliveries for a single order, or several invoices.
Order-to-Cash (O2C) process
In 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 purchase-to-pay process, the challenges can start already in 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 requisiton 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 company's IT systems to bring insights into the company’s business operations. This is achieved 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.
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