What is Process Mining?
Introduction to process mining
Process mining is a technique to discover, analyze, and monitor processes. In traditional business process management, processes are analyzed through process workshops and interviews, which results in a subjective picture of the ideal process. Additionally, the method is time-consuming.
Process mining takes an entirely different - and far more objective – approach. Process mining uses existing data from corporate information systems, synthesizes this data, and automatically displays a dynamic visualization of the real processes. Moreover, process mining provides answers not only to “what is happening in my processes?”, and “when is it happening?” – but also “why is this happening?”.
Traditional Process Discovery
- Looking at one specific point in time
- High ROI
- Continuous and predictive
The 5 steps of process mining
Make use of the event data available in your IT systems. Process mining takes the existing data in these information systems with ready-made connectors for a variety of systems (SAP, Oracle, Salesforce, Microsoft Dynamics, etc.).
See automatic visualizations of your as-is process flows and discover how your processes de facto work. Drill down to the most granular detail, see all your process variations, or view trends on a high level.
Analyze root causes
The Root Cause Analysis reveals problem areas (such as bottlenecks, rework, automation issues) in your processes by highlighting them in flowcharts and ranking them based on how they contribute to business outcomes. This helps you prioritize when you want to improve your business operations.
See a prioritization of automation candidates
Once you’ve optimized your processes, process mining shows you which processes that are suitable for automation – in priority order with validated business case. Process mining is the best way to optimize and scale automation initiatives.
Processes are continuously changing. Keep monitoring your KPIs, automation rates and trends, and measure how your strategic objectives are met with process mining.
How does process mining work?
When your employees or software robots interact with IT systems – such as SAP, Salesforce or Oracle - in your company, the activities leave a trace of data behind, referred to as an event log.
Process mining takes the data that exists in these information systems and uses it to visualize the real-life execution of your company’s processes together with other insights drawn from the event logs.
Getting started with process mining is simpler than you would imagine. The required event data contains the following three columns:
- The case ID. This is a series of characters that identify different cases in the system, for example, sales order number, purchase order number, or an order line identification number.
- Event type. This explains the occurring process step, for example that the purchase order has been created.
- A timestamp. This is the actual time when each process step has been completed.
With this data, the process mining tool creates business process flowchart diagrams, finds root causes to problems, identifies automation opportunities, and much more.
The benefits of process mining
With process mining, you can find and get rid of your biggest process inefficiencies. Process mining reveals problem areas in your processes by highlighting them in flowcharts and ranking them based on how they contribute to business outcomes. This tells you what to prioritize when you want to improve your business operations. Process mining provides answers not only to “what is happening?”, and “when is it happening?” – but also “why is this happening?”.
Process mining enables you to:
- Get an x-ray of your processes
Get a 100% objective view of your processes based on the data in your IT systems: understand your processes, see bottlenecks, errors, and other inefficiencies – and have the confidence to make the required changes in your processes.
"You build an x-ray of your processes"
-Siem Jaspers, Supply Chain Analyst, Terumo Europe
- Quantify the value of improvement initiatives and automation
Demonstrate value before and after implementing changes. Prove how improvement initiatives and automation contribute to concrete business outcomes.
- Get your stakeholders on board
You need to understand how your organization works, what to prioritize, and what to transform – and get everyone else on board. Process mining helps you make data-driven decisions with expected ROI and investigate the process in detail together with your stakeholders.
- Get value in no time
Process mining has a short time-to-value:
“We gave the data of the system, and right away, in 5 minutes, we saw the bottlenecks of the process."
While auditors traditionally receive information on processes through extensive interviews and reviewing process documentation, process mining increases the effectiveness of the work of both internal and external auditors by providing them with instant, full insight into the organization’s present and past processes. This allows auditors to move from an analysis of subjective samples to an analysis of the objective, full, as-is process, bringing along assurance and cutting down on precious time consumed.
Process mining tools are an efficient and effective way to identify possible compliance issues. To check the compliance of processes, compliance managers will have to go through extensive sampling, as processes often vary from one cycle to another. Still, this does not guarantee 100% transparency, as deviations fly past the human eye. Process mining on the other hand allows users to view, compare, and contrast each complete cycle with the other. This significantly cuts down on the hassle and provides the end-user with a thorough list of all irregularities.
Digital transformation is a must for any organization wanting to thrive in their current market. However, deciding on and justifying changes and new systems may be tricky. Process mining tools provide change managers with end-to-end visibility of their processes, making it easy to identify areas in need of improvement. Proving the value of automation has never been this easy – your case can be supported by the click of a button.
Robotic Process Automation (RPA)
Unlike popular misconception, RPA and Process Mining are not competing technologies, rather they work side-by-side to increase your organization’s ROI. In RPA, repetitive processes are streamlined through so called ‘bots’, ensuring that process steps are carried out in no time. However, for the questions like “what processes should I automate?” and “did my automation initiative work?” process mining provides a helping hand.
Process mining allows you to see the as-is state of your business processes, showcasing which processes are repetitive and which need to be harmonized (and how) before automating. Furthermore, process mining technology enables continuous monitoring and a follow-up evaluation of the automation, providing a solid base for your business case.
Process KPI Reporting
In order to make decisions based on facts and data, management teams need to have a system of smart, effective, and realistic KPIs. However, many businesses struggle with their KPI-related tasks: often, it simply takes too long to establish a KPI measurement and reporting system in the first place.
Included in a process mining model are already 1000+ KPIs – process mining users won't have to waste time waiting for individual KPIs to be built to monitor and report the state of the business. Process mining and the predictive capabilities provided by some vendors allow you to act on the most important KPIs already before potential issues or bottlenecks arise. This is effectively changing the way organizations think - from late fixes to preventive actions.
IT & ERP Development
Process mining is also used by IT professionals to manage the complexity of ERP migrations, implementations, and deployments. When organizations are about to either undertake a system transformation or implement a brand-new ERP, the first steps always involve understanding and reviewing the current process before moving on to new systems and processes.
Without having an end-to-end view of the processes continuously, they end up migrating the same ineffective processes into the new system while not being able to see the bottlenecks and problems in the migration. Process mining is used to tackle these challenges: it compares the as-is processes compared to the designed process models, shows the best and the worst process variations, and provides continuous end-to-end visibility of the process flow and alerts users when problems arise.
Process mining processes
Processes can be defined differently based on each business’ needs. However, fundamental business processes that most companies have include Purchase-to-Pay (P2P), Order-to-Cash (O2C), and Service Management processes. On top of this, there are supporting processes that process mining can help improve tremendously: Accounts Payable, Accounts Receivable, Order Management, and Incident Management – to name a few examples.
The Purchase-to-Pay process is also known as PtP, procure-to-pay, or req-to-check. It refers to business processes that cover requisitioning, purchasing, confirming, receiving, paying for, and accounting for goods and services.
As the transactional volume is extremely high and often quite complex (with different approvals, procedures requests and suppliers), each step within the processes is a potential source of errors. This makes Purchase-to-Pay a good target for process mining, which brings visibility to the entire end-to-end process and identifies root causes for problems such as bottlenecks, uncompliant processes, and Maverick Buying.
Did you know that you can get an x-ray of your purchasing process and see all Maverick Buying that is taking place in your organization within minutes with process mining? See how in this video. Not only will you spot root causes behind noncompliant procurement, but you can see patterns and dig much deeper into the issues behind the problem.
The Order-to-Cash (OtC) process covers the whole process cycle of handling customer orders, extending across different units, such as warehousing, delivery, invoicing, and account management. Consequently, the Order-to-Cash process is a key business process in many enterprise information systems. A typical OtC process includes five major steps: sales order created, picking done, confirmed delivery date, invoice created, and payment received.
However, it's not always this straightforward. The Order-to-Cash process is usually a high-volume process that often has lots of variations (for instance, unwanted changes in the process that prolong lead times and affect both internal efficiency and customer satisfaction).
Process mining visualizes the OtC process continuously and automatically. It shows you how to reduce rework, delays, and order changes by showing root causes for the inefficiencies discovered in your OtC process. Moreover, process mining helps you identify delivery or automation blocks and compliance issues with ready-made analyses and charts and monitor the performance of the end-to-end process continuously.
From the starting point of your service management processes all the way until resolving a customer case or service-level agreement, a record exists of when such an event took place in the service management process. Process mining provides an unbiased, fact-based analysis of service management processes.
Process mining transforms the event traces - the process data - into actionable insights. Spotting breaches of Service Level Agreements (SLAs) and monitoring the state of company-wide or unit-wide service requests has never been easier.
Accounts payable processes are carried out continuously throughout all companies, regardless of industry or size. It is one of the broadest and most important processes, yet many find it hard to keep track of the endless paths that an invoice may take on its route to payment. Furthermore, unwanted invoices that end up in the stream as well as extensive policies and regulations do not make the job any easier.
Process mining can help you at every step of the way by providing you with a transparent and easily comprehendible view of your complete processes. As such, you can identity points at which invoicing is delayed, why these delays occur, and which invoices end up in the wrong hands. This enables you to cut down on the rate of overall outstanding receivables, reduce the amount of time spent on manual corrections, improve cash flow, and showcase your accountability to your partners.
Without accounts receivable (A/R) processes, your business would quickly see your available capital diminish from your bank accounts. In all simplicity, the process follows the following pattern: an invoice is created, sent out, and paid. However, as with any process, things are bound to sometimes not go according to plan. The terms of an agreement may change, the invoice may have had incorrect billing information, or the receiving partner was supposed to be subject to a price decrease – sending your invoices on a path of inefficiency.
Process mining is your safeguard to smooth A/R processes and the answer to the question “where are we going wrong?”. With process mining, you will be able to drill down in detail on where incorrect invoices are sent out or what clients are causing delays, how these cause inefficiencies, and what changes you can make to improve your cash flow. With process mining you may find that simple acts of automation or a change in the invoicing path may significantly improve your performance.
From running out of stock, lost shipments, to long production times, order management is an endless loop of faulty processes. Where companies often push to work faster to make sure that products reach the end customer as quickly as possible, they often fall short on viewing order management from a holistic perspective. In order to be fast, you will have to understand your complete process and as such you will be able to avoid time-consuming errors piling up.
Furthermore, order management is about meeting the client’s expectations and quick delivery, although important, is only one aspect thereof. Customers also expect accurate information about their delivery, from a to-the-day accurate estimated time of delivery time to an on-call ability to check the status of their order. By providing you with a complete view of your order management process, process mining enables you to meet your clients’ expectations: pin-point inefficiencies in order processing, provide data-based delivery time estimates, and understand where accuracy would be a better KPI than speed.
An incident is an unplanned interruption to an IT Service that may result in complete unavailability or a reduction in the quality. The goal of the incident management process is to restore a normal service operation as quickly as possible and to minimize the impact on business operations. However, this is not a straightforward process, and often involves multiple people in multiple different teams.
Process mining serves as a tool for you to synchronize your data of actual responses to incidents and through analysis thereof examine similarities and differences in incident management across the whole organization. This allows not only a check of conformance and an evaluation of a specific incident, but also for a continuous loop of incident management improvement as your compilation of event data can be compared across time and place.
Common questions and answers about process miningFind answers to common questions such as:
- “What kind of problems and solutions can you discover with process mining?”
- “Our data is in two different systems. Can process mining software connect to these systems and combine data from different sources?”
- “We already use a BI system, what’s the difference to process mining?”
- “What is required from us in order to use your process mining tool? We’re not looking to invest in any integration of systems.”
Book a demo
Do you want to understand the value that QPR's solutions can bring to your business, or are you looking for a solution to a specific problem?
Schedule a 30-60 minute online demo meeting with us - we'd love to help!