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The self-optimizing enterprise

ARTICLE | February 7, 2022 | 4 min read

The self-optimizing enterprise

An interview with process-mining pioneer Alex Rinke

By Stuart Luman, deputy editor of Workflow

Editor’s note: This story originally appeared in the Optimization issue of Workflow Quarterly.

In the modern digital enterprise, system logs record every action, interaction, and reaction of a business. Process mining is a technology that analyzes data captured by these logs and then suggests actions to optimize systems and processes throughout a company.

Celonis, a ServiceNow partner headquartered in Munich and New York, is a leader in this field. Co-founder and co-CEO Alex Rinke likens process mining to an X-ray machine for business, revealing a company’s internal processes, identifying faulty ones, and pushing proactive measures to improve them. Other players in this space include UiPath, IBM, and Software AG.

Once processes have been mined, the company’s Execution Management System (EMS) goes further, allowing non-IT experts to examine and visualize, from start to finish, internal processes gleaned from their existing enterprise systems such as SAP, Salesforce, Oracle, and ServiceNow. The EMS then suggests process improvements allowing companies to enjoy greater productivity, profit, and sustainability.

“It gives our customers a 360-degree view of business processes, by weaving together different events and data points,” says Rinke. “On top of process mining, our EMS automatically comes up with recommendations and actions to take.”

Much of a company’s daily operations consist of set processes, defined as a series of actions that have a beginning and an end. Examples include accounts payable and receivable, procurement and inventory management.

Nowadays these business functions are heavily automated in many organizations. Computer systems log every step taken, every second of every day. These logs and the data they contain are the raw materials that Celonis and other process miners analyze to provide real-time monitoring of a company’s operations.

Process mining creates interactive dashboards that map operations, pinpoint errors or exceptions, and show how to correct and prevent them in the future. The system continues to run after the initial scan, parsing individual processes and making suggestions to achieve ever-greater efficiencies.

Process mining could revolutionize what until now has been a largely subjective field dominated by management consultants, replacing them with automated, dynamic systems that anyone can use. “In a few hours you see the workflows and where the friction points are,” says Rinke. “You get a way higher quality picture, faster. It’s automated, it has endless resolution, and there’s no politics.”

Celonis isn’t the only company doing process mining, but it was one of the earliest to get started and is ahead of the competition, according to Daniel Johnson, director of automation at Future WorkForce, a British-Romanian firm that specializes in helping companies adopt machine learning and artificial intelligence technologies, including Celonis’s EMS.

“The value and power of something like Celonis, from my point of view, is that it allows operations teams to actually understand what’s happening within their business processes day-to-day,” says Johnson. “And then where their processes are inefficient, giving them data to make decisions about how they can improve those processes to reduce costs or operations, delight their customers, or increase revenue.”

One customer who has seen a big improvement is German automaker BMW. The company decided to start slowly, collaborating with Celonis to focus on one process in one area: to reduce the amount spent on paint in one factory. After a successful result, BMW now uses Celonis to monitor 50 different processes, which affects 80% of the carmaker’s manufacturing footprint, according to Rinke.

Celonis was founded in Munich a decade ago by three German university graduates: Bastian Nominacher, Martin Klenk, and Rinke. Since then, it’s grown fast. Today the company has more than 2,000 employees at 16 locations worldwide and more than 2,000 enterprise-scale customers, including Uber, AB InBev, Deutsche Telekom, Cisco, Whirlpool, Dell, and of course BMW. 

In mid2021, the company announced it had raised $1 billion in a Series D investment round that valued the company at $11 billion.

The company has also been engaged in a flurry of acquisitions and partnerships. In October 2020, it acquired Integromat, which helps customers to create automation across internal systems. In October 2021, it acquired Lenses.io, which produces software that lowers technical barriers to analyzing and utilizing real-time data streams. It has also entered into strategic partnerships with companies such as Conexiom and IBM.

In October 2021, Celonis and ServiceNow announced they would jointly deliver solutions to help customers identify and prioritize processes that are suitable for automation, then create digital workflows to optimize those processes for more seamless digital operations. ServiceNow also pledged to invest in Celonis. The companies plan to release jointly designed products and services in the first half of 2022.

Ultimately you will have processes that compose themselves on the fly and then decompose themselves.

The market for process mining is part of a larger IT trend that research firm Gartner calls “hyperautomation.” The term refers to the use of various emerging technologies, including process mining, robotic process automation, execution management, machine learning, and virtual assistants, to automate as many business processes as possible. Gartner projects the hyperautomation market will reach almost $860 billion by 2025.

The next stage of process mining will focus less on tweaking existing processes, according to Rinke. Instead, the goal will be to generate new and better processes by analyzing a company’s entire business holistically. It could also tailor specific processes for individual customers.

“Ultimately you will have processes that compose themselves on the fly and then decompose themselves,” he says. “Meaning you come in as a customer, call customer service, and immediately the system in real time analyzes all the other customers that look just like you, which product you’re using, and then actually composes the process in real time, the perfect process for you.”

To date, process mining has mainly been applied to help companies improve their productivity. In the future, it could also help reduce global carbon emissions, Rinke says. In the sprawling agricultural sector, for example, streamlined processes could help reduce food and resource waste, along with unnecessary emissions. “If food waste were a country, it would be the third largest carbon emitter in the world,” he says. “And 80% of food waste is caused by inefficient processes in the supply chain, not with the consumer.”

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Author

Stuart Luman is the deputy editor of Workflow.

Articles by Stuart Luman