What is process mining?
Process mining (PM) is an approach to identifying operational inefficiencies in an organization using event logs – files containing granular listings of what has happened on the organization’s computers and networks, like opening Excel or saving a copy of a certain report to a network drive.
Modern process mining tools typically deploy algorithms based on AI or other methods designed to identify recurring, time-consuming, and/or potentially automatable sequences of events recorded in these log files. PM tools are sometimes bundled together with other tools that can help users rank critical events in terms of their impacts, automate them, and/or better control them.
Many organizations use process mining tools and see benefits – indeed, most organizations could. So does this mean PM tools are the next right step for your organization?
Probably not. Here’s why.
Opportunity cost
Any sure bet to increase efficiency is hard to pass up. But what if pursuing that opportunity comes at the cost of foregoing an even bigger one?
To successfully execute almost any analytics or digital transformation initiative worth doing, an organization must marshal the time, focus, skill, and enthusiasm of some of its most talented individuals. These resources are precious. So the question that leaders should be asking themselves is, ‘Among the opportunities before me, does it make sense to throw these scarce resources into the success of process mining vs. other opportunities to create value?’.
Of course, to answer this question, one must know the value of those other opportunities. That’s a challenge – but one that presents its own opportunity to create significant long-term value. How? By creating a framework for using data to make better decisions. In this framework, leaders use the principles of economics to evaluate the options before them and select the best path forward.
Economics - A better place to start
First, know that it is possible to use data to very quickly gain a better understanding of the value of different paths forward. How? Rather than looking elsewhere for new tools, try looking inwards. Your own data have the potential to reveal trends in what drives and detracts from profitability and growth.
For example: How important for your organization’s profitability and growth are fluctuations in labor costs and labor productivity vs. customer acquisition and retention? How much, and how often, do these metrics deviate from potential as defined by best practices across your organization?
Almost any organization can do the analyses needed to answer these questions using their ERP data and appropriate economic modeling tools. If you need help marshaling data or understanding how to use it for this purpose, organizations like ours are here to help.
The results provide appropriate context for determining the best path forward by assessing various business levers and the bang-for-buck that each lever offers. This analysis could well point to PM as the next right step to accelerating growth and improving profitability. But even when it does, it also provides a detailed road map for data-driven management – the goal setting, progress tracking, and troubleshooting that every organization can and should have in place whether they plan to pursue PM or other avenues of innovation in their work.
In summary, PM is an exciting and potentially useful tool, but only one of many worth considering. Even if PM is right for your organization, there is a better place to start. Use your data and economic principles to gain an understanding of the relative importance of different opportunities to create value. That way, you can deploy your organization’s scarce talent and other resources more optimally.