Can you transform what you don’t fully comprehend?
Genchi gembutsu is a Japanese term that translates to “go and see.” These are two words that transformation leaders must never forget.
In the context of a digital transformation, what genchi gembutsu means is that without analyzing the place where work is conducted, and the processes that employees use, it’ll be hard to comprehend how an organization works.
It’s because reality and ideal are never the same, which also applies to business processes.
Process mining brings a much-needed transparency to how an organization works and therefore allows transformation leaders to understand where to focus on and prioritize and what to optimize and transform as it relates to creating the next version of their organization.
What is Process Mining?
Organizations are very complex adaptive systems with multiple stakeholders, information flows, decision authorities, processes, and supporting infrastructures.
On a typical day, a large enterprise may perform millions of tasks to deliver a product, service, or offering to its customers. Some companies produce fashion products; others sell consulting services, or market software as a service. To do so effectively, companies follow processes, block of tasks that they need to accomplish, to be able to achieve a desired output, outcome, or decision.
These processes can get quite complicated and deviations start occuring over time. Wouldn’t you like to have an MRI scan of how your organization actually works? That’s what process mining allows you to do.
Case Example: Approving a New Raw Material Supplier at a Pharma Co.
By way of an example, let’s assume that a pharmaceutical company is approached by a new supplier that is interested in selling raw material to this organization. A pharma company operating in a regulated industry has well-defined process flows for analyzing and accepting any new raw materials for its production.
That may include testing the raw materials for quality, e.g., chemical make-up, impurities, biological suitability, and physical standards. It may also include investigating whether or not the Supplier passes specific business criteria and policies that the Pharma company imposes on its vendors (e.g., creditworthiness, GMP and ISO certifications, payment terms).
Some of these processes can be conducted in parallel. So, for example, several tests in the quality assurance lab don’t need to wait for each other. But other processes need to be sequential; for instance, if the raw material doesn’t meet the quality standards in the lab, it should never be tested in small scale test production because the latter is a very costly process.
Or if the QA department has not first approved the material and the manufacturing departments haven’t provided their seal of approval, the Supplier should not be audited for its GMP (Good Manufacturing Process) practices, which may require factory visits to the Supplier.
What if the ideal process is not always followed and small batch productions are scheduled at your manufacturing sites without the QA tests have been finalized? It should never happen this way, at least according to your As-Is process maps? But how do you know whether reality follows the ideal case or not?
Process as a Dynamic Terrain
Processes are also not stale. They evolve as organizations face events and scenarios that they need to respond to, learning from these experiences and changing.
For example, a manufacturer that follows a stage gate process for investments, may decide to develop a fast-cycle new product launch process for introducing incremental innovation to market. This may be absolutely necessary to counter a new competitor that is much more agile in bringing new products to market. Now, employees will need make a choice whether or not they will use the fast-cycle approach. Although both process flows are well documented and the case is clear, that doesn’t mean that the organization follows the processes. What if you find out they follow this 60% the time? Is that acceptable or not?
Without process mining we would never know whether or not any one of these cases may be happening, and whether the deviations are acceptable or not.
The processes that exist in an organization is a culmination of the real-world events and scenarios an organization is faced with and how the organization chooses to respond to them.
Therefore, a large organization will have tens of thousands of processes and many exceptions to these processes. It’s impossible to know what really happens with just looking at “As-Is” process flows. And of course, an organizations’ productivity will be closely tied to how well it executes its operations, how effective and efficient its teams operate.
Applying process mining techniques, such as process discovery, reveals how an organization truly works, step by step. Process mining algorithms diligently analyze the IT systems, investigating and analyzing real event logs, and pairing them with the associated processes; along the way revealing all modifications and deviations to the ideal process flow.
The discovery through process mining helps a transformation team decide whether or not a process has the potential for optimization. If there are activities and tasks associated to a process that can and should be avoided, accelerated, or improved, that process is an ideal candidate for review and optimization.
If there are weak points in a process, such as bottlenecks, loops, or inefficiencies, that process is usually an excellent candidate for optimization and perhaps automation.
There are many reasons why employees may not follow the ideal process flow, resulting in what we call process deviations. Sometimes, deviations and variations are warranted. Other times, they are absolutely unnecessary. You won’t know this until you have a way to bring transparency to how work is conducted. And that’s why process mining is so critical.
Process mining has become more critical in recent years, as companies engaged in digital transformations and as new data mining algorithms were developed and could be employed to analyze these massive amounts of event data.
Several software start-ups have developed intelligent process mining tools that automate the analysis and visualization of processes and help reveal how an organization works, and which deviations exist. Celonis and Lana Labs, both from Germany, are two of these organizations.
Here is how they define process mining.
According to Celonis’ website:
“Process mining is an analytical discipline for discovering, monitoring, and improving real processes (i.e., not assumed processes) by extracting knowledge from event logs readily available in today’s information systems.
Process mining offers objective, fact-based insights, derived from actual event logs, that help you audit, analyze, and improve your existing business processes by answering both compliance-related and performance-related questions.”Source: Celonis.com
According to an article Lana Labs published, process mining is visualization and analysis of event logs.
“Process Mining is first and foremost the visualization and analysis of event logs with the help of algorithms and mathematical procedures.
Event logs are the protocol of IT-based processes. They list the events — individual activities in the IT system — together with their attributes.Source: Lana Labs article on Medium
Typical attributes are the case ID, the time stamps of the start and end times, and other attributes of the event that are dependent on the system, such as the person processing the event or the location.
An event log thus maps one or more business processes holistically from start to finish. Process mining methods are ‘Process Discovery’, ‘Conformance Checking’ and ‘Model Enhancement.'”
All of the above is performed using machine learning algorithms that firms like Celonis and Lana Labs firms developed to allow process discovery teams quickly identify root causes of process deviations.
Why Is Process Mining Critical for Digital Transformations?
Can you transform what you don’t comprehend?
I believe you already know what my answer is. If you are an entrepreneur or disrupter, you have the freedom to start from a blank sheet of paper. Most corporations should make an effort to comprehend how work gets done before they attempt to embark on a transformation journey.
Lacking a detailed understanding of how work gets done, an executive leading a sizeable strategic change program will almost always be operating in the dark. Furthermore, her expectations will not be grounded on facts, and worse, she will likely fail to become the leader that her teams desperately need.
If an organizations’ leaders are unclear about how their company works, it’s unlikely that they can re-invent it.
Jeff Bezos, a believer in standardization and automation and agility, is quoted to have said the following:
“In today’s era of volatility, there is no other way but to re-invent. The only sustainable advantage you can have over others is agility, that’s it. Because nothing else is sustainable, everything else you create, somebody else will replicate.”Source: www.inspiringalley.com
If agility is a critical pillar for your transformation, which I hope it is, you should be making every genuine effort to understand and improve how you work today. That’s why I recommend my clients to engage in process mining at the outset of their transformation journey. Furthermore, I also recommend that they employ process mining before any robotic process automation (RPA).
While process mining helps identify and improve the processes and prioritize processes suitable for automation, applying robotic process automation on prioritized processes, companies can make focus on real opportunities and truly reinvent their business.
Doing so will not only enhance your understanding of how your organization works, but it also improves the probability of success of your transformation.
It is a deep understanding combined with creativity and innovation that generally leads to re-inventing.
Talk to us if you’re in the midst of a transformation, and your teams are not using technological advances like process mining tools. We help our clients comprehend before they act so that they can genuinely re-invent themselves vs. wasting valuable resources.