The Next Big Thing in Business Automation: Process Mining
Running a big business is complicated—often mind-numbingly so. Seemingly straightforward processes such as taking an order and receiving the payment can take thousands of possible paths, for example if an extra credit-check is needed, delivery has to be confirmed or a follow-up invoice sent. Though often necessary, the rigmarole complicates life for companies and slows things down. The resulting inefficiencies can cost businesses eye-watering amounts—between 20% and 30% of annual revenue, according to one estimate.
Software-makers are now finding ways to untangle the procedural spaghetti with the help of “process mining”. Its dull name notwithstanding, it is one of the fastest-growing areas of information technology (IT). It generated around $1bn in annual sales in 2022, reckons Gartner, an IT consultancy, and could treble in size in the next few years. Celonis, a German process-miner, recently raised $1bn at a valuation of $13bn, making it Germany’s biggest startup and its hottest tech success story since SAP, a business-software giant, was founded 50 years ago.
Consultants have long tried to model and optimise business processes for corporate clients. But their abstract models rarely reflected the complex reality. To get a better view, two things needed to happen. Firms had to be able to extract “log files” from IT systems, showing in minute detail how these systems operate. And algorithms had to be developed to process these data. Based on that, “you can automatically construct a model which shows you what is really happening,” explains Wil van der Aalst, a pioneer of the field now at RWTH Aachen University in Germany. That helps companies determine if, for instance, the extra credit check leads to unnecessary shipping delays or if the confirmation of delivery was registered in a timely fashion.