What is Process Mining?

In recent years, process mining has emerged as a pivotal technology for understanding and optimizing business processes. This blog provides an in-depth look at process mining, exploring its potential to transform the way businesses operate and achieve their strategic goals. 

What actually is Process Mining? 

Process mining is the bridge between traditional business process management (BPM) and data science. It revolves around the analysis of event logs, which are sequential records of activities logged by systems like CRMs or ERPs, to reconstruct and visually represent the actual execution of processes within an organization.  

Unlike traditional methods reliant on workshops or interviews, where employees subjectively describe processes, process mining offers an objective, data-driven perspective, spotlighting bottlenecks, inefficiencies, and avenues for enhancement. 

According to the Process Excellence Network (PEX), “90% of organizations that have implemented process mining report positive results.” This is unsurprising with outcomes that include 100% transparency into complex processes, on average a 50% boost in process optimization, and a 30% enhancement in process efficiency. 

Gartner notes, for example, in their global forecast that the process mining market is set to grow to $2.3 billion by 2025, with a CAGR of 33% over that period. In another report, Gartner adds that “accelerated digital transformation efforts, growing process visibility requirements and increasing demands for operational resilience” are the core drivers underlying the ongoing adoption of process mining software solutions. 

How does process mining work?   

Using process mining, teams can combine information from their processes’ past, present, and projected future into a holistic view. This is critical for organizations looking to take a proactive approach to continuous improvement initiatives to drive targeted business outcomes.  

Process mining works by analyzing event logs from various systems within an organization to reconstruct and visualize the actual flow of processes. This analysis is powered by advanced algorithms that sift through massive amounts of data, looking for patterns, deviations, and bottlenecks in processes. These algorithms can identify the most common paths taken, where delays occur, and which steps could be optimized for efficiency. 

This deep understanding gives companies a roadmap for more informed decision-making to streamline operations, reduce costs, and enhance overall efficiency.

You can see exactly how process mining works in this video:

The 5 Critical Process Mining Capabilities 

To get a 360° view encompassing the past, present, and future of mined processes, businesses need a process mining solution that delivers on five critical capabilities: 

·         Connectivity to process design (also referred to as process modeling) 

·         Simulation 

·         Real-time monitoring 

·         Predictive analytics 

·         Customer journey analytics 

To read more about the 5 critical process mining capabilities, download the free white paper ‘The Essentials of Process Mining’. 

What problems does process mining help solve? 

There are two main areas where process mining can drive benefit; process excellence and risk and compliance. 

How process mining delivers process excellence: 

Business leaders aim for process excellence to fulfil objectives of business transformation, often focusing on revenue growth, cost reduction, or risk mitigation. However, they lack deep process intelligence to assess current processes and identify improvement opportunities. Years of technology investments have led to complex, disparate systems, generating overwhelming amounts of data. In an attempt to address these challenges, leaders rely on subjective methods like interviews or whiteboard sessions, resulting in incomplete insights and missed improvement opportunities. 

Process mining addresses these challenges by providing deep process intelligence to business leaders. It offers insights into how processes are currently functioning, identifying areas for improvement and potential ROI. By analyzing the vast amounts of data generated by complex systems, process mining enables leaders to make data-driven decisions and prioritize improvement initiatives effectively. Instead of relying on subjective methods, process mining provides objective analyses of processes, ensuring that leaders can uncover hidden inefficiencies and optimize operations more efficiently. 

How process mining supports compliance and risk management: 

Heavily regulated industries face substantial financial and reputational risks due to regulatory enforcement actions, such as those imposed by the SEC in 2023. While executive teams acknowledge the importance of compliance, they also recognize the costs involved, including time and capital investments. Risk and Compliance teams aim to transition from cost centers to strategic partners but struggle due to a lack of shared process intelligence. This gap leads to inefficiencies, internal conflicts, and increased risk exposure, ultimately impacting compliance, operations, and reputation.  

Process mining can help address these challenges by providing organizations with deep insights into their processes, including how they currently operate, areas for improvement, and key performance indicators for success and risk. By analyzing process data, organizations can identify inefficiencies, compliance gaps, and control failures, enabling them to optimize processes, enhance compliance efforts, and mitigate risks effectively. Process mining fosters a shared understanding of processes across departments, facilitating collaboration between executive, risk, and compliance teams. This shared process intelligence enables organizations to streamline operations, improve compliance outcomes, and protect their reputation in heavily regulated industries.

How is process mining different from business process management (BPM)? 

Process mining and business process management (BPM) are related but two very distinct concepts. 

Business process management (BPM) focuses on the design, execution, monitoring, and optimization of business processes. It involves modeling processes, defining rules and workflows, and managing process execution to improve efficiency, agility, and effectiveness within an organization. BPM typically involves using software tools to create, automate, and manage processes. 

On the other hand, process mining is a data-driven approach that involves analyzing event logs or transaction data from IT systems to discover, monitor, and improve real-life business processes. Process mining techniques use actual data from systems to visualize and analyze process flows, identify bottlenecks, deviations, and inefficiencies, and provide insights for process optimization and compliance. Unlike BPM, which relies on predefined models and assumptions, process mining extracts process information directly from operational data, offering a more objective and accurate understanding of how processes are actually executed in practice. 

What are the benefits of process mining? 

Using process mining, modern businesses can understand exactly how their processes are unfolding. They can also identify any bottlenecks or inefficiencies hampering their ability to operate at peak performance. 

The answers discovered from process mining can also help businesses decide which processes to automate and how to do things faster. From there, they can reduce errors and streamline their offerings and thereby boost the value they bring to their customers. In short, it can help them gain a much-needed edge in an increasingly competitive business environment. 

It’s not surprising then that current projections suggest that by 2025, around 80% of organizations will use process mining as part of their daily operations. 

There’s also no doubt that most of those businesses will see improvements to their core business outcomes.  

Here are four of the most important benefits of process mining: 

• Operational transparency: Process mining provides companies with a clear, objective view of how their processes are actually being executed. This transparency helps identify inefficiencies, bottlenecks, and compliance issues, enabling organizations to make informed decisions for improvement. 
• Process optimization: By analyzing process data, companies can identify opportunities to streamline operations and reduce waste. Process mining helps to identify the most efficient paths through a process, leading to improved productivity and resource utilization. 
• Continuous improvement: Process mining supports a culture of continuous improvement by providing real-time insights into process performance. Organizations can use these insights to implement changes and monitor their impact, driving ongoing optimization and innovation. 
• Data-driven decision-making: Process mining enables companies to make decisions based on empirical data rather than intuition or guesswork. This approach ensures that changes are grounded in evidence, leading to more effective and sustainable improvements in operations. 

What are some examples of process mining in business:

So, how can organizations put process mining to work? It can be especially valuable in areas like finance and compliance, where it can drive substantial improvements in process efficiency and control. Here are just a few areas to consider: 

Finance: Process mining can help in streamlining financial processes such as accounts payable and receivable, budgeting, and financial closing. It can identify process deviations and inefficiencies, enabling corrective actions to be taken. 

Procurement: By examining the purchase-to-pay process, for example, businesses can uncover inefficiencies in procurement processes, such as delays in purchase order creation or approval bottlenecks. It can also help in optimizing supplier relationships and improving contract management. 

Risk Management: Process mining tracks and documents all steps in a process, making it easier to demonstrate compliance during audits. It can highlight compliance gaps and non-conformance, enabling teams to fix issues before they have a negative impact. 

Supply Chain Management: Process mining can provide valuable insights into each step of the supply chain, helping to identify deviations from the ideal process. It can aid in optimizing inventory management and logistics, including ensuring timely deliveries and optimal inventory levels. 

You can see some examples of process mining in action in our recent Process Excellence Network webinar:

What are the challenges of process mining? 

While process mining offers a number of benefits, it alone is not enough to bring true value – organizations need a way to turn discovered insights into action.  A process intelligence platform integrates process mining, design (or modeling), and simulation capabilities to offer a holistic approach to process optimization. Process mining provides a real-time, data-driven analysis of existing processes, uncovering inefficiencies and areas for improvement. This analysis serves as the foundation for process modeling, where new process designs can be created and tested in a virtual environment. Simulation then allows companies to simulate the performance of these new processes under different scenarios, predicting their impact before implementation or any up-front investment.  

How is process mining different from task mining? 

Process mining analyzes event data from IT systems to understand end-to-end process execution, while task mining captures user interactions with software applications to analyze specific tasks. Process mining focuses on overall process flow and performance, while task mining captures granular data on desktop activities.  

Combining both approaches provides a comprehensive view, such as analyzing invoice processing, where primary activities occur within an ERP system and ancillary tasks are captured using task mining tools. 

How to get started: 

If this article has piqued your interest in process mining, book a demo of the Process360 Live Process Mining tool to see how it could transform your next process improvement initiative.