Celonis - Transforming Enterprise processes using process mining

Context

Celonis the leader in process improvement acceleration software reported triple-digit growth earlier this year. It has been an eventful year for Celonis as it announced its first SAAS process mining solution - Intelligent Business Cloud and doubled its growth by retaining and acquiring new customers across geographies.

Since its inception in 2011, Celonis has made strategic moves to enter the niche in a thriving B-B market. Associating closely with SAP, Celonis has found a partner that understands the ERP business better than anyone else in the industry. Leveraging the subject matter experience of SAP, and innovating process mining, Celonis has positioned itself to be the market leader in the process acceleration cloud software. In 2016, Celonis announced partner reseller agreement with SAP and this was a formidable strategy that will not only help SAP with Celonis Cloud but will also help Celonis gain market share keeping them ahead in the race among the 20 other vendors in process mining.

Process Mining

Process mining is a process analysis technique that improves performance by analyzing event logs that are extracted from the information systems. Process mining methods are used to improve event-based processes. This could be in ERP, IoT Applications, or any other workflow management application.

Why Process Mining is a Necessity

As per IDC, companies do not realize the weaknesses in their processes and hence lose 20 - 30 percent of their revenue. This is a shocking number but it is definitely possible as you do not have the insights on your processes and you can lose money by not knowing when to pay. This increases your excess working capital and subsequently your cost of working capital increases which does not look good on your balance sheet.

Analysis

Following the bowling alley strategy by making incremental improvements in the applications and aligning it with the customer preference, Celonis has crossed "The Chasm" and in on the verge of incremental growth as per the figure above. With Gartner recommending the market size to grow by 10 times the next challenge would be to prepare for the future by making smart integrations. In my analysis, I was amazed to see how Celonis integrated with SAP to update the baseline purchase order with a click of a button.

Image Source: celonis.com

Similarly, integration with Microsoft and Slack lets the user send messages to the appropriate person to notify them of corrective actions.

Image Source: celonis.com

I love the UI and the clean integrations of analytics with data showing how Celonis has helped customers to reduce the early payment rate on their dashboard. The value proposition here immensely resonates with companies looking to improve their processes by using a process improvement insights solution like Celonis. The solution offering is segregated into Discover, Enhance, and Monitor.

Discover: Using Process Discovery and Process analytics customers can create their processes visually and find the root cause of the problem in their processes. Hence, they can take steps to mitigate friction.

Enhance: Using AI, Machine learning and process Celonis help the customers to enhance the processes by suggesting the next steps to be taken.

Monitor: Using the dashboard like shown above the customers can monitor their processes and see the impact of the steps taken to mitigate the friction.

Challenges and Recommendations

One of the biggest challenges with the "technology products" is convincing people who are not able to perceive the impact of the solution or who don't want to perceive the impact as it could reveal mismanagement, inefficiencies, and compliance problems. My recommendation would be to increase visibility and showcase Celonis at mega-events like SAP TechEd or Tech Confluences to reach the maximum audience.

Sometimes customers are not able to relate the process with their journey and we have solutions like Qualtrics, Cloudcherry which are trying to improve customer experience. Integration with a customer experience management tool would help to map the customer journey with the process map.

One size doesn't fit all: Every industry might have a different use case and a different problem to solve. For example, the process improvement lifecycle for a manufacturing company can be totally different from an IoT solution provider. Hence, the hyper-personalization of solutions and technology as per the need of the customer and their use-cases will be a way to go forward.

When to jump the S-Curve?

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This is misjudged by many companies and this leads to a decline in sales as industries do not realize the pace of demand. Process mining is a growing business and we have projections of the market increasing by 10 times. Preparing for the next five years, Process Mining solutions should integrate with partner technologies like RPA, BPM, BPA to provide a convergent solution and harmonize the common goal of gaining process efficiency. This will increase the capabilities of these individual offerings and reduce the TCO on the customer end. The strategy should be to be a center stage enabler.