Organizations invest in software with the idea that the new tools will deliver a variety of benefits. Some benefits are more qualitative, such as an improved user or customer experience, but others can have a direct impact on your bottom line. Whether it's an asset management solution, payroll system, or procurement application, technology has the ability to save organizations substantial amounts of money by streamlining your business processes. But actual savings are often difficult to quantify, especially if you don't have a firm understanding of how your systems are performing today—your as-is state. Without this knowledge, it's very difficult to determine how much benefit a new system is bringing to the business.
It's therefore imperative to obtain as deep an understanding about what's going on in your business processes now before embarking on any software transformation. It's the best way to establish a solid starting point against which you can gauge the success of any cost saving measures you implement.
So, what is the best way to cut business costs? One obvious way is to eliminate as much inefficiency from your processes and workflows as possible. Doing so can have a dramatic impact on your employees, customers and constituents, and your bottom line. For example, according to a recent McKinsey article, a manufacturer discovered inefficiencies within its order-to-cash processes that equated to 3–5% of its total EBITDA. Eliminating these inefficiencies would deliver the "... equivalent of millions of dollars in new business."
Some organizations take a more ad hoc approach to rooting out inefficiency, but this is not the best way to achieve broader business cost reduction. For a more comprehensive business process optimization initiative, follow these steps to gain insight into your processes and then turn that insight into action:
Gaining insight into how well your processes perform has traditionally been an inexact science. Relying on conversations with people who perform individual tasks can give you an incomplete picture of what's going on in the end-to-end process. Their input can also be subjective and carry unconscious biases. A better way to get the real picture of what's going on in your processes is to use a process mining tool.
Process mining provides a purely objective, unbiased means of discovering exactly what takes place at every step within your processes. It uses the data created by the systems that support your processes to create a map of every task, every decision and movement, in order to highlight what's working well and what's not. The result is what's known as a spaghetti diagram, which brings to light all the areas where important steps are skipped, unnecessary duplication occurs, bottlenecks slow your processes, or activities are taking place that could introduce risk to your business.
Say for example you were to process mine a process within your supply chain operations. The tool would show any areas where your employees have to enter data into multiple systems that don't communicate with one another, where manual approvals needed to shift inventory are holding up production, or where you lack insight into where goods are when they're in transit with your logistics provider. These are all issues that could cost valuable time and money and keep you from running your business operations at an optimal level.
Intelligent process mining unlocks ... value by automatically discovering process flows, providing sophisticated tools to analyze process behaviors, helping you optimize productivity, customer satisfaction, and quality of service. Then, monitor process execution in near real-time to sustain peak performance.1
Of all the technologies that can help you cut costs, why is using process mining the best business decision you can make? There are many reasons, but let's take a look at the top four:
Every organization wants to be lean and minimize unnecessary costs. Especially for larger organizations, there are countless areas where inefficiencies can creep in and send your costs skyrocketing. Instead of guessing where your opportunities for optimization lie, use process mining to provide data-based evidence of where you need to focus your efforts. Then, once you’ve implemented measures to make your processes more efficient, process mining becomes an even more invaluable tool for achieving ongoing, long-term, continuous improvement.
Learn how a discover, design, automate approach to process optimization can drive efficiency and lower costs for your organization.
1 Intelligent Process Mining in Robotic Process Automation, Ryan M. Raiker, July 2018