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There’s gold in them thar SAP ERP systems… Part 3

Emily Kucukalic Thursday, August 24, 2017 Blog

By Geoff Armstrong

In Part 1 of this blog series, we introduced the topic of Business Process Mining and how it will deliver the return on investment that SAP clients have been pursuing for 30 years! In Part 2 we examined how process mining works and some of the Software tools to enable Business Process Mining. In this blog (part 3), we will look in-depth at Celonis and how to apply Process Mining to your SAP system.

Why Celonis?

As I pointed out in Blog 2, there are over 20 Process Mining tools on the market. While each of the tools has a different niche, as an SAP consultant, I have found that Celonis is most closely aligned to analysing SAP processes in an efficient manner. Additionally, they are also a certified partner with SAP.

Therefore, I would use this to tool to apply process mining in an SAP context. They have prebuilt analyses for the major SAP business processes (eg P2P, O2C etc) and have standard extractors for SAP source systems (eg, ECC, S4HANA, SRM, CRM).

Can’t I do this with existing SAP Toolkits?

Over the years, SAP has provided various approaches for process analysis such as BI content, Spend Analytics, and Operational Intelligence. While each of these provides value, they do not have the specific Process Mining capabilities to “Discover the real processes”. This is the breakthrough approach!

What outcomes can I achieve using Celonis Process Mining?

The range of possible outcomes that can be delivered by Celonis Process Mining is as broad as the number of processes within your organisation! In this blog, we will focus on the following 3 areas which have proven ROI for existing clients;

  • how to identify non-compliant processes at first glance;
  • how to optimize throughput times by identifying bottlenecks and;
  • how to reduce manual interventions in process execution through automation.

To illustrate these benefits, let’s walk through an example.

The Data

For those interested in ETL, we undertook the following steps to get the data to Celonis;

  • Firstly, we have loaded the raw SAP data for purchasing from our SAP ECC6 system to our HANA Database;
  • Data in HANA is transformed to an “activity log” using SQL scripts;
  • The activity log is made available to Celonis via a JDBC connector.

These steps will be detailed in a future blog.

The Analysis – Variant Explorer

Once we have uploaded the activity log and constructed the data model in Celonis we are ready to start analysing. In the following examples we have used the “Variant Explorer” to understand the process;

As we can see from this analysis, the typical P2P system will have a large number of process variants.

The fact that each activity has a timestamp means we can generate performance metrics and highlight the activity connections with the highest throughput times.

This represents a massive opportunity for clients to streamline their process and remove bottlenecks!

Compliance / Conformance to Best Practice Models

Many organisations have their theoretical best practice models developed in static tools such as ARIS, VISIO or PPT.

  • These can be loaded to Celonis and compared against the actual data to show a level of conformance.
  • In this example, we can see that our actual data “complies” with the Best Practice Model 57% of the time and there are 15 process “violations”.

Violations

  • A violation is either an activity which is not expected (e.g. change price) or an activity which is out of sequence (e.g., starting the process by scanning the invoice).
  • The top 3 violations are “Change Price”, “Scan Invoice” and “Block Purchase Order”.
  • From here we can drill down to further analyse the top violation “Change Price” which represents 14% of the cases.

Identification of Root Causes or What to do next?

  • At this point, we have identified “Change Price” as a violation of our standard process.
  • Based on Data Mining algorithms, Celonis will suggest which data points have had the biggest influence on the violations.
  • This can be based on the number of cases or the strength of correlation.
  • In this example, we see that Vendor Umbrella Corporation has had 50,716 price changes.

Drill down to Individual Cases

  • The intelligent filtering capability allows us to jump directly from the root cause analysis to the individual cases causing the violation. In this case, it’s the list of purchase orders for “Vendor “Umbrella Corporation” where the activity “Change Price” has occurred.
  • At this point, we are in a position to discuss with our procurement department or the vendor why so many “change price” activities are occurring.

Automation

  • Additional KPI’s are available to show the impact of this non-conformance on throughput time and the automation rate.
  • The automation rate can be derived from the type of user performing the activity.
  • Activities which are performed manually can be identified and targeted for automation.

Conclusion

In conclusion, a tool such as Celonis can be used to identify non-compliant processes at first glance, optimize throughput times by identifying bottlenecks and reducing manual interventions in process execution. In fact, we almost have a guided procedure as it assists us to identify possible improvement targets, provides a to-do list of process violations as well as a hit list of likely root causes!

So, that is the end of this initial 3-part blog on Process Mining. I hope you have enjoyed the blogs and I hope I have stimulated your interest in Process Mining. From here I will be taking a detailed look at Celonis capabilities focusing on a business process or capability in each blog.  If there is a process or capability you would like me to focus on, please let me know and I’ll do a blog on that!

If you’re interested in this topic, feel free to click here to continue the conversation.

References

Professor dr.ir. Wil van der Aalst, Department of Mathematics & Computer Science, Eindhoven University of Technology.

Distinguished university professor Wil van der Aalst is one of the most cited computer scientists in the world and thought leader in areas such as business process management, process mining, and data science.

COURSERA – Process Mining: Data Science in Action, Eindhoven University of Technology.

Wikipedia

LinkedIn Group

Celonis

By Geoff Armstrong, Solution Lead – BI & Analytics, Plaut Australia

Geoff joined Plaut in 2001 and has deployed SAP BI and Costing solutions in some of  Australia’s most sophisticated implementations in both the private and public sectors. 

Click here to contact Geoff.

One Response to "There’s gold in them thar SAP ERP systems… Part 3"

  1. […] Or simply find out more about this exciting product in our recent blogs here,  here and here. […]

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