Process discovery from SAP data isn’t rocket science

SAP, the omnipotent ERP system with many mysteries. It is often regarded as complex, or a black box, so unfortunately organizations actually use a fraction of the wealth of information they collect to improve their business performance. Let’s take supply chain as an example as its state has direct impact to business. The performance is usually followed through numerical KPI reports giving statistics on lead times, delivery accuracy or stock rotation. But is this enough to ensure the optimal running of such a core process? Wouldn’t it be great to have timely access to information which gives basis to make relevant changes with the wanted impact rather than just guess WHY the reported delivery time has gotten longer.

Getting the WHY from SAP, and even quickly, is just about knowing, which data tables are needed. And then a process mining software that has the built-in capability to acquire the right information directly from SAP and transform it to an end-to-end process visualization. Automated data acquisition is key and our software QPR ProcessAnalyzer delivers just that. When talking to customers, the value of being able to see how their supply chain runs in reality is almost priceless. Yes, they systematically follow performance metrics, have different dashboards but what has been lacking is the visibility to the process itself, the process reality.

As they say, a picture is worth a thousand words, or numbers in this instance. This truly is the case when looking at a process flowchart that is based on facts. Keeping with the supply chain example, from the flowchart, organisations can see immediately at what stage of the process the promised delivery time is compromised or an order is not handled according to guidelines. And it takes just one click to get to the root cause, the WHY. With the right process mining tools, organisations can harness their SAP data to build an understanding of where the issues lay so that they know what needs to be corrected in order to improve the supply chain performance. The time spent on trial and error is removed, saving money, enabling better sales and ultimately delivering better customer experience with a smoothly working process.

When striving to best possible process performance, it’s not enough to rely just on statistics. You need to understand the real underlying problem before you can effectively improve anything.  It’s the same with your own performance or condition. If you notice a pain, a problem, you get an expert to tell you what you need to do to fix the issue right away rather than randomly try different things, hoping one would eventually work. Or do you?

Teija Räsänen

https://fi.linkedin.com/pub/teija-r%C3%A4s%C3%A4nen/3/7b3/71b 

What's the deal in LATAM?

My colleague and I did a 3 week road trip in Latin America where we visited some of our  partners and customers as well as hosted several marketing events in different countries such as Brazil, Chile, Mexico and Trinidad and Tobago. It was a great experience as we got firsthand insight of the local business environment in both private and public sectors. During the trip we learned how organizations approach strategy execution and operational development.

Focus on Performance Management and Strategy Execution
What we perceived when talking to customers and partners is that the business environment in Latin America is not significantly different from Europe.  Organizations are facing similar kinds of challenges - political changes, new laws and directives as well as pressures caused by the downturn in economic growth. These pressures force organizations to rethink their strategies and business models and also think how to improve operational efficiency.

However, organizations in Latin America and Europe do differ considerably in the way they approach the above mentioned challenges. In Europe, the market pressures are tackled by aligning strategic requirements with operational development and to support this organizations have already adopted methodologies to measure performance and model operations such as business processes and IT-systems. In Latin America, organizations are focusing, or starting to focus, on making their operations transparent through Performance Management and only few companies have started to model their operations with the goal of making plans on how to improve the performance.

From left: Angel Arturo Perez Cotero (Laguna Verde), Mario Nuricumbo (NG Business Value -QPR partner), Raul Partida (QPR), Tero Aspinen (QPR), Martin Nuricumbo (NG Business Value - QPR partner)

Another focus area for organizations in Latin America is strategy execution and by far the most adopted methodology is Balanced Scorecard. Many companies have achieved brilliant results with this approach. For instance, the largest Nuclear plant in Mexico, CFE’s Laguna Verde power plant, won a prestigious BSC Hall of Fame award based on their successful strategy executions using Balanced Scorecard methodology.

New approaches to operational improvement create interest
When facing the current market challenges, organisations in Latin America are driven to improve their strategy execution and operational efficiency with Balanced Scorecard and Performance Management being the most popular approaches at the moment. But I see great value for organizations when they will, probably during the upcoming years, apply also methodologies focusing on planning and identifying how they can improve their operations based on strategy and performance requirements. In this area methodologies, such as strategy driven Enterprise Architecture and business process modeling as well as Automated Business Process Discovery (ABPD) will offer organizations great value. This provides great opportunities for organization working with QPR as QPR’s total offering supports organizations to formulate and communicate their strategy as well as to monitor and plan the operations to match the strategic requirements.

Raul Partida
https://fi.linkedin.com/in/raulpartida 

Tero Aspinen
http://fi.linkedin.com/pub/tero-aspinen/2a/592/344

Data and processes in Portugal

Couple of weeks ago QPR joined OnGlobal Solutions, our partner in Portugal, to a breakfast seminar in Lisbon titled “Improving and monitoring performance with QPR ProcessAnalyzer”. Sharing the stage was also Link Consulting who presented how process performance monitoring is linked to overall process management and improvement. In QPR’s presentation I concentrated on describing how organizations can get value out of the data that they already have in their existing IT systems such as SAP ERP.

It’s actually surprising how many organizations still improve their processes and performance merely based on a “gut-feeling” and on perceptions of individuals. According to a study we published in September in Finland, about 40% percent of the interviewed organizations said that they are not measuring the performance of their processes and only 1/3 of the organizations measured a crucial KPI like delivery accuracy. Truthfully, these results were a bit shocking to us. But they also showed that there really is a lot to do within organizations when it comes to process performance measurement and monitoring. And the best value can be reached by using existing data.

The seminar presentation in Lisbon and of course data driven process improvement itself generated a lot of discussion amongst the audience. Many of the participants were not aware how much information regarding their process performance and inefficiencies they actually could get from the data they just have “laying around” in their systems. And how easily and visually it can be done with QPR ProcessAnalyzer. The discussion continued also after the seminar in one-to-one meetings with customers together with OnGlobal Solutions and so message of using data to improve processes is well on it’s way in Portugal.

Mika Leonsaari

fi.linkedin.com/pub/mika-leonsaari/3/359/495/



Process improvement with hunch or facts

Traditionally, processes have been developed more or less based on a hunch that comes from often subjective viewpoints. By talking to people and manual modeling, you do get about 80% understanding as to how a process runs, or should run, and where the possible problems may lay. But it’s the unknown 20% of the process where most of the problems can usually be found. That 20% causes 80% of the process hassle so it’s vital to open that up and get it under control.

Data is the road to discover the unknown 20%. You get the data from business IT systems such as SAP. As most organisations have support systems which log data, so in principle, all those companies already have the possibility to benefit from that information by using process mining or automated business process discovery (ABPD) methodology (both terms are used for using data to improve processes).

Visualization of process based on data from the IT system

Usually data is looked at through BI goggles, which doesn’t tell anything about the actual process, only numbers. There are tools available that let you analyze the data in a process context and reveal surprising facts of the process performance.  Based on the experience of dozens of process mining projects we have done, customers are amazed what data can unveil and what development possibilities it provides. The biggest pain points can be found in Order to Cash and Procurement to Pay processes. The discoveries and benefits that our customers have gained include e.g. optimized raw material purchasing lowering the working capital levels and shortened process lead times after discovering the root causes for the bottlenecks.

Organisations today continuously battle to develop their processes and optimize costs. And to reach optimal results, In our opinion, organizations can’t afford not to use their existing data for process improvement. Thoughts?

Mika

fi.linkedin.com/pub/mika-leonsaari/3/359/495/