The IT business segment does not differ from a classic enterprise. However, technology companies have specific features. For example, in an information enterprise, data collection and optimization of business relationships are equally important. The process of mining is an analytical method for creating an enterprise strategy. The term does not refer to blockchain. In the article, we will tell you what the method is for and how the tool works.
What is the process of mining
The process mining (PM) technology is created by Wil van der Aalst based on the principles of product management. The idea is to analyze the event log to further eliminate deficiencies. The method is similar to blocks in cryptocurrency. The basic aspects of business intelligence are described in the book Lean Startup by Eric Ries. First you need to understand how they work.
The approach is based on the classic model of product management. For example, to open a profitable online store, the results of subtasks are tracked. The entrepreneur or hired boss creates markers in which the KPI of the staff is observed, how the negotiations with the partner ended, what is the income from the new project and other. Fixing processes is needed to work on mistakes.
PM is based on the classic aspects of product analytics. However, the approach has changed – the focus of the enterprise is on task templates.
The physical product is formed in 3 steps:
- Purchasing (manufacturing)
- Regulations
- Trucking.
If you regulate the chain from creation to sale of the product, you can increase profits and (or) reduce losses. For example, there is an option to reduce the volume of the warehouse, increase the cost of goods according to the principles of unit economics. They assume net income from the user, product, partner.
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PM takes as an example a template to which one should strive when performing a task. For example, for a bank to grant a loan, it is necessary to check the solvency of the client in 2 days and process the documents in a week. As a result, a pattern-pattern with a time frame and the required result from the manager of the financial institution is created.
Key benefits of the technology
Process mining is a way to uncover the details of a business. The technology is used for the following purposes:
- Automation of the firm. It is possible to replace human labor with cheap machine work.
- Cost reduction. The payback in unit economics is increased through elimination of unnecessary steps.
- Improved customer service. Production time is reduced.
- Market relevance. Product manager can notify the company of unit (deal, project, task) deficiencies in real time through accelerated auditing.
Comparison with alternative methods of analysis
There are differences between auditing approaches in business processes. The data is summarized in the table.
| Differences | Process mining | Data Mining |
|---|---|---|
Practical use cases
Ruukki is a steel firm that conducts business according to the principles of process analytics. The company collected customer service cycle data. It then looked at sales in a single process. It turned out that order fulfillment was running slow because of CRM. After fixing the flaws, revenue increased.
Engineering company Caverion also used process mining. Through the QPR Process Analyzer tool, the stages of product release were measured. Slow work on the part of the accounting department was identified. Optimizing document preparation and reporting accelerated sales. In January 2023, the firm is using the analytical approach as normal.
Process Mining software products
Optimizing business processes can be done through applications. The following enterprise utilities are available in the market:
- QPA Process Analyzer. A tool for electronic data collection. Transactions can be entered into the utility, diagrams and benchmarking are supported.
- DCIS. A program for continuous optimization of enterprise business processes. The product is designed for i-ERP (organizational strategy) decision making.
- MTS. Utility from an IT company for evaluating the productivity of employees of firms.
- Promease. An application created by business consultants for the banking, industrial and oil and gas industries.
- VK. A software solution from a Russian social network for process analytics of product lifecycle stages in large companies. Extension developed to identify failures in the chain of creation and sale of goods or services.
Conclusions
Process mining helps businessmen to track the product life cycle and regulate the stages of formation of goods or services. The tool is designed to increase the efficiency of the enterprise.
It is necessary to introduce a new tool into the work of the company in stages. It is necessary to take into account the costs of changing the strategy.
Implementation of process analytics speeds up auditing and work on errors in real time. The system is managed by a product manager or CEO.
The enterprise needs to choose an analytical tool in the course of its activities. Correct regulation of all stages of business operations increases revenue and reduces unnecessary costs.
Frequently Asked Questions
📣 What is Kanban?
Kanban is a method to improve company performance. The principle of the approach is a time frame for a task. For example, you need to do a report on Monday by 12pm.
✨ Can the tool be applied in life?
Process mining is suitable for tasks outside the business. For example, you can use the template in sports, career or to move up the social ladder.
📢 When did the technology first appeared?
The tool was the result of scientific research. The experiments were conducted in 2009 by scientists from the Institute of Electrical and Electronics Engineers in the United States. There were 75 people involved in the research of the analysis method, but the results remained confidential.
📌 How to implement the analytics method?
First, you need to digitize all the data about the company’s business processes. If it is large, you need to place the information on a server or cloud storage (combining with cloud native approach).
🔥 How to optimize process time?
To reduce the cycle, you need to find the bottlenecks in the company’s operations. You need to understand where the system is failing and implement changes.
⚡ Is the method suitable for my own business?
To evaluate the result of the tool on the company, you need to conduct A/B testing. Versions can be compared on a dedicated group of consumers of the product. For example, for 100 new users, the sales offer is changed and the final demand is recorded.
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Author: Saifedean Ammous, an expert in cryptocurrency economics.
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