Time for a change Image by Alexas_Fotos from PixabayCelonis has published the 2023 Process Optimisation Report. Based on a survey of over 1,217 business leaders, the report looks at the views towards and impact of process optimisation. 83% of business leaders say that processes are the greatest lever for value and the fastest lever for change. What the report doesn’t reveal is what the remaining 17% consider as the greatest lever.

The optimisation of existing processes is important, though, for the majority, with 99% considering them “essential” or “important” to optimize their processes to meet their business objectives. Most leaders (81%) are either investing or planning to invest in technology to optimise processes.

One of the key findings highlighted by Celonis is that 72% of those using AI are concerned that process shortcomings may hold back further successful implementation of AI.  However, while the report does look at the barriers to process optimisation, without any qualitative element, it falls short of finding out why respondents answered in this way specifically for AI.

Process optimisation is desired by most, yet few are actually doing it, and the report highlights the barriers that are stopping people.

Alex Rinke, Co-Founder and Co-CEO, Celonis
Alex Rinke, Co-Founder and Co-CEO, Celonis

Alex Rinke, Co-ounder and Co-CEO, Celonis, said, “The potential of emerging technologies, including AI, is top of mind for every enterprise right now, and it’s clear that business leaders understand the need to optimize their processes to be able to harness that potential. However, they’re facing numerous barriers in doing so; departments speak their own languages, data and teams are siloed, systems don’t play well together, and processes are hard to see.

“With the recent advancements to our process intelligence platform, we are enabling our customers to overcome these barriers and bring their teams together around a common language for understanding how their processes run end-to-end and how to improve them fast.”

What is in the report

The full report (no registration required) is divided into four sections:

  • The process optimization imperative
  • Processes are the lifeblood of organizations
  • Processes aren’t running as they should
  • Tech investment in the process era

The report broke down the respondents by function and geography on several questions. However, the difference between process/operations respondents and the full set of responses were minimal in most cases. The study also had responses from DACH (33%), the UK, France and Spain (34%) and the US (33%). However, again, the authors pulled out only a few variances, and there was no graphical analysis.

The report provides a mix of commentary, data points and data visualisations, some of which add value and some do not. What is missing from the report are qualitative responses or quotes from thought leaders about the data points. There are also no actions or questions that the reader can take away from the report to consider for their firms. Instead, these are left to the reader to consider.

The process optimization imperative

This section looks at the factors driving process optimisation with interest in harnessing emerging tech such as AI (70%), compliance (64%) and cost reduction (69%), the top three factors. The top factor is odd and perhaps indicates a desire to experiment rather than a focus on business value. However, AI is top of mind for many, both from this survey and others.

Processes are the lifeblood of organisations

Organisations need people, technology, information and processes. The optimising process appears more important in the US (98%) than DACH (89%). Again, finding out the answer to the why question might have thrown up some interesting insights from the DACH respondents.

There were some interesting responses to questions about desired outcomes.

The top four were:

  • Revenue Growth – 53%
  • Cost Reduction – 46%
  • Optimise working capital – 42%
  • Flexibility to respond to change quickly – 40%

Concerningly, ESG Performance was only 12%. This seems to reflect the drop off of concern around ESG that has been seen during 2023, though after COP 28, it will be interesting to see if that changes next year, especially with CSRD coming into force in the EU in January.

Processes aren’t running as they should

Processes may be the lifeblood of organisations, but are they healthy? Apparently, not in many cases. 45% of departmental processes are sub-optimal, and 62% of processes that flow between departments are optimal.

What is surprising, is that firms are not aiming for continuous improvement of processes. Only 14% are saying they are doing it on a continuous basis. Considering the recognition that Kaizen got within MBAs, this is surprising. Even more stunning is that 51% have not optimised any process in the last year. With continuous change being forced upon companies over the last few years, this is surprising, worrying and a huge opportunity for companies like Celonis.

The report looks at the barriers preventing optimisation, and they are familiar:

  • Soloed data and Teams (45%)
  • Process complexity (45%)
  • Opportunities to improve are hard to identify (43%)

There were several others. One that was omitted was a lack of time; whether this was included within the answer options, we cannot say, but it is an obvious omission. The report goes on to look at the impact of sub-optimal processes. The authors call out that only 18% say that it prevents innovation. Ironically, it is innovation that can help improve processes.

Tech investment in the process era

49% are already investing in process optimisation tech, and a further 32% plan to do so in the next five years. However, it is unclear if the respondents had a definition of what process optimisation tech is. Respondents did, however, reveal what technologies and services they are looking to use to deliver process visibility. Gone are the days of time and motion studies, though external consultants are still the 3rd most popular (52%). Above that are RPA and business intelligence tools. While process mining was the lowest highlighted, it is gaining traction. The authors note that Gartner published its first Magic Quadrant for Process Mining Tools in 2023.

The authors lay out the seven challenges that process mining addresses when it comes to process optimisation. It is probably this that is the fundamental takeaway from the report and makes it worth reading.

In closing, it looks at the different departments that are leading process optimisation within their organisations with IT & Digital, Operations and Supply Chain. Procurement and Logistics are leading the way.

Enterprise Times: What does this mean

With 84% of business leaders saying process optimization can deliver a bottom, top, and even green-line value, some of the low figures in this report are surprising. Organisations need to consider how to overcome some of the challenges they face to start introducing continuous improvement within their organisations. The resistance is potentially cultural, though the report does not delve into the why in many cases.

Perhaps next year, if the report is repeated, it will include some trending information and perhaps an element of qualitative responses for the study. While the conclusion is a notable indirect plug for process mining and the Celonis platform, it is a valid one. Organisations appear stymied and perhaps looking at the Celonis platform with the recent launch of the Process Intelligence Graph. It is an example of how technology can help overcome many of the barriers leaders face in introducing process optimisation.

If leaders believe that processes are hindering process improvements, are they looking at the wrong technology?

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