Celonis acquires PAF to bring deep process mining capabilities closer to Microsoft users

Derek du Preez Profile picture for user ddpreez March 29, 2022
Summary:
PAF specialises in process mining insights within the Microsoft Power Platform. The acquisition aims to bring Celonis’ technology to where users are working.

Image of Celonis and Microsoft Platform demo
(Image sourced via Celonis)

Celonis has today announced the acquisition of Process Analytics Factory GmbH (PAF), a company that specializes in providing process mining insights within the Microsoft Power Platform. The deal will bring the capabilities of Celonis’ deep process mining tools to millions of Microsoft users, where they are working, and follows a broader trend of Celonis embedding itself within popular enterprise platform ecosystems. 

Celonis historically has a strong background in the SAP ecosystem, but has since also announced a strategic partnership with workflow vendor ServiceNow. ServiceNow also made a financial investment in Celonis. 

Speaking with diginomica this week, Bastian Nominacher, Co-Founder and CEO of Celonis, said: 

What we do at Celonis is really help companies make sense of their data, allowing them to reveal and fix inefficiencies that they were not able to see beforehand. It can be used for any type of business process if you want to understand what is going on, to also get recommendations and active areas for improvement. 

We have acquired PAF, which is a highly regarded process mining company that really specializes in providing process insights in the Microsoft Power platform. We have acquired them as part of our strategy to enable companies everywhere, in all industries, to be able to access and utilize the Celonis process mining and execution management. And it’s important to get that information to where people are actually working. 

PAF’s process mining product is completely integrated into Microsoft Power BI and Microsoft 365, which it states is available for the analysis, visualization and optimization of almost any process. Celonis’ Execution Management System (EMS) combines real-time data and process intelligence to help organizations understand their process pain points and take targeted action. 

PAF will be fully integrated into Celonis EMS, said Nominacher, and will allow users to take advantage of the process mining technology within their Microsoft environments. Nominacher said: 

Thousands of companies already get this information out of the Celonis EMS. But there are thousands more that are working within the Microsoft platform, particularly the Power platform. There are over 10 million business users that leverage it on a daily basis, 97% of the Fortune 500, more than 260,000 companies around the globe. So we want to put Celonis out there, where the work is done. 

This is really part of our strategy to democratize access to Celonis and the technology. This is part of our execution management everywhere strategy, which our partnership with ServiceNow was also part of, to bring us close to the ServiceNow ecosystem. 

Nominacher said that part of the driving force behind the acquisition is also bringing the PAF team and its expertise into the Celonis fold. 

Given the recent ServiceNow partnership, and now the commitment to the Microsoft ecosystem, diginomica asked Nominacher if Celonis intends to ramp up its presence across additional enterprise platforms via similar means. He said:

We are continuously evaluating the market, but it’s really mostly driven by customer demand. We have traditionally come from the SAP ecosystem, we have a strong ServiceNow side, and now with Microsoft - so we have very good coverage. 

But we keep continuously evaluating. And we don’t only do this from a tech partnership perspective, we also have partnerships with Accenture, IBM, and the global GSIs, which helps us get into many more platforms and ecosystems, as well as industry verticals. 

Understanding the use case

Nominacher said that Celonis’ process mining platform is “relevant for all industries and processes”, but that companies typically select an area that they have a particular process pain point, build a small team, and then rapidly expand from there. 

The ambition - or the targeted outcome - is often cost savings, as well as improving both employee and customer satisfaction, by fixing bad processes. In addition, other use cases that are common include compliance and sustainability, given that there is a lot of waste created by poor or inefficient processes. 

A number of high profile companies have indicated the central role Celonis is playing in their cost saving and/or transformation agendas. For instance, Deutsche Bank recently said that it was able to use Celonis to help deliver over EUR 60 million in cost savings, from just improving the efficiency of 40 processes. 

Equally, Siemens said that it is using Celonis to help target savings of EUR 270 million in 2021 and BP said that the vendor’s process mining capabilities were playing a key role in helping it identify $2.5 billion in cost savings. 

With the acquisition, Nominacher explains how Microsoft users will be able to deepen their use of PAF in combination with Celonis. He said: 

Imagine you are an automotive manufacturer and you face challenges in your supply chain, which in the current macro environment is quite a common challenge of our customers. 

Obviously you can go into the Celonis EMS and see everything that’s happening - let’s say your delivery reliability has tanked from 90% to 60%, you can route drill down into why. But also you can see this directly within your Power BI dashboard. Before you could only see this observation and you had to do your own digging. 

Now with Celonis Experience you can, directly out of this KPI, deep dive into Celonis and see where the issues are and then directly trigger action. 

You can now also have auto-orchestration, for example, using Microsoft Teams and track it on a day to day basis. So it’s an end-to-end perspective on all your transactional and knowledge worker systems to, in the end, maximise execution capacity. It could also trigger a ServiceNow workflow, or other components, obviously. 

My take

My attention was drawn to Celonis at the time of the ServiceNow partnership. It’s very rare for ServiceNow to make financial investments in companies - typically favoring homegrown development. It suggested to me that Celonis could be one to watch over the coming months. 

When I asked Nominacher what success looks like to Celonis, he said that one of his main priorities is to get strong customer stories into the public domain. That’s music to our ears - and the public reference points from some of the world’s largest organizations suggests that this is going well. We look forward to speaking to some of those customers and getting those stories on the record. 

I’ve long said that too much of companies’ digital transformation efforts focus solely on the front-end engagement layer, whilst ignoring the broken processes that continue to persist in the back-end. There’s no point in having a fancy digital tool if it still requires manual manipulation and ad-hoc fixes across multiple systems behind the scenes. 

The next wave of digital transformation will focus exactly on that problem - diving deeper into process, whilst applying automation tools to action fixes. Celonis is well positioned to help companies solve that exact problem. 

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