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Celonis becomes a ‘profit center’ for AmerCareRoyal as it mines process data - but education is key

Derek du Preez Profile picture for user ddpreez July 18, 2023
Summary:
AmerCareRoyal initially procured Celonis to standardize processes around a legacy ERP, but has since become a critical value driver for the business.

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AmerCareRoyal manufactures and sources disposable products used in the food service, hospitality and medical industries, delivering goods to customers across the United States. The company was formed in 2016, following the merger of Royal Paper and AmerCare, and has since acquired a number of other leading suppliers, including 511 FoodService, The Ocala Group and PrimeWare. 

Owned by private equity group HCI, AmerCareRoyal is now using Celonis to standardize its processes across these organizations to operate more efficiently, but is also using the process mining technology to identify significant cost savings. The team responsible for this work is now being recognized as a ‘profit center’ by the business, given the results it has been able to achieve. 

AmerCareRoyal achieves over $1 billion in annual revenue and has grown substantially in recent years, but has faced challenges in terms of its operational effectiveness. That is until it started using Celonis and began to understand where its process pain points were. 

We got the chance to speak with Jeff DeSandre, Chief Integration Officer at AmerCareRoyal, who described the situation when he joined in 2019 as follows: 

Each one of these acquisitions gave us different capabilities that we didn't have. But the reason I needed Celonis is because when I got here nothing had been integrated systematically. 

The issue was that AmerCareRoyal was going to market as though it was one company, but was dealing with disparate data and disparate systems. 

The company was experiencing severe service disruptions, lots of problems. So my job was to quickly get this under control and to be able to get the processes and the systems aligned so that we can operate at scale. 

AmerCareRoyal made the decision that it was going to use the systems adopted by Royal Paper as its starting point for standardizing across the business. Royal Paper uses an ERP system called S2K. DeSandre said that AmerCareRoyal wasn’t clear on its own processes and needed Celonis to firstly understand how the business was operating in its entirety, whilst also then seeking to model new approaches. He said: 

We had to mine all the data, we had to get it set up. But what it allowed us to do was have a baseline of Royal Paper in Celonis, and then we could bump that up against the systems at a company that we buy. So for example, if one uses Microsoft Navision - then the idea would be we would get into Navision and we would do a comparison. Here's our process versus yours. How much dissonance is there, how much disconnect? 

A two phased approach

Comparing Royal Paper’s original processes to those of the new systems acquired into AmerCareRoyal was the original purpose of using Celonis. However, what the business found was that when it took the time to mine the data, it ended up with really useful visualizations and dashboards. 

As such, initially, DeSandre and his team put process mapping on pause and shifted focus to getting more and more business data into Celonis. He said: 

We started off by just making sure all data was in there and visualizing the data. 

It turned into a very good real time data store for us, where we were able to visualize our data and use the data to run the business. 

Having achieved this, bringing all of the business data into the platform, AmerCareRoyal is now back to process mining. And this is key to the company’s approach to using the platform - it is a two-pronged strategy. 

On the one hand it uses Celonis for data visualization, understanding metrics that include everything from warehouse lead times to revenue income. On the other hand it is using the platform to map processes, identify where things are taking too long, where errors are being made, and where efficiencies could be introduced. DeSandre said: 

That kind of took us a little off course but ironically we're right back where we started now and we're knee deep into the process mining side, because all of our data is in there now. So now we're going really deep on savings, which has really been interesting and great. 

Our strategy is twofold. We're mining the data and then we're providing real time analytics data to our business through these dashboards. 

We have tons and tons of processes in there. We have tons and tons of data in there - finance, IT, warehouse, etc. It shows me the steps that we go through for a particular process. 

Providing examples of how Celonis is being used for process efficiencies, DeSandre added: 

Why are we doing that? And how many times does it happen? For example, I can see if something [erroneous] is happening 13% of the time, I don't know how much time that takes up, but there's probably some money there. It just keeps telling us more and more and more. Why is a process going backwards? That's one thing that I'm always going to be worried about. 

We put in a new transportation management system last year. And we managed to reduce our costs by 31%. It's pretty amazing stuff. We're able to very quickly find needles in the haystack and figure out why. 

Education and stakeholder engagement

DeSandre reiterated that it’s the two-pronged approach that makes Celonis particularly valuable. He said that whilst something along the lines of Power BI can provide a business with analytics and visualizations, no other tool can provide those insights and do the process mining at the same time. 

That is to me what is the huge power of what Celonis is. 

However, as with most systems that can deliver operational change, technology is only part of the solution. DeSandre acknowledged that change management plays a huge role and providing education to the business about the art of the possible is essential, in order to deliver meaningful results. He said: 

The change has been big. It's helpful that I'm on our executive leadership team, I report to our CEO. I'm not gonna lie, that's extremely helpful, because I'm able to align all my peers on the leadership group behind this. In other words, we're looking at solutions holistically. It's not just me talking about it, it's my peers. And that took work. 

DeSandre provided an example of AmerCareRoyal’s Supply Chain team, which included a group that are Power BI experts. He said that they were happy with their approach, but DeSandre wanted to articulate the value of Celonis to them. 

I said to them, if all you want to do is visualize, Power BI is a better tool for that. I'm not gonna lie, if you want to be really good at visualizing what already happened, that’s great. 

I want to focus on what's happening now and how I can make it better. And that's what Celonis is. The change starts with education, because people don't know what this is. So you have to have to be able to see it. 

To do this, and to enable the required change, DeSandre decided to give the team autonomy over their use of Celonis and remove his team as a barrier. He said: 

How I did it was I partnered with one of our supply chain executives, the VP of logistics, who is someone who is very data driven, very smart and also really really knows how to use data to save money. 

And honestly, I had to make him feel like he had zero inertia to get this done. The business is always going to want to be in control of their own destiny. And if Power BI does that for them, or Microsoft Excel does that for them, they're gonna take that over dealing with me any day of the week, right? 

So what I did was I removed all inertia. I said to him, you have a BA and you have a developer, it's all yours for the next three months, build something awesome. And they went and did that. And by doing that, he realized that he could get things done the right way, technically, with IT, without all of that overhead that we sometimes bring to the table that people don't want to deal with. 

This change is now cementing across the business and AmerCareRoyal’s use of Celonis is delivering results - so much so that how the business is thinking about the platform is changing. This is evidenced by how AmerCareRoyal is measuring its success in using Celonis’ process mining technology. DeSandre said: 

We started judging success by how many times people sign in, how many times people are coming into Celonis. We can't really make it our centralized tool if we don't have people using it right. 

But now we are measuring it by savings. So we come up with quarterly savings targets that we commit to. It’s interesting, my team that runs Celonis is actually a profit center now. 

Even though we're a cost center, we look at Celonis as revenue generation because it's an offset to our costs. That's really where we are heavily focused right now, being able to monetize and prove the savings. And that's really what our metric is now.

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