Celonis helps customers quantify the value of process efficiency

Phil Wainewright Profile picture for user pwainewright June 13, 2022 Audio mode
Summary:
At last week's Celonis World Tour in London, customers spoke about analyzing processes to improve efficiency, with success tracked in quantifiable value

Nick Mitchell speaks at Celonis World Tour London June 2022
Nick Mitchell, Celonis (@philww)

For many years, enterprises have sought to automate their processes by making them digital. But in the past, that automation has often left gaps, either because the designers of the automation omitted certain steps or exceptions, or because requirements have changed since the original system was built.

But one of the huge advantages of moving data out of paper-based systems and making it digital is that this then allows for automated analysis of that data. Today, the computing power exists to analyze all of the steps in those existing processes, find those gaps, and take steps to address them. That is the promise of business process execution vendor Celonis, whose World Tour conference series passed through London last week.

Customers speaking at the event gave numerous examples of how the Celonis software had helped them identify process inefficiencies and correct them. For example, here's electronics giant Brother speaking about its work to bring more process standardization to its European operations. Basil Fuchs, Head of Process Transformation at Brother, recalls:

It very quickly became evident through the dashboard of Celonis, through the analytics, that across the marketplaces, we saw the same activity taking up to twice as long in one place versus the other ... We also looked at automation rates and, again, we were surprised to find that what we thought was an automated billing process had many manual interactions that cost us long delays.

Often, simply having the data about what exactly is happening is of value in itself, because it provides a starting point to measure against. At car maker Jaguar Land Rover, the first use of Celonis was to look at how to speed up the procure-to-pay process. Kate Goodhart, Head of Intelligent Automation Discovery, says:

There's a lot of noise, a lot of opinions, around how long the process takes. You'd hear things like, 'Oh, it takes 100 days to get a purchase order out.' But actually, when we looked at the data, the average was around 25 days. Being able to have that evidence and then be able to do things about that was brilliant ...

By having Celonis plugged in, we'll be able to measure the impact of both those types of changes that we're making.

Analyzing process efficiency

It's important to be able to find quick wins when starting these projects, because the promise of finding efficiency through automation is one that the computer industry has made since its earliest days, and has often failed to deliver. "There's a healthy level of skepticism," admits Nick Mitchell, Vice President and Country Manager UK&I, who we spoke to at the event. But once the initial case has been proven, the Celonis software can go on to look at cross-functional, multi-system processes. He says:

We often look at one system and see what the inefficiencies are in that system, because we can do that quickly and efficiently and then deliver results quickly that give buy in to the organization for them to then go further.

Then we start to look at end-to-end processes ... That can cross multiple systems, multiple departments, multiple geographies.

When analyzing process efficiency, Celonis uses benchmarks based on analysis from across its customer base, so that it can highlight underperforming processes and also give a realistic estimate of the potential benefit of making changes. The ability to analyze aggregate customer data in this way is one of the promises of SaaS, but it depends on getting the necessary permissions from customers. This is something Celonis has done from the start, because of the collective benefit that comes from anonymously sharing this data. Mitchell says:

We've always wanted to understand what good looks like ... It's important that we're building our machine learning algorithm, and what-if analysis, in order to really help drive the best efficiency. If we can't understand what best looks like, then we can't provide that extra level of value.

Quantifying value delivered

A more commonplace practice among SaaS vendors is to track customer success, although in many cases this is tracked in vendor-centric metrics such as adoption and usage. For Celonis, success is based on customer goals. Rather than using the term customer success, the company's internal post-sales customer engagement team is focused on customer value. This is typically measured in strictly financial terms, although other goals such as compliance or sustainability are also important for some customers. Mitchell says:

Yes, the system has to be up and running. It has to do what it says on the tin. But the real results are based on what value is delivered. Typically, that's a monetary value, but it could be [the customer's] customer KPIs [and] customer success, or it could be risk and compliance — a lot of financial services companies use us from a risk and compliance perspective. If we're reducing their risk, and can demonstrate that reduction of risk, there's a value associated with it.

From the outset, Celonis works with customers to objectively quantify the value of each project, and follows through to establish whether the value is achieved. He explains:

Typically we frame the value, and then we build plans to action the value, to realize that value. Then we get their finance department, whoever, to sign off that their value has been realized. [It] is a very formulaic, structured process to make sure that some of the results that were set up on the screen are bona fide, are signed off by the right levels within that organization. That methodology is part of that customer value package.

Agility to do things differently 

While cost savings are important, another big factor for customers is their need to build more agility into their processes without having to go through a major update to core systems. Recent experiences have demonstrated the urgency of being able to do things differently. Mitchell comments:

How do you create that fluidity in your systems to be able to cope with the next pandemic or big issue that's going to come and hit your business, and be able to change those things and adapt quickly and survive? I think that's where the modern technologies can help supplement those systems without them having to be replaced outright.

That's driving adoption of solutions like Celonis, as organizations come to terms with the latest unexpected disruptions and look at what they need to shape up. He adds:

I think we've seen a little bit of crisis paralysis in March, April of this year. What we're seeing now is an uptick in engagement as people say, 'We're battling on, we need to do something about this. We've solved short-term supply chain issues. Yes, we can sort those out. Actually we need to solve this problem for the longer term.'

Now people are much more engaged and looking at things in the longer term and how they can look at their systems and their processes to cope with these ongoing issues that we're going to continue to face.

My take

Two themes that I've been following closely came through strongly in what I heard from Celonis and its customers last week. The first theme is the emergence of Frictionless Enterprise, which emphasizes the change that comes from connected digital technology. Whereas the first generation of computing consisted of digitizing processes within individual functional silos, connecting up that siloed data for analysis allows for a more intelligent reconfiguration of processes that goes far beyond what could be achieved with that earlier technology. What is particularly interesting about Celonis is that it can be added as a layer around the earlier technology and work with it rather than requiring its replacement to make an impact.

The second theme is an exploration of what customer success really means. I'm with Celonis here — customer success should be measured in terms of quantifiable outcomes for the customer's business. Its approach has much in common with the notion of value engineering, which in the past has often been used to make a business case for technology implementations. The key difference here is that Celonis actually follows up to discover whether the business case was delivered. This is more appropriate to the kind of ongoing relationship that a SaaS vendor has with its customers, and rather than being a one-off pre-sales exercise, it can continue throughout the customer lifecycle.

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