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Celonis targets “government mavericks” to improve public sector processes

Derek du Preez Profile picture for user ddpreez March 23, 2023
Summary:
Celonis has secured a deal with Carahsoft to make its Execution Management System (EMS) widely available to US Federal, State and Local Governments.

digital-government

Celonis is expanding its presence across the government sector, where it is seeking out “government mavericks” that understand the potential of process mining to transform the delivery of public services. The company has signed a deal with Carahsoft, which via its General Services Administration (GSA) schedule, will make the Celonis Execution Management System (EMS) widely available to buyers across US Federal, State and Local Governments. 

Celonis is also building out an experienced team of government veterans and experts, who understand the complexities of public sector service delivery, and is investing in the vertical market for what it has identified as a significant opportunity. 

The vendor has gained a reputation in recent years for delivering huge efficiencies for its customers via its Execution Management System, which not only analyzes the data from a company’s underlying systems to visualize processes and inefficiencies, but then also provides tooling to quickly apply fixes and automate these across processes.

The government sector is an incredibly complex market, however, where there are interwoven elements of service delivery across multiple layers of administration. Buyers have to contend with cyclical budgets and ever-changing political motivations, as well as years and years of underfunded legacy technology. 

Celonis believes that the key to driving change is helping these public sector organizations better understand their processes, in order to automate and deliver improvements. But it does require strong leadership and executive sponsorship to support the disruption and investment, which is where Celonis sees the “mavericks” playing a role - buyers that understand the potential of the technology (and perhaps see it as a career opportunity too). 

We got the chance to speak with Chris Radich, Celonis’ VP of Solution Engineering and GTM, about why Celonsi is pursuing this sector at this moment in time. Radich explained that the current economic environment, following COVID-19 relief programmes, is fuelling the investment from buyers. He said: 

Clearly we're at an inflection point where we’ve had this era of low interest rates and massive government relief programmes. Now we've got disciplined government budgets and transparency. So where we've seen we're having the greatest impact is with government leaders looking for more transparency on financial spend. 

That's led us to significant momentum in the defense market.They have the largest ERPs and some of the largest budgets and line items across government. We've also seen it at state level. All of the COVID relief flew through the State Government, to ultimately get to the constituents. 

As that spigot has been turned off, they're looking to understand their budgets and procurement life cycles at a much deeper level. 

And then there’s federal-civilian, which is just a vast opportunity. And that is kind of an industry of industries, if you think about it across healthcare, treasury and financials, there's a variety of missions that we plug into nicely. I think that will be our biggest market over time, but right now we see State Government as such a massive opportunity because of that financial shift.

Transparency and control

The Carahsoft GSA partnership provides Celonis with an established route to serve the government market, for which it already has a number of buyers. Radich said that the vendor’s core value proposition is that it is going to bring more transparency and control to what is a complicated, fragmented system. In particular for organizations that recognize the interconnected nature of service delivery in the public sector. He added: 

One example we found was for a financial digital twin for one large government agency, for its end to end procurement. And we found hundreds of thousands of variants or opportunities to standardize processes. And that was across multiple government agencies for their procurement process. So this is one of the few technologies that can cut through that political dynamic that you see across government.

Radich said that Celonis has typically found success with government buyers that are looking to build out a process excellence organization within their agency or department and with leaders that are seeking improved financial transparency. Radich said that the financial transparency also isn’t necessarily about driving margin improvement, but instead is about preparing for third party audits, which is a “very high priority initiative”. 

But also key to these conversations with government buyers is improving their understanding of how to deliver successful projects. Radich added: 

The metric is staggering - 87% of government tech projects over $6 million fail. You focus all this time on selecting your technology, your modern technology stack, and then you bring in a BPO or a systems integrator who has to go back in time and do process discovery or requirements elicitation, without a real objective way to do that. 

But that's why we see process mining as something that can fundamentally change the game. It's the first technology that could solve this problem and not rely so much on outsourcers or institutional knowledge.

Leadership opportunities

Radich said Celonis' key objective is to get more EMS pilots and R&D projects established in the government sector to demonstrate the value in the platform. The belief is that once some value is delivered, then this will fuel more investment. Radich added: 

Lean into a pilot or R&D project with process mining, on one of your core financial processes, just to see how much transparency and improvement you can drive in four to eight weeks. That's really it, because once you get started, then you kind of visualize how much change you can drive in your agency. 

However, aside from the projects themselves, Radich said that the key to success in the government market for Celonis is finding the leaders that understand the potential of process mining. He said that the projects need CXO sponsorship, whether that be a CIO, CFO, or something similar - as well as “someone in the trenches” who’s going to view the technology as an opportunity to scale process excellence through their organization. Radich explained: 

This is such an opportunity for government leaders that want to drive change. You gain full knowledge of the problem statement, the situation and implications. And then you can go out and automate and trigger some of that improvement very quickly. 

We’ve found transparency can be scary to some. And that's why we're looking for mavericks in government, who are willing to maybe expose some inefficiencies to improve constituent services long term. And those folks are out there. 

That's why we're excited about the market opportunity, but we do have to find them and educate them on an opportunity we bring to the table.

My take

As someone that’s covered the government technology sector for a decade, it’s always been clear to me that one of the key things standing in the way of real change is that agencies and departments need to invest in technology with an understanding that they’re not operating in silos. Citizens’ lives are complex and their interactions with government can require touching multiple agencies for one service - but those agencies often don’t understand the interconnected processes and are sometimes just maintaining the status quo. Having insight into how your services are delivered, via process mining insights, creates an interesting proposition to move the needle in the right direction. 

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