Checking in with Celonis on how it's accelerating time to value in ERP and supply chains

Profile picture for user gonzodaddy By Den Howlett June 11, 2020
Summary:
Hala Zeine, CPO Celonis explains and demonstrates how process mining coupled with machine learning adds value to ERP systems.

Hala Zeine Celonis
Hala Zeine, CPO Celonis (via Celonis video)

It's rare for me to participate in product demos these days. I did that for many years in the 1990s and early 2000s but in recent times I've found many to be deadly dull. Not this time.

Earlier this week I caught up with Hala Zeine, chief product officer (CPO) at Celonis. Ms. Zeine and I are acquainted through her work at SAP when she was leading the indirect access topic but this was the first time we had spoken in her current role. 

Initially I wanted to catch up with her to discover what it is about Celonis that pried her away from SAP after a 19 year career and while I didn't take notes - our call was scheduled to be more informal catch up than formal discussion, one expression stood out to me and it goes something like this:

The systems of record of the past are fine at what they do but they were not architected to respond in times of chaos. They only provide a part of the answer to problem solving, In today's world that translates into making offline decisions often based on gut instinct and outside the tried and true best practices of processes baked in many years ago. We need operational systems that help leaders make the right, data driven decisions both within a business context and driving the means to alter and/or augment business processes. 

Hearing that was music to my ears since it strongly reflects the many ways in which our team see the enterprise software landscape. We have been asking a single question for some years: what does the next generation of enterprise applications look like and how will it solve problems of real-time, redundancy, overlaps and a sheer lack of intelligence? Celonis thinks it has an answer. 

In that context Ms. Zeine talked about how cash might be conserved by examining the data and processes informing current AP systems. She explained that in a traditional ERP system, accounts are paid sequentially and according to the rules set out for suppliers. In a time of change, that may no longer hold as representing the right way to make payments, especially if it is having a disproportionate impact on cash balances when, on the AR side, customers are negotiating extended credit terms. 

To that end, she showed me how a new application can interrogate a process and show how cash is being burned through the AP system, which accounts are being paid and on what terms that could be delayed to balance the overall cash position. The application uses Celonis process mining technology to provide the business context to which machine learning is applied as a way of understanding the nuances underpinning the AP process, sensing friction to give executives a dashboard on which they can take the best decisions. 

If that sounds like rocket science then maybe so but the demo is one of the most convincing I've seen in a long time and one where I could understand value delivered within five minutes. It doesn't stop there. Depending upon the goals that executives want to set, the business could optimize for cash discounts or reduced processing time. It can also capture duplications that an ERP system cannot find. 

According to Ms. Zeine the company is doing extremely well within its existing customer base and is on target to reach its financial goals, despite the COVID-19 crisis. That's because its offerings solve pain points quickly and without disruption to existing ERPs. The company claims that it can typically get up and running with a customer inside two weeks. 

I asked that if that's the case then why isn't Celonis growing faster still. Inertia among customers and a familiarity with their legacy ERP provider represents a challenge to newer offerings like those coming from Celonis. That is despite the claim that rather than pulling value away from an ERP, firms like Celonis add value. It also helps answer the kinds of question that Brian Sommer raised in our recent discussion about the value of existing relationships and the need for both business and IT executives to take a broader view of what is on the market. 

Does that sound compelling to you? At a time when every industry has been impacted by COVID-19 whether positively or negatively, is now the time for you to rethink value? Might firms like Celonis prove helpful?

Bottom line? It's a long time since I was as impressed as I was with what Ms. Zeine demonstrated and it left me wondering if I have just have seen a glimpse of the future. One thing is for certain, I shall be following this company. 

Oh - and here is a link to a promotional video that captures the essence of what I saw and which accompanies an explanatory post that Ms. Zeine recently published.