8. Process Mining

Question 1

Today’s challenges for businesses (6)

Answer 1

• high customer expectations
• shorter product cycles
• mass customization -> variety of customers from all
  over the world have different demands
• digital transformation
• disruptive technologies
• global supply chains

=> remaining competitive and on top of the market for the long-run is difficult nowadays:

   "Processes are the engine of every experience"

Question 2

What is a process? (Definition, Problem in practice)

Answer 2

= a business process is a collection of related, structured activities or tasks that in a specific sequence produce a service or product

Problem: In practice, there are many things that can go wrong!
- problems mean direct costs for the business
(employees, material, etc.)
- problems mean indirect costs/opportunity costs
(customer satisfaction, time factor, etc.)

Question 3

Old vs. New Way: Process Mapping (2 Characteristics and Problem)

Answer 3

Process Mapping:
- subjective and partial -> consultants reconstruct
processes by doing personal interviews, on
premises analysis and come up with a model
- very lengthy and costly

Problem: Full complexity of the problem is difficult to understand, only fractions/symptoms/snapshots are being analyzed and adopted => one time understanding

Question 4

Old vs. New Way: Process Mining (3 Characteristics)

Answer 4

Process Mining

• objective and complete by having a data driven approach
• immediate information available (time efficient) and self-servicing
• continuously enhancing -> real time data upload tells us continuously about the process as oppose to being restricted to only snapshots with Data Mapping

Question 5

Interdisciplinary Approach (5 Factors for each components)

Answer 5

1. Process Science
   
   • Process Management
   • Automation
   • Process Control
   • Process Improvement
   • Operations Management
2. Data Science
   
   • Data Mining
   • Statistics
   • Machine Learning
   • Databases
   • Predictive Analytics

=> intersection of both sciences defines Process Mining

Question 6

Process Mining

Answer 6

= data analytics tool to reconstruct, analyze, and improve business processes based on log data from transactional IT systems
-> Process Mining bridges the gap between model-based analyses and data-centric analysis techniques.

Question 7

Businesses heavily rely on IT systems (Data Storage, Examples)

Answer 7

Business data is stored in a variety of IT systems such as workflow management systems, ERP and CRM systems, supply chain management systems etc.

Question 8

Event Logs (Basis of Process Mining, Definition of Event Log, Minimum, Characteristics (5)

Answer 8

• > structured data is the basis of Process Mining as well as looking at the digital footprints
• > an event log stores the data that is required for Process Mining (at the minimum, the event log covers three columns: caseID, activity name, timestamp)

Characteristics:
- CaseID: indicates which process instance the event
belongs to (a case usually consists of multiple
events)
- Activity: Describes the action that is captured by the
event
- Timestamp: indicates the time when the event took
place
- Trace: A sequence of events, ordered by timestamp
that belong to the same case
- Variant: The traces of all the different cases with the
same activity sequence

Question 9

Process Mining Techniques (3)

Answer 9

Discovery = uncovers how processes are executed vy replicating a process model from the event log

Conformance Checking = compares the “as-is” process from the log data with the “to-be” model

Enhancement = uses insights from discovery and conformance to improve the process

Question 10

Business Impact of Process Mining (4 overall impacts, 3 direct impacts)

Answer 10

Efficiency

• perfect order
• automation

Quality and fulfillment

• rework
• rejections

Speed and Agility

• On-time delivery
• throughput time

Compliance

• “Should-be” vs. “As-Is”
• Process monitoring

=> affects direct costs
=> affects indirect costs
=> affects opportunity costs

Question 11

Advantages of Process Mining (Regarding organizational change)

Answer 11

+ reduce process cost
+ increase revenue
+ reduce working capital
+ improved risk-management