As more and more IT professionals are tackling the challenge of how they can utilize the troves of Big Data accumulating in their IT systems to create substantial business value, a new way of using process mining on SAP HANA seems to be a very good solution.
Celonis, a promising new startup, is working with SAP customers to filter and analyze the data generated by their IT systems with process mining technology, a technique that creates full transparency across the as-is processes running in an organization based on event logs stored in the IT systems. By leveraging the in-memory computing capabilities of SAP HANA, Celonis has developed a process mining solution that provides large enterprises with a holistic view of how their business processes are running, and enables them to drill down to make adjustments in order to unstop bottlenecks and remove inefficient steps – while the process is running, in real time.
SAP software and the need to create more transparency
“IT processes are everywhere in a company,” says Alexander Rinke, co-founder, Celonis. As Rinke describes the pervasiveness of IT systems like SAP in large enterprises, he cites the example of a customer with an accounting department of 3,000 people that uses SAP software to make daily work more efficient. “But this also has a lot of downsides. One of the disadvantages of having thousands of users is that you lose almost all transparency about what is actually going on. We want to bring this transparency back.”
Founded two-and-a-half years ago as the outgrowth of academic research at the Technical University Munich (TUM) in Germany, Celonis has gained momentum as the interest around Big Data technologies has grown exponentially.
As graduate students at TUM, Rinke and fellow Celonis founders Bastian Nominacher and Martin Klenk started working with basic process data, which records the behavior of IT systems and manifests itself in change tables and other storage locations. By applying various algorithms to this data, the students were able to discover new insights into the performance of the underlying business processes. Within a short time, they found their first big customer, Bayerischer Rundfunk (Bavarian Broadcasting), a public television and radio broadcaster also based in Munich. As the talk around Big Data grew, customer interest took off rapidly. So that now Celonis, which has not taken venture capital funding, can conceivably expect to reach its target of 400% growth per year. “What is remarkable about us is that we are really pushed by the customer. So, we are a high-growth startup,” says Rinke.
Bayer, Siemens, and Fiducia: customer satisfaction makes startups successful
Great technology alone doesn’t make a startup successful; satisfied customers do. And it is especially helpful when those customers speak publicly about their positive experiences. Celonis’s first customer, Bayerischer Rundfunk, won several industry awards with its Celonis system, for example, the Service Globe 2012 and the IT Service Desk Award. Other customers like Bayer AG, Siemens AG, and Fiducia (one of the largest data centers in Germany) have also spoken about the value created in their enterprises by the Celonis process mining solution.
Following on from these customer successes, Celonis was selected by the highly competitive German Silicon Valley Accelerator program to receive support in establishing its foothold in California’s Silicon Valley. In 2013, the company opened its office in Sunnyvale, California, to be within short range of key sources and vendors, as well as many of its global customers. “We are really well positioned to address scenarios in the Fortune 500,” says Rinke. “With process mining we have a great technology, and on the execution side, we have a great team.” It is not surprising that Celonis customers tend to be large enterprises. As Rinke explains, “Process mining is more attractive the more data you have.”
Celonis focuses its efforts on digitalized processes that have a high economic impact – for example, procurement, order to cash, supply chain or IT service – because they typically require that an employee must respond and interact with the system before the work can move to the next step of the process. “In most business you cannot complete an order or request completely automated,” as Rinke says. “You need to have highly skilled people do certain steps, which create the costs.”
Analysis of pharmaceutical data from multiple SAP systems
Celonis has been extremely successful in the areas of accounting and compliance across vast system landscapes. For example, leading pharmaceuticals firm Bayer uses Celonis technology to collect and analyze data from its more than 20 SAP systems. Also, IT service processes have provided rich opportunities for Celonis’s process mining. In one case, Celonis has helped a customer reduce its IT costs by 30%.
Another area where Celonis has made inroads is in hospital management, where it has been awarded for its work helping hospitals control costs and manage processes efficiently. Hospitals provide an ideal environment for process mining. For example, the work of the surgeon, CEO, and controller in providing patient treatment depend on the transparency and overview of many complex processes running in parallel. There are also difficulties concerning financial processes for hospitals, such as producing an invoice and receipt of payment. Celonis was able to help one customer reduce its processing of outgoing invoices from more than 20 days to 5 days.
Customer relationship management (CRM) is one area where bottlenecks can slow down processes and hinder the profitability of a company. The approval of proposals is a process that is often rife with bottlenecks. According to Rinke, Celonis has been especially helpful for organizations by examining the lead-to-order process in combination with the order-to-cash process. He says that looking at processes in combination with one another can be very revealing about where slowdowns may be occurring.
A startup’s vision for SAP HANA
SAP HANA has been a key technology for Celonis, which started building the SAP in-memory technology into its products in 2012. SAP HANA has two distinct advantages over other technologies, according to Rinke. “On the one side, it allows us to build a very scalable platform for large Fortune 500 customers. SAP HANA is really the most powerful and economic solution to address this without spending a lot of money for other databases,” Rinke says. “On the other side is data integration,” he continues. “Currently, users of SAP software are by far our largest market, but SAP is different in one manner to many other IT workflow management systems: Data access is quite difficult and the amount of data typically stored in an SAP system is huge.”
Accelerator for Big Data, predictive, and real-time analytics startups
Celonis is part of the SAP Startup Focus program, which supports startups in developing new applications on SAP HANA. The SAP database platform streamlines analytics, planning, and predictive and sentiment assessments to allow business to operate in real time. The SAP Startup Focus program is an accelerator for Big Data, predictive, and real-time analytics startups. More than 650 startups are participating in the program to-date and have developed distinct SAP HANA-based use-cases, from gaming to retail to finance and manufacturing.