Process-mining companies are surging. They might need the enterprise software establishment to thrive.

Enterprise software giants are buying process-mining startups to bolster their capabilities in workflow management and automation. This combination of new thinking and old data could be a new frontier for business software.

A miner in a mine in 1923.

Process mining can give companies a real-time view of operations on an ongoing basis.

Photo: Library of Congress; Wikimedia Commons

The enterprise software establishment is on a process-mining buying spree. Just last week Microsoft purchased process-mining company Minit; early last year SAP acquired Signavio for an undisclosed sum; and IBM acquired startup myInvenio just a few months later.

But why are these business software giants investing so heavily in process mining? The answer may be less about process mining itself, and more about what process mining, workflow management and robotic process automation can achieve together. In this industry, the whole could be greater than the sum of its parts.

Process mining isn’t a new concept, but it wasn’t broadly understood until a few years ago. Process mining lets companies analyze their business processes — workflows and procedures that employees follow in response to various events, such as receiving an invoice — in order to fix bottlenecks and make other operational improvements.

But the complexity of today’s business operations makes this no easy task. And there’s often a pretty strong divergence between the processes a company claims to have and what actually happens day-to-day.

“[Process mining] was only known more at the academic side and less so in the true operations of larger customers,” said Rouven Morato, general manager of SAP Signavio.

One of those early academics was Wil van der Aalst, a professor at RWTH Aachen University, and also the chief scientist for Celonis, one of the better-known upstarts in the process mining world. “In the mid 1990s, I saw the uptake of workflow management solutions and there was then a huge wave of systems to support business processes by just modeling them,” he said. Van der Aalst shifted his research from workflow management to process mining, a topic he said hadn’t existed at the time.

Traditionally this work has been done by systems integrators or consultants, who map out processes by interviewing employees and analyzing documents. But both Van der Aalst and Morato agree that process improvement should be a continuous practice, not a one-off project.

“Oftentimes what we see in the market with customers is that they run these transformation projects where they look at procure to pay as one project: They analyze it, they find inefficiencies, they might even take the next step of fixing it,” said Morato. But when vendors go back to those customers a year later, they might have stopped following the new processes and are back at square one, he said.

“A lot of people think process mining is a good picture, [but] it's actually a model that allows you to understand how an organization operates,” said Celonis co-founder Alexander Rinke.

Although process-mining companies essentially digitize the work consultants used to do, the difference is that process mining can give companies a real-time view of operations on an ongoing basis. That ability to constantly monitor operations and spot patterns over time seems like it would cannibalize the work of consulting firms, which might be welcome news to some corners of IT.

Rinke, however, doesn’t think that’s the case. In fact, Celonis has a product built specifically for consultants, and works with firms like Accenture, PwC and Deloitte.

Mining isn’t enough

Still, process mining on its own isn’t enough to drive the types of operational improvements enterprises are seeking. To Rinke, process mining is a “gateway technology to building new and better processes,” which is why it's often lumped together with workflow management and robotic process automation.

That’s why the recent merger activity points to a logical transition for big companies that sell enterprise resource planning software, known as ERP, because they probably have all the necessary operational and process data already in their systems. By plugging in a process-mining component, these companies can provide more value to their customers by making their processes faster or less error-prone, for example.

SAP acquired Signavio for that exact reason, because customers started asking for help improving their processes. In response, SAP formed an organization dedicated to process mining, and made the decision to pursue acquisitions. Since SAP was already one of the largest customers of Signavio, the purchase was a no-brainer.

And to Morato, the integration between an ERP system and process-mining software is essential. “If you think about what you want to achieve with a process change, at the end of the day you want to change the execution of how the process is being executed. And that always requires the underlying transactional application.”

After a company has identified its processes, the logical next step is to automate them, which is why process mining and robotic process automation services are also talked about in conjunction. In fact, process mining is a necessary first step before even using RPA.

“So using process mining, you can detect repetitive work, and then provide the information that is needed to automate it in the proper way,” said van der Aalst. That’s why Microsoft’s acquisition of Minit was in part a way to bolster its Power Automate product. And “companies that are specializing already in automation, they want to buy workflow technology, in order to fuel this new form of automation,” van der Aalst said, noting UiPath’s acquisition of ProcessGold a few years ago.

Overall, it’s clear that further industry consolidation lies ahead for process-mining, ERP and RPA players.

Celonis, for instance, is expanding into both workflow management and automation using a build, buy and partner strategy, said Rinke. “To accomplish that we launched our partnership with ServiceNow, [and] we’ve acquired PAF to integrate insights and target actions in the context of Microsoft Office 365 and other Microsoft tools.”

In fact, some industry practitioners think process-mining and RPA companies will almost have to expand into adjacent spaces to survive.

“I think that consolidation clearly shows that as a standalone mining vendor, it's really hard because by now it’s very hard to differentiate, it's very hard to get traction in the market,” said Morato. “And that's a reason for the quick consolidation that we saw because you now see that the larger players are coming in and grabbing market share quickly.”

Morato sees the market becoming commoditized because so many companies can do process mining. “We see that already, that a pure mining play is more and more a commodity in the market,” he said.

Rinke however, disagrees. “I think it’s actually a space that is commoditizing other things and not getting commoditized,” he said, pointing to RPA as an example. “Because you look at RPA, I mean RPA is really a transient technology. It doesn't have long-term durability.”

If process mining companies can’t succeed on their own, it might prove that a platform play is ultimately more impactful than a more focused approach pursued by a single vendor. And it would be a feather in the cap for ERP companies who have been touting that strategy for years.


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