Enterprise

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.

Policy

Google is wooing a coalition of civil rights allies. It’s working.

The tech giant is adept at winning friends even when it’s not trying to immediately influence people.

A map display of Washington lines the floor next to the elevators at the Google office in Washington, D.C.

Photo: Andrew Harrer/Bloomberg via Getty Images

As Google has faced intensifying pressure from policymakers in recent years, it’s founded trade associations, hired a roster of former top government officials and sometimes spent more than $20 million annually on federal lobbying.

But the company has also become famous in Washington for nurturing less clearly mercenary ties. It has long funded the work of laissez-faire economists who now defend it against antitrust charges, for instance. It’s making inroads with traditional business associations that once pummeled it on policy, and also supports think tanks and advocacy groups.

Keep Reading Show less
Ben Brody

Ben Brody (@ BenBrodyDC) is a senior reporter at Protocol focusing on how Congress, courts and agencies affect the online world we live in. He formerly covered tech policy and lobbying (including antitrust, Section 230 and privacy) at Bloomberg News, where he previously reported on the influence industry, government ethics and the 2016 presidential election. Before that, Ben covered business news at CNNMoney and AdAge, and all manner of stories in and around New York. He still loves appearing on the New York news radio he grew up with.

Sustainability. It can be a charged word in the context of blockchain and crypto – whether from outsiders with a limited view of the technology or from insiders using it for competitive advantage. But as a CEO in the industry, I don’t think either of those approaches helps us move forward. We should all be able to agree that using less energy to get a task done is a good thing and that there is room for improvement in the amount of energy that is consumed to power different blockchain technologies.

So, what if we put the enormous industry talent and minds that have created and developed blockchain to the task of building in a more energy-efficient manner? Can we not just solve the issues but also set the standard for other industries to develop technology in a future-proof way?

Keep Reading Show less
Denelle Dixon, CEO of SDF

Denelle Dixon is CEO and Executive Director of the Stellar Development Foundation, a non-profit using blockchain to unlock economic potential by making money more fluid, markets more open, and people more empowered. Previously, Dixon served as COO of Mozilla. Leading the business, revenue and policy teams, she fought for Net Neutrality and consumer privacy protections and was responsible for commercial partnerships. Denelle also served as general counsel and legal advisor in private equity and technology.

Workplace

Everything you need to know about tech layoffs and hiring slowdowns

Will tech companies and startups continue to have layoffs?

It’s not just early-stage startups that are feeling the burn.

Photo: Kirsty O'Connor/PA Images via Getty Images

What goes up must come down.

High-flying startups with record valuations, huge hiring goals and ambitious expansion plans are now announcing hiring slowdowns, freezes and in some cases widespread layoffs. It’s the dot-com bust all over again — this time, without the cute sock puppet and in the midst of a global pandemic we just can’t seem to shake.

Keep Reading Show less
Nat Rubio-Licht

Nat Rubio-Licht is a Los Angeles-based news writer at Protocol. They graduated from Syracuse University with a degree in newspaper and online journalism in May 2020. Prior to joining the team, they worked at the Los Angeles Business Journal as a technology and aerospace reporter.

Entertainment

Sink into ‘Love, Death & Robots’ and more weekend recs

Don’t know what to do this weekend? We’ve got you covered.

Our favorite picks for your weekend pleasure.

Image: A24; 11 bit studios; Getty Images

We could all use a bit of a break. This weekend we’re diving into Netflix’s beautifully animated sci-fi “Love, Death & Robots,” losing ourselves in surreal “Men” and loving Zelda-like Moonlighter.

Keep Reading Show less
Nick Statt

Nick Statt is Protocol's video game reporter. Prior to joining Protocol, he was news editor at The Verge covering the gaming industry, mobile apps and antitrust out of San Francisco, in addition to managing coverage of Silicon Valley tech giants and startups. He now resides in Rochester, New York, home of the garbage plate and, completely coincidentally, the World Video Game Hall of Fame. He can be reached at nstatt@protocol.com.

Workplace

This machine would like to interview you for a job

Companies are embracing automated video interviews to filter through floods of job applicants. But interviews with a computer screen raise big ethical questions and might scare off candidates.

Although automated interview companies claim to reduce bias in hiring, the researchers and advocates who study AI bias are these companies’ most frequent critics.

Photo: Johner Images via Getty Images

Applying for a job these days is starting to feel a lot like online dating. Job-seekers send their resume into portal after portal and a silent abyss waits on the other side.

That abyss is silent for a reason and it has little to do with the still-tight job market or the quality of your particular resume. On the other side of the portal, hiring managers watch the hundreds and even thousands of resumes pile up. It’s an infinite mountain of digital profiles, most of them from people completely unqualified. Going through them all would be a virtually fruitless task.

Keep Reading Show less
Anna Kramer

Anna Kramer is a reporter at Protocol (Twitter: @ anna_c_kramer, email: akramer@protocol.com), where she writes about labor and workplace issues. Prior to joining the team, she covered tech and small business for the San Francisco Chronicle and privacy for Bloomberg Law. She is a recent graduate of Brown University, where she studied International Relations and Arabic and wrote her senior thesis about surveillance tools and technological development in the Middle East.

Latest Stories
Bulletins