Mining Your Business

38 | Accelerating Business Transformation with Process Mining Centers of Excellence with Maximilian Röglinger, Fraunhofer FIT

June 22, 2022 Mining Your Business Episode 38
Mining Your Business
38 | Accelerating Business Transformation with Process Mining Centers of Excellence with Maximilian Röglinger, Fraunhofer FIT
Show Notes Transcript

To better understand the status quo of process mining inside organizations as well as to provide best practices and recommendations on how to drive scale, Celonis and Fraunhofer FIT have conducted a joint study on Centers of Excellence (CoE) for process mining. Maximilian Röglinger, co-author of the study, is going to discuss with us further details.

00:00

Patrick:

Welcome back to the Mining Your Business podcast. A show all about process mining, data science, and advanced business analytics. Today's topic, Center of Excellence. Jakub, we kind of know what that is, right?

 

00:10

Jakub:

Kind of, yeah.

 

00:11

Patrick:

Yeah. Here to help us out is Maximilian Röglinger, a professor and head of digital business at Fraunhofer Institute joins us on the podcast to talk about Centers of Excellence for process mining, why you need one, and how to set one up properly to ensure success of your business.

 

00:34

Jakub:

I think smart people in Fraunhofer Institute must be doing something really, really well. How else can you, Patrick, explain their second attendance on our podcast? I mean, after Sebastiaan Van Zelst who visited us in our podcast on episode 34, we are about to conduct an interview with his fellow colleague, Professor Maximilian Röglinger, a vice chair of the Institute and head of digital business at FIT.

 

00:59

Jakub:

Maximilian, welcome to our show.

 

01:01

Maximilian Röglinger:

Yeah, thanks for having me.

 

01:04

Jakub:

First of all, I always have to say what a pleasure to have you on. Having you here just for me just proves how much social media and their powerful algorithms are moving the needle for us. And probably not only for us, because if it weren't for LinkedIn, my LinkedIn addiction would have not come across your study. And that would be a shame, not only for us, but also for our listeners. So we are here today to discuss mainly your whitepaper called Accelerating Business Transformation with Process Mining Centers of Excellence, which you published in an interesting cooperation with Celonis, and more specifically, with Lars Reinkemeyer, also a guest who previously appeared on our show. And well, now the beauty of this episode is that we are recording this before the planned roundtable and like an official release session, which interestingly will be on 21st of June where you and Lars are going I assume to discuss the paper and after, you know, a day before our episode is going to air. So it's very, very nice. That means two things. First, that we are the first one to know, and second, for anyone who listens now, you know they can catch up with whatever they missed in the session. And before we dove into the study, let's first talk about you and your career a bit. So my favorite question, how did you end up with process mining?

 

02:27

Maximilian Röglinger:

Yeah, yeah. So first of all, thanks for the nice introduction. So I started my career when studying information systems in Bamberg which is located in the northern part of Bavaria. And you must know, process thinking is a very big part of the information systems discipline. Yeah. So it's kind of in my in my academic DNA. Yes. And when I continued with my Ph.D., I always was in close contact with industry. And this is also the case today when I'm working not only for the university but also for the Fraunhofer Association. I very much like this strong collaboration between academia and industry. And while everything is processed yes. So this is where digital technology is put in use, is contextualized. So everything comes up and gets together in the process domain typically, when I started my academic career, I had a rather strong perspective on the management part of business process management. You cannot simply ignore process mining today. We see this in our research. We see this in our projects. With industry partners. This is such an industry, such an interesting topic. And that's why we also founded the Fraunhofer center of process intelligence with Sebastiaan Van Zelst, for example and we try to be very active, both on the computer science part of process mining. But yeah, nonetheless, on the management side of process mining and this is at least in my opinion, strongly neglected topic in industry and also in academia and that's why we are so keen on pushing the boundaries of this specific perspective on process mining.

 

04:33

Jakub:

What I found very interesting that you said is that you started like with the management and with the proper business background, and slowly, slowly, you adapted this process mining techniques. What specifically does process mining bring so valuable in terms of the management of the business processes?

 

04:53

Maximilian Röglinger:

Yeah. So so typically I like to quote a friend of mine, you know, Michael Roseman, also a very, very well known BPM researcher and Michael always says that process mining brings us from confidence to evidence. Yes. And this is why I very much like to combine a process mining and a business decision making, because we have to make very complex decisions with very huge impact on the organization or on entire value ecosystems. And in former times, we simply did not have the data and many of the future oriented decisions had to be made based on gut instinct or based on simulation and process mining provides us with actual real world data. And this, from my perspective, helps us to make evidence based decisions. Very well grounded on what is currently really going on. So in my research group, we try to pursue a thing that that we call a process mining for management decisions. Yes. And we try to to bridge this gap so we are not so much involved in the classical discovery topics, but I think it's important to leverage all the insights we can get for management decision making.

 

06:21

Patrick:

So how important is this management perspective in comparison to other disciplines, not just process mining? I mean, there's tons of different industry applications or things that you could implement. How does process mining differ and why does it need its own little research group to figure out how to give management the tools to really wield it?

 

06:43

Maximilian Röglinger:

Yeah. So my perspective, as I already said, is everything is process. So this is where things come together. The resources used, the IT employed, the people engaged. So the process perspective is kind of a glue that ties everything together and that's why, in my opinion, it needs special attention. On the one hand, it is particularly complex because so many perspectives have to be merged and joined in a reasonable manner. And on the other hand, it provides us with in-depth insights into what's currently going on. That's why it's a special topic and deserves a special attention from my perspective.

 

07:37

Patrick:

Now, I've seen a lot of research papers on the actual technology of process mining, but none really about the business management part of it. I might just be my own ignorance, but is this a big field or is this just you are and your research group are the sole group that is really discovering this, this part?

 

07:54

Maximilian Röglinger:

Yeah. So definitely from my perspective, this is a big deal. So this is typically the way it goes. Yeah. So we have an emergent technology and first of all, the technology is not mature enough in order to be employed beyond the research context or beyond a small POCs, small proof of concept implementations. So from my perspective, it's quite natural to start with the technologically focused research in order to advance technology itself. You cannot talk about the management issues of using process mining if you don't have a professional solutions or only simple algorithms in place, but today we have so have a look at all the research that is going on. Have a look at the massive movements we can see in the vendor landscape. There's so much going on and fantastic processes are back on the on the boardroom agenda. This is fantastic, from my perspective. And now it's a perfect point in time to shift the focus, or to additionally focus on the management things. So many so many companies right now made very nice experiences with the one or the other vendor, one or the other tool. And so the question is now how can we scale all this? How can we create true business impact using this technology? And this is where the information systems, the technology acceptance, the organizational design perspective comes into play. And, you know, this is what I'm really passionate about. And I think this is necessary now to create a true and long lasting value for companies.

 

09:54

Jakub:

Yeah. And I guess it's also the main theme of the paper that you published together with Celonis, The Center of Excellence. And it's also honestly a big pain point for us and for our projects because, you know, we come to companies, we do implementations and we have this little sandbox that we are playing with couple of users. And the scaling is always that's always a challenge. There are different people, different mindsets, you know, different level of adoption and maturity and making things fall into right place at the right time. Also, like with the maximum I would say the maximum value is is difficult and it's challenging. So can you tell us a bit more about so I guess the reason behind the paper? What does this paper tell us?

 

10:45

Maximilian Röglinger:

So the key objective of this white paper of this study was to get firsthand insights into the why, what and how of process mining Centers of excellence. Yeah. And the key topic, as you already said, that we wanted to address is to understand how companies already succeeded with setting up a center of excellence what are the effect, for example, faster realization of business value, creating higher return on investment. How can centers of excellence be set up? Yeah, because, you know, I'm quite sure also from your work that there are no companies like another one. So the question is, what are the design dimensions of centers of excellence? What are typically archetypes for our roadmap to success? So this is the key outcome of the study. And also here we wanted to move from from confidence to evidence. Shall we have anecdotal evidence? We from our project Celonis, they from their projects. You from your projects. Yeah, but we wanted to get firsthand insights from companies that already successfully implemented centers of excellence. Yeah. To move from anecdotal evidence to true insights.

 

12:17

Patrick:

Now, how does a study like this even come about? Right. How does one go from. Oh, I kind of want to know how these centers of excellence, if there's some sort of proven metric that we can say that this is the key to success or higher ROI or something like that, like how does how do you go from that idea to actually doing the study?

 

12:34

Maximilian Röglinger:

Yeah. So to be honest, I met Lars Reinkemeyer by accident and we got to know each other at some kind of process mining expert roundtable. And then we contacted each other via LinkedIn, so the same social media addiction that you have, Jakub. And then we simply met in Munich at a cafe. And I think we liked each other at first sight. And we also we share this, this passion for the organizational dimension of process mining. Basically, that's it. Yeah. And then couple of weeks later, we sat together, had the project kick off and kicked off the study.

 

13:32

Jakub:

Yeah. To be fair, Lars is very likable, so no surprise there. So you basically had this idea to kick off this study, and then how did you even think about what data, what dimensions to look into because you mentioned you want to go from this feeling or just the gut feeling to evidence. How did you design all those data points of success and the points that you wanted to measure?

 

14:02

Maximilian Röglinger:

Yes. So this was a joint effort between Lars' group and my group. And Lars, of course, brought the substantial Celonis experience from setting up centers of excellence to the table. And I at my research group, we have quite some experience in researching other organizational phenomena. And so, for example, a couple of years ago, we studied how to successfully set up agile IT setups. Yes. And so we had a quite a good starting point for the dimensions that are relevant. Quite early we had a big picture of the things we wanted to investigate. And then we iteratively developed the question, particularly by involving friends of the community from my side, but also customer value managers from the Celonis side. Yes. So to get an alignment both from the academic and the industry world. We did a pilot study and all the things that you typically do when setting up a research study.

 

15:22

Patrick:

What did the study involve? Was it one questionnaire? Did you take it in different points of time? Was there some sort of level of maturity that needed to be done for these centers of excellence before you? These questions were valid, like what did the study actually ask in the questions?

 

15:36

Maximilian Röglinger:

So we focus on Celonis customers that already had to have quite some experience with process mining, but that did not necessarily need to have a center of excellence in place. Yeah. So and center of Excellence is a nice little term. Yeah, but but not every company that has a process mining team, for example, thinks of it as a true center of excellence. Yeah. So, so the only prerequisite that the companies had to meet was that they have adopted a process mining technology for quite some time. So say yes, six months or 12 months between six to 12 months. And then in our study we did a single assessment. Yeah. So we distribute it to quite some customers and we received valid questionnaires from more than 200 Celonis customers and then we classified the respondents regarding whether they already have a CoE, only a process mining team, whether they plan to have a CoE, and this was also very important for doing all the data analysis, in order to come up with insights.

 

17:00

Jakub:

I guess this is also a good time to say a specific definition of CoE and for everyone who doesn't know it. So a center of excellence is a theme that has been mandated to provide leadership, best practices, technical deployment, support and training for Celonis in your organization. Right. So basically I would ask the question, why is a CoE a must?

 

17:29

Maximilian Röglinger:

So this was also a very important start. As already said, we focused on tge the why, what and how. Yeah. Like in the Golden Circle. In many cases, a very good structure also for for research projects and for research studies. And I think all of us had quite some good gut instinct, gut feeling that that CoE is something useful. But that's already said we wanted to have first hand experiences and we wanted to listen to the customer's voice to the user's voice. And to be honest, 100% of the customers that answered the questionnaire were convinced that we have a true business value that can be gained from center of excellence. Yes. So this is a very general statement. And what does it mean in detail? So Center of Excellence, first of all, increases the probability that you can employ process mining in economically sensible manner. Yeah, you can do this faster. Yeah. So higher probability to succeed. You can do this faster, and you can also see that there are some additional benefits yet like for example, the use cases get better, they get better qualified and the level of automation and impact on the organization gets better. Tt's truly like an accelerator for implementing process mining in a manner that creates positive business success.

 

19:16

Patrick:

So what was really fascinating to me when I read that that 100% confirmed that the CoE is valuable, but you also said that you also had enterprises that don't have a center of excellence. Is that more of a Hey, we probably should have done one and regret it now that we didn't. Or what is the sentiment there?

 

19:35

Maximilian Röglinger:

I cannot be very precise about the sentiment because we didn't talk to the people. So this is one of the drawbacks when you do a question based study. But I think the sentiment there is that even the companies that did not yet implement a center of excellence, they are convinced that this is a good idea. Yeah. Because they heard from their fellows, from the community and there is very much very positive momentum in the industry because everybody wants to implement that technology to have true impact on the organization. And if you asked to your fellows from other companies. So I think the sentiment is very positive. And yeah, there is much momentum there.

 

20:32

Patrick:

Now actually that leads me to my next question of who was polled when with this questionnaire, because I'm imagining that if you ask a business user about, hey, would you like a team that dedicates itself to actually building the analysis and building all the dashboards and answers all your questions and gives you trainings and all that, I would be surprised if they didn't say that that was a positive thing, but it's probably from a different perspective. Somebody that has a sponsor, the whole thing that has to provide the resources and all these things might have a different opinion of the value of a center of excellence.

 

21:03

Maximilian Röglinger:

Yeah. So we approached the guys responsible for process mining in the organization. Yeah. So you probably know that Celonis has quite an elaborate customer value manager community and so the good thing about is that you do not simply distribute a questionnaire to whomever it may concern. There were very close relationships between the people from Celonis and the customers. And we leverage this customer value community at Celonis and to leverage the one on one relationships that exist between Celonis and their customers. This was also very positive in terms of their response rates. So we had very positive feedback. We could also do follow up calls in case something was not clear. So without this, it wouldn't have been possible. So simply addressing the same amount of people via LinkedIn in an anonymous manner, it would not have worked out. So this was a true asset for this study, That's the basic reason also why we joined forces.

 

22:28

Jakub:

I would also recommend towards readers to download the study, you will find the URL to do that in the description of the episode and especially reading through the key messages, which I think are very interesting where you can see this, you know, the percentages, those are the distribution of what the regions and what people are responding and so on. So give it a try, give it a look. I'm sure you will like it. One question that comes into my mind here now is how do you differentiate between a center of excellence and an actual project team? Where do you draw a line? And you say, OK, this is already something that we would consider to be a center of excellence. And no, this is just a couple of people doing a project in one domain and they don't really count as the center of excellence.

 

23:17

Maximilian Röglinger:

So this is a very valid question and I think it's very easy to answer in case for those companies that have a high process mining maturity. So, for example, that have connected five plus processes and involved many departments. So there you typically also have a high level of we call it institutionalization. Yeah, so something that leaves behind when the project has ended. Yes. Or when the when the use case has been implemented. So for the very mature companies, this is easily to be answered. And it's more difficult when you look at those companies that are about to start with process mining because in the beginning and I'm also in my Fraunhofer role I am also talking to many companies. We still see many companies who are not sure whether to really institutionalize the process mining capabilities. So there are still many companies also around who still have a lack of success stories who still need to convince all the guys in the business and the IT departments and still many of these companies get stuck in the POC phase and I think in these cases, we only have a project. When the project has ended, nothing is left. Then there is this very important tipping point where companies typically make a very clear decision about whether to scale it or not. And if the answer to this question is yes, then you move on from the project to an institutionalized structure, dedicated people, dedicated governance, dedicated roles, things like that and then you have this true institutionalization, which is about to grow. When you connect more processes and so on, but then you have this tipping point.

 

25:30

Patrick:

So you've talked a little bit about how the study lays quite well about why a center of excellence is really a benefit to your enterprise. And, but then I think a lot of businesses then also struggle, OK, we want to do it, but how do we do it well? What are the pitfalls? How do we not do it? What common mistakes can we avoid in order to have the best foundation to get this up and running? Can you tell us a little bit about what the biggest outcome of the study was in terms of this?

 

26:02

Maximilian Röglinger:

Yeah, so I think there are some questions that need to be answered very, very clearly. Yeah. And as I already said, it may be the case for some companies that process mining just doesn't make sense at the moment and I'm quite sure that these companies will get back to the technology in one year or two years. So I think we share the opinion that process mining has come to stay and sooner or later, every company will use it to some extent, but there are some questions that need a very clear answer. So first of all, as with many things in the business world, the question about sponsorship needs to be answered. Who is the executive sponsor? What is the sponsorship, by the way? Yeah, it's the person, ideally a senior executive in the organization that is a big fan of the technology and believes in the value that it can generate and leverages that network in order to open the doors to make relevant operational decisions. The executive sponsor is very important. Then the level of ambition is also very important. Where shall we start? And what is the value proposition at the beginning? So you can do process mining with very different value propositions. Yeah. Starting from a pure technology providing center of excellence through execution management excellence ambition. So this is very different and also has a huge impact on the amount of resources. A resource commitment that you need in order to be successful. And so not only the executive sponsorship but also the level of ambition and the value proposition needs to be answered quite clearly. I think these are two important things. Yeah. And the third important thing is to be quite clear about the people to be involved. Regarding, for example, who's in the team? Who will stay in the team and what is the right balance between make or buy? So where do we want to develop capabilities or skills on our own as a company? When our consultancies have to come in and what is the inside out model for the start?

 

28:52

Jakub:

I really want to unpack these points a bit more, but before I do so, I also want to ask you if there maybe was something missing that you were surprised by that maybe there was a point that wasn't a factor or wasn't as strong as you would probably think it would be?

 

29:11

Maximilian Röglinger:

Very good question. So I think what was not really surprising for somebody who is doing research on this all the time, but I think worth mentioning is that we did not find specific technology related factors or hurdles. This also matched very well with our basic assumption that the technology is mature enough. It's not the key problem anymore. So the lack of technological maturity is not a key problem anymore, by the way, not only for Celonis, but for many different vendors on the market. So this was a point worth mentioning. When leveraging this technology, even institutionalizing it, the biggest success and at the same time failure factor is the human factor. And this is what all the study was about, to be honest.

 

30:24

Jakub:

Going back to humans, while the key factor in the study is highlighted and proper you know, detailed out is the importance of having an executive sponsor. You already mentioned it, but who is such a person and also next question would be because you also lay a term of a business champion. How do these two people actually differ from each other and what is required from each to drive the initiative?

 

30:57

Maximilian Röglinger:

Yeah. So the sponsor typically is a single dedicated person,as I already said, who believes in process mining. He who is convinced that convinced that eventually positive business value can be created by using this technology and who also ideally is a person who disposes of sufficient authority and or resources also in terms of people and budget to get the journey started. Yeah. And I think this is for many technologies and for many change initiatives in organizations. The executive sponsorship is one of the key topics and this also holds true for process mining. Business champions is another role. Yeah, that is quite important. Business champions, it's more operational. It can be located in different business departments of the organizations and are something like power users. So champions spread the word about the technology in their business department, try to get it operationally going, serve as power users, answer the questions to the evangelization within their local departments. And while you typically have one specific executive sponsor, you can have many business champions, you can have a business champion community, in order to foster knowledge exchange between the departments while you scale. So these two are very important roles overall.

 

32:51

Patrick:

Now I was wondering if you don't have an executive sponsor behind this, is there still hope for you or are you saying it still possible even without this? Or what can you do?

 

33:04

Maximilian Röglinger:

Well, if you don't have one, you should win one. Yeah, so we could see that almost 100% of those customers with a positive return on investment on all the things that go into process mining, have an executive sponsor. You know this from your projects, so I think without an executive sponsor, you can try it, you can do a POC, in order to create first success stories, in order to win and to convince executive sponsors, but I would say without an executive sponsor, scaling is not possible. You're fighting against windmills yeah. You could to individual POCs, I think this is possible. Do it on a very small scale, but in order to successfully leverage the potential of process mining at any other technology and bigger organizations, you definitely need an executive sponsor.

 

34:12

Jakub:

Number two in your list was a highly qualified and especially committed team, and it actually brings me to a question because, well, we are still a consulting company that helps organizations to start things off. And I really liked your point when you said that the center of excellence kind of happens when you start actually getting people into the project, like on a full time or like dedicated only to process mining as you finally acknowledge within your organization that this is going to stay. How does consulting fit into this?

 

34:47

Maximilian Röglinger:

From my perspective, it can accelerate the acceleration. Yeah, so Process Mining Center of Excellence is there to accelerate the adoption of process mining in organizations. Consulting comes into play typically in, first of all, typically in early phases, when there's a lack of skills in organizations to get the journey started. That's why I said to accelerate the acceleration because typically you start with an individual use case or two use cases and then at the same time or only with little delay make a positive COE decision and this is why consulting can help establish the center of excellence. Yes. So this is one thing and then it can also help during the scaling. Because, you know, it's quite hard nowadays for companies to hire skilled employees, specifically in the area of another technologies in the area of process mining. This can provide some temporary engagement until new people could be found. Or until this huge need of resources is not there any longer.

 

36:21

Patrick:

What are the hallmarks for having that successful and highly qualified team? I mean, if you're an executive sponsor and you have a look at your team, what makes you say, yeah, yeah, they can do this. Is it that we need new people we need to hire specific skills for this? Or is this something that, you know, people that already work there can kind of do already and kind of transition?

 

36:41

Maximilian Röglinger:

I think if you are a big enough company, you can definitely work with existing people. So when we did the study, we also had a closer look at the competencies and the roles that are necessary for making use of process mining for establishing a center of excellence. Of course, we have to typically role a more the leadership role like the CoE lead. We need the subject matter experts, which are typically located in the business departments, so you definitely have them in place without any problems. Then there is a switch towards more IT related roles. So we need data analysts, data engineers. Somebody who takes care of the process mining solution. And I think this is the most difficult part, because when you start to get going with process mining, it is super important to have this IT related or data engineering related roles because you have to set up new data models. You have to connect the process mining solution with existing IT systems and to set up all the ETL routines and things like that. So this why I think that the crucial roles are the data analysts and data engineers. When you are scaling it's more important to get grip on the subject matter experts and we have also seen that the number of subject matter experts that need to be involved increases linearly, proportionally with the number of use cases that you do with the number of processes you connect while by contrast there's a huge learning effect when it comes to the data engineers and data analysts.

 

38:49

Jakub:

Now, the second interesting keyword in your number two point is the commitment of your team and the commitment of the people. Now, I love asking this question because it's just a difficult one to answer and to have a general answer for every organization, because you were very on point where you said that each organization just works differently. There will be a different dynamics, different way of working, however, how do you get your team committed to the CoE, to the process mining idea? Is this maybe also one of the key roles of that executive sponsor who says, OK, this is your job now and this is what you have to do, or are you hoping for this more natural adoption in there?

 

39:33

Maximilian Röglinger:

This is a very good question. So I think if an executive sponsor would say, though, this is your job now, I think that there certainly are many people who would do a good or decent job. Yeah, but I think the most important thing is creating intrinsic motivation. And for me, it depends on the interplay between the CoE Lead and the executive sponsor. So I think it's the duty of the CoE lead to establish a strategic narrative. So what do we want to achieve? What is the benefit for the company? What is the benefit for the customers of the company? I think the key duty of the CoE lead when starting a process mining initiative is getting everybody on board, getting everybody motivated and creating this strategic narrative. This is one thing - creating intrinsic motivation. And the second thing is to grant the people dedicated capacity. This is I think you already know this from your projects. When you ask people, hey, could you do this on top? On top is not a very good idea when you really try to bring something forward. You could do a POC with this on top attitude, but you simply cannot scale. We see this typically, those companies who start with a CoE have gained experience with the technology with one, two, three use cases, POCs. When you really try to adopt the technology at large scale, you need dedicated resources, not only intrinsically motivated people but also dedicated capacity because a lack of capacity eats intrinsic motivation for breakfast and this will only be a temporary phenomenon, but not long lasting.

 

41:51

Jakub:

I love the splits. Whenever we are very often overworking someone. So the new person who's in the project, you know, they split the responsibilities. They will now be 50% dedicated to their old work and 50% to the new work. What happens is that they are still 100% committed to their old work, plus 20% to the new work.

 

42:10

Maximilian Röglinger:

True, 50 / 50 is not too bad anyway, but as our study showed as well, you need 100% person dedicated resources as well. Otherwise you won't really get the impact needed to accelerate the things.

 

42:29

Jakub:

So speaking of CoE team, what does it look like? Who is in it and what persons should be involved?

 

42:39

Maximilian Röglinger:

As I already said, there are multiple roles. So first of all, and this is a crucial role specifically when you kick the CoE off is the CoE lead who is responsible for creating all the shared vision, strategic narrative, the overall rationale for motivating people and also for, for getting together with the executive spends are getting the funding, the resource and so on. And then we have a split between business roles, professional roles and technical roles. So on the on the business side, we have subject matter experts. So people who are really know the process domain by heart. Yeah. So if you if you start with the in the CFO domain, which is quite a typical starting point for process mining initiatives, accounts payable, for example. Yeah, a very common starting point. You need experts with accounts payable process. So you need domain experts. This is very important because otherwise you only have a domain agnostic usage of the technology and you cannot judge whether solutions are good or bad. So this is very important in the beginning and as I already said, also very important when you scale. Yeah. Then you scale to other processes, to other process domains and move up and down, the process change. The subject matter experts are the key role on the business part of the professional part. And on the technology part you need data analysis, of course, data engineers because you typically have to create new data models, establish ETL procedures, all the things that we know. Yeah. And also somebody who takes care of the solution. No matter whether the solution is operated in the cloud or on premise, you need somebody like an IT application owner who takes care of the process mining solution.

 

44:43

Patrick:

Now, is it more that you have all these people in one bunch, or is it that these are also distributed because we have like the purchase to pay, we have accounts payable, we have the sales department. Do they each get their own little people dedicated for them, or is it that it's all just lumped into one big pile?

 

45:00

Maximilian Röglinger:

Yeah. So we could see from our study that almost two thirds of the respondents have something that we call centralized, a CoE structure. So they have one big CoE established in the organization. When you have a look at the big multinationals, it may also be the case that they have a central CoE and then some regional or departmental, process specific, smaller, decentralized mini CoEs about two thirds really have a central CoE. So this is one part of the answer and the other part of the answer is not so easy. What is relatively clear is that the data analysts and the data engineers that they are to at least to some extent located in the CoE. It's not so clear when it comes to the subject matter experts, because they typically are hosted in the business departments. So from our own project experience with Scaling Process Mining Organization, we see that the clear separation of concerns, the clear division of duties between the CoE, the IT department and the business departments is rather complex. It's also company specific. When I talked to company and we talk about Center of Excellence and talk about scaling. So one of the key questions for me is - so guys, who is the first level support to the second level support, then to a third level support. Please locate this to business department CoE and IT and you will get very different answers. Yes, depending on how frankly revalation between business and IT is, it can also be very different for different business departments and the same IT department in the same company. Yeah. And this is something to handle with care, in my experience.

 

47:18

Jakub:

Yeah. So, Maximilian, could you give us like some kind of a, I would say recipe, on how to get things started? So let's say that you are either at the very beginning, you haven't even extracted your data or you are already getting some first insights into your first process that you are kind of happy with, but you are struggling with scaling and with rolling this thing out further in your organization.

 

47:47

Maximilian Röglinger:

Yeah, sure. So I think there are different ways how you can start so there is not the one single way to glory. There are different things. I always talk about agile transition or agile road mapping, so to say, because there is no three year or five year plan to roll out and scale process mining. So you also have to do this step by step and also by continuously refining your process mining backlog. So for me, this is also very important task of the CoE, if you have one to continuously update to continuously review the process mining backlog. What do I mean by this? Yeah. So typically when you leverage a technology like process mining, you have two things to do at the same time. First of all, you have to create operational success as fast as possible, in order to ensure that the funding and the resourcing is continued. You cannot simply take one or two years to have the first success story. So you have to do this, get very tangible results very fast and create success stories, create momentum. This is indispensable. And at the same time, you have to do something that we call development of dynamic capabilities, which means that you have to do this institutionalization. The thing is that you have to do both things at the same time dynamically intertwined, because in my experience, you don't get $1 million or €1 million for being laid back with all the operational things and simply set up the CoE and then continue creating operational success, so for me, this is a crucial success factor to smartly interconnect the operational value creation and institutionalization. You have to do this at the same time. So this is important and in order to do this, you have to continuously review your process mining backlog, but when you start, I think it's good to start with an easy use case. Don't choose the most complex process when you're trying to get familiar with the technology. Even try to improve a process that is running not too bad badly, but where you are quite sure that there's something in it and you can create improvement and positive results because it's very good and important at the beginning to ensure that people have a good feeling with the technology. Yeah. So I would recommend not to start with the most complex process but with a straightforward use case. See where you where you can get from there.

 

50:58

Patrick:

So, so what I'm imagining is that once you have the initial steps, the initial foundation, you obviously can't just say, OK, let's hire seven people to run our center of excellence if there's just no need within the business to create it, right? So they need to have something to do, need to actually have processes to implement, continuously improve things just based on what the users or the business actually needs. So is this more of a question about adoption then or is that more of a how much funding do we have at the given moment?

 

51:30

Maximilian Röglinger:

So the experience from our study tells us that the Center of excellence is also growing with the business need. So you can start with a rather small CoE. So when you do the first POC, the first two or three use cases, you don't need a CoE, but once you want to go beyond, you need to institutionalize the CoE. You can start with a very small team and then typically the CoE will grow with business appetite. Yeah. And we see that there is a tipping point when you connect more than five processes when you support more than five departments. So this is a point of no return. And this is also a point where operating without a CoE simply doesn't make sense from a resources and from an economic perspective.

 

52:30

Patrick:

Now, what do you say to the executive sponsor? What would be executive to sponsors when they say, well, I thought I was buying a software and now I have to think of how my business runs, all of the sudden dedicate a lot of money to set it up after dedicating a lot of money to run the center, like I thought I was buying software. What is this?

 

52:50

Jakub:

Yeah, I thought I was buying black box which was just going, you know, point me exactly where my process fails, I'm just going to fix it in one go and then it's done.

 

52:58

Maximilian Röglinger:

Yeah. So you know, I'm from the information systems discipline, so in my opinion, software alone has never resolved a problem so far. It's always about the smart usage of technology and always about taking people along. To be honest, and I said this in the beginning, I'm very much addicted to the organizational and to the economic perspective on business process management. This is a simple matter of business case. So I know there are people outside who say that you don't need a business case for process mining because it's simply hygiene, but in my experience, when you talk to somebody with responsibility for budget, they would love to talk about and know about return on investment. For me, it's a simple business case calculation and you will see if you compare a scenario without a CoE and supporting five plus processors and with a CoE, it would be become crystal clear that the dominant case is having a CoE in place.

 

54:21

Jakub:

I will probably end our episode on a very nice sentence from the study that, you know, you don't just provide a technical platform, but try execution excellence and transformation. I think that was actually very well said. So, Maximilian, where can people find you if they are interested in more of your work? Where can they go?

 

54:43

Maximilian Röglinger:

So you can write me an email, drop me an email any time. Yeah. So it's maximilian.roeglinger@fit.fraunhofer.de and you can also visit our website which is fit.fraunhofer.de and I'm always happy to talk. As I already said, I'm really passionate about bringing academia and industry together, so feel free to contact me. I'm already looking forward to this.

 

55:16

Jakub:

Well, Maximilian, we are up with the time, but once again, thank you for joining us here today. It has been lovely and yeah, I hope to get to know you also at some point personally.

 

55:31

Maximilian Röglinger:

Pleasure was on my side. Thanks for having me.

 

55:34

Jakub:

All right. For you, dear listeners, thank you for being with us. Thank you for listening. I hope that you enjoyed yet another episode of Mining Your Business podcast. We'll be looking forward to, you know, hear back from you if you have any questions, any feedback, if you are interested in specific topics, feel free to reach out to us. We are very active on LinkedIn, as you probably already know. You can also send us an email on at miningyourbusinesspodcast@gmail.com and otherwise we will be just looking forward to have you on in two weeks time. So thank you very much and bye bye.