Combining value management and process mining techniques can help generate greater business value for your organisation. Find out how you can harness both methodologies to factually benchmark your performance and optimise your SAP business process management, leading to better decision-making, increased revenue and reduced costs
What is Value Management?
Value Management is a methodology that was developed in the 1960s. Its purpose is based on defining and sustaining value to increase the monetary worth and market capitalisation of an organisation. This can happen directly by either increasing revenue or decreasing costs, or indirectly by improving a company’s strategy and positioning.
This effectively means that a company’s targets can be directly related to its profitability and market value or to the effectiveness and quality of the products and services being offered.
The aim of value management is that as an organisation you invest only where you see value. Using this philosophy, the company would prioritise and drive forward only high value projects that would have a direct impact on increasing revenue or reducing costs. Ultimately, this aim is linked both to the shareholders who will in turn receive more dividends and to continuing investment in the organisation.
Many customers are already using SAP to digitalise their business processes and with most of their SAP data already readily available, it’s possible to factually measure company performance, predict value of optimisation projects and track results. That’s why driving your SAP projects based on value will directly and positively impact your company’s overall performance.
What is process mining?
Process Mining is a technique designed to discover, monitor and use real processes (not assumed processes). It works by extracting readily available knowledge from the event logs of your information systems to improve business processes, by actually measuring how they are executed versus how they should be executed. The discipline usually includes automated process discovery, compliance checking, model extension and business case predictions and recommendations.
Process mining is about creating linear business processes and ensuring they are defined and executed in the most efficient way, so that you can measure and factually report on those processes and make better decisions.
Why should you use both techniques?
Both disciplines are different, but they complement each other, and a successful business will typically deploy both techniques. While value management creates meaning around why an organisation should decide on one project or investment over another, process mining helps to better understand how you can optimise your business processes based on facts, in order to close inefficiency gaps.
Value management is always a top down approach because it stems from the shareholders who desire to increase the value of the company and the stakeholders who are deciding the company’s goals. Whereas process mining is more of a bottom-up approach where you are examining the system logs to gain insight and solve problems.
How to benefit from both techniques in one platform
A successful organisation will need to be bridging both techniques to ensure the right senior level decisions are being made and to address efficiency issues in their business processes.
To answer a typical question such as why I should improve my business processes, you need to understand how efficient they currently are and determine how far away you are from best practices of your industry. Only when you have this insight on the table and can determine whether improvement is reachable and achievable, and whether your value-based assumptions will deliver real value from your proposed investments, can you look how at increasing revenue and reducing costs.
Benchmark your data trends and gain valuable insight into your SAP projects
That’s why we developed Performer, a single platform that helps to benchmark and optimise the value and performance of your SAP business process management.
Performer uses a bottom-up approach to deliver KPIs calculations, identify missing and expected value, identify different investments and projects that the organisation should consider and predict business case scenarios. The customer then uses Performer data and guidance and puts it together with its own intelligent insight on company strategy and goals and to decide which direction to go in.
Performer is about giving the customer all the facts that are measured and benchmarked against industry peers so that they can make informed decisions on their business strategy. And while you may have many projects in the pipeline that are deemed valuable, prioritising the execution of each of them will be key to successfully achieving the results you need.
Communicating the Proof of Value
Value Tracking enables you to answer key value management questions and may actually lead to additional resources being made available, by providing fact-based proof to senior level executives and other stakeholders.
It uncovers the strengths and weaknesses of your past and existing projects, using facts and data trends to measure actual business value. It works by capturing the trends of your different KPIs to assess whether they have increased or decreased within the timeframes of the project.
You can then communicate this proof of ‘value’ to senior level management and shareholders, whether it’s about monetary gains or savings, related to team spirit or to gain traction in growing the business.
You can also better drive the change management generated by your transformation project by giving more fact-based sense to the different stakeholders.
We believe Performer is unique. Very simply, it is the only platform to link value management directly to reality with real fact-based insight, not intuition. Of course, there are other value management tools on the market including SAP’s VLM (Value Lifecycle Manager) but none that offer full integration with SAP with the neutrality of Performer.
While Performer isn’t a process mining tool in itself, it does complement other process mining tools on the market by addressing the stages before business process optimisation, providing a vital connection between optimising business processes and increasing market cap. Performer’s focus is on creating meaningful KPIs and their relationship to value, while relating this to the market cap or mission of a company’s business strategy.