The received wisdom in ERP is that businesses design their processes in the system for everyone to follow. Except they don’t.
Ten years after implementing SAP ECC worldwide, GSK considered its ERP unification something of a success.
But a close analysis of how business processes were actually running revealed that SAP’s system was not exactly, well, unified.
Kate Morris, former director of the pharma firm’s global ERP competency centre, told The Register that after using process-mining tool Celonis to examine how work was actually executed on its business applications, it discovered around 28,000 different variations for the process of running a sales order.
“It really surprised us but we had very little visibility of our processes before,” she said. “We had a lot of data, a lot of anecdotal discussion, and the global process owners knew country by country how processes were operating. But we [had] no hard factual visibility of how things looked so it was a surprise but not a shock.”
Headquartered in the UK, GSK reported sales of £34bn in 2020. A global ERP project that began in 2010 moved 100,000 users and 190 different business entities onto a single instance of SAP ECC, the predecessor to its in-memory S/4HANA.
Despite wide variation in how processes are executed on the system, Morris said it was a success that such a large global business made it on to a single system at all.
“GSK is in a really privileged position that we took the decision about 10 years ago, to move on to a single ERP platform,” Morris said. “By the end of this year, 99 per cent of our business transactions and turnover and revenue will go through this platform, which is massive.”
Getting such a large business onto a single platform is a notorious challenge. M&As, changes in business strategy, and different priorities in regions or business units often means it is more pain than it is worth.
But for GSK it was just the beginning. The “journey”, said Morris, was to be more efficient and simplify processes on that system.
“Because you are on one platform everyone, theoretically, it’s meant to follow the same process, which they do to a point. But there’s increasingly variations of what people do, especially as you get nearer to the customer. Sometimes, it’s correct, they should be doing different things, but we had transactions that weren’t being used, that had been designed but were then defunct. We were able to remove transactions or process steps. We also had steps in the process that quite quickly we were able to automate, and that has made something more efficient.”
In 2018, Morris led the group to begin work with Celonis in an effort to find out how processes were run on SAP in the wild, rather than how they were designed to run. One of the reasons for the project was to give global process owners who are in charge of processes in a particular area – say, order to cash – the data they needed.
“It’s all there in these SAP tables, but to actually pull it together meaningfully across the globe was hugely, hugely resource consuming,” Morris said. “By the time they got to any level of insights, it was generally out of date. It was very difficult to benchmark and see entities side by side and see how the process is running.”
Another user of Celonis was the ERP competency centre, which was there to iron out challenges – both in terms of technology and people – in bedding ERP into the business, usually by flying around the world and sitting with business users, Morris said. When Morris’s team first saw process mining, it could see a lot of the data in real time, graphically, at the “touch of a button.” Although it did take about 15 months to get it working, she admitted.
As many Reg readers know, process mining is the idea that by gathering data from people’s interactions with business applications, organisations can find out how their processes are actually performed, rather than how they were designed, or how people were trained.
It has seen a wave of interest in the last 10 years, with German start-up Celonis raising $290m in 2019 to value the firm at $2.5bn. The firm uses application logs and machine learning to build a picture of process activity.
Another market entrant, FortressIQ, which raised $30m in May 2020, uses a different approach. It works by recording all the user’s screen activity and using AI and computer vision to try to understand their behaviour.
The trend has not escaped the notice of ERP behemoth SAP. In January, it acquired Signavio, another German startup, to boost its transformation-as-a-service product, RISE with SAP.
GSK’s work in process mining has led it to tackle audits with the approach, specifically looking to manage the risk in its operations and supply chain, which is required by law, and get a better grip of its commercial practices, work Morris now leads as program director for audit and assurance.
Although Morris said her team was able to demonstrate savings to the finance department, she warns others looking to tap into process mining not to underestimate the effort in getting it working, mainly in deciding the questions to answer and finding trustworthy data.
“Getting the right data and validating it – really being able to explain it and understand it – that’s absolutely fundamental and I think although it might take you a little bit more time at the start, without that you’re lost,” Morris said. ®