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Why inflation, supply chain, sustainability crises require Execution Management, efficiency gains
Inefficiency is a generational problem that hides in plain sight and needs to be fixed in a hurry via Execution Management and process excellence. Why? The only way for companies to outrun supply chain issues, inflation and sustainability is to become more efficient.
"The scale of the problem we're talking about is bigger than anything we've ever seen," said Dave Peterson, Celonis Chief Marketing Officer, during the event keynote.
That was the message framed by Celonis executives as World Tour 2022 kicked off in San Francisco. World Tour 2022 features 11 additional stops around the world including Houston, Munich, New York, Amsterdam and Copenhagen to name a few. Each stop will feature a subset of 1,200 Celonis customers from multiple industries sharing best practices and knowledge.
Celonis World Tour 2022: Everything you need to know
Enterprises are juggling multiple crises amid inflation, supply chain disruptions and sustainability concerns. These companies are trying to answer the following questions. How much of inflation can be passed on to customers? Can efficiency efforts maintain margins and deliver value? What supply chain process improvements can help lower carbon and get you goods faster? How do you transform your ballooning roster of systems?
Also: Why and how to scale Celonis Centers of Excellence (CoE) to grow value | 4 must-know Execution Management themes from Celonis Labs
The answers to those questions are in the data, which is currently spread around multiple enterprise systems. The big fix all starts with processes. The world produces 64 zettabytes of data and uses less than 1% of it. The challenge is to cut through that data and operate smarter.
A few facts to ponder via Celonis executives:
Labor productivity is at a 100-year low.
$4.5 trillion has been invested in digital transformation since 2019 but only 20% of companies see returns on investment.
In 1996, companies ran on two systems. Today companies average 256 systems and few of them play nice together. Even worse, these systems produce data but don't use it to create intelligence.
Add it up and there's a breeding ground for hidden inefficiencies.
"Nobody ever designed a process to be inefficient," said Peterson. But over time, inefficiencies sneak into your processes due to market changes, business priority changes, system changes and the like. Peterson gave several real-world examples of these inefficiencies.
"It's highly likely that you are shipping goods and not invoicing your customers," he said. It's not every order and it may not even every one in every hundred orders, but if it's one in a thousand orders, it adds up, Peterson explained. Another process inefficiency are invoices that are paid twice or orders that are canceled due to stock outs when you actually have the product. Businesses can't afford these inefficiencies and execution gaps in today's inflationary environment.
The way to fix these inefficiencies will be process improvements and Execution Management.
"We are in the midst of a generational shift on how we execute the core processes that we run our business on," said Peterson.
Celonis also demonstrated a new user interface for its Execution Management System (EMS), outlined real-world order management and supply chain use cases, the Celonis Process Data Engine, which has 23 patented technologies, Actions with more than 1,000 systems connectors and Celonis Experiences for Microsoft, which was outlined with the PAF acquisition.
Ariel Bardin, Celonis CPO, said Celonis is focused on making the Celonis EMS intuitive, reliable and differentiated in the market. He highlighted how the EMS lets customers both identify execution gaps and automatically fix them.
"In our world, we like automation," said, Bardin. "We've combined both intelligence and action in a very unique way...and as a couple of weeks ago we were triggering a million actions in a week."
What comes next, argued Celonis executives, is a movement aimed at closing the expectation and reality gap that plagues processes. Every business is made up of thousands of individual processes, but they don't run like they were drawn up. Execution Management will fix the inefficient soup of processes and trigger actions that can be automated.
Only when these processes are X-rayed and cured will manufacturers end duplicate payments, cut complaint resolution time and drive order-to-cash efficiency. The list of processes that can be fixed is never-ending. Imagine the headway companies can make by just fixing a few and scaling from there.
Execution Management as a category is relatively new. The argument for it is being accelerated by inflation, supply chain and sustainability crises.
More:
Supply chain optimization, sustainability are blending together
How inflation, supply chain and sustainability could drive efficiency gains
Process mining hits inflection point in 2022 as decision makers eye better execution
