Vodafone’s Finance Operations function started to work with process mining technology in 2015 to start building an evidence-based foundation for continuous process improvement. To date, it has implemented process mining technology and discipline across five business processes in Finance Operations: accounts payable; transactional cash management (processing statements, payments clearing); intercompany accounting; asset and project accounting; and employee expense processing.
Case study key facts
|Current goals||Over the past 10 years Vodafone has implemented a global back-office consolidation programme, focused on unifying and streamlining systems, processes and organisations in supply-chain management, human resources and finance functions. However, for some time, Vodafone was trying to manage its globally-shared, common back-office systems and processes from a very reactive position. Without real clarity regarding the detail of process operations, teams struggled to identify and prioritise process improvement tactics and projects with confidence.
Vodafone’s Finance Operations function started to work with process mining technology in 2015 to start building an evidence-based foundation for continuous process improvement.
|Current approach||To date, Vodafone has implemented process mining technology and discipline across five business processes in Finance Operations: accounts payable; transactional cash management (processing statements, payments clearing); intercompany accounting; asset and project accounting; and employee expense processing.|
|Outcome||Vodafone’s Finance Operations has seen some significant wins through process mining, the primary win being the achievement of a key milestone in its ‘touchless invoice automation’ initiative – the invoice automation rate has increased from around 13% to around 40%.|
|Tools and suppliers used||Celonis Process Mining.|
Vodafone Group is one of the world’s largest telecommunications providers, providing service to over 500 million customers in 26 countries across Europe, Asia, Africa and Oceania. The Vodafone business was originally created in order to operate the UK’s second cellular telecommunications license; it was launched in 1985. It now employs over 100,000 people around the world.
Over the past 10 years Vodafone has implemented a global back-office consolidation programme, focused on unifying and streamlining systems, processes and organisations – particularly in supply-chain management, human resources and finance functions.
As part of this consolidation, all Vodafone’s country operations transitioned to common, shared SAP systems-of-record in these areas (this work was completed in 2012-13). Common, shared business processes were defined across these functions, and a group of Process Owners identified as responsible for documenting, controlling and improving these processes. Shared service centres in India, Egypt, Hungary, Romania and South Africa now operate these processes on behalf of individual Vodafone operating companies, employing around 20,000 people.
Project background and drivers
As part of its global back-office consolidation programme, Vodafone’s process owners worked with operations teams to design, define and document detailed process models and procedure definitions. However, there was no way of knowing to what extent the prescribed processes were being followed.
Of course, Vodafone had put some process management systems in place: for example, an internal audit team was used on a periodic basis to sample-check the work of shared-services teams – but this could only ever give a very partial picture of process conformance and fitness-for-purpose. In addition, every month KPI reports were created that showed how operations teams had performed over the previous month, but again these gave only a partial and backward-looking view.
In summary, Vodafone was finding it challenging to back up improvement projects with data-led decisions. Without real clarity regarding the detail of process operations, teams struggled to identify and prioritise process improvement tactics and projects with confidence – as there was little solid data that could help teams make informed comparisons and judgements about the relative scale of potential improvement opportunities.
Implementation overview and status
With this as background, Vodafone’s Finance Operations team was introduced, via Vodafone’s process governance team, to Celonis – a specialist provider of process mining technology.
Process mining technology gives organisations the ability to explore and analyse the performance of business processes as they actually occur in their business operations day-to-day, even when those processes are not actively controlled and automated through software (for example using a BPMS platform). Process mining works by ingesting and processing log data from the software applications that people use in their day-to-day business activities, and correlating data within and across these log files to build up models of how individual work cases actually flow – between people as well as through processes. Analysts can then explore these models visually – in isolation and in also in the context of prescribed business process models, so teams can understand where processes deviate from the ideal, and identify the root causes of problems.
In early 2015, the Finance Operations and Supply Chain Management teams conducted a pilot project on operational data relating to one individual Vodafone operating company, and saw the value that Celonis Process Mining could potentially provide. The team extracted one year’s worth of procure-to-pay process data for one of its local markets, and provided this to Celonis – who reconstructed the actual as-is process from the data, and helped Vodafone quickly see areas of process improvement opportunity (for example, the team identified the amount of additional effort and delay that was being caused by PO processing rework; and got important insight into the effects of delays in invoice processing).
Vodafone was particularly drawn to Celonis’ technology for three reasons:
- With its back-office systems consolidation onto global SAP instances and an ongoing exploration of SAP HANA technology, Celonis’ seamless integration with SAP applications was a natural fit.
- The ease-of-use and responsiveness of Celonis’ tools meant that the team could immediately see how it could be applied in multiple situations.
- Celonis Process Mining’s ability to quickly ingest and analyse operational data updates meant that the team saw the potential to drive process analytics on an almost real-time basis, rather than retrospectively and periodically.
Key use cases
After successful conclusion of the pilot project, Vodafone elected to start working with Celonis Process Mining across Finance Operations. To date, Vodafone has implemented Celonis Process Mining across five business processes in this area: accounts payable; transactional cash management (processing statements, payments clearing); intercompany accounting; asset and project accounting; and employee expense processing.
For these five processes, Vodafone carries automated data imports from its SAP systems on a daily basis; this enables analysts to explore process conformance and performance much more proactively and enables teams to start getting more of a sense of ‘leading’ KPIs – being able to predict, for example, whether a team will hit its monthly ‘touchless invoice processing’ target.
Vodafone is currently considering using Celonis across other business processes (for example, order to cash).
In the context of Finance Operations, Celonis Process Mining is now seen as a strategic tool – it’s become a core part of how the function drives continuous process improvement. Other functions within Vodafone (at Group level and also in-country) are starting to explore Celonis Process Mining in this context too.
Crucially, Vodafone has thought very carefully about how it can add value with Celonis. It would have been easy for the team to focus narrowly on enabling its Shared Services Centres, or individual country-based Operating Companies, to better understand the execution of their own work. However, the team made a deliberate decision to create one shared implementation, working from a global dataset, and then to make all countries’ data available to all players. This has two important benefits:
- Every country’s key process owners and managers have gained access to crucial conformance and performance insights at the same time as every other country. Qatar, for example, gained access at the same time as (much larger territories) UK and Germany.
- Teams across countries are able to benchmark their process conformance and performance against those of other countries, and are thereby empowered to learn from each other to see how they can improve further.
Richard Cooper sums up the value that Vodafone gets from using Celonis as enabling the company to “identify the next best course of improvement action” for individual in-country teams, as well as for Vodafone’s Shared Services Centres.
Looking forward, the team driving Celonis adoption within Finance Operations is exploring pairing Celonis’ models to machine-learning tools, through a product set called Celonis Pi (Process Insights), in order to create recommendation algorithms that highlight promising routes to improvement.
Organisation and people
As described above, Vodafone started its deployment and use of process mining technology within the procure-to-pay process in Finance Operations, then quickly expanding to other Finance Operations processes. It has worked in a very deliberate way regarding stimulating broader adoption: rather than gaining and demonstrating initial benefits from its work and then trying to ‘push’ the benefits of Celonis’ technology to other groups and encourage them to start working with it, it has decided to focus on working more deeply within its initial five business processes, exploring more and more ways it can drive value from process mining.
As a result of the benefits it’s realised through its continued focus on these five processes (see below), the Finance Operations team has seen other parts of the Vodafone organisation start to approach it with questions – in other words, rather than ‘pushing’ the technology, the team has created an environment where other teams are starting to ‘pull’ it.
At the time of writing, beyond the core team using Celonis Process Mining, around 140 users working within individual in-country Vodafone operating companies, in Shared Services Centres and the Global Process function have ‘viewer’ access to the technology – meaning they can use the tool’s dashboards to monitor process conformance and performance. This number is expected to double soon.
Roles and resources
Richard Cooper, Global Process Lead for Finance Transformation at Vodafone, currently leads the implementation of Celonis Process Mining within Financial Operations. He has a small team of two data-science specialists working closely with him. This core team takes responsibility for configuring the Celonis tools and infrastructure, creating core analyses and dashboards.
This core team has trained around 10 of Vodafone’s global process experts across the Finance function as Celonis process analysts. This broader team has the skills to configure and tailor analyses, reports and dashboards created by the core team.
Technology and infrastructure
As already mentioned, within Finance Operations (and also within Finance more broadly, as well as within supply-chain management and HR) Vodafone works with globally-consolidated SAP instances as the systems-of-record. These systems, hosted and managed on-premises by Vodafone, currently provide the sole source of data that gets ingested into Celonis Process Mining.
On a nightly basis, data is fed from SAP’s operational data stores into a SAP HANA in-memory database instance. An ABAP (application) server working against this in-memory database then serves this data to Celonis Process Mining on demand. Each of the business processes that Celonis is used for has its own data schema, managed within the Celonis server.
Vodafone is currently working with Celonis to develop a role-based dashboarding capability. The use case here is to provide higher-level views of process conformance and performance to senior management, while providing more detailed, process- and country-specific dashboards to operational managers and analysts.
To date, the adoption of Celonis Process Mining within Vodafone has been limited to Finance Operations, with one small team driving the implementation and adoption of the technology. However, at the time of writing other functions and teams across Vodafone – at Group level as well as at country level – are starting to explore the potential of using Celonis’ technology. As a result, Richard Cooper and his team are starting to explore the practicality of formalising a governance model and structure for Vodafone’s use of the technology.
Richard Cooper highlights the insights that Vodafone’s Finance Operations team gets from process mining technology, saying “it’s like gold dust to a process owner.” In the months since Vodafone’s Finance Operations function started to use Celonis Process Mining in its Finance Operations function, it’s seen some significant wins – including:
- Providing deep insights that have helped it drive its ‘touchless invoice automation’ initiative – over the past 2 years, Vodafone has managed to increase its invoice automation rate from around 13% to around 40%, with visibility from Celonis being crucial in identifying and validating improvements.
- Developing a working capital management toolkit to individual countries, enabling managers to quickly identify and avoid operational behaviours that impact working capital. Here, the team has used Celonis technology to create scenarios and worked examples of common process issues and their impacts.
- Automating invoice pipeline analysis for Vodafone’s Shared Services Centres. Historically, each country’s manager for this function would spend 2-3 hours per day creating a manual assessment of the day ahead’s work. This is now automated with Celonis – managers can easily see where individual invoices are, which workflows they’re in, and which are most critical. Using Celonis has eliminated 7 man-days of work daily through this automation, and has also enabled much greater collaboration between Shared Services Centre managers and in-country managers, who know work together to resolve and prioritise issues based on a shared view.
Naturally Vodafone has encountered challenges along its journey with Celonis. Richard Cooper highlights technical challenges and cultural challenges in particular:
- From a technology perspective, the team has had to work hard in conjunction with IT teams to ensure that the needed IT infrastructure supply can keep pace with demand. As more data is loaded into Celonis Process Mining, so the data models get bigger – and more infrastructure is needed to store and manage that data.
- From a cultural perspective, the use of process mining technology has created a new management dynamic in Finance Operations. Whereas historically, teams would spend time and energy debating the validity of information, now teams have to move quickly to conversations about who’s responsible for fixing the problems that the technology identifies. Data-crunching and technical analytics skills are less important; and instead, it’s becoming clear that people who can step up and take impactful actions are more valued. The lack of hard evidence can no longer be used as a barrier to making changes or improvements.
Recommendations for adopters
In our conversations with Vodafone for this case study, Richard Cooper, Global Process Lead for Finance Transformation, offered the following recommendations for organisations embarking on a similar initiative:
- Really define your end-to-end process(es) first. Vodafone’s team realised, after some work, that they hadn’t covered whole processes when they thought they had. Knowing start and end points for analysis is very important.
- Involve the end users / consumers right away – to understand the right questions and highlight the pain points so you’re building the dashboards and capabilities that really matter.
- Be prepared to bring outside people in – the team has really benefited from having curious data specialists working on projects and business scenarios, but people who aren’t process specialists. hese people bring a really fresh approach; Richard Cooper is sure that Vodafone would have gone down different paths and got different answers if the team had developed in a more “traditional” way.
Best practice insights
In its adoption of Celonis Process Mining in its Finance Operations function, Vodafone has clearly demonstrated a number of best practices. Two in particular stand out.
First, the implementation team has understood the potential value of Celonis Process Mining to Vodafone at large – but rather than expending significant time and energy on a ‘roadshow’ or similar internal marketing exercise to try and ‘push’ the benefits onto other teams and convince them of the value, it has focused on continuing to develop use cases within its initial implementation scope. As a result, other teams within Vodafone have started to hear about the benefits being achieved by Finance Operations; and have started to ‘pull’ Celonis Process Mining into their own areas. We find that in general, pull-based adoption of technologies that create business change is much more sustainable than push-based adoption, because teams start to adopt because they already see the value and own the opportunity (and challenge), rather than having a ‘solution’ pushed on them regardless of whether they see the opportunity or challenge.
Second, in providing access to all countries’ process mining data to every in-country team, the Finance Operations team driving implementation of Celonis Process Mining has created an environment where second-order improvements can flourish. Instead of just enabling individual country teams to understand opportunities for improvement within their own direct sphere of operation, giving all teams access to the whole data set means teams can start to compare their own process conformance and performance to those of other teams – and start to work together to share ideas for improvement and problem-solving.