Michael Hogenboom | How Celonis can be a Sustainability Partner

As sustainability is a crucial topic for both humanity and business, I thought it was important to have a focused conversation around process mining and sustainability. Efficiency and sustainability are closely correlated but not always aligned when it comes to business initiatives.  I had the opportunity to learn, gain insights and discuss this topic in detail with Michael Hogenboom. 

What is your role with Celonis?

My role at Celonis is Sustainability Go-To-Market Lead, with a particular focus on Europe. We help companies plan and launch sustainability programs using process mining. In addition, we build and maintain standardized sustainability apps which can be quickly deployed for standard data models such as Order-to-Cash (OTC) and Procure-to-Pay (P2P). 

Why use Process Mining?

When it comes to most technology problems, there are many tools which could be leveraged to solve a given problem - so for sustainability, why use process mining? 

With Celonis, you are able to capture performance metrics such as cost or emissions and have them automatically measured and tracked. If you are already leveraging process mining to improve your performance, this is a new use case where you can use a pre-existing data model.  However, supply chain leaders cannot improve their processes without key insights on how the process is performing today. Or as Michael stated:

“Everything you do at scale comes down to the process, it’s the lifeblood of an organization.” - Michael Hogenboom

When you compare process mining to other analytics tools you run into limitations. For example, with most reporting tools, you are limited by the data and data models available. You lose the ability to span across various toolsets, groups and processes in some cases. Also, when building reports you depend on the analyst to decide what's valuable and what is relevant – and the value based on their capabilities and insights. Whereas with process mining you start with a 100% process view. At Celonis we provide unparalleled visibility into how a company’s processes run – think of it like an MRI over your business. That means finding your status quo and unearthing ‘unknowns’ and downstream impacts is rapid and effective.  

How do Companies Get Started?

I think for many companies, it is pretty daunting to start with sustainability in process mining because it is like a double innovation with both digital twin and sustainability work happening at the same time.  The IT discipline has a lot to contribute with the agile methodologies breaking complex big things into small steps. Therefore we have a “think big, start small” approach where we boil it down into one small chunk of the process and start tracking/improving the process. For example we might start with outbound shipping emissions at one site, and once we understand how to track, improve and control that process we scale up to a regional analysis. 

Successful companies typically pull together a cross functional team of experts representing the following three key process areas. 

IT Teams - Who know the data, the technology, how to automate processes

Business Teams - Who are interested in how to improve performance and what could be done on a cost of emissions basis

Sustainability / Strategy Teams - Understanding the broader picture and how to best align to the company's strategic goals 

What are the Impacts Being Realized?

There are a lot of efficiency gains that can be realized with process mining that have win-win impacts such as reducing error freight or half-empty trucks. This would lead to a cost and emissions reduction, but also a business improvement in the broader sense. When talking about sustainability, it is not something that we separate from a broader business ROI perspective. When speaking with customers, we typically focus on top line value and bottom line value. In the context of sustainability, we introduced a concept of green line value, which is the necessary emissions reductions required to meet corporate goals and be in alignment with the Paris Agreement. 

Efficiency gains are how we started moving into the sustainability space, but as our ambition has grown we want to help companies make sustainability a focus for operational improvements. The first step for that is measuring in an automated way continuously as part of your process performance and then being able to plan, prioritize and realize improvements in that performance. This information is scattered across systems and there for most companies there is not a single source of truth. 

This is especially important for talking about a company’s Scope 3 Emissions which are all the emissions that occur upstream and downstream in a supply chain, not directly by the company but caused by suppliers and customers. In essence this means that if you contract a company to do your freight or transportation, their emissions are included in your Scope 3 emissions. What is interesting about Scope 3 is that it's the area that companies do the least amount of tracking at the moment, but often account for around 70-80% of a company’s total emissions! Depends on the industry of course but if you look across many industries they are the massive bulk of emissions and they are essential to tackle if you would want to be net zero or have sustainable business practices. 

Tracking these emissions is critical, therefore process mining is critical in validating metrics and improvements. With process mining we are embedding granular measurements and logic in the data models, which can then be audited by external parties and updated as necessary, which ultimately provides flexibility and traceability to a sustainability program. 

How do I Learn More? 

Sustainability is one of those overarching topics which should be a goal of every company regardless of your vendors. Celonis offers some key advantages, but there are lessons here which could be applied to any company or technology leveraged.  I recommend the following sources to learn more:

Celonis Sustainability Solutions - Dedicated to the services, goals and objectives of this unique group

Celonis Sustainability Report - Covering Celonis own sustainability performance and initiatives

Hackathon - Pre-existing customers can leverage their existing data and compete in building new analysis dedicated to sustainability