To improve its process mining offering on Microsoft Power Platform, Celonis has acquired Process Analytics Factory, developer of PAFnow Credit: Thinkstock For the past decade, process mining specialist Celonis has been helping enterprises optimize processes around their ERP systems — and more recently has branched out to help them optimize their use of workflow automation platforms, too. Now it is acquiring Process Analytics Factory to improve its process mining offering and help enterprises automate with Microsoft’s Power Platform. Enterprises can save time and money by automating processes — but only if they automate the right ones. Identifying which processes to focus on first can be done with simple heuristics — or by process mining: analyzing data from logs to uncover the most-used processes with the greatest inefficiencies. This analysis is key, according to R. “Ray” Wang, founder and principal analyst at Constellation Research. Robotic process automation (RPA) tools only automate; they don’t analyze or optimize processes, he said. “Process mining uses math to understand how processes are connected, what’s working, what’s not. It’s a level of intelligence that most RPA vendors cannot deliver on and thus are partnering, building, or acquiring.” Celonis branches out Process mining was the sole focus for Celonis for years, initially around SAP systems. As SAP prepared to launch its own process mining tool by acquiring Contextor and Signavio, though, Celonis began to extend its capabilities. In October 2020 it launched its Execution Management System (EMS) to visualize and design more efficient processes, and in April 2021 formed a partnership with Microsoft to deliver process analytics through Power BI and to integrate its process improvement tools with Microsoft power Platform. Then, in October 2021, it partnered with ServiceNow to deliver process mining capabilities to the Now platform. It also has technology partnerships with Appian, Coupa, IBM, Oracle, Salesforce, Snowflake, Splunk, and a handful of other software vendors. Celonis has grown organically since its founding in 2011, with only two other significant acquisitions in its history: automation software vendor Integromat in October 2020, and streaming data software developer Lenses.io in October 2021. Now, its acquisition of Process Analytics Factory, developer of fellow top process mining tool PAFnow, is bringing it new process mining capabilities and broadening its access to the Power BI and Power Platform markets. “Power BI has a 13% market share in the business intelligence market,” a market that’s worth $21 billion today and will grow to $41 billion by 2026, said Constellation’s Wang. Marc Kerremans, a vice president and analyst at Gartner specializing in business operations management, said, “Process Analytics Factory has been the first vendor in the process mining market to combine BI software and services with process mining technology. PAFnow is embedded in Microsoft’s Power Platform, and it extends Microsoft Power BI with process mining capabilities, allowing Power BI users to enhance their current BI infrastructures with process mining. “By acquiring PAF, Celonis not only acquires other process mining capabilities; it also adds capabilities that gives it a direct and proven strong connection to the successful Power Platform and Office365,” he said. The benefits flow the other way, too, said Kerremans. “If the existing PAFnow backend capabilities are extended by the powerful and scalable capabilities of Celonis’ EMS engine, it brings world-class process mining and execution management — putting insights into action — at the fingertips of the extensive Microsoft community.” That Microsoft user community is key for Celonis co-founder and co-CEO Bastian Nominacher. “If you look at a typical customer, they might be currently a few hundred users working with EMS but there might be thousands of additional users on the Power Platform, so this really gives us a strong reach extension and doubles down on our strategy to democratize process and execution insights for everyone,” he said. Process mining comes of age Celonis has been cited by a number of business leaders during shareholder earnings calls as key to rooting out inefficiencies. BP, Siemens, and Scandinavian telco Telia have said they are using it, and in December 2020, Deutsche Bank Chief Transformation Officer Fabrizio Campelli told investors he expected the company’s work with Celonis would lead to €60 million in cost efficiencies from the reengineering of 40 processes. Gartner’s Kerremans also saw a role for Celonis in enabling the effective deployment of low-code and no-code application development in the enterprise, particularly — with this latest acquisition — on the Power Platform. “By continuously using process mining to monitor and capture the way of working, a low-code application development environment can consume this knowledge, reverse-engineer the outcome, and create and continuously adapt applications that reflect the actual organization,” he said. Rather than organizations having to adapt to their applications, the applications will adapt to the organization, he said. Now that it has a taste for growth by acquisition, Celonis will likely not stop there, said Constellation’s Wang: “I can see future acquisitions focused on deeper industry processes and more AI capabilities.” Related content feature 10 projects top of mind for IT leaders today From embracing AI to modernizing infrastructure, IT leaders are focusing more on key business differentiators, risk mitigation, emerging issues, and transforming IT to accelerate change. By Mary Pratt May 20, 2024 11 mins Business IT Alignment Data and Information Security IT Strategy opinion Assembly required: 8 myths about knowledge management debunked Business leaders intent on fostering innovative cultures must differentiate between knowledge management and knowledge assembly. One involves systems, data, and collaboration; the other, insights, dialogue, serendipity, and courses of action. 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