6 Ways Process Mining Enhances Compliance in '24

Errors in business processes or failure to meet the rules and regulations can lead to financial and reputational losses. Companies can avoid these issues and improve compliance by rigorous compliance checks. However, compliance checks have their own costs. Even though, the cost of compliance is significantly lower than cost of non-compliance, it is estimated to cost on average $5.5M per business.

Process mining enables automatic and data-driven operational compliance because it identifies variations and errors in process execution. Compliance (i.e. conformance validation) is one of the major application areas of process mining.

This article provides a list of use cases of process mining in compliance.

1. Enforce compliance levels and risks

Organizations define their standard operating procedures, policies, work instructions and best practices in IT systems like CRM or ERP. For example, manufacturers save all the data related to machinery, equipment and production, such as outlines, schedules, maintenance, servicing, and inspections in their ERP systems. Process mining enables business analysts and leaders to monitor and ensure that their actual processes comply with these standards, policies and instructions by extracting data from these systems and visualizing process flows.

Isala Hospital in the Netherlands benefitted from process mining to analyze the compliance of the entire patients’ records management operations. The hospital managed to skip 30 unnecessary medical steps on average and reduce emergency management duration.

2. Identify performance deviations

Benefit

Process mining analyzes process performance, including the individuals involved, by comparing them against the KPIs. Process mining examines and identifies the level of efficiency and overall outcomes by detecting process deviations through conformance checks.

For instance, Children’s National Medical Center in Columbia applied process mining to measure their level of compliance with the ATLS protocol analysis. They analyzed the clinical behaviour, detecting differences and individual employee deviations. Consequently, the Medical centre managed to standardize their trauma resuscitation routine by editing their checklist.

3. Assess compliance levels and risks

Process mining enables firms to assess compliance levels and risks and test key indicators, like segregation of duties, by comparing ideal or expected processes and the actual process. It is estimated that 17% of businesses do not know their compliance risks due to a lack of compliance capabilities. By deploying process mining, companies lower the risk of legal sanctions, financial losses or any failures with standards and regulatory requirements. 

A German logistics company implemented process mining to improve process management systems. The firm identified more than 70% compliance risks in its credit and collections management cases.

4. Standardize processes across the organization

Process mining can identify similar processes achieved via different methods across different business areas or regions. That helps businesses standardize these processes, which can be helpful for a large multinational company or a project with teams collaborating across other countries. Process mining can compare the defined standard practices with operations across different business units, subsidiaries and countries to enforce various departments to comply with the optimal process.

Bayer, a German company, implemented process mining in their compliance processes to bring visibility to their procurement, sales and logistics processes. Bayer analyzed operations, performance, and risk indicators across all the firm’s systems and countries.

5. Discover automation opportunities

Benefit

Process mining provides insights into the compliance processes that can benefit from automation. Companies that leverage automation tools, like RPA bots, can automatically extract and compare regulation and policy documents to notify the auditors when errors and deviations occur. Such automation effort helps companies remain up-to-date and leads to fast, less costly and more accurate compliance assessment.

For example, EON is a utility company in Germany that integrated process mining with business intelligence tools to automate the calculation and evaluation of risk indicators for their purchase to pay processes. 

6. Automate compliance reporting

Process mining streamlines the compliance checking because it finds any deviation, error or an undefined shortcut. Additionally, process mining tools generate a detailed audit log of the checked processes and data results. Therefore, process mining helps users leverage the resulting data to automate compliance reporting via tools that include reporting capabilities or by integrating report automation tools like RPA. 

A vendor claims¹ that a financial institution implemented their solution to automatically detect and report deviations and violations, which increased their complete compliance by 52% and automated 65% of their manual activities related to compliance. The automation enabled the organization to decrease the throughput time by 9 to 10 days on average.

Further Reading

To uncover the ways process mining is applied in other business functions and sectors, feel free to read:

• Top 4 Process Mining Use Cases in Human Resources
• Process Mining in Education: Use cases, Benefits & Challenges

To choose a vendor and start benefitting from process mining, you can check out our data-driven list of software.

Check out comprehensive and constantly updated list of process mining case studies to find out more process mining compliance real-life examples.

Also, feel free to contact us if you need more help to find the right vendor.

Sources

A financial service case study