CIOs prioritize AI regulation & sustainability, researcher exposes “dark side” of process mining

“Option paralysis” hampers digital transformation for manufacturers and supply chain reforms fail to deliver business outcomes

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Michael Hill
12/09/2024

PEX Network’s weekly news bulletin rounds up the latest research, reports and publications in operational excellence (OPEX), digital transformation, artificial intelligence (AI) and automation, business process management (BPM), process mining and process intelligence and more.

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CIOs to prioritize AI regulation, sustainability and NaaS in 2025

AI regulation, sustainability-driven innovation and a ‘coming of age’ for Network as a Service (NaaS) will dominate enterprise tech leaders’ agenda over the next 12 months. That’s according to new research from digital infrastructure company Colt Technology Services.

The firm surveyed more than 1000 global chief information officers (CIO), finding that businesses are looking to global regulators to provide guidance and clarity around AI as more use cases emerge and countries have a clearer understanding of business and societal impact. What’s more, organizations are seeking ways to use AI wisely, sustainably and responsibly, with 64 percent of respondents stating that AI plays a role in supporting or facilitating their environmental impact and governance strategy.

“As the new year approaches, IT leaders are stepping forward with cautious optimism, ready to navigate the evolving global economic, political and technological landscapes after months of uncertainty,” said Mirko Voltolini, VP, technology and innovation at Colt Technology Services. “They’re looking for new, unique ways to drive sustainability and generate energy efficiency across their infrastructure, they’re expecting regulators to build frameworks for AI which protect them but give them the freedom to innovate and they’re exploring the scope and scale of NaaS to secure a market advantage and optimize their infrastructure for AI.”

Watch Tyrone Smith Jr., program faculty member/adjunct associate professor at University of Southern California (USC) and founding member of Society of People Analytics (SPA), discussess building trust in AI

Beware the dark side of process mining

Process mining has grown in popularity and applicability with companies investing heavily in experts and tools to discover, analyze and optimize their processes. However, Vinicius Stein Dani, a researcher at Utrecht University, found that while there is plenty of evidence that process mining can effectively help organizations, this is not always the case. His research identified key challenges and specific causes why process mining initiatives fail, offering recommendations to overcome them and maximize effectiveness.

In his PhD research project, Stein Dani carried out a process mining literature review of the data preparation phase of process mining. During the study, he noticed an overwhelmingly positive portrayal of process mining in most case studies. This raised his suspicions. “It was just too good to be true,” Stein Dani reflects. As a result, he started interviewing process mining experts from around the world about their experiences. “That’s when I started uncovering the dark side of process mining,” he said.

During the interviews, many experts shared stories about process mining failure in organizations. Stein Dani started identifying the main challenges and specific causes of these failures, which he called “terminators.” These are:

Laborious data preparation.
Loss of interest.
Lack of expertise.
Lack of incentive.
Denial.

Watch Leona Holzbecher, psychologist, organizational developer and thought leader, reflect on acountability in process management

Supply chain reforms fail to deliver business outcomes

Many supply chain reorganizations suffer from at least one of three critical organizational design mistakes that can derail their efforts to achieve critical business outcomes, according to new findings from analyst firm Gartner. The research was based in part on qualitative interviews conducted between February and June 2024 with supply chain leaders from organizations that had undergone organizational redesign.

“Supply chain reorganization is high up on chief supply chain officers’ (CSCOs) agendas, yet many are unclear about how organization design outcomes link to business goals,” said Alan O'Keeffe, senior director analyst in Gartner’s supply chain practice.

The most common pitfalls in supply chain reorganization design are:

Unbalanced organizational structures that result in delays, gaps in performance and confusion about responsibility.
Headcount reductions as a primary goal of reorganization that undermine long-term organizational capability.
Copying organizational designs from other companies without considering enterprise-specific variations, slowing decision-making and hindering organizational effectiveness.

“Option paralysis” sees manufacturers fall behind on digital transformation

Manufacturers are falling behind on digital transformation due to “option paralysis” and an inability to capitalize on industry advancements. That’s according to new research from tech provider IFS. The firm surveyed 815 global manufacturing leaders and found that, while all admitted their businesses cannot survive without the right technology, less than 10 percent qualify as digital leaders. Almost two thirds (65 percent) of respondents called themselves “laggards” – failing in the early stages of digital transformation with no firm plans in place. What’s more, 82 percent of respondents claimed their business won’t survive more than one to three years without a stronger commitment to technology, reported The Manufacturer.

When asked to prioritize technologies, more than 80 percent of respondents listed every option as essential, underscoring a confusion that prevents decisive action, IFS stated. The option paralysis experienced by manufacturers is exacerbated by the fact that each job level is pulling in a different direction, it added.

“The manufacturing industry is at a crossroads,” said Maggie Slowik, industry director, manufacturing at IFS. “Many understand the urgency but remain immobilized by indecision, waiting for proven results or guidance from a trusted partner before committing to action.”

Watch Nao Anthony, senior manager in OPEX at Commonwealth Bank, and Tariq Munir, APAC financial planning transformation lead at PepsiCo, discuss the complexities and challenges of digital transformation

Researchers advance object-centric process mining with multi-dimensional data operations

Researchers proposed four operations to change the granularity of analysis of object-centric event logs (OCEL) and allow analysts to seamlessly transition between detailed and aggregated process models, facilitating the discovery of insights that require varying levels of abstraction.

“Analyzing process data at varying levels of granularity is important to derive actionable insights and support informed decision-making,” the researchers wrote. “Object-centric event data (OCED) enhances process mining by capturing interactions among multiple objects within events, leading to the discovery of more detailed and realistic yet complex process models. The lack of methods to adjust the granularity of the analysis limits users to leverage the full potential of object-centric process mining (OCPM).”

The researchers implemented the four operations of drill-down, roll-up, unfold and fold in an open-source Python library. “To validate their utility, we applied the approach to real-world OCEL data extracted from a learning management system that covered a four-year period and approximately 400 students.” Their findings demonstrated significant improvements in precision and fitness metrics for models discovered before and after applying these operations. “This approach can empower analysts to perform more flexible and comprehensive process exploration, unlocking actionable insights through adaptable granularity adjustments.”