At the moment, process mining is still predominantly used economically in Europe. The method for digital process analysis was first developed for academic purposes in the 1990s and only around 20 years later was it offered as a process solution for companies by Dutch software developers. There are now around 25 process mining providers on the market – the majority of them are European companies with European customers. Why is the technology still so focused on Europe, more than ten years after the market emerged? After all, not only European companies have complex, non-transparent processes and increasing pressure to become more efficient. However, if you take a look at economically strong nations such as the US, China or Japan, then process mining is not necessarily just a question of demand, but of other external conditions, too.
Process Mining in Practice – How Much External Support Is Needed?
A decisive factor for the marketing of process mining is where suppliers are based. Companies often initially focus on the national market. This decision can be attributed to barriers to entry, market information, culture or communication. In addition, the distance to the customer – the company – is crucial for implementation. While companies are increasingly investing in resources for topics such as data science, process management and IT-supported process solutions, the implementation and continuous application of process mining is tied to certain capacities. Especially in the initial phase, many companies are dependent on the support of the providers. As a result, implementation with geographically close customers is more efficient in terms of on-site support and communication.
Based on the providers’ marketing and sales strategies, which target the European market, mainly European companies have been among the early users. The German process mining market in particular is one of the larger markets with currently 6 providers. The system and process experience with customers also helps providers to make the implementation of similar projects more efficient, making cooperation more attractive for both developers and users of these system and process structures. These structures and certain process topics tend to be more similar at the national than at the international level.
Thinking Outside the Box
But what is stopping companies from (physically) entering the market in countries with high market potential?
If you take a look at countries outside the European Union, economically strong nations such as the United States, Japan and China are particularly promising markets. This is not surprising in a B2B market where the majority of customers are large corporations. However, economic strength is only one part of market attractiveness. Certain requirements must be met for the application of process mining, as attractiveness is determined not only by market factors, but also by legal and technological constraints. It is not necessarily easy to compare this at the country level.
However, there are new studies that provide valuable information. The IMD study “World Digital Competitiveness (WDC)” compares the ability of countries to develop and adopt new technologies, and analyzes the dissemination of knowledge, the level of technology and future security as crucial criteria for market entry. Since process mining is increasingly cloud-based, the study “BSA Cloud Computing Scorecard“ from 2018 provides valuable insights too. In this study, 24 key global countries are evaluated for cloud computing on the basis of their political framework conditions – for example with regard to data protection, security or IT readiness. In addition to technological and political factors, countries with a high automation potential are also interesting because process mining is often used for process automation, from identification to the realization of automation potential. Take Japan, for example: the work of 56 percent of the Japanese workforce can feasibly be automated. This makes Japan a potentially interesting market with attractive economic and political conditions.
Political Factors: China vs. the US
On the flipside, China as the world’s second largest economy with its huge workforce has many potential process mining users, but the current technological and political conditions are still problematic. In the IMD study on digital competitiveness, China only ranks 31st internationally, and thus attains a rating around 25 percent lower than that of the US as the highest-ranking country. China also achieved bad results with the BSA Cloud Computing Scorecard, particularly in the fields of data protection and the promotion of free trade. For example, cloud computing providers are restricted by law when it comes to data localization and have no protection to guarantee technology neutrality or the non-discriminatory procurement of cloud services.
According to current studies, the United States shows the greatest potential. The US has the highest economic performance, the greatest technological progress, the necessary know-how, the readiness for the future for digital transformation and the framework conditions that are favorable of cloud computing providers. In addition to this country, Canada and Australia also have attractive prerequisites for marketing process mining solutions.
Process mining is a very specific and at first glance complicated method, which is why marketing is very resource-intensive. Accordingly, many suppliers are planning a relatively late international market entry for capacity and strategic reasons. However, process mining requires a certain political and technological environment, which does not necessarily exist in economically strong countries such as China. For this reason, such markets are currently not interesting for suppliers, despite their exciting target groups, whereas countries with high potential and suitable conditions such as the US, Australia and Canada have witnessed a clear growth trend in recent years.
As a result, there are in fact regions outside the European Union with increasingly promising market potential. This is because companies around the world have long since moved beyond the question of “why” and are now concerned with the “how”. Companies use process mining for various transformation projects: from the optimization and automation of their processes to system migrations. The implementation of process mining has become a matter of resources and framework conditions that both users and providers have to face. With an international partner network, Lana Labs offers the solution for specific know-how and resources: process and data experts worldwide support companies with the implementation, process mining analyses and completion of transformation projects.
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