Deutsche Telekom Services Europe’s approach to process mining to drive visibility

Alex Johnston

For Deutsche Telekom Services Europe (DTSE), a subsidiary of telecommunication firm Deutsche Telekom, success means providing innovative, high-quality, end-to-end shared services across the company.

Challenge


For Deutsche Telekom Services Europe (DTSE), a subsidiary of telecommunication firm Deutsche Telekom, success means providing innovative, high-quality, end-to-end shared services across the company. DTSE is a shared services centre combining the finance, reporting, procurement and HR functions to deliver a highly digitized procure-to pay process for the entire Deutsche Telekom group.
 
They handle everything from negotiations over requests and order management, to invoicing and payment, so that other departments can focus on their core business. Their procure-to-pay process handles over 2 million order items — with an order volume of more than €7bn — and processes almost 9 million invoices a year. It needs to run like a well-oiled machine.
 
The slightest hiccup in their value chain could mean millions of dollars in losses. One of the main challenges Peter Tasev, Senior VP of procure-to-pay at DTSE, and his team faced was to leverage the vast amount of data generated every day in the shared services center to identify and tackle operational friction. Though they had successfully digitalized all of their core processes and were aware of some pain points, DTSE struggled to zero in on the root causes of these inefficiencies and, by extension, act on them. The pain points identified included;

  • Duplicate payments to vendors led to high cash losses
  • Blocked payments prevented them from maximizing cash discounts
  • Suboptimal delivery date accuracy caused harsh penalties
  • Employees were wasting time on low-value transactional tasks
  • Discussions, and ultimately business decisions, were based on subjective experiences, not numbers.

Approach


Partnering with Celonis, DTSE connected data from more than 10 source systems — such as SAP Ariba and Salesforce — gaining unprecedented visibility into their process flows. The partnership allowed DTSE to track the data produced by its enterprise software systems, extracting knowledge from event logs to audit and visualise business processes.
 
This mapping exercises provided an objective view of process flows and friction points. As part of its approach, DTSE set up a centre of excellence (CoE) for process mining. Serving as an interface between IT, data scientists, data analysts, and business analysts as well as executives, the CoE covers all areas within the process mining cycle from data collection to analytics, process enhancement and end-to-end KPI monitoring. This team within the CoE identified over 150 use-cases where Celonis’ platform could support identifying inefficiencies, and to track process performance.
 
Use cases included cash discounts, where frequently a missing goods receipt or an approval led to opportunities being lost, and reducing the number of procurement touch points in tactical sourcing. Leveraging this enhanced process visibility, procurement worked with stakeholders from audit, finance, controlling, technology and Deutsche Telekom AG’s internal control system to discuss end-to-end process improvements. Armed with up-to-date knowledge of how its processes actually ran, DTSE could now not only define new KPIs for the performance of those processes, but also develop an early warning system for the KPIs going off-track.

 

The Solution


The process mining initiative provided a number of benefits to DTSE, including;

  1. Maximising cash discounts: Real-time reports with open blocked invoices helped DTSE achieve a cash discount rate of 96% and led to additional savings of €40M per year.
  2. Paying on time: With the help of real-time alerts and automated process steps, DTSE reached an on-time payment rate of over 90%.
  3. Increasing automation: DTSE increased the no-touch rate within order management significantly, which freed up capacity for tactical sourcing and resulted in tactical savings of €12M. More efficient processes mean DTSE’s Purchase Orders are now right the first time, over 90% of the time.
  4. Avoiding duplicate payments: DTSE also established a real-time analysis for duplicate payments. By comparing all outgoing payments and flag duplicate payments to employees, DTSE has saved €3M — and blocked any future duplicate payments too.
  5. Enforcing contractual penalties: DTSE also systematically analyses contracts for contractual penalty options. As a result, they received approximately €1.6M in penalties in 2019 alone.

The initiative has laid the framework for DTSE’s artificial intelligence push; supporting the identification of the most promising use cases for AI, selecting the right technology and monitoring its impact on the business.

More insights

Scroll to Top

Submit the form to find out more about membership