How Process Mining Works: A Beginner’s Guide to Understanding Business Processes

In this beginner-friendly guide, we’ll explain how process mining works, why it matters, and how it helps companies understand and improve their operations.

Every business process—from ordering a product online to processing a customer refund—leaves behind a digital footprint. These digital footprints, also known as event logs, are treasure troves of information. But how do businesses make sense of them? This is where process mining comes in.

What is Process Mining?

As we discussed earlier in the blog about What Process Mining Is, let’s now dive into how it works by starting with the basics.

Process mining is a technology that helps businesses understand how their internal processes are actually working in real life—not just how they think they work. It uses data from business systems (like ERP, CRM, and HR platforms) to map out every step in a process.

Instead of interviewing employees or reviewing paper documents, process mining uses real-time system data to create a visual map of the process.

Why is Process Mining Important?

Imagine you run an e-commerce company. You may assume that every order follows a simple path: Order placed → Payment processed → Product shipped → Order delivered. But in reality, delays, rework, or missing steps often occur.

Process mining gives you a clear picture of how things actually happen. This helps you:

• Identify bottlenecks
• Spot inefficiencies
• Improve customer service
• Ensure compliance

Read Also: Process Mining vs Process Modeling: What Differentiates The Two.

How Process Mining Works: Step-by-Step

Let’s break down how process mining works into simple steps:

1. Collect Event Logs

The first step is gathering data. Every time an activity happens in your business system (like a sales invoice being issued or an employee clocking in), it gets recorded as an event log.

Each event log contains:

• Case ID (e.g., order number)
• Activity (e.g., payment received)
• Timestamp (e.g., the exact date and time it happened)

These logs are exported from systems like SAP, Oracle, Salesforce, or custom ERP tools.

2. Create a Process Model

Once the data is collected, process mining tools (like Celonis, UiPath Process Mining, or Disco) use the event logs to automatically create a visual map of your business process.

This is called a process model. It shows all the different paths a process can take, not just the ideal one.

For example, you might discover that 20% of your orders are getting stuck in the payment verification stage. That’s something you may never notice without process mining.

3. Analyze the Process

After building the process model, the next step is analysis. The software will highlight:

• Frequent steps
• Deviations from the standard process
• Delays or bottlenecks
• Rework loops (when a step gets repeated unnecessarily)

With these insights, you can pinpoint what’s slowing you down or costing you money.

4. Get Actionable Insights

Process mining doesn’t just show you problems—it helps you solve them. Most tools come with built-in dashboards and reports that give you actionable suggestions.

You can:

• Redesign the process to eliminate waste
• Improve automation
• Enhance customer experiences
• Ensure better compliance with regulations

Visit Also: Enhancing Process Mining with Customer Experience Data: A Banking Perspective.

5. Monitor Improvements in Real Time

Once changes are made, process mining can continue tracking your operations in real time. You can see whether improvements are working or if new problems are popping up.

This creates a cycle of continuous improvement.

Real-Life Example: Order-to-Cash Process

Let’s say a manufacturing company wants to improve its order-to-cash process. This includes everything from when a customer places an order to when the company receives payment.

Using process mining, they discover:

• 10% of orders are delayed due to manual data entry errors.
• Some invoices are stuck in approval for weeks.
• Customers are calling to follow up on late deliveries.

By visualizing the entire process and spotting issues, the company decides to automate invoice approvals and digitize order entries. Within a few months, they see faster deliveries, happier customers, and more on-time payments.

That’s how process mining works in real life.

Read Also: Your First Steps into the World of Process Mining: Unveiling the Path to Business Optimization.

Where is Process Mining Used?

Process mining is used across many industries, including:

• Banking & Finance: For detecting fraud and improving loan processing.
• Healthcare: To reduce patient wait times and improve billing accuracy.
• Manufacturing: To streamline production and supply chain operations.
• Retail: To track orders and improve customer service.
• IT Services: To optimize incident resolution and ticketing systems.

Benefits of Process Mining

Now that you know how process mining works, let’s look at the key benefits:

• Transparency: You get a clear view of how your processes actually run.
• Speed: Faster identification of issues and delays.
• Cost Savings: Remove inefficiencies and reduce manual efforts.
• Customer Satisfaction: Improve response times and service delivery.
• Compliance: Ensure that processes follow industry standards and regulations.

Common Myths about Process Mining

Myth 1: It’s only for big companies.
Fact: Even small and medium-sized businesses can benefit from process mining with the right tools.

Myth 2: It’s the same as Business Intelligence (BI).

Fact: BI shows what happened. Process mining shows how and why it happened.

Myth 3: It replaces humans.

Fact: Process mining empowers employees to make smarter decisions.

Choosing the Right Process Mining Tool

Popular tools that help you understand how process mining works include:

• Celonis
• UiPath Process Mining
• Disco by Fluxicon
• ARIS Process Mining

These tools are designed to be user-friendly, and many offer drag-and-drop interfaces for beginners.

Read Also: How Process Mining Software Can Help You Boost Efficiency and Achieve Beautiful Success First.

Final Thoughts

Understanding how process mining works is the first step toward transforming your business operations. It takes what you already have—your existing data—and turns it into valuable insights that drive real change.

For any business looking to grow, improve efficiency, and serve customers better, process mining is no longer a luxury—it’s a necessity.

Whether you’re new to the concept or ready to implement a tool, now is the perfect time to start exploring how process mining works for your organization.