Overview

BW Fishing Inc. (BWF) sells fishing supplies mainly to businesses across the country. The company has grown steadily over the last 10 years. BWF found a strategic niche in taking orders and fulfilling them immediately around the clock. Since BWFs customers order supplies at unusual hours, BWFs always open mantra has received customer praise. This practice, along with competitive pricing, has allowed BWF to build a loyal network of customers.

BWF uses process mining to visualize data about its order-to-cash cycle. Several functional areas use process mining, including:

Internal Audit Department: to understand process flows, evaluate internal controls and inform risk assessments

Corporate Accounting and Finance Departments: to look for process improvements, understand the costs of different activities (in terms of dollars and time), etc.

Information Technology Department: to see if enterprise resource planning system processes and controls are functioning correctly

Your tasks are to understand the basic process at BWF and then perform the basic analysis that each functional area listed above would perform.

Order-to-cash cycle at BWF

BWF has previously documented its typical order-to-cash process in a narrative and flowchart, as covered in the EYARC Innovation mindset Process mining Document the process case. These have been provided in Appendix 1 and Appendix 2, respectively, for easy reference. Carefully review this information so you have a full understanding of the standard process that BWFs management wants all employees to follow for the order-to-cash cycle.

Process mining dashboards for the order-to-cash cycle

A special process mining data analytics team prepared several dashboards for a set of BWFs transactions. You can assume that the team competently extracted all data from the BWF system and included all transactions for your review. The team extracted the first 1,000 transactions for you to review.

Dashboards can be viewed in a Celonis cloud environment at this link.

https://ey-academic-resource-center.eu-2.celonis.cloud/process-mining/public/4bfd2da8-98a1-4619-aa0b-8e032ba5da6d/#/frontend/documents/4bfd2da8-98a1-4619-aa0b-8e032ba5da6d/view/sheets/348d26f2-b8a3-4e84-bc39-8fde38fc2bf7

The following questions test your basic understanding of the process and the process mining visualizations. For these questions, consider all sales orders.

How many sales are included in the data?

What is the dollar value of all sales included in the data?

How many different path variants are there in the given data?

The happy path is the most common path that transactions follow. What percent of transactions do not follow the happy path?

How many activities are there in the fourth most common path variant (note that the Process Start and Process End nodes do not count as activities)? The fourth most common path variant can be seen on the dashboard Variant Explorer by selecting the number 4 in the pane on the right.

What is the time stamp of the first activity included in the data set? What is the time stamp of the last activity included in the data set?

What was the dollar amount for sales order 30333 (hint: search for 30333 in the TransactionID column)?

How many customers are located in the city of Coeur dAlene, Idaho (note that the code for Idaho is ID and the system uses a space instead of an apostrophe in the name of the city, Coeur dAlene)?

How many cases do not conform to the email policy during the month of January (remember the data is for the year 2021)?

Invoices were not emailed to customers for how many sales orders? Exclude from the analysis orders for which the credit was denied. As a hint, this is most easily done using the Variant Explorer dashboard and filtering.

What is the total dollar value of the sales orders that were not invoiced? Make sure to exclude all transactions that did not include an email activity and also those for which credit was denied.

How many unique customers were not invoiced (note that this is not asking about sales orders, but unique customers)? Remember not to include transactions if credit was denied.

Internal Audit Department questions

The process for billing customers at BWF requires the accounting clerk to review the sales invoice before the system emails the invoice to the customer. This is done to keep customers happy by billing them correctly the first time. It also saves BWF from managing customer inquiries. Internal Audit has been asked to look into the compliance with this procedure.

Report the transaction ID and the name of the employee for any sales invoices that were approved after the customer received the sales invoice.

According to BWFs documentation, who should review all sales invoices? Use the dashboards to examine and summarize who actually reviews sales invoices. Do your findings suggest an increase in the risk of misappropriation of assets or of misstated financial reports? Do your findings suggest an increased risk of poor operating performance? Provide any recommendations based on your findings.

Corporate Accounting and Finance Department questions

Management is concerned about the costs, in terms of time and money, associated with not sending invoices to customers. Address the following questions related to this issue.

Consider the transactions you found in response to question 2 (i.e., sales orders for which no invoice was emailed). For how many of these transactions does BWF not have record of a payment? For each nonpayment, record the transaction ID and the dollar amount of the invoice. What is the total dollar amount of all nonpayments?

How much longer does it take for customers to pay off their purchase if they do not receive an invoice via email? Report the following about the average number of hours it takes for the entire order-to-cash process under these two scenarios. (Hints: Exclude from the analysis any transaction where credit was denied, but do not exclude any transactions for which the review and approval of the invoice come after the payment is received. Use the Conformance dashboard to help with this analysis.)

The customer does not receive an invoice emailed to them.

The customer does receive an invoice emailed to them.

Report the difference between these two numbers (with a positive number indicating it takes longer for customers who do not receive an email).

BWF has a very tight cash situation. BWF has a line of credit that charges 14% annually. If BWF uses credit to finance any collection time, how much money is the company losing due to financing for the extra time to collect invoices? Answer the following questions to address this question (without using the dashboards).

What is the percentage of money lost per hour due to financing (do not round your answer and use 365 days in a year)?

How much money has the company lost during the time period based on the sales orders for which customers were not sent an invoice (from question 8), and use the estimated loss (from question 3)? Round answers to the nearest penny.

Given the current losses for the first three months of the year, estimate how much the company is likely to lose by not sending invoices for the year because of the extended financing costs. What is your annual estimate (assume this is not a leap year and there will be no more sales during the month of March)? Round answers to the nearest penny and use the rounded answer for computations from the previous question. Also, use the number of days to compute this and not quarters (since the first quarter has fewer days).

Information Technology Department questions

The Information Technology Department is tasked with understanding why customers are not receiving emails. To that end, investigate the following questions.

You learn that some emails bounce when sent to customers, and the system records these transactions as not having been emailed an invoice. Investigate if any of the bounced sales orders are caused by having dirty or problematic email data, meaning their emails were null, contained corrupt data, etc. Identify the company names and email addresses for any customers that are dirty. (Hint: For this analysis, you only need to examine customers who did not receive an email and were granted credit from question 2). Provide recommendations for improving this process so that emails do not bounce for this reason.

A second reason emails may bounce is a bug in the system. Bugs are errors in the system that can cause incorrect or unexpected results. They can often be identified by patterns in the results. That is, the bug usually identifies all transactions with a certain attribute as having the same error, and other transactions that dont have this attribute will not result in that error. Identify the bug in this data. (Hint: To find the bug, investigate any unusual patterns in the activity immediately preceding the Email Sales Invoice to Customer activity, i.e., the Review and Approve Sales Invoice activity, for customers who did not receive an email and did not have any dirty email data).