Financial Evaluation and Optimization of Business Processes

Financial Evaluation and Optimization of Business Processes

Partha B. Sampathkumaran (Institute of Computer Science, Ludwig-Maximilians-University, Munich, Germany) and Martin Wirsing (Institute of Computer Science, Ludwig-Maximilians-University, Munich, Germany)
Copyright: © 2013 |Pages: 30
DOI: 10.4018/jismd.2013040105
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Abstract

Designing and optimizing a Business Process based on its financial parameters is a challenging task which requires well defined approaches, actions and recommendations which when implemented lead to tangible and quantifiable results. In this paper the authors consider Business Processes represented through the Business Process Modeling Notation with their Costs evaluated through a pattern based methodology. Using this concept of Cost calculation the authors analyze the effect of different well known best practices on the financial parameters of the process. In this study the authors also evaluate the impact of each task in a process on the overall Cost through Sensitivity Analysis leading to a structured approach to parameter variation to achieve financial optimization. The study briefly introduces the Business Process Modeling Notation, Workflow Patterns, and available Performance Measures Evaluation Techniques and recommends an adaptation of Devils Quadrangle suitable for impact evaluation.
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Cost, Reliability And Business Cost

Business Processes are defined with different perspectives and objectives, be it internal or external, customer or industry oriented, product or process oriented. The processes have distinct characteristics; Cost and Reliability are two of them. Every Business Process when executed incurs a certain amount of Cost and performs at certain Reliability. Due to these reasons, the returns from a process and the optimization of the same have always a high importance when an organization decides to implement a Business Process. This calculation decides if to have the process at all or not. There would be very few cases where the returns from a process are negative. The aim of undertaking financial optimization is to find out how we could implement a process which gives the maximum returns. The concern is how to calculate and reason out the Cost of a process (either implemented or still in design).

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