Business Process Simulation, Article Review Example

Summary

The article entitled “Business Process Simulation: A Fundamental Step Supporting Process Centered Management” revealed that business processes are one of the most important keys in the survival and success of various business in this present day. This due to the fact that business process simulation provides an avenue for businesses and companies to practice process centered management. This means that businesses are now able to optimize their processes and improve their performance in the market and thus, increasing productivity and profitability. In this regard, efficiency, effectivity and chance can be observed in the manner of performing business processes. The focus is no longer geared towards the ordered approach of management but rather on what can help and contribute to a more competitive business management. In order to understand further the effect of business process simulation and the role it plays in various industries such as computers and banking. As the need for a more competitive and flexible banking experience, banks are switching over to using business process simulation. Therefore, there are more than one way to conduct banking rather than going to the bank in person. People can do online banking and with the help of analytics involved in the simulation process, banks and management now are able to utilize their resources better.

Introduction

The author set out an example by providing a statistics that estimated the cost of establishing various bank branches to be about $330 billion in the year 2002 alone. This cost can be avoided with the help of the business simulation process. It can easily help managers and business operators pinpoint the innovations and working managerial processes necessary to access new technologies and services to improve services. In addition, the article also focuses on the various building blocks that are essentially required for a successful optimization of the business processes. These building blocks such as customer, strategy, flexibility and change are important to ensure that the business is on the right track to betterment and improvement. It is noteworthy to say, however, that there are essentially four factors that have to be considered when applying business process simulation to achieve success. These factors are consisting of the characteristics of the process, simulation objectives, expectations and the value of input information. These factors are important because it the measure by which the simulation process is assessed for success.

Reasons for the Choice of Article

I chose this article and topic because of the two primary reasons: 1) it is the current trend in the business industry today. Meaning to say, a lot of business are switching and are utilizing business process management to achieve success and to promote a more customer-orientated service; 2) although it is the current trend, there are still a lot of people that are not aware of this trend and have a limited, if not none, knowledge of the process. There is a great need to understand what business process management in order to increase audience participation. In addition to this, it cannot be denied that every business and participant has their own understanding, definition and perspective of what BPM is and how can it really help increase productivity and profitability.

Critically Review

This article is one of the well-explained articles about business process simulation. It clearly gives a good explanation as to why there are two perspective on the topic such as technology-driven and optimization. It cannot be denied that business process simulation/management is not an easy topic to understand. When businesses talk about it, the first thing that comes in mind is technology. A way to develop and create an application that will result in the automation of various business processes such as online banking and online shopping. For optimization, business people think of CI, Six Sigma and TQM as methodologies for success (Kaplan, 120). And yet, there are groups of business people in the industry that consider process management as a way to enhance visibility and the list verves on. Not that these perspective are wrong. These perspectives are, in their entirety, makes the idea of business process management whole. Hence, to say that one of these factors is to be isolated is misleading. In actuality, business process management is a comprehensive and business oriented process as proven by the article (Joiner, 61).

It is true that the building blocks of business process management are customer, strategy, flexibility and ability to change. This is because of the fact that the end-result of the processes involved in the system yield to the needs of the customer needs. Meaning to say, one of the main questions that must be answered by any business corporation is “what do our customers want?” Once this is answered, the business can now change and be flexible in the deployment and observance of the measures and methods of using its resources. It can also improve and be flexible on the strategies that it is employing to ensure customer satisfaction. However, it must be noted that customers are not the only important ones in this process. The operation of the business is likewise of significance.

It is relevant that the article stated that, overall, business process simulation is a tool that supports not just the design of the various business processes that are being employed by the managers and business owner as well as the analysis of the same. This is due to the fact that BPM is not limited to what the customers can get although the end result benefits them. BPM is a tool that helps business managers and owners to align their procedures with a strategy- old and new.  The business industry is an evolving one. It is continuously looking for ways to improve in its functions and daily undertaking (Johnson, 37). The operations have to be flexible enough modify and re-applied as the necessity arises for it. However, the sad reality is that, people are not open to change. It is a hard process. Hence, it can be frustrating and at times negatively impact a strategy that based on the BP can improve productivity and profitability of a business (Kay, 55). With the help of the BPM, though, managers and workers are able to maintain a state of consistency in its operations and processes while making sure that they have are monitoring the performance of the strategies being implemented in the entire organization.

The focus is to ensure that the strategies are aligned with the process. The absence of such alignment will only result to failure. It is a known fact that in every business must be implementing strategies that are consistent with the goals of the company. Without the consistency, the company will fail. The processes will not be able to reach the goals even though they are being executed properly. Everything in a business must work hand-in-hand and in accordance to the goals to meet the expectations set forth by the company.

In addition, the significance of business process management is undisputed when it comes to growing the revenue of the business. This means that with the utilization of BPM, the company is being afforded with various means and ways to measure the speed in which the company is growing when it comes to the revenue and the sales. Also, the reduction of costs and management of risk are some of the perceptible benefits of the usage of BPM (Hutchins, 44). The cost is being reduced because of the fact that with the implementation of BPM, the room for error when it comes to the formalization of strategies and tasks for the operation of the business is reduced considerably. The time it will take for a task to be fulfilled is likewise reduced by virtue of the automation and informed decisions aided by the BPM. The improvement of benefits as well as customer satisfaction is greatly increased. More importantly, the article is right when it stated that there the expectations about the performance of the BPM should be realistic. This is true not just in the realms of BPM but in any endeavour as a matter of fact. The BPM is a tool that can help in the realization of the expectations in reaching the margin goals, utilization of resources, capacity and the utilization of capital.

However, it cannot be denied that BPM is not intended to be used as the decision-maker in the company. It is not a “magic box” as the authors put it. In order to realize the goals and the objectives of the company, there is a need for the management to be on top of everything because the industry has grown so much that competition is very intense. There is a need for every business to fight for their existence, increase competitive advantage and secure their place in the business world (Wood, 110).

Although the article is clear about the various benefits and advantages that a company can benefit from utilizing BPM. However, there is not much said about the disadvantages of the utilization of business process management such as limiting innovations. It is known fact that innovations also happens in the course of employing BPM. The problem, though, is that it only happens in increments (Hussey, 24). With this in mind, it cannot be denied that when a need for a radical innovation is necessary, the company or a business might have a hard time adapting which can result to the absence of innovations. Elucidating further, when time prove that a rapid change is necessary, there is a huge chance that the company will not be successful in transitioning as compared to those who do not employ process management (Ulrich, 66). But it does not mean that it is impossible to happen. Transition and rapid changes can still happen provided that the company and a business are geared and are able open for consideration and exploitation of its resources.

Also, one of the problems that are being faced by the article is the fact that there is not enough exploration when it comes to the modeling process. If any, there are only few imperative attempts that were made towards the development and improvement of the theoretical approaches to it (Jacobson, 118). This might be true because everything about the business process management is brought upon by business people, the practitioners and the participants but very few come from the academic side.

The process should not be treated in isolation. The complexity and the intricacies of its details are connected to the customers- the end receiver of the process as one might say. It is a process that starts with identifying the needs of the business as far as customer needs are concerned to the developing of various strategies and methodologies to meet such needs (Harrington, 67). But such process should not get lost in translation and every aspect of the business form the processes to the customers and profitability is balanced.

Conclusion

In conclusion, the article successfully conveyed the message that process management is now an everyday part of any business activities regardless of its limitations. It is being pictured as a phenomenon. However, with it comes the task of further analysis and continued development and dedication not just from the business people but as well as from the academic. With this, there is a need for the development of a platform for research in the future. A common language must be created in order to further understand the process and contribute to its growth without sacrificing the success, productivity and profitability of a business. After all, the main agenda of having and conducting businesses is to make money. To make money or profit, the business has to satisfy the customers and make them come back for more. Customer satisfaction should be guaranteed. The processes that a business is using are the reflection of how the management works. If the management of a business is not mindful of its processes, it cannot be bothered about the business (Harrington, 96).

Work Cited

Harrington, James. Total Improvement Management. New York: McGraw-Hill, 1995.

Harrington, James Business Process Improvement. New York: McGraw-Hill, 1991.

Hussey, David. Strategic Management. Oxford: Butterworth-Heinemann, 1998.

Hutchins, David. Achieve Total Quality. Cambridge, UK: Director Books, 1992.

Hutchins, David. In Pursuit of Quality. London: Pitman, 1990.

Jacobson, Ivar. The Object Advantage- Business Process Reengineering with Object Technology. Englewood Cliffs, NJ: Prentice-Hall, 1995.

Johnson, Gerry. Exploring Corporate Strategy. London: Prentice-Hall, 2001.

Joiner, Brian. Fourth Generation Management- The New Business Consciousness. New York: McGraw-Hill, 1994.

Kaplan, Robert. Measures for Manufacturing Excellence. Boston, MA: Harvard Business School Press, 1990.

Kay, John. Foundations of Corporate Success. Oxford: Oxford University Press, 1995.

Ulrich, David. The HR Value Proposition. Boston: Harvard Business School Press, 2005.

Wood, Robert. Competency-based recruitment and selection. Chichester, UK: Wiley, 1998.