Two-stage process analysis using the process-based performance measurement framework and business process simulation

Abstract

Many enterprises have recently been pursuing process innovation or improvement to attain their performance goals. To align a business process with enterprise performances, this study proposes a two-stage process analysis for process (re)design that combines the process-based performance measurement framework (PPMF) and business process simulation (BPS). The two-stage analysis consists of macro and micro analyses of business processes. At the early stage of business process analysis (BPA), macro process analysis is conducted to identify the influence of a business process on a target key performance indicator (KPI) or the contribution of a target KPI to other KPIs. If target business processes that need improvement are identified through the macro process analysis and to-be processes are newly designed, micro process analysis using simulation is conducted to predict the performance. The proposed method is validated by application to a real business process within the setting of a large Korean company. By using the proposed, two-stage process analysis, company staff involved in process innovation projects can determine the processes with the greatest influence on enterprise strategy, and can systematically evaluate the performance prediction of the newly designed process.