SIMULATION MODELLING OF BUSINESS PROCESSES Ray J. Paul, Vlatka Hlupic, George M. Giaglis Brunel University, Department of Information Systems and Computing Uxbridge, Middlesex UB8 3PH Tel: 01895 – 203 374 Fax: 01895 – 251 686 E-mail: Ray.Paul@brunel.ac.uk ABSTRACT Increasingly, organisations need to adapt to new conditions and competitive pressures. Various change management approaches such as business process re- engineering have been developed to meet this perceived need. This paper investigates the potential of simulation modelling for modelling business processes. After a discussion on business processes related issues, an overview of business process modelling methods is presented. The usability of simulation modelling for evaluating alternative business process strategies is investigated. Finally, a framework for business process simulation is proposed. INTRODUCTION It is claimed that the increasing competitive pressures that organisations face encourages them to minimise the time it takes to develop the product, bring products to market and service customers whilst maximising profits. This pressure has made Business Process Re-engineering (BPR) a popular topic in organisational management and created new ways of doing business (Tumay, 1995). BPR relates to the fundamental rethinking and radical redesign of an entire business system to achieve significant improvements in performance of the company. Many leading organisations have conducted BPR in order to improve productivity and gain competitive advantage. For example, a survey of 180 US and 100 European companies found that 75% of these companies had engaged in significant re- engineering efforts in the past three years (Jackson, 1996). However, despite the number of companies involved in re-engineering, the rate of failure in re-engineering projects is over 50% (Hammer and Champy, 1993). Some of the frequently cited problems related to BPR include the inability to predict the outcome of a radical change, difficulty in capturing existing processes in a way that can be seen by multidisciplinary team members, shortage of creativity in process redesign, cost of implementing the new process, or inability to recognise the dynamic nature of the processes.