Inefficient processes can cost businesses up to $1.3 million a year, with resistance to change and outdated workflows being the main barriers to getting ahead of the curve. According to a study by the American Productivity & Quality Center (APQC), organizations that prioritize process improvement plans experience an average cost savings of 20% to 30% and a significant reduction in errors and defects. Process management is a proven way to identify and mitigate inefficient workflows through digital transformation.
Process simulation is a key component of any business process management strategy, enabling key stakeholders to test out „what if“ scenarios and gain complete clarity over every single decision.
This blog lays out the basics of process simulation, its potential benefits, and how to integrate it into your process management strategy.
What is process simulation?
Process simulation analyzes workflows using digital representations of your company’s operations. It enables companies to test „what-if“ scenarios and see how changes impact their business, identifying areas for improvement before making investments
The result? Efficient processes, optimized workflows, and data-driven change that is easier to rally the organization around.
Why is it important?
Every change to a business process has an impact, and simulation allows businesses to forecast its implications.
Process simulation software isn’t just about efficiency optimization and eliminating bottlenecks; it also identifies each process’s potential risks, ensuring decision-makers can maintain compliance.
Implementing new workflows that don’t support business objectives can result in wasted resources and lost productivity. Process simulation ensures that process improvements will actually produce ROI aligned with business goals, making it a vital strategy for forward-thinking companies.
The goal of process simulation
Every leader has to make operational decisions, ensuring their company remains competitive and has a streamlined approach to complex processes. Process management allows companies to optimize workflows and achieve more efficiency.
Without process simulation, process management would be like walking into an unknown place with a blindfold. You don’t know the impact of a new process until you implement it—unless you simulate the potential outcomes.
And that’s the goal of process simulation: testing out new workflows or optimizing existing ones, and gaining clarity on how they’ll align with your company’s objectives.
The benefits of process simulation
Process simulation unlocks powerful benefits for organizations that want to remain competitive and achieve seamless operations. Empowering decision-makers to streamline workflows and transform employee experiences leads to a synergistic environment that drives success.
Let’s explore some key benefits associated with process simulation.
Reducing costs
Organizations can lose a lot of money when testing processes in a real-world environment. However, simulating changes in a virtual environment reduces costs and ensures nothing impacts your company’s bottom line.
If the simulation doesn’t offer optimal results, you can optimize it until you find the best solution.
Risk management
In an ultra-competitive business landscape, risk-taking is integral to achieving growth and prosperity (Forbes). There’s a big difference between throwing caution to the wind and taking a calculated risk. That difference is often process simulation.
By testing your workflows beforehand, you can avoid disruptions and reduce complications.
Decision making
Process management provides detailed insights regarding a company’s productivity and efficiency. By mapping different workflows, decision-makers can prioritize process development and make decisions that support organizational objectives.
By eliminating guesswork, companies can prepare for the future and have clear strategies.
Sustainability
In an increasingly eco-conscious society, businesses must show they respect the planet. Research from McKinsey highlights that over 70% of consumers care about sustainability, and many will pay more for eco-friendly products.
Mapping your processes enables you to assess their environmental impact and where you’re wasting resources. Conducting a dynamic simulation can lead to greener operations and enhance your organization’s reputation.
Six steps for successful process simulation
Process simulation has six steps, each ensuring total clarity and removing room for errors. Here’s how it works:
Step 1: Process mapping
The first step is to create a visual representation of every step in the process, including tasks, steps, and decision points. Put simply, process mapping strips each process down to expose inefficiencies and offer key stakeholders a complete view.
Business process management software creates flow charts or diagrams to highlight each step of the process, removing the need for manual task identification and mapping.
Step 2: Gathering data
The data-gathering stage involves collecting information on each process, including its costs, duration, and resource availability. Once you have this data, you can use it for baseline metrics and create parameters for process modeling. Creating an accurate baseline is absolutely crucial to be able to trust simulation output, so it’s recommended to use process mining to gather data in an objective manner.
Step 3: Developing the process model
The software uses the process map and data to create a digital statistical model of how each task, resource, and decision connects. It’s essentially a blueprint that identifies the base process and enables the simulation of various scenarios.
Step 4: Simulations
Once you understand how existing processes might impact operational efficiency, you can modify the base model to test different scenarios. This could mean allocating more resources or removing them, re-engineering process workflows by adding or removing steps, or changing the duration of each task.
Performing simulation runs allows you to isolate bottlenecks, identify areas for deploying new technology like automation or AI, and develop a strategy to eliminate inefficiencies.
Step 5: Process optimization
Process simulation and optimization go hand in hand because you can optimize each process once you collect insights. Remember, this stage is about refining and rerunning your simulations to achieve the best results.
Step 6: Implementation
Once you’ve run simulations and assessed the results, you can implement them in your real-world setting. Ongoing monitoring enables decision-makers to identify bottlenecks and supports real-time optimization. Adjusting each process promotes continuous improvement.
When to deploy process simulation
Process simulation is a valuable tool for all companies, from small businesses to international enterprises. However, if you’re new to simulating processes, figuring out where to start deploying simulation software can be challenging. The following scenarios are excellent use cases for process simulation:
- You want to implement process engineering changes but are unsure how they’ll affect real-world applications.
- There are significant resource constraints, which means trying different processes is impossible. Building the simulated process into a digital twin allows you to simulate optimizations without wasting your resources.
- It’s impossible to stop your current processes when you want to test new ones. For example, businesses focusing on continuous manufacturing can’t shut down their production lines to try out a new workflow.
- Senior management and internal stakeholders won’t allow process changes until they receive accurate data and a cost-benefit analysis.
How process simulation supports business process management
Traditional business process management relies on historical data and previous experiences, which can be beneficial, but it has limitations. Process simulation integration creates a digital replica of each task and workflow, enabling you to test various scenarios.
Here’s how simulating processes can support business process management:
- Isolating Bottlenecks: BPM is effective for optimizing your current processes but can miss bottlenecks. Simulation software models possible scenarios, resulting in an effective process with less room for weaknesses.
- Compliance: Imagine implementing a new process, only to find it risks your company’s reputation. Modeling and simulating different scenarios before implementing them ensures your organization remains compliant and doesn’t suffer reputational damage.
- Reliable Decisions: Process simulation uses predictive analytics to forecast the potential outcomes of each scenario. Decision makers can feel confident with their implementations and clearly explain how each process will improve operations.
- Employee Training: New workflows can be daunting for employees, leading to disengagement and a lack of productivity. Process simulation software can train your workforce before the new processes are implemented.
Examples of process simulation in action
Process simulation has very varied use cases. From the manufacturing industry to healthcare and project management, all industries can integrate simulation into the business process management strategy.
Healthcare
The healthcare industry is always in high demand but constantly deals with supply issues. Process simulation can optimize patient flows and identify systemic weaknesses.
It can also test different staffing levels, predict the positive impact of automation, and help healthcare services provide a seamless patient experience.
Manufacturing
Companies within the manufacturing sector frequently adopt process simulation software to optimize production lines. Decision-makers can try scenarios that enhance logistics by understanding bottlenecks and assessing material and product streams.
For example, a process plant might use simulation software to assess resource usage and find solutions that promote sustainability.
Project management
Large organizations often struggle with project management, but simulation optimizes the as-is process to secure better outcomes.
For example, if a project manager wants to improve workflows, they can test „what if“ scenarios, including delays, unavailable resources, and introducing new strategies.
Introducing process simulation software into your BPM strategy
Process simulation software relies on data science and algorithms to build a digital model of your process and forecast the outcomes of various scenarios. It identifies potential bottlenecks, enabling teams to optimize each process or task within that process for optimal results.
The most advanced process simulation software solutions offer pinpoint accuracy and allow you to create a digital twin of your entire real-world organization.
Advances in technology mean that organizations don’t have to worry about integrating various process mapping, simulation, and management tools. Process360 Live is an end-to-end platform that supports all areas of business process management.
The platform’s three phases help you turn inefficient processes into streamlined workflows that keep your employees engaged and customers happy.
- Discover: Use process discovery and mapping tools to get in-depth insights into your current processes.
- Design: Create a better future for your organization by running simulations and discovering how they impact its bottom line.
- Optimize: Use Process360 Live to optimize and monitor each process for better results.
Are you ready to transform your business with process simulation?
Business transformation is an ongoing process, but process simulation simplifies everything. Once you understand the impact each process might have, it’s easier to ensure compliance and benefit from ongoing cost savings.
If you’d like to see how process simulation software can move your organization toward its goals, please book a free demo of Process360 Live. You can also take advantage of a free trial with no obligation to invest in the software.
FAQs
Can I run process simulations in Python?
Yes, you can. Python is an open-source solution that uses general-purpose language. If you’re familiar with Python programming and understand the nuances of process simulation, it’s possible to use it.
However, specialist software makes process simulation accessible to anyone without extensive programming knowledge.
What happens to business process management without process simulation?
BPM is still an effective strategy but lacks the clarity that process simulation offers. As the software looks at historical data and previous experiences, it’s not as effective at predicting the potential outcomes of new implementations.
Integrating process simulation into your far-reaching BPM strategy offers total clarity and allows you to reduce the risks associated with introducing new processes.