Predicting and Improving Complex Business Processes: Values and Limitations of Modeling and Simulation Technologies

Abstract

This paper argues that the value of simulation and modeling technology tends to be contingent on creating models that can offer a systematic and well defined way of representing firm's structure and business processes. Over time, stable and simple business processes can reach equilibrium. As such, the behavior of the stable systems can be predicted through modeling and simulation. However, complexity in hierarchical business processes and introduction of random changes within such business processes create dynamic systems that have a tendency not to reach equilibrium. Hence, simulation and modeling may add less value in predictability of behavior within complex and dynamic business processes