Valuation of manual and automated process redesign from a business perspective

Abstract

PurposeThe continuous redesign of processes is crucial for companies in times of tough competition and fast‐changing surrounding conditions. Since the manual redesign of processes is a time‐ and resource‐consuming task, automated redesign will increasingly become a useful alternative. Hence, future redesign projects need to be valuated based on both a manual and an automated redesign approach. The purpose of this paper is to compare the manual and automated process redesign on the basis of the Business Process Management (BPM) lifecycle.Design/methodology/approachIn this paper, the authors compare the manual and automated process redesign on the basis of the Business Process Management (BPM) lifecycle. The results form the basis for a mathematical model that outlines the general economic characteristics of process redesign as well as for the manual and automated approaches. Subsequently, the authors exemplarily apply their model to a set of empirical data with respective assumptions on particular aspects of the automated approach.FindingsIn the problem setting described in the paper, the valuation model shows that automated process redesign induces an equal or higher number of optimized processes in a company. Therefore, the authors present a decision support that outlines how much to invest in automated process redesign.Research limitations/implicationsThe model considers the cost side of automated process redesign; therefore, further research should be conducted to analyze the possibility of higher returns induced by automated redesign (e.g., through a quicker adaption to real‐world changes). Moreover, for automated redesign, there is no requirement for broad empirical data that should be collected and analyzed as soon as this approach leaves the basic research and prototyping stages.Practical implicationsThis paper presents an approach that can be used by companies to estimate the upper limit for investments in manual and automated process redesign. Working under certain general assumptions and independently from actual cost and return values, the paper demonstrates that automated process redesign induces an equal or higher ratio of optimized processes. Thus, companies introducing automated redesign cannot only apply the model to evaluate their investments but can also expect a higher ratio of optimized processes for this approach.Originality/valueAs existing literature primarily focuses on the technical aspects of automated process redesign, these findings contribute to the current body of literature. This paper discusses a first decision‐support for the economic aspects of automated process redesign, particularly with regard to the investments that are required for it. This information is relevant as soon as the approach leaves the stage of a prototype.