A thread at ebizQ this week led me over to a nice post by Rashid Khan, founder and former CEO of Ultimus: “The Hype about Simulation and Optimization“. To summarise, Dr Khan’s position is that there is value in process simulation, but that it’s not a panacea and that the technology – particularly in the context of process optimisation – is over-hyped. Dr Khan collected quite a few comments on this post, and in themselves they’re pretty interesting (take a look).
There’s a variety of positions in the comments, ranging from “simulation is valuable, and we’ve used it to great benefit” to “simulation is a crock”. My take is that all the positions are honest and true – because, like so many other business technologies, the only real answer to the value question is “it depends”.
In my experience, simulation is a capability that many organisations ask for as a “tick box” feature in their BPM technology RFPs / RFIs – because they’ve been conditioned to do so by Gartner. However very few actually use the technology in anger.
In practice the case for using a simulation capability is mostly seen as marginal in the context of the overall BPM effort, and the larger value that can be realised by agreeing on a standard process and starting to put some automation or active guidance in place. Rightly or wrongly the overwhelming perception of simulation in practice, where BPM technology is being implemented, is that the return from running simulations is just not worth the effort of setting them up. Nevertheless, companies like Lanner do very decent business selling simulation tools, so there’s no doubt that a viable market exists. But the question remains – does it have mainstream industry applicability or is it a specialist/niche technology?
I plan to go into more detail on this in a full report, but for now I’ll say that the answer lies somewhere in the middle. Clearly in the context of industrialised processes, where the focus is on continuous process improvement and process thinking is already well-ingrained, the answer is yes, there’s a wealth of examples of simulation playing a valuable role. The crucial thing to note, however, is that the work areas where BPM technology is being applied today are mostly not like those processes – they’re not well-understood and they’re not very often highly-structured.
There’s a parallel to process simulation in terms of its potential applicability, I think, and that’s CEP (Complex Event Processing). CEP has a well-established application with a clear business case: algorithmic trading. However outside capital markets, CEP has so far failed to become seen as a technology with wider applicability or real mainstream potential. Of course there are many places where “event processing” has value and in fact where the technology is already employed (network/systems monitoring, RFID, fraud detection, billing/revenue management, and so on) but how widespread is the need for the advanced capabilities that CEP provides, really?
Regarding CEP as a mainstream technology the question hasn’t yet been answered – not to my satisfaction, at least. Regarding process simulation as a driver for optimisation in the context of today’s BPM efforts, I’m also still waiting to be convinced. As an aside, there’s a potential value from process simulation in the context of risk management (essentially as a tool to drive what-if analysis to highlight the potential impacts of environmental changes) – but that’s a subject I’ll explore another day.
Tags: Research
