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Business Process
Simulations
- THE VALUE -
Razvan Radulian, MBA
Independent Consultant/Coach/Trainer
Why-What-How Consulting, LLC
W5HY.com
PICTURE
THIS...
Hypothetical (…more or less) CHALLENGE:
Can a CRO* reduce its RFP/Proposal+Start-up
processes from 15+30 to 5+15 days?
Some of the MANY variables to consider:
• Huge stakes:
• Sponsor: $600K to $8M loss per delayed-day
• CRO: WIN (if profitable) or DIE (if miscalculating operational
timelines and/or costs)!
• Large number & diversity of players
• Many AND very complex processes
• Aggressive competition
• Global operations
• Complex Regulatory environment(s)
* CRO: Clinical Research Organization
How would we (YOU) handle
that?
“Hmm,
I don’t know”
Is it… …?!?
Another approach…
“I don’t
know, but
LET’S TRY”
Can it be… …?
WHY: Reasons & Expectations
PAST EXPERIENCE
What prevented us (the world
without Simulations):
• Too COMPLEX
• Too UNCERTAIN
• Too many INTERDEPENDENCIES
• Myths & fears...
FUTURE EXPECTATIONS
What are we trying to achieve?
• Understand & Communicate
• Validate the Process Model(s)
• Exploration & Experimentation
• Facilitate Decisions:
• Design choices
• Managing Operations
• EXPECT+EXPLAIN the UNEXPECTED• Avoid the UNEXPECTED
• Accept/ignore the UNEXPLAINED
WHEN NOT TO DO IT…
• Alternative methods that are:
• Better
• Cheaper
• Easier to implement/execute
• Not sure why we *want to+ do it…
• Risks too high if tinkering with
something that looks like
“reality”, BUT it is not
• More… SIMULATIONS MIGHT NOT BE
THE BEST OPTION!
Can’t Model
Reality
Better
Alternatives
Unclear
Goals
WHAT IS IT?
Part of a larger process…
Goals &
Objectives
Discover
Model
SimulateAnalyze
Optimize
WHAT IS IT?
Types of Simulation
Process Validation
Structural Analysis
Time Analysis
Resource Analysis
Calendar Analysis
Operations
Management
Design
Exploratory
Based on Areas
of Use
Based on Type of Analysis
WHAT IT IS NOT
Related but not the same…
Not the
Real
“Thing”
Process
Modeling
Pure
Mathematics
Pure
Testing
Guess-
work
MYTHS: WHAT WE FEAR IT IS
“Some” fears/concerns…
Simulation vs. Alternatives
Experimenting with the Real Thing/Process:
• Do we actually have a/the REAL THING?
• Technically/operationally possible?
• Convenient? Any distractions?
• Can we afford it (costs, resources…)?
• Can we control it? Too risky?
• Do we have enough time?
• Too long to even try it?
• Politically/strategically possible?
• Any possible misinterpretations?
• Can competitors find out about it?
Simulation vs. Alternatives
Using Mathematical Models:
• Possible?
• Do we have the Knowledge?
• Do we have the “Rocket scientist”?
• Do we have the Data?
• Too complex?
• Any moving parts?
• Any complex interdependencies?
• Predictable? Any uncertainties?
• Our we certain about these… uncertainties?
• Do we even understand/model the data behind this model?
Simulation vs. Alternatives
• Guessing (“What do we THINK it would happen?”)
• Is it even possible?
• How can we tell if we are right?
• If wrong, how risky is it?
• Who knows enough (to make a smart guess)?
• Any differences of opinion? Do we all agree?
• How many chances do we have
(before we get it right)?
HOW
• Process Modeling
• Data:
• In: Parameters
• Out: Results
• Analysis:
• Multi-level Analysis
• Scenarios & What-If Analyses
• Interpretation:
• Unexpected (OK) vs. Unexplained (not OK!)
• Options/ideas to optimize
• Standards & Best Practices
• Tools
Process Model(s) [BPMN]
Core Process Elements:
• Activities:
• Tasks
• Sub-Processes
• Decisions/Gateways:
• Exclusive work (either A or B)
• Parallel work (A and B)
• Optional work (A and/or B and/or C)
• Events:
• Start + Trigger
• End (Waiting or Terminating)
• Intermediate (e.g. Delays, Messages, etc.)
• Interrupting (e.g. Timers, Exceptions, Cancellations, etc.)
Work coordination:
• Orchestration (within Processes)
• Collaboration (between Processes)
Progressive Levels of Analysis
Process Validation:
• Deadlocks
• Infinite loops
• Branches that are never used
• Logic faults (e.g. unexpected work items/tokens)
Time & Throughput Analysis:
• Processing & Cycle Times
Resources & Constraint Analysis:
• Resource Capacity & Over/Under Utilization
• Delays (due to waiting on available resources)
• Costs (fixed & variable)
Calendar:
• Resources availability by Calendar Periods
“Does it even make
sense?”
“Can it be done?”
“How long would it
take?”
“Can we do it?”
“Can we afford it?”
“Can we do it better?”
“What’s the best way?”
Simulation Data
Inputs (parameters):
• Historical data
• Estimates (constant)
• Probabilistic/Statistical
(distributions)
Visualizing the Data/Results
“Real-Time” (accelerated) data:
• Animation
• Items processed
• Items waiting (to be processed)
• Utilization Graphs
• Etc.
Outputs/Results:
• Time Estimates
• Resource Estimates
• Capacity Estimates
Scenarios & What-If Analyses (“2 or 3
Nurses?”)
Timing
Scenarios & What-If Analyses (“2 or 3
Nurses?”)
Resources
LEVEL 0: BPMN VALIDATION
What are we looking for?
•Verify BPMN Specification conformity
“Are we even
communicating in the same
language?
LEVEL 1: PROCESS
LOGIC/STRUCTURE
What are we looking for?
•Deadlocks
•Infinite loops
•Branches that are never used
•Logic faults (e.g. unexpected work items/tokens):
• Anti-patterns
“Have we modeled it in a way that makes
sense?”
LEVEL 2: TIME ANALYSIS
Assumptions:
Level 1 assumptions +
• Unlimited resources
• No Costs associated with either Resources or Activities
What are we looking for?
Level 1 results (i.e. valid BPMN & Logic) +
• Cycle-Time
• Processing Time
• Preliminary “Critical Path”
“How much time will it
take?”
LEVEL 3a: TIME + RESOURCES
ANALYSIS
Assumptions:
Level 2 assumptions +
• Resources ARE limited
• Resources are either People or other kind of Resources
(e.g. systems, materials)
What are we looking for?
Level 2 results +
• Waiting times (delays) due to Resources not being
available, Critical Path
• Resource Over and Under-Utilization
“Can we do it?”
LEVEL 3b: TIME, RESOURCES + COST
ANALYSIS
Assumptions:
Levels 2, 3a assumptions +
•Variable-Costs associated with Resources (e.g. hourly
rate)
•Fixed-Costs associated with Activities (e.g. materials)
What are we looking for?
Levels 2, 3a results +
•Costs to perform the process
“Can we afford it?”
LEVEL 4: RESOURCES, TIME, COSTS +
CALENDAR ANALYSIS
Assumptions:
Level 3 assumptions +
• Resources Availability varies by Calendar
Periods (e.g. Shifts)
What are we looking for?
Level 3 results +
• Optimizing Costs & Resource Utilization
• Identify Critical Time/Calendar Periods
Again…
“Can we do it?”
“Can we afford
it?”
LEVEL 5: SCENARIOS & WHAT-IF
ANALYSIS
Assumptions:
Level 4 assumptions +
• Some scenarios may work better (or worse) than others
What are we looking for?
Level 4 results +
• Optimization:
• Compare various alternate scenarios
• Chose BEST alternative/option “Can we do it
better?”
“What’s the best
Remember
this?
… could
we do it
without
Simulation
s?
* CRO: Clinical Research Organization
Hypothetical (…more or less) CHALLENGE:
Can a CRO* reduce its RFP/Proposal+Start-up
processes from 15+30 to 5+15 days?
Some of the MANY variables to consider:
• Huge stakes:
• Sponsor: $600K to $8M loss per delayed-day
• CRO: WIN (if profitable) or DIE (if miscalculating operational
timelines and/or costs)!
• Large number & diversity of players
• Many AND very complex processes
• Aggressive competition
• Global operations
• Complex Regulatory environment(s)
Standards and Best Practices
• BPMN: http://www.bpmn.org/
• BPSim: http://www.bpsim.org/
• Patterns and Anti-Patterns
Tools
Many available tools:
• Commercial
• Open-source*
But, be aware…
… look for GOOD tools, not “just” GREAT!
* The tool and some of the examples used in this presentation were from Bizagi (Bizagi.com)
DEMOS & EXAMPLES
• "Simple" case: Patient Assistance Process*
• Complex cases: just imagine (see next)
* Source: Bizagi.com
SO…
What does all this mean to you?
Business Process Simulation and:
• Business Analysis
• Risk Management
• Project Management
• More (e.g. Innovation, Business Intelligence, Knowledge
Management, Feasibility Studies…)
Some bits of ADVISE
• Start SMALL
• Start SIMPLE
• EXPERIMENT, SHARE, INTERPRET
• ADJUST
• Expand SCOPE
• Add more PATTERNS, more COMPLEXITY…
• REPEAT
… use ITERATIVE & INCREMENTAL approach
(for PMs: progressive elaboration)
Q&A
THANKS & CONTACT INFO
Mr. Razvan Radulian
… better know as Razz:-)
razvan.radulian@why-what-how.com or razvan@w5hy.com
LinkedIn: whywhathow
Twitter: @w5hy
Blog: w5hy.com

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BPSim The Value of Business Process Simulation

  • 1. Business Process Simulations - THE VALUE - Razvan Radulian, MBA Independent Consultant/Coach/Trainer Why-What-How Consulting, LLC W5HY.com
  • 2. PICTURE THIS... Hypothetical (…more or less) CHALLENGE: Can a CRO* reduce its RFP/Proposal+Start-up processes from 15+30 to 5+15 days? Some of the MANY variables to consider: • Huge stakes: • Sponsor: $600K to $8M loss per delayed-day • CRO: WIN (if profitable) or DIE (if miscalculating operational timelines and/or costs)! • Large number & diversity of players • Many AND very complex processes • Aggressive competition • Global operations • Complex Regulatory environment(s) * CRO: Clinical Research Organization
  • 3. How would we (YOU) handle that? “Hmm, I don’t know” Is it… …?!?
  • 4. Another approach… “I don’t know, but LET’S TRY” Can it be… …?
  • 5. WHY: Reasons & Expectations PAST EXPERIENCE What prevented us (the world without Simulations): • Too COMPLEX • Too UNCERTAIN • Too many INTERDEPENDENCIES • Myths & fears... FUTURE EXPECTATIONS What are we trying to achieve? • Understand & Communicate • Validate the Process Model(s) • Exploration & Experimentation • Facilitate Decisions: • Design choices • Managing Operations • EXPECT+EXPLAIN the UNEXPECTED• Avoid the UNEXPECTED • Accept/ignore the UNEXPLAINED
  • 6. WHEN NOT TO DO IT… • Alternative methods that are: • Better • Cheaper • Easier to implement/execute • Not sure why we *want to+ do it… • Risks too high if tinkering with something that looks like “reality”, BUT it is not • More… SIMULATIONS MIGHT NOT BE THE BEST OPTION! Can’t Model Reality Better Alternatives Unclear Goals
  • 7. WHAT IS IT? Part of a larger process… Goals & Objectives Discover Model SimulateAnalyze Optimize
  • 8. WHAT IS IT? Types of Simulation Process Validation Structural Analysis Time Analysis Resource Analysis Calendar Analysis Operations Management Design Exploratory Based on Areas of Use Based on Type of Analysis
  • 9. WHAT IT IS NOT Related but not the same… Not the Real “Thing” Process Modeling Pure Mathematics Pure Testing Guess- work
  • 10. MYTHS: WHAT WE FEAR IT IS “Some” fears/concerns…
  • 11. Simulation vs. Alternatives Experimenting with the Real Thing/Process: • Do we actually have a/the REAL THING? • Technically/operationally possible? • Convenient? Any distractions? • Can we afford it (costs, resources…)? • Can we control it? Too risky? • Do we have enough time? • Too long to even try it? • Politically/strategically possible? • Any possible misinterpretations? • Can competitors find out about it?
  • 12. Simulation vs. Alternatives Using Mathematical Models: • Possible? • Do we have the Knowledge? • Do we have the “Rocket scientist”? • Do we have the Data? • Too complex? • Any moving parts? • Any complex interdependencies? • Predictable? Any uncertainties? • Our we certain about these… uncertainties? • Do we even understand/model the data behind this model?
  • 13. Simulation vs. Alternatives • Guessing (“What do we THINK it would happen?”) • Is it even possible? • How can we tell if we are right? • If wrong, how risky is it? • Who knows enough (to make a smart guess)? • Any differences of opinion? Do we all agree? • How many chances do we have (before we get it right)?
  • 14. HOW • Process Modeling • Data: • In: Parameters • Out: Results • Analysis: • Multi-level Analysis • Scenarios & What-If Analyses • Interpretation: • Unexpected (OK) vs. Unexplained (not OK!) • Options/ideas to optimize • Standards & Best Practices • Tools
  • 15. Process Model(s) [BPMN] Core Process Elements: • Activities: • Tasks • Sub-Processes • Decisions/Gateways: • Exclusive work (either A or B) • Parallel work (A and B) • Optional work (A and/or B and/or C) • Events: • Start + Trigger • End (Waiting or Terminating) • Intermediate (e.g. Delays, Messages, etc.) • Interrupting (e.g. Timers, Exceptions, Cancellations, etc.) Work coordination: • Orchestration (within Processes) • Collaboration (between Processes)
  • 16. Progressive Levels of Analysis Process Validation: • Deadlocks • Infinite loops • Branches that are never used • Logic faults (e.g. unexpected work items/tokens) Time & Throughput Analysis: • Processing & Cycle Times Resources & Constraint Analysis: • Resource Capacity & Over/Under Utilization • Delays (due to waiting on available resources) • Costs (fixed & variable) Calendar: • Resources availability by Calendar Periods “Does it even make sense?” “Can it be done?” “How long would it take?” “Can we do it?” “Can we afford it?” “Can we do it better?” “What’s the best way?”
  • 17. Simulation Data Inputs (parameters): • Historical data • Estimates (constant) • Probabilistic/Statistical (distributions)
  • 18. Visualizing the Data/Results “Real-Time” (accelerated) data: • Animation • Items processed • Items waiting (to be processed) • Utilization Graphs • Etc.
  • 19. Outputs/Results: • Time Estimates • Resource Estimates • Capacity Estimates
  • 20. Scenarios & What-If Analyses (“2 or 3 Nurses?”) Timing
  • 21. Scenarios & What-If Analyses (“2 or 3 Nurses?”) Resources
  • 22. LEVEL 0: BPMN VALIDATION What are we looking for? •Verify BPMN Specification conformity “Are we even communicating in the same language?
  • 23. LEVEL 1: PROCESS LOGIC/STRUCTURE What are we looking for? •Deadlocks •Infinite loops •Branches that are never used •Logic faults (e.g. unexpected work items/tokens): • Anti-patterns “Have we modeled it in a way that makes sense?”
  • 24. LEVEL 2: TIME ANALYSIS Assumptions: Level 1 assumptions + • Unlimited resources • No Costs associated with either Resources or Activities What are we looking for? Level 1 results (i.e. valid BPMN & Logic) + • Cycle-Time • Processing Time • Preliminary “Critical Path” “How much time will it take?”
  • 25. LEVEL 3a: TIME + RESOURCES ANALYSIS Assumptions: Level 2 assumptions + • Resources ARE limited • Resources are either People or other kind of Resources (e.g. systems, materials) What are we looking for? Level 2 results + • Waiting times (delays) due to Resources not being available, Critical Path • Resource Over and Under-Utilization “Can we do it?”
  • 26. LEVEL 3b: TIME, RESOURCES + COST ANALYSIS Assumptions: Levels 2, 3a assumptions + •Variable-Costs associated with Resources (e.g. hourly rate) •Fixed-Costs associated with Activities (e.g. materials) What are we looking for? Levels 2, 3a results + •Costs to perform the process “Can we afford it?”
  • 27. LEVEL 4: RESOURCES, TIME, COSTS + CALENDAR ANALYSIS Assumptions: Level 3 assumptions + • Resources Availability varies by Calendar Periods (e.g. Shifts) What are we looking for? Level 3 results + • Optimizing Costs & Resource Utilization • Identify Critical Time/Calendar Periods Again… “Can we do it?” “Can we afford it?”
  • 28. LEVEL 5: SCENARIOS & WHAT-IF ANALYSIS Assumptions: Level 4 assumptions + • Some scenarios may work better (or worse) than others What are we looking for? Level 4 results + • Optimization: • Compare various alternate scenarios • Chose BEST alternative/option “Can we do it better?” “What’s the best
  • 29. Remember this? … could we do it without Simulation s? * CRO: Clinical Research Organization Hypothetical (…more or less) CHALLENGE: Can a CRO* reduce its RFP/Proposal+Start-up processes from 15+30 to 5+15 days? Some of the MANY variables to consider: • Huge stakes: • Sponsor: $600K to $8M loss per delayed-day • CRO: WIN (if profitable) or DIE (if miscalculating operational timelines and/or costs)! • Large number & diversity of players • Many AND very complex processes • Aggressive competition • Global operations • Complex Regulatory environment(s)
  • 30. Standards and Best Practices • BPMN: http://www.bpmn.org/ • BPSim: http://www.bpsim.org/ • Patterns and Anti-Patterns
  • 31. Tools Many available tools: • Commercial • Open-source* But, be aware… … look for GOOD tools, not “just” GREAT! * The tool and some of the examples used in this presentation were from Bizagi (Bizagi.com)
  • 32. DEMOS & EXAMPLES • "Simple" case: Patient Assistance Process* • Complex cases: just imagine (see next) * Source: Bizagi.com
  • 33. SO… What does all this mean to you? Business Process Simulation and: • Business Analysis • Risk Management • Project Management • More (e.g. Innovation, Business Intelligence, Knowledge Management, Feasibility Studies…)
  • 34. Some bits of ADVISE • Start SMALL • Start SIMPLE • EXPERIMENT, SHARE, INTERPRET • ADJUST • Expand SCOPE • Add more PATTERNS, more COMPLEXITY… • REPEAT … use ITERATIVE & INCREMENTAL approach (for PMs: progressive elaboration)
  • 35. Q&A
  • 36. THANKS & CONTACT INFO Mr. Razvan Radulian … better know as Razz:-) razvan.radulian@why-what-how.com or razvan@w5hy.com LinkedIn: whywhathow Twitter: @w5hy Blog: w5hy.com