PDF Ebook Performance Evaluation for Cost Calculation of Business Processes
Business processes (BP) are a chain of internal activities as well as activities across companies that result in an output [15]. Managing BP includes methods, instruments, and tools to support their design, enactment, management, and analysis [1]. Recently, BP have changed dramatically. Just-in-time production/delivery, outsourcing, B2B/B2C, virtual factories/companies are familiar terms denoting particular facets of this development. Consequently, an evaluation of BP nowadays cannot be done on static information only, but has to take the dynamics of systems into account. Besides, it is necessary to cost out such BP in order to evaluate them.
Cost accounting instruments support such cost-oriented evaluation of BP. Traditional cost accounting instruments are widely used in most companies. These instruments, however, usually sum up the costs accrued from the business activities without considering to what degree each of the products or services contribute to the total costs. In contrast, process oriented cost accounting instruments like activity based costing (ABC), which accurately allocate the accrued costs to each business activity and product, are attracting a great deal of attention. But in practice, companies seldom employ ABC because of the lack of available detailed information concerning cost causation.
The aim of the paper is to demonstrate how ABC could get the required data from dynamic simulation models. Performance measures accessed from simulation results, like through-put, lead time, population etc., can be used as bases for ABC calculations. The paper focuses on a comprehensive cost calculation which also takes sophisticated cost-relevant measures into account, and describes how sufficiently detailed measures assist to calculate costs.
Most enterprise resource planning (ERP) tools available today fall short of providing these measures required for the management of BP. Tools with modeling capabilities are used for building different model scenarios of the BP. These scenarios are analyzed in order to select the optimal ones that best represent the objectives of the company. Existing BP software tools, like SAP R/3 CO [19] and the ARIS Process Cost Analyzer [18], provide a basic support for cost analysis, but do not display all cost-relevant measures of BP [16]. E.g., the ARIS-toolset models process flows without considering resources and inventory, thus ignoring relevant elements influencing the dynamics of BP.
In this article we describe the performance evaluation for cost calculation of BP in the ProC/B-paradigm. ProC/B and its corresponding toolset [2] have been developed in a large interdisciplinary research project, the collaborative research center “Modelling of Large Logistics Networks” [17], in which supply chain and business process management are important research topics. The evaluation of some cost-relevant measures based on standard performance measures has been described in [5]. In this paper also non-standard measures are used to support comprehensive cost calculations. In our approach, all cost calculations are based upon steady-state results obtained by a simulation of the model, assuming that steady-state exists.
The outline of the paper is as follows. The next section deals with a comparison of two cost accounting techniques followed by an introduction of the ProC/B-paradigm in Sect. 3. Sect. 4 deals with the evaluation of performance measures and the subsequent cost calculation. An exemplary evaluation of a BP model is presented in Sect. 5 and the conclusions follow in Sect. 6.
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PDF Ebook Performance Evaluation for Cost Calculation of Business Processes
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