Start Date
12-17-2013
Description
Although flexible processes are deemed critical for many companies and constitute a key concern of business process management, there is a lack of approaches for valuating process flexibility from an economic perspective and for determining an appropriate level of process flexibility. Today, companies do not know how flexible their processes should be. While generally advocating balanced investments, scholars provide concrete recommendations for very specific settings only. What is missing is a more general guidance and a deeper investigation of the positive economic effects of flexible processes, which are hard-to-measure and beset with risks. Against this backdrop, we propose an optimization model that enables determining the optimal level of process flexibility in line with the principles of value-based business process management. We also report on the insights gained from applying the optimization model to the production processes of an international company from the semi-conductor industry.
Recommended Citation
Afflerbach, Patrick; Kastner, Gregor; Krause, Felix; and Roeglinger, Maximilian, "An Optimization Model for Valuating Process Flexibility" (2013). ICIS 2013 Proceedings. 4.
https://aisel.aisnet.org/icis2013/proceedings/BusinessProcess/4
An Optimization Model for Valuating Process Flexibility
Although flexible processes are deemed critical for many companies and constitute a key concern of business process management, there is a lack of approaches for valuating process flexibility from an economic perspective and for determining an appropriate level of process flexibility. Today, companies do not know how flexible their processes should be. While generally advocating balanced investments, scholars provide concrete recommendations for very specific settings only. What is missing is a more general guidance and a deeper investigation of the positive economic effects of flexible processes, which are hard-to-measure and beset with risks. Against this backdrop, we propose an optimization model that enables determining the optimal level of process flexibility in line with the principles of value-based business process management. We also report on the insights gained from applying the optimization model to the production processes of an international company from the semi-conductor industry.