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The first decade of the 21st century showed that no industry is able to neglect to have a look into the future. Oil disaster, financial crisis, radioactive contamination – a series of frightening events – indicating that the damages could have been reduced or prevented using scenario management and simulation techniques.

Simulation is still regarded as being too complicated and impractical from a management view regardless of talking about the simulation of business processes, projects, insurances or trading risks using static relations between the risk positions. Too much data, too much expertise needed – only senior mathematicians understand it.

Actually this view is in contradiction to the results that are reported by those who have leveraged simulation. Simulation usage has grown from below 10% of process-related projects to over 35% according to Gartner.  Simulation based on real data has grown from one or two percent to over 10%. In a world where business models and constraints are changing faster than ever and investments become higher and higher, simulation can shine as a means to avoid disaster and achieve high-margin objectives.

Nowadays simulation is available as part of business process management software and easy to use (even) for business people. Investments in technology are very low compared with the savings which can be and are achieved. Actually it is in general quite easy to save 1 million € by reducing risk event occurrences and optimizing process performance in parallel – ROI on such simulation projects is a given in most cases!

I'm starting today a short series of blog posts to introduce you to the usage of business process simulation with special focus on risk events and control activities. Ralf will follow up and will demonstrate how the effects of risk occurrence as well as the effects of controls introduced to counter the risks can be determined by conducting a simulation study with ARIS Business Simulator. In particular modeling and configuration of risks and controls in a process model, the simulation of the process model and the interpretation of the simulation results will be discussed.

Stay tuned on this new option in Risk & Control Evaluation!

Tags: simulation GRC ARIS risk