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Investment Cost Model … (Arta Moro Sundjaja) 113 

INVESTMENT COST MODEL 
IN BUSINESS PROCESS INTELLIGENCE 

IN BANKING AND ELECTRICITY COMPANY 
 
 

Arta Moro Sundjaja 
 

Information System Department, School of Information System, Bina Nusantara University, 
Jl. K.H. Syahdan No. 9, Palmerah, Jakarta Barat, 11480 

asundjaja@binus.edu 
 
 

ABSTRACT 
 
 

Higher demand from the top management in measuring business process performance causes the 
incremental implementation of BPM and BI in the enterprise. The problem faced by top managements is how to 
integrate their data from all system used to support the business and process the data become information that 
able to support the decision-making processes. Our literature review elaborates several implementations of BPI 
on companies in Australia and Germany, challenges faced by organizations in developing BPI solution in their 
organizations and some cost model to calculate the investment of BPI solutions. This paper shows the success in 
BPI application of banks and assurance companies in German and electricity work in Australia aims to give a 
vision about the importance of BPI application. Many challenges in BPI application of companies in German 
and Australia, BPI solution, and data warehouse design development have been discussed to add insight in 
future BPI development. And the last is an explanation about how to analyze cost associated with BPI solution 
investment. 

 
Keywords: Business process intelligence, business process management, investment cost model 

 
 

INTRODUCTION 
 
 

Nowadays the numbers of top management in a company facing many strategic problems that 
required reliable information about company performance to develop business solution in short time. 
Business intelligence has that capability to perform data mining and statistical analysis. Business 
process intelligence is an integrated tool that support and maintaining the business process so the top 
management can ensure the process execution quality. The objectives of managing performance are 
producing and controlling the performance system that is used by the organization. From the 
management perspective, performance management system consists of planning, implementation, 
evaluation, training, and reward management (Wade & Recardo, 2001). The characteristics of 
corporate performance management (CPM) are process-oriented, goal and metric oriented, 
methodology support, IT support. Process CPM was design based on organization procedures and 
integrated with defined corporate strategic process, cascading the strategic into business process, 
analyze the strategy and process implementation, and formulate appropriate decisions. In supporting 
measurement process and maintaining the business process, top management needs a clear objective 
so that can be cascade into strategy and metric development to measure and control the process. 
Performance management strategy such as balanced scorecard, intellectual capital or value-based 
management is a model for connecting the strategic goal and the measurement metric so the 
management can use it as measure and control the organization performance. 

 
Performance management strategy is needed to integrate the strategic formulation, the 

business process development, and the business process execution. Information technology role in 



114   ComTech Vol. 7 No. 2 June 2016: 113-120 

performance management is very important; top management cannot measure and analyze the 
company performance without integration between IT and performance management system. 
Balanced scorecard implementation in the organization as a performance management tool can 
contribute major performance improvement compared with a traditional organization (Andersen, 
Cobbold, and Lawrie, 2003; Davis and Albright, 2004; Wade and Recardo, 2001). In supporting 
performance measurement process, business process automation implementation in the organization is 
optimizing business process and operational function integration. A business process is supported by 
more applications such as customer relationship management (CRM) application to support interaction 
between company and customer, service management (SM) application to coordinate service requests 
with billing system (BS) application for billing, and human resource management (HRM) to manage 
employees. 

 
In supporting the business process that aligns with organization strategy, all application 

functions need to be integrated with the business process procedure. By using the business intelligence 
technology, data from all business applications can be integrated into decision-making repository, save 
the data, and access the data(Watson, 2009). Business intelligence technology implementation also 
helps the management to compare data from various business process performances to improve 
business performance. Business Process Intelligent concept is beginning to be developed for the 
collection and reconciliation of all operational data of a particular business process that enable 
management in process performance measurement and identification of opportunities for process 
improvement. 

 
This literature review provides insight for an organization to get better understanding through 

the case study of business process intelligence implementation, challenge in business process 
intelligence implementation and the cost model for calculating the investment of business process 
intelligence. 

 
 

METHODS 
 
 

To explore the BPI concept in this research, all published article about business process 
intelligent implementation, challenge in business process intelligent development and implementation, 
and cost model for calculating the business process intelligent implementation in Science Direct and 
Proquest were searched. This literature review tries to explore the business process intelligence 
implementation, challenge in business process intelligence implementation, and cost model to 
calculate the Business process intelligence investment soother researcher can use it as guidance in 
implementing the business process intelligence. Case study is used to explain the business process 
intelligence implementation, challenge in business process intelligence implementation and cost model 
in business process intelligence implementation. In this paper, the topics are divided into three 
sections. The first section discusses business process Intelligence (BPI) applications in companies 
(Genrich et al., 2008; Hawking and Sellitto, 2015). The second section discusses challenges in BPI 
application(Genrich et al., 2008; Grigori et al., 2004; Mansmann, Neumuth, and Scholl, 2007). The 
last section discusses cost model for BPI investment measurement (Wade and Recardo, 2001). 

 
 

RESULTS AND DISCUSSIONS 
 
 

In the first section, business process intelligence implementation in several companies is 
discussed. The implementation of process mining can contribute many benefits to the business; not all 
companies already implemented it in their operational level. Genrich et al., (2008) explain that more 
organizations such as German bank, German insurance company, and Australia utility company. 



Investment Cost Model … (Arta Moro Sundjaja) 115 

Those organizations use the business process data for performance evaluation to gather better business 
insight (Genrich et al., 2008).The research objective is to analyze single transaction in multi-input and 
multi-output to understand the deficit in process performance. The research objects are securities 
settlement and clearing process. This research cooperates with Commerz bank AG using bank's 
operational data. This research introduces data envelopment analysis (DEA) approach. DEA approach 
is a non-parametric and non-stochastic efficiency measurement method. DEA is used as performance 
evaluation method to compare different decision-making unit with the best observation practices. 
Researchers apply DEA in business process level to identify inefficient business process patterns 
based on resources transformation (process, financial data, and human resources) into the result 
(quality, risk, cost, etc.). Based on the study, it can be summarized that bank in the financial industry 
faces a fierce competition such as high regulation from the government, customer demand more 
service, and product. Based on those facts, process management is influenced by complexity in service 
and product and missing efficiency standard. This condition causess a gap between inputs factor and 
results from the transaction security in various cases. Therefore, DEA method is an appropriate 
method for measuring process performance in banks. Besides, it was found that there is no agreement 
and definition of a business process in a company or industry level. The agreements like how to 
calculate transactions or comparisons across companies to assist in measuring the performance of the 
business process. 

 
Top management is required to make an effective decision in designing the business process 

and allocating the resource; this condition required a reliable operational data that obtained timely and 
accurate. An insurance company in Germany wants to improve the decision-making process that 
includes information related to business processes. The top management initiates business process 
intelligent project to response the inconsistent information caused by the different system to retrieve 
the information and saving customer information and corporate rules. Those problems caused by the 
data source and mining method were aggregated in the wrong way. Activity-based costing method 
requires information about the resource, cost, time, and frequency of activity. The problem exists 
because the existing business process mapping system fails to provide the number of processes and 
activities directly estimated from the data in the company's mainframe systems. All the data for 
calculating the activity based costing already defined but the mainframe systems only record the time 
of each transaction so that the time required to process an activity cannot be calculated. The 
management decided that implementation of electronic document management system can solve the 
problems; so that the audit trail information can be stored in the system and can be used for calculating 
activity based costing. The re-engineering of infrastructure triggered by the top management and 
supported by the senior management that resulting a major positive impact on overall business process 
performance. 

 
Electricity failure during and after a storm and it takes time to fix the problem. It causes a 

major problem in customer satisfaction for electric utilities in Australia. The study was conducted on 
electric utilities owned by the state that have responsibility for the distribution and operation of the 
electrical network about 10,000 km to support approximately 600.000 users. This research has focused 
on the interaction and performance of call center services, operations center, and field personnel in the 
event of a storm and unplanned network failure. The initial goal of this project is to understand and 
mitigate the root causes of the problem of communication between the three groups in the unexpected 
accident. The problems such as high volume of data during outages, low data (customer information, 
outages description, type of deterioration) quality produced by several systems and synchronization of 
data from network operation center, contact center, and field crew. Those problems become a 
challenge for the system to examine the data associated with the electricity failure caused by the 
storm. First, the analyst must understand the cause of the problem such as increasing outages and 
communication problems between parts. Lesson learned gathered by the organization is isolated 
transaction flow and focus on efficiency or optimal performance for the customer. 

 



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According to Hawking and Sellitto (2015), utilities company in Australia faced a challenge in 
supplied the electricity to their customer via network infrastructure that required regular maintenance. 
The IT department deploys various information systems to support the maintenance program and 
monitoring the cost of maintenance the infrastructure.  After a couple of years later, the information 
system developed could not answer the development and the business needs of the company. The 
business unit and IT department faced data and business integration issue so that the system 
maintenance cost increased.  Finally, the top management decided to implement the ERP system for 
data structure standardization, and business process integration and business intelligence for 
information delivery and analysis improvement in Australian Utilities Company was very helpful in 
top management decision making. In 2008, the company finally developed the Information 
Management Strategy to accommodate Business Intelligence Implementation. The main goal of this 
strategy was the company had one version of reliable and trusted data for helping the top management 
in making the right decision. The Information Management Strategy consists of four aspects, as 
follow: information hierarchy, application strategy or business intelligence architecture, reporting 
strategy, and governance model. Information hierarchy was designed based on the user requirement. 
The application strategy was designed to provide the Business Intelligence environment to generate 
high quality and consistent data through a system that has been developed so that the users can 
develop right decisions. Reporting strategy was designed based on information that required by the 
user. The governance model was identified based on governance roles and responsibilities within the 
company, so that enhance the link between information technology and business units. 

 
It is concluded that the importance of business process implementation in several companies 

can produce an effective decision making to solve the strategic and operational level. In the second 
section, challenge in the implementation of business process intelligence development is discussed. 
Grigori et al. (2004) stated that there were some challenges in BPI solution development. (1) 
Understanding BPI architecture identification, BPI function production (analysis, prediction, 
observation, controlling, and optimization) and BPI implementation knowledge to achieve 
organization objectives. (2) Able to identify the concept and metric for analyzing the business process 
at business and qualitative level. (3) Able to develop or use the application to get the knowledge 
without write any programming commands. (4) Able to understand the interaction between business 
process management systems (BPMS) and user to produce a report and make a right decision in a 
critical situation. 

 
Mansmann et al., (2007) explained that there were some challenges for data warehouse 

designer in BPM contexts, such as the many-to-many relationship between facts and dimensions, 
heterogeneity when inserting the facts, fact exchange functions, and dimension. Genrich et al.,( 2008) 
stated that there were some challenges in BPI implementation at German Bank. (1) Security of the 
applications in every process function (data enrichment, confirmation, settlement, clearing and 
booking). (2) Functional focused on applications development and not focused on the process. (3) 
There is no documentation on functional and technical; this problem is caused by senior staffs who 
manage the application over the years. (4) Each application uses an individual reference; there are 
overlapping references and thus requiring the mapping of the unique references across the application. 
(5) Need more time to select the right database. 

 
Genrich et al., (2008) stated that there were more challenges in BPI implementation at 

German Insurance Company. (1) No reliable data sources to provide information to the top 
management when they are required making a decision. (2) Information provided by the existing 
systems was not accurate because of many data sources and inappropriate combination technique. (3) 
Mainframe systems only record the time per transaction, resulting the management to cannot calculate 
the processing time consuming for all processes. 

 
Genrich et al., (2008) stated there were challenges in BPI implementation at Australian utility 

company. (1) High data volume generated during the electricity failure, the entire process of 



Investment Cost Model … (Arta Moro Sundjaja) 117 

identifying trends in the electricity failure data analysis that requires strenuous effort. (2) In some 
systems, not all the data is stored properly, poor data quality at the time of the electricity failure. Data 
such as customer information, failure information, data field associated with a qualitative description 
of the outage. 

 
Based on the challenge that already explained, it can be concluded that the classic problem 

faced by management is alignment between the network operations center data, field officer data, and 
contact center data. 

 
The last section of this paper discusses cost model to calculate business process 

implementation to measure the investment cost. Mutschler, Bumiller, and Reichert(2005) explained 
that the company is forced to optimize business and services processes regularly, in the context of the 
information systems alignment with a focus on process is important. The use of BPI solutions indeed 
offers promising results, but the company will consider the investment and profits if you want to 
implement such solution. Before considering factors that affect the cost and benefit approach of the 
BPI, Figure 1 illustrates the conceptual reference architecture BPI. 

 
This architecture consists of three tiers, such as data integration, main function, and 

visualization. In data integration tiers, process warehouse stores the application data and generated 
control during the real-time process. It also keeps a process warehouse the estimated value of the 
reference (derived from the simulation process) so that, the delta analysis can be done. In the data 
loading process into the data warehouse, data obtained from various information systems supporting 
business processes through the ETL (extract, transform, and load). The data warehouse is located in 
process execution event logs, event execution logs (audit trail) is sufficient level of detail varies from 
general to detail, depending on the use of information systems. In practice, the integration of log data 
is quite challenging. In the main function tier, BPI must be able to measure and evaluate the 
performance of the process. Unit processing must be aggregate and calculate the key performance 
indicator (KPI) based on data provided by process warehouse. Process mining component responsible 
for automating the modeling process model (optimal) based on log data. Components provide support 
for the administration of access rights. In visualization component provides set of presentation 
elements (traffic light or graphic) to designing needed presentation by the user (dashboard). 

 
 

 
 

Figure 1 Conceptual Reference of BPI Architecture 
Source: (Mutschler et al., 2005) 



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In analyzing, the costs associated with BPI investment can be divided into two cost scenarios. 
The first cost scenario is the total cost of ownership of BPI. As it can be seen in Figure 2, analysis of 
the total cost of ownership of BPI can be divided into direct costs and indirect costs. Cost can be 
divided into four categories: BPI software, BPI hardware, BPI support, and BPI customizing.  Indirect 
costs arise due to a decrease in productivity, cause of indirect costs is self-support of users, informal 
learning activities, and personal customizing. It can be concluded that calculating direct cost is easier 
than indirect cost. 

 
 

 
 

Figure 2 Classification of BPI Investment Cost 
Source: (Mutschler et al., 2005). 

  
 

In practice, the complexity of the BPI investment scenario could affect exponentially in 
increasing the cost variation. W is the economies of scale or scenarios with increasing complexity BPI. 
In cost model, if W ≤ 1, then the complexity is high, and investment BPI shows economies of scale. If 
the complexity of the scenario increased two-fold BPI, BPI investment costs to be more than doubled. 
W = 1 describes the economic scenario with BPI standards and uneconomically can be balanced. If W 
≥ 1, the complexity is low BPI and BPI shows uneconomically investment. Cost model to calculate the 
BPI investment can be seen in Figure 3. 

 
 

 
 

Figure 3 Cost Model for Calculating BPI Investment. 
Source: (Mutschler et al., 2005). 



Investment Cost Model … (Arta Moro Sundjaja) 119 

The second cost scenario is impacts from BPI application development. The cost algorithm 
model based on the mathematical formula for predicting impacts of technology application 
improvement on cost and schedule lifecycle can be seen as follow. 

 
  (1)

 
A represents application system quantity that measurable using line of code, functions points 

or object points. B represents exponential scale factor for calculating relativity of economical or not 
economical scale from quantity increasing of a system project. EM is a collection of linear effort 
multipliers addition. 

 
The model above can cover a fairly large area in an application project; the problem is that the 

model does not represent probabilities of impacts from BPI. So the suggested effort multiplier would 
be EMbpi, as it can be seen in Figure 4. 

 
 

 
 

Figure 4 Assessment for Cost Trigger of BPI. 
Source: (Mutschler et al., 2005). 

 
 

CONCLUSIONS 
 
 

This article describes that BPI applications of companies in German and Australia spotted 
many challenges in BPI development and introduction of two cost models for analyzing two aspects 
related to BPI investment. This discussion about success in BPI application of banks and assurance 
companies in German and electricity work in Australia aims to give a vision about the importance of 
BPI application. Many challenges in BPI application of companies in German and Australia, BPI 
solution, and data warehouse design development have been discussed to add insight in future BPI 
development. And the last is an explanation about how to analyze cost associated with BPI solution 
investment. 

 
This article has some limitations; there are only three companies that already implement 

business process intelligent which are reviewed. It is suggested to review more companies that already 
implement business process intelligent in order to provide more examples about the successful 
business process intelligence and give a better insight about challenge in business intelligence process. 

 
The future research is how to use the cost model in real world scenario using a case study, 

how to classify the financial statement in a company such as balance sheet and income statement into 
business process intelligence cost model so the top management can analyze the cost and benefit of 
implementing business process intelligence in their company. 



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