Simulation of business transformation outsourcing of sourcing, procurement and payables

A method of simulation in a computer, said method comprising:

• receiving, in the computer, for at least one business transformation outsourcing service, spending inputs, process inputs, and information technology inputs;
• based on said inputs, performing, in the computer, a spending simulation, a process simulation, and an information technology simulation;
• computing, in the computer, net savings values, based on said simulations;
• performing a value simulation, in the computer, based on said net savings values;
• and
• outputting, by the computer, at least one measure of economic value for said business transformation outsourcing service, wherein:
• the spending simulation, process simulation, information technology simulation, and the value simulation have a plurality of periods of simulation, each period having either a current condition under which no outsourcing by the business transformation outsourcing service is performed, a transitional condition in which outsourcing is being put into place, or an outsourcing condition in which outsourcing by the business transformation outsourcing service is performed, and wherein there is at least one period having a current condition, at least one period having a transitional condition, and at least one period having an outsourcing condition,
• the process simulation, based on the inputs, computes both a number of transactions during each period of simulation, of the plurality of periods of simulation, and a process cost, based on a status of the particular period being under current conditions, transitional conditions, or during outsourcing conditions,
• the process simulation utilizes a flow model showing how transactions flow through sub-processes, wherein a rate at which information technology is substituted for current processes, represented by a schedule, affects the computation of the number of transactions during a transitional condition period of simulation in the spending simulation, process simulation, and information technology simulation, and the sub-processes through which the transactions flow in the flow model,
• the information technology simulation simulates, based on the inputs, the tasks needed to design, build, implement, operate, and maintain new information technology to implement the outsourcing, and computes a transformation cost for each period of the simulation, of the plurality of periods of simulation, based on the status of the particular period being under current conditions, transitional conditions, or during outsourcing conditions,
• an output of the spending simulation, the processing savings, and the information technology transformation costs are combined to identify the net savings values representing a transition from current conditions to outsourcing conditions,
• the value simulation simulates, based on the net savings and business financial input information, effects of transitioning from current conditions to outsourcing conditions, on a financial position of the business, and
• the at least one measure of economic value for the business transformation outsourcing service is calculated based on the effects of transitioning from current conditions to outsourcing conditions on the financial position of the business.