All Flashcards
Anthony’s model
Mixes:
- Functional view in terms of business funtions
- Organizational view in terms of hierarchical levels
- At each intersection different IS functions are needed
Business logic
Business rule encoded in computer language
- – In a 3 tiers architecture a business rule typically is encoded in application tier
- But can also be encoded in presentation layer or data layer (db triggers)
Definition of Business process
Set of activities
- (executed in some parallel or sequential order)
- performed by an organization,
- to deliver a service /product
- With defined inputs/outputs (information and things)
Activity: time spent by one or morepeople to do a task
ERP, main aspects
Enterprise resource planning
Features:
- Data sharing: modules have access to same data, avoiding replication
- Prescriptivity: Same modules are sold to different companies
- Modularity: modules are added to integrate features, good to reduce costs and spread them over time.
Data sharing avoids the chaos of legacy islands where data is inconsistent and lost.
Business rules
Statement that constrains some aspect of the business
- Can only be true or false
- Can apply to people, processes, IS
Definition of Application Portfolio
Set of applications used by an organization
Cobit: Control loop
Control loop model
It focus on the context and theenvironment. The organization is influenced by five actors: customers, suppliers, regulatory agency, stockholders and competitors
COBIT
Control Objectives for information and related technology.
It was introduced to enumerate the IT area processes. Used to verify if IT processes are well governed.
Can be seen as a cube:
- Dimension 1: IT resourced, all assets involved in the company
- Dimension 2: IT processes, all processes that can be found in a company. These processes can be grouped in 4 categories:
- Monitoring ->
- Plan and Organize ->
- Acquire and Implement ->
- Delivery and Support.
- Dimension 3: Information criteria, how to evaluate processes (efficiency, reliability, defectiveness, security, compliance, …)
The model is used through a table having processes on rows and resources/criteria on columns.
Definition of Information System (IS)
System to store and process information used by organizations (paper, people, computesr, software) CBIS: Computer based system to store and process information used by organizations. CBIS: subset of ISs. IS – Definition, Laudon: Interrelated components working together to collect, process, store, and disseminate Information to support: decision making, coordination, control, analysis, and visualization in an organization
ERP, pros and cons
Pros:
- Modules should be tested and robust
- No need to buy specialised software for certain tasks
- Faster, no development time, only installation and training
- Support is guaranteed and should be efficient
Cons:
- The same tech is used in several different company, this should be avoided if a company wants to retain internal know-how
UML Deployment diagram
BMRS
A Business Rules Management System (BRMS) is a software system that can be used to define, deploy, execute and monitor business rules.
Manufacturing: Value Chain
The value of a product is how much the customer is willing to pay for it.
Outsourcing axes
- Activity/service: which parts of the company can I outsource? (IT infrastructure, Apps, Business processes)
- Unicity: Dedicated (only for few customers and customized) or Shared (many customers use the same service)
- Location: On-site (inside the company), Off-site, Near-shore (outside the company but in the same contry/continent), Off-shore (outside company, outside contry/continent)
Managerial processes pyramid
Ways the IT Area can be placed inside a company.
- At the same level of Marketing, Manufacturing, HR, Accounting (line function)
- Detached from the main department of the company, acts as a support area of direction: staff function
- Sub-area of a main one, like a sub-branch of accounting.
Centralized (line and staff function) vs Distributed IT (sub-line function)
Centralized:
Pros:
- Data sharing
- Uniformity of applicaitons and format
Cons:
- Could be hard to reach by other areas in case of problems (bureaucracy)
Distributed:
Pros:
- Easier to reach by a certain area, because IT is part of that area itself
Cons:
- No data sharing
- Each IT dept. could use different apps and different formats, so there is a need for translation.
T Model process families
Management Control Loop
Anthony’s model: information intensity of product vs business process
Process type VS. phase
KPI
Key Performance Indicators
They evaluate the success of an organization/activity. The unit measure should be used.
General:
- Input volume
- Output volume
- Human resources
- Non human resources (plants, machines, facilities) - Inventory
- Other resources
Efficiency:
- Cost per unit
- Productivity of resources: (i.e. products per employees)
- Utilization of resources: effective working hours compared to paid ones (also for machines)
Service KPI:
- Response time, lead time
- On time
- Perfect orders
- Flexibility toward customer
Quality KPI:
- Conformity
- Reliability
- Customer satisfaction
IT View / Model
The IT model is composed by two main models: application model, thatdescribes the software architecture, and technological model, that describesthe hardware architecture.
App. model: presentation, rules (algos), data.
Tech. model: usually client server, either 2-tiered (data and app.) or 3-tiered (data server, app. server, presentation server)
Hosting vs Housing
Hosting: Assets and asset management are outsourced.
Housing: Asset are of the company, asset management outsourced.
Definition of Business Process
Activity: time spent by one or morepeople to do a task (simpler and shorter than a business process) Set of activities:
- (executed in some parallel or sequential order)
- performed by an organization
- to deliver a service /product
- With defined inputs/outputs (information and things)
Company Strategies.
How do companies pursue competitive advantage accross the chosen market?
- Cost leadership: lower costs than competition,can be achieved by process improvement, high asset utilization,minimizing production costs in some ways such as outsourcing,minimizing supply costs (for example ordering large quantities of raw materials to gain a discount)
- Differentiation: differentiate products in order to be more competitive
- Niche: focus on few targeted markets
Cobit: Governance and Management Scheme
Agency Theory
Analyses friction and disturbances that can happen inside an organization.
Transaction theory says that firm is a monolithic entity aiming at one goal. Unluckily, due to nonrational behavior of firms and conflicting behavior of individuals in them that assumption is always false.
The problem of the transaction theory assumption is that it doesn not consider that agents have own interests and goals, and they try to maximize individual utility - not only the firm’s utility. Those contrast between goals of agents and principal (organization) causes agency costs (that have to be reduced as much as possible or company is destined to die)
CSF
Critical success factors
Elements that are fundamental for an organization/project to achieve its mission. They are in poor words, general objectives.
Corporation:
- Brand recognition, image
- Dealers network
- Equipment of cars
- Reliability of cars
- After sale service
Function (manufacturing):
- Production costs
- Quality of product
- Environmental issues
- Relationships with trade unions
Manager (quality):
- Reputation with regard to other roles
- Skills of techicians
- Process certification
- Technology for monitoring quality
Level of process description in business life cycle
Drools
Drools is suite of software products to manage business rules.
The Rete algo: Used to manage execution of rules, it uses DAG to represent rules.
Things that can be outsourced and rule of thumb
- Strategic processes should never be outsourced.
- From COBIT POV “Plan and Organize” and “Monitoring” cannot be outsourced, since these processes are performed in order to understand what to outsource and how the outsourcing is going.
Rule of thumb by Levy: “if you can really write the whole job down on paper, then somebody else can do it”
Organizational model
Organizational model represents IS as a service offered to organizational level (and group) of organization.
The model is often given by Organizational chart (macro level and micro level), Linear Responsibility Chart (LRC) and Swim lane (BPMN).
Definition of Application
Software to support an activity or process
IS and Functional Model
Describes what the IS should do, not how.
Processes
- Activities, functions
- (CRASO, BPMN, UML activity diagram)
Data
- UML Class diagram
Interaction
- Use cases
Conway’s law
organizations which design systems … are constrained to produce designs which are copies of the communication structures of these organizations.
CSF vs KPI
- CSF are vital for a strategy to be successful
- CSF move forward the strategy, it makes it a success or a failure
- Strategiest should ask “Why would customers choose us?”, the answer is a CSF
KPIs are low level indicators.
CRM
Indicates all processes involved in customer relationships (sales, support, marketing)
Multi-channel organizations have data coming form: Web, phone, e-mail, physical persons.
All these data must be consistent.
End-to-end service chain: Receiving order of item from customer, planning and executing production of item, shipping item, monitoring user satisfaction, providing assistance in using item.
Agency Costs
Agency costs fall in threecategories:
- Monitoring: control of agent by principal (time lost by principal, it’s a cost)
- Bonding: time spent by agents to report to owner (instead of working)
- Residual loss: lost profits by principal due sub-optimal behavior of agents.
T model: Primary
Business domain = Telecom operators
Service company, like banks.
Typically large, provide internet and call service.
Main ops:
- network: plan, design, maintaining
- service: activatio, delivery and operation (internet, calls)
- workforce: plan/execute jobs, procue, store parts, manage technical docs.
Marketing and sales are very important, since usually there is a lot of competition between telecom companies. They continually push to develop better services for their customers.
Organizational structures
- Functional: Employees are grouped by skills
- Divisional: Employees are grouped by product/branch, skills may be replicated in different branches.
- Geographical
SCOR
Supply-Chain Operations Reference
Is an effort by non-profit organization made by 750 members. This was done to make a standard in the processes and bind to each one a software function. Most of the functions are supported by existing software.
Processes:
- Plan
- Execute
Source: supplies
Make: production
Deliver: shipping and distribution
Return: defective products or supplies
- Enable: Preparation storage and processing of information for Plan and Execute
3 levels: top, configuration (to company), process element (low level p.).
T Model
High level model to describe 3 core processes
Roles in IT
CIO: Information Officer -> top level manager of IT area, usually reports to top management (CEO)
CTO: Tech Officer -> tech scouting, tech choices, reports to CIO and CEO
CEO: Executive Officer
COO: Operation Officer
Management vs Operations
T model: Primary
Business domain = Manufacturing
Can be modeled with Value chain and application portfolio.
Value chain: represents the company as a sequence of processes to deliver a product.
Value of the product is determined by the sum of the value added at each step.
Value != price. Inbound logistic: buy materials, stock it.
- Operations: making of the product
- Outbound logistics: ship the product to stores
- Marketing and sales: market the product
- Service: given to the users once they buy the product (i.e. warranty)
Decision Theory
Problems:
- often info is unprecise
- capacity of info management by individuals is limited.
Bounded Rationality By Simons states that decisions cannot be optimal because all information cannot be always available; humans have limits in collecting, storing and processing informaiton, thus, all decision are made within these constraints.
Decision:
- Structured vs Unstrucutred: if well defined parametrs are establised -> structured.
- Planned vs Unplanned: unplanned when disaters happen
Cost of not producing information:
- Miscommunication: cost of collection and trasmission of data to higher levles
- Opportunity cost: delays in availablility of information at higher levels and lost opportunities
- Suboptimal decision: because of delays / imprecision.
Transaction Theory
Assumptions:
- Actors take decisions reatinally to maximize utility and profit
- all actors have the same information
The consequence is that market defines the best price of a product because it is the perfect place to have a transaction. So is a company has to buy a product the only thing that matters is cost, i.e. buy or build internally -> just look at costs of the two.
CRASO Model
An high-level functional model that shows activities, actors doing them and ma-terial/immaterial object treated by activity.
- Customer
- Request
- Activity
- organiSation
- Output
Policy
General direction implemented through several business rules.
SLA
Service Level Agreement
Part of the contract in which particular aspects of the service (scope, quality, responsabilities) are agreed upon between provider and customer.
Responsabilities: who takes the blame if one or more aspects of the SLA isn’t fulfilled?
TCO
Total cost of Ownership.
FInaicial estimate to help buyers/owners determine the direct and indirect costs of a product.
Usually there are 4 main aspects:
- Construction: cost to contact producers and buy needed assets.
- Deployment: cost to start production
- Operations
- Maintenance
- Dismissal: costs to dismiss the systems once it served its purpose.
Definition of Organization
Group of people intentionally organized to accomplish an overall, common goal or set of goals.
- Organizations include and manage resources (people, machines, buildings)
- Organizations implement business processes to achieve the goals
- Enterprises/companies are organizations working for profit
ITIL: definitions of process, service and service management
Process: set of activities with a goal
Service: a means of delivering value to customers (without owning specific costs and risks)
Service management: a set of organizational capabilities to deliver services, and in this way value to customers.
T model: Primary
Business domain = Production industries
2 high-level primary processes: production and maintenance of a plant.
Also in this domain value chain can be used, but the steps are easier.
- Inbound logistics: buy raw materials
- operations: plant supervision
- outbound logistic: distribution and sale.
Issues are with maintenance of the facility: safety and coordination.
Type of decisions with respect to operational level
ITIL
Information Technology InfrastructureLibrary.
Can be used to manage IT services both developed internally to an organization, orexternally (outsourcing)
Grouping of processes:
26 processes under 5 different groups:
Service strategy
Service design
Service transition
Service operation
Continual service improvement
Definition of Business Function
Group of people (and other resources) in an organization performing functionally similar activities.
Major business functions:
- Manufacturing
- Sales and Marketing
- Finance - Accounting
- Human Resources
BSC
Balanced ScoreCard
It’s a strategy performance management tool, supported by design methods and automation tools, used to keep track of execution of activities by the staff witihin their control and to control consequences arising from these actions.
It uses a 4 pespective approach to indentify what measures to use to track the strategy implementation:
- Financial: high-level financial measures that answer to “How do we look to shareholders?” -> cash flow, sales growth, operating income, return on equity
- Customer: “How do customers see us?” -> % of sales of new products, on time delivery, share of important customers’ purchases, ranking by important customers
- Internal business processes: “What we must excel at?” -> cycle time, unit cost, yield, new product introductions
- Learning and growth: “How can we continue to improve, create value and innovate?” -> time to develop new gen. products, life cycle to product maturity, time to market vs competition.
T model: Primary
Business domain = Utilities
Suppliers of gas, electricity, water.
The infastructure is one and cannot be subject to competition, it owned by the state.
Three layers of company: Production, trading and operations.
Renewable energy changed that a bit, since decentralizes electricity.
T model: Primary
Business domain = Bank Insurance
Service companies that do account/investment management, lending or insurances on vehicles, lifes, etc.
Most of the works is maintaining databases, backups and so on. Lots of competion here like in telecom.
T model: Primary
Business domain = Retail
Big retailers like IKEA, Decathlon, Amazon.
They have logistic problems, products must be distributed and be identified.
Companies with hundreds of stores, typically logistic is given to external companies their IS with the one of the company.
Inventing and choosing the right product is another manufacturing problem.
Policy
Is a general direction that is implemented through several business rules.
Analysis paralysis
In decision theory.
We have a lot of data available but we don’t have the capacity/computational power to process it.
Deployment Diagram
COBIT vs ITIL: Comparison of the stages
ITIL: Functions
- Service Desk
- Technical management
- Application management
- IT operation management
ITIL Function: Service Desk
People who are a contact point between users and the IT office.
Often it is a call center for customer support.
It manages any communication to IT service providers, incidents, service reqeusts, change requests and owns incident management process.
ITIL Function: Application management
It must manage applications, end-to-end procures and skill development.
ITIL Function: IT Operation management
About regarding operations of facilities and monitoring the software.Managing pace is day by day (power, heating/cooling, etc.)
ITIL Function: Technical management
(Infrastructure level) It must ensure that SP has right capabilities and resources to deliver the requested IT services.
Function Point Analysis
A function point is a “unit of measurement” to express the amount of business functionality an information system.
- Inputs
- Outputs
- Reusability
- Complex processing
- Communication
- Installation ease
- Performance
- Features
Usually PM give weights to these elements based on past projects.
COBIT: BUILD ACQUIRE IMPLEMENT
This domain is involved in both maintenance and development. The real main activity is not development but decide and buy software package or services from an external company.
define requirements, identify solutions and build.
Manage assets: machine, operating systems
Manage knowledge: DB and people
Make people accept changes by training and communication
Manage changes: from development to deployment of a new version of an application, many changes may be put together in a monthly release.
COBIT Monitor Evaluate Access
It has to Monitor Evaluate and Assess:
- performance and conformance,
- the system of internal control,
- compliance with external requirements.
COBIT: Deliver Service and Support
It is the domain where most of the money (50-60%) goes. It has to manage:
- Operations
- Server requests and incidents
- Problems
- Security
- Reliability
- Business process control
COBIT: Align Plan and Organize
Manages
- Budget and cost (CIO)
- Supplier that have to deliver something
- Enetrpirese architechure
