Chapter 7 In Class Notes Flashcards
is a network of activities that
generate value by transforming inputs into outputs
Business process
Activities can be performed by:
– Humans
– Humans augmented by computer systems
– Computer systems, only
Formally defined, standardized
processes that involve day-to-day operations (e.g.
accepting a return, placing an order, purchasing raw
materials, etc.)
Structured process
Flexible, informal, and adaptive
processes that generally involve strategic and less
specific managerial decisions and activities
Dynamic process
How Do Structured Processes Differ from
Dynamic Processes?
Structured processes support operational and structured managerial decisions and activities and Standardized, and usually formally defined and documented and exceptions rare and not well tolerated and process structure changes slowly and with organizational agony. Example is customer returns, order entry, purchasing, and payroll. Dynamic supports strategic and less structured managerial decision and activities, less specific, fluid, usually informal, exceptions frequent and expected and adaptive processes that change structure rapidly and readily. Examples are collaboration, social networking, ill-defined, and amgibuous situations.
Can Information Systems Serve Both
Structured and Dynamic Processes?
The focus of this chapter is on structured processes
and information systems, but the answer is absolutely
YES!
Common Departmental Information
Systems (Goals of Org. Unit) 6 of them
Sales and marketing Operations Manufacturing Customer Service Human Resources Accounting
How Do Structured Processes Vary by Scope? What are the 3 different scopes?
- Departmental
- Enterprise
- Inter-enterprise
What is the fox lake example of the Departmental one?
Scheduling of ground keeping
What is the fox lake example of the Enterprise one?
Charging of membership fees
What is the fox lake example of the Inter-enterprise one?
Ordering of restaurant supplies from supplies
What are the characteristics of the Departmental Scope?
10 to 100 of users; procedures understood within group; problem solutions within group; data duplication among departments; somewhat difficult to change
What are characteristics of Enterprise?
100 to 1000s of users; procedures formalized; problem solutions affect enterprise; data duplication minimized; very difficult to change.
What are characteristics of the Inter enterprise Scope
1000s of users; procedures formalized; problem solutions affect multiple organizations; controlled data duplication; difficult to change; inter-organization IS required
Q2: How Can Information Systems
Improve Process Quality?
“Processes are the fabric of organizations; they are
the means by which people organize their activities to
achieve the organization’s goals…process quality is
an important, possibly the most important,
determinant of organizational success.”
Two Dimensions of Process Quality
- Process efficiency
2. Process effectiveness
What is process efficiency?
ratio of process outputs to inputs
What is process effectiveness?
How well a process achieves organizational strategy
Ways to improve process quality (3 ways)
– Change process structure
– Change process resources
– Change both
How Can Information Systems Improve
Process Quality while
• Performing an activity
– Partially automated vs. completely automated
Islands of Automation (a.k.a.
information silos
Islands of Automation (a.k.a. information silos)
• Information silos are not a problem until processes begin to
use and store data about the same entities (duplicate data).
• Ongoing evaluation and short and long term strategic thinking
is needed…
• If we have information silos, is that an inherent or natural part
of our business, or is it an indication of lack of focus?
(Depends)
– VCs inherently do this and do it well.
– At the same time, some of the worst merger & acquisition
deals of all time were ones where the company was
swinging for the fence
How Do Information System Silos Arise? 4 ways
– Data isolated in islands of automation
– Different department goals
– Different personal and workgroup needs
– Duplicate data as organization grows
Eliminating Duplicated Data
• Two Options:
– Eliminate duplicated data is to store a single copy of
the data in a shared database, and revising business
processes and applications to use that database
(enterprise information system)
– Allow the duplication, but to manage it to avoid problems
• Impractical?
Emergence of Enterprise Application
Solutions.
• Existing business processes were ineffective and
needed to change
– Business process reporting was inherently slow and
inaccurate
• Adopting integrated data and enterprise information
systems promised to significantly improve process
quality over time
Altering and designing business processes to take
advantage of new information systems
Business Process Reengineering
is difficult, slow, expensive,
and require a high level of expertise
Business process engineering
Proprietary systems are
expensive – High initial development costs – High ongoing maintenance costs • Business needs and industry requirements are constantly changing
create stronger,
faster, more effective linkages in value chains
– No pain, no gain`
Integrated data, enterprise systems
Emergence of Enterprise Application
Solutions. 4 of them
- Inherent processes
- Customer relationship management (CRM)
- Enterprise resource planning (ERP)
- Enterprise application integration (EAI)
– Predesigned procedures for using software products
– Based on “industry best practices”
Inherent procedures
• Suite of applications, a database, and a set of
inherent processes
• Manage all interactions with customer though four
phases of customer life cycle:
– Marketing, customer acquisition, relationship
management, loss/churn
• Intended to support customer-centric organization
Customer relationship management
Customer relationship management Manage all interactions with customer though four
phases of customer life cycle: What are the 4
Marketing, customer acquisition, relationship
management, loss/churn
CRM Applications: Major Components. 4 of them
- Solicitation and Lead Management Application
- Sales Applications
- Relationship Management Application
- Customer Support Applications
Four Phases of Customer Life Cycle
- Marketing - attract
- Customer acquisition - Sell
- Relationship Management - Support & resell
- Loss/Churn - Categorize
• A suite of applications called modules, a database,
and a set of inherent processes
• Consolidates business operations into a single,
consistent, computing platform
• CRM functionality + accounting + manufacturing +
inventory + human resource management
Enterprise Resource Planning (ERP)
Enterprise Resource Planning (ERP) Eliminates data redundancy by
storing information in
a single database (increased transparency across the
organization)
Enterprise Resource Planning (ERP) Primary purpose is
integration
Enterprise Resource Planning (ERP) components
- Sales applications
- relationship management application
- customer support app
- accounting app
- manufacturing app
- inventory app
- human resource app
- solicitation and lead management app
• Suite of software applications integrating existing
systems with layers of software that manage
connections between applications
• Connects system “islands”.
• Enables communicating and sharing data.
• Provides integrated information.
• Provides integrated layer over the top of existing
systems while leaving functional applications “as is”.
• Enables a gradual move to ERP
Enterprise Application Integration (EAI)
EAI Automatically Makes
Data
Conversions Among Different Systems
There is no centralized EAI database?
True. Instead, EAI software keeps files of metadata that
describe data formats and locations (helps to locate
data)
Q5: What Are the Elements of an ERP
System? 5 of them
Applications programs, databases, procedures,
training and consulting that integrate: On next question.
Q5: What Are the Elements of an ERP
System?
• Applications programs, databases, procedures,
training and consulting that integrate: What 5 things
– Supply chain – Manufacturing – CRM – Human resources – Accounting
– Set configuration parameters
– Choose and ERP solution close to organization requirements
or defeats the purpose of ERP (build vs. buy)
• ERP application programs
ERP databases
– Initial database design included (2 things)
• Trigger program code (do something automatically when certain
conditions arise) – (Security Alert: Watch system permissions –
Trojan or SQL Injections)
• Stored procedure code (enforces business rules – discounts)
What Companies Are the Major ERP
Vendors?
Epicor, Microsoft Dynamics, Infor, Oracle, SAP
Q6: What Are the Challenges When
Implementing New Enterprise Systems?
• Four Primary Factors
– Collaborative management
• No single boss (steering committee recommended)
– Requirements vs. capability gaps
• Change organization vs. change system dilemma
– Transition problems
• Isolated systems to unified system
– Employee resistance due to threats to self-efficacy
(sense of being able to accomplish one’s job)
• Software design philosophy
• Activities are organized into modules of functionality
called web services
• Web services are requested and delivered over the
internet using SOA standards
• Service providers create “service descriptions” that
help developers know how to interact with web
services
• Service descriptions are published using Web
Service Description Language (WSDL)
• Web services delivered via XML, SOAP, REST, et al.
• Used by SAP, Oracle ERP
What Is Service-oriented Architecture
(SOA)?
What Is Service-oriented Architecture
(SOA)?
• The Pizza Stand
– Pizza ordered by customer – Delivery occurs in accordance with the terms of the menu – Production of the pizza is encapsulated or hidden from the user
Why is SOA important for Enterprise
Systems?
• Many ERP applications developed before the internet
• Re-writing source code to be mobile device and
internet friendly is expensive and in many cases
infeasible
• SOA can allow access to popular functions and
features via web and mobile
