MIS Chapter 8 -Processes, Organizations, and IS

Lets cook up this chapter :fire:

Business process

a network of activities that generate value by transforming inputs into outputs

Activities

subparts of processes that receive inputs and produce outputs

can be performed by:

• humans only

• computer systems only

• humans augmented by computer systems

Structured processes

formally defined, standardized processes that involve day-to-day operations: accepting a return, placing an order, purchasing raw materials, and so forth,

Dynamic processes

flexible, informal, and adaptive processes that normally involve strategic and less structured managerial decisions and activities.

ex. Deciding whether to open a new store location and how best to solve the problem of excessive product returns

Three levels of organizational scope

Workgroup

Enterprise

Interenterprise

Generally, the wider the scope, the more challenging the process is to manage

Workgroup process

exists to enable workgroups to fulfill the charter, purpose, and goals of a particular group or department.

ex. operations, manufacturing, human resources, sales and marketing, customer service, accounting

Workgroup information system

exists to support one or more processes within the workgroup

An information system that supports a particular department or workgroup

functional information systems

another name for workgroup information systems

Workgroup information systems that support a particular business function

functional application

the program component of a functional information system

Enterprise processes

processes that span an organization and support activities in multiple departments

ex. Hospital:

process for discharging a patient supports activities in housekeeping, the pharmacy, the kitchen, nurses’ stations, and other

Enterprise information systems

IS that support one or more enterprise processes

IS that support cross-functional processes and activities in multiple departments

• spans thousands of users / difficult to change

Major advantage of enterprise systems

Data duplication within the enterprise is eliminated together

or changes to duplicated data are carefully managed to maintain consistency

Inner-enterprise processes

span two or more independennt organizations

ex. the processes of buying a healthcare insurance policy via a healthcare exchange involves many insurance companies and governmental agencies

Inter-enterprise information systems

support one or more enterprise processes

• solutions to problems require cooperation among different, usually independently owned, organizations

• problems are resolved by meeting, by contract, and sometimes by litigation

Processes

• the fabric of organizations

• means by which ppl organize their activities to achieve the organization’s goals

• quality is important

Process efficiency

a measure of the ratio of process outputs to inputs

Process effectiveness

a measure of how well a process achieves organizational strategy

How processes can be improved

Change the:

• process structure

• process resources

• both structure and resources

Change the process structure

• Changing process quality by reorganizing the process

ex. making customer credit done first and checking inventory second

Change process resources

• improve process quality by changing the allocation of resources such as humans and information systems

ex. add more people (may increase cost)

How information systems can improve process quality

• Performing an activity

• augmenting a human who is performing an activity

• controlling data quality and process flow

Performing an activity

• Making IS perform the entirety of a process activity

ex. When you purchase from Amazon, IS check your credit while your transaction is being processed

ex. reserving a seat on an airline

Augmenting a human performing an activity

• augmenting (make greater, increase) the actions of a human who is performing an activity

ex. managing patient appointments in a doctor’s office.

• you talk with a receptionist who uses an appointment IS. That IS augments the appointment creation activity

Controlling Data Quality Process Flow

• The IS ensuring that correct data values are being input

• Ensuring that data are complete before continuing process activities

The cheapest way to correct for data errors is at the source, and it avoids the problems that develop when process activities are begun with incomplete data.

Information silo

is the condition that exists when data are isolated in separated information systems

Problems of Information Silos

• Data duplication / data inconsistency

• Disjointed processes

• Limited information and lack of integrated information

• Isolated decisions lead to organizational inefficiencies

• Increases expense

How do organizations solve the problem of information silos

• integrate the data into a single database and revise applications (and business processes) to use that database (DUH)

• allow isolation, but manage it to avoid problems

First, isolated data created by workgroup information systems are integrated using enterprise-wide applications

Second, today, isolated data created by information systems at the enterprise level are being integrated into inter-enterprise systems using distributed applications (such as iMed Analytics)

linkages

• enterprise systems enabled the creation of stronger, faster, more effective ____ among value chains

Business Process Reengineering

The activity of altering existing and designing new business processes to take advantage of new information systems

Inherent processes

Predesigned procedures for using the software products

The procedures that must be followed to use licensed software effectively.

For example, the processes inherent in ERP systems assume that certain users will take specified actions in a particular order. In most cases, the organization must conform to the processes inherent in the software

Customer Relationship Management System (CRM)

a suite of applications, a database, and a set of inherent processes for managing all the interactions with the customer, from lead generation to customer service.

Customer Life Cycle

(Taken as a whole??? wth does this mean?

The processes of marketing, customer acquisition, relationship management, and loss/churn that CRM systems must manage.

Enterprise resource planning (ERP)

a suite of applications called modules, a database, and a set of inherent processes for consolidating business operations into a single, consistent computing platform.

Modules

a suite of applications in an ERP system

ERP system

An information system based on ERP technology

• include the functions of CRM systems but also incorporate accounting, manufacturing, inventory, and human resources applications

• Primary purpose is integration: allowing the left hand of the organization to know what the right hand is doing

  • allows for real-time updates globally, whenever and wherever a transaction takes place

Enterprise application integration (EAI)

A suite of software applications that integrates existing systems by providing layers of software that connect applications together. EAI does the following

• Connects system “islands” via a new layer of software/system

• enables existing applications to communicate and share data

• provides integrated information

• leverages existing systems—leaving functional applications as is but providing an integration layer over the top

• enables a gradual move to ERP

Major benefit: Enables organizations to use existing applications while eliminating many of the serious problems of isolated systems

ERP product

Must include applications that integrate:

• Supply chain (procurement, sales order processing, inventory management, supplier management, and related activities)

• Manufacturing (scheduling, capacity planning, quality control, bill of materials, and related activities)

• CRM (sales prospecting, customer management, marketing, customer support, call center support)

• Human Resources (payroll, time and attendance, HR management, commission calculations, benefits administration, and related activities)

• Accounting (general ledger, accounts receivable, accounts payable, cash management, fixed asset accounting)

An ERP solution is an information system and, as such, has all five components. We consider each in turn.

ERP PaaS

Replace an organization’s existing hardware infrastructure with hardware in the cloud. Install ERP software and databases on that cloud hardware. The using organization then manages the ERP software on the cloud hardware

• Larger installations will likely move to PaaS

ERP SaaS

Acquire a cloud-based ERP solution. SAP, Oracle, Microsoft, and other major ERP vendors offer their ERP software as a service. The vendor manages the ERP software and offers it to customers as a service.

Smaller and new ERP systems are likely to use SaaS

Trigger

a computer program stored within the database that runs to keep the database consistent when certain conditions arise.

Stored procedure

a computer program stored in the database that is used to enforce business rules.

ex. never to sell certain items at a discount

Process blueprints

In an ERP application, comprehensive sets of inherent processes for all organizational activities, each of which is documented with diagrams that use a set of standardized symbols

Train the trainer

Training sessions where vendors train the organization’s employees, called Super Users, to become in-house trainers in order to improve training quality and reduce training expenses.

To reduce expenses, the vendors sometimes train the organization’s employees, called Super Users, to become in-house trainers in training sessions called: