ITSS 3300 Lec. 5

Business Process

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

Types of Typical Process

1. Structured Processes

2. Dynamic Processes

Structured Processes

Formally defined, standardized, day-to-day operations

1. Supports operational and structured managerial decisions

2. Stable and formally documented

3. Rare and not tolerated and changes slowly

ex. customer returns, order entry, purchasing, payroll

Dynamic Processes

Flexible, informal, and adaptive process involve strategic and less structured managerial decisions

1. Less specific and fluid

2. Requires human judgement

3. Frequent and expected and changes rapidly

ex. Business strategy, product design, collaboration

Three levels of organizational scope

Workgroup, enterprise, inter-enterprise

• wider the scope, more challenging the process to manage

Workgroup Process

exists to enable workgroups to fulfill the purpose and goals of a particular group

• 10-100 users

• Problems solved within the group and can duplicate data

• Somewhat difficult to change

Enterprise Process

Span an organization and support activities in multiple departments - support enterprise-wide processes

• 100-1000+ users

• Affects enterprise and needs more than one department

• Eliminates workgroup data dpublication

• Difficult to change

Inter-Enterprise

span across two or more independent organization, requires collaboration and coordination between them

• 1000+ users

• Affects multiple organization and requires cooperation of independent orgs

• Very difficult to change and can resolve duplicated data

2 dimensions of process quality

efficiency and effectiveness

Process efficiency

is a measure of the ratio of process outputs to inputs - higher ratio indicates greater efficiency

Process effectiveness

measure of how well a process achieves organizational strategy

Process Quality

Goal is to balance effectiveness and efficiency, ensuring processes achieve intended outcomes with fewer organizational resources

3 ways to improve process quality

1. Change the process structure

2. Change the process resources

3. Change both process structure and resources

Enterprise System

Enables data to be centralized in an enterprise database and eliminates problems of information silos

Information Silos

Isolated, duplicated, inconsistent departmental data

Customer Relationship Management (CRM)

suite of applications, a database, and processes for managing all customer interactions from lead generation to customer service

goal: streamline processes, improve customer service, increase sales

4 CRM Application Groups

Solicitation & lead management, Sales, Relationship management, Customer support.

4 phases of Customer Lifecycle

1. Marketing

2. Customer Acquisition

3. Relationship Management

4. Loss/churn

Enterprise Resource Planning (ERP)

Suite of applications called modules, a database, and processes that consolidate business operations into a single, consistent computing platform

Primary Function of ERP

Integration, enabling dynamic, real-time updates across the business to keep everyone informed

What does ERP Include

CRM Functions plus accounting, manufacturing, inventory, and HR modules

Elements of ERP System

Supply chain, manufacturing, CRM, Human Resources, Accounting

Material Requirements Planning (MRP)

Software that helps manufacturers determine what material they need, when they need them, and in what quantities

ERP vs. MRP

ERP streamlines the entire enterprise and does it all but MRP is just manufacturing

Challenges of Implementing ERP

1. Needs a big budget

2. Requires skills and heavy collaboration between departments

3. Transition Problems from old to new

4. Employee resistance - fear of losing jobs

Major ERP Vendors

1. SAP: 20% share; market leader, expensive, gold standard

2. Microsoft: 14%; Dynamics AX, Dynamics CRM as SaaS, no ful cloud ERP

3. Oracle: 9%; strong tech base and large customer base, innovative cloud solutions, stronger challenger to SAP

4. Infor: 7%; many non-integrated solutions, evolving w/ 3D printing, manufacturing/supply chain

5. Epicor: 4%; leading ERP for mid-sized companies, custom solutions

Enterprise Application Integration (EAI)

suite of software applications that integrates existing systems by providing layers of software that connect applications - best choice if ERP does not work

Key Aspects of EAI

1. Data integration - connects different systems

2. Process Automation - enables automation by linking business processes across different systems

3. Real-time access: ensures data updated and accessible in real-time across systems

4. Communication: enables existing applications to communicate and share data