CH 8 Info Systems

Business Processes

  • Definition: A network of activities that generates value by trans+forming inputs into outputs.

Dramatic Changes in Business Processes

  • Example: Walmart's checkout system resembles Amazon Go stores where customers scan items and are charged upon leaving, reducing theft.

  • Reflection on changes in various industries:

    • Banking Industry:

    • Shift towards online banking.

    • Impact:

      • Reduction in fraud cases.

      • Fewer employees required.

      • Decreased foot traffic in banks.

    • Discussion on industries that have not seen drastic changes.

    • Distinction: Structured vs. Dynamic Processes.

Common Workgroup Processes

  • Each workgroup has a specific information system tailored to fulfill their unique needs.

  • Information systems vary by scope, ranging from small scale to large scale.

Information Silos

  • Definition: A condition where data is isolated in separate information systems.

  • Problems arising from information silos:

    • Data duplication.

    • Data inconsistency (e.g., not having a married name).

    • Disjointed processes.

    • Lack of integrated enterprise information.

    • Inefficiency leading to isolated decision-making.

    • Increased operational costs for the organization.

  • Visual representation: Table of problems created by information silos.

Improving Process Quality

  • Two key measures for assessing process quality:

    • Process Efficiency:

    • Ratio of outputs to inputs.

    • Aim: Achieve high efficiency quickly.

    • Process Effectiveness:

    • Measures how well a process fulfills organizational goals.

    • Focuses on overall goals.

  • Methods to improve processes:

    • Changing process structure.

    • Altering process resources.

    • Combination of both approaches.

  • Example of process improvement:

    • Patient Appointment Scheduling System:

    • Enhances process quality through partial or full automation.

    • Controlling Data Quality:

    • Ensures data completeness and correctness prior to progressing through activities.

Business Process Reengineering (BPR)

  • Definition: The redesign and alteration of business processes leveraging new information systems.

  • How enterprise systems address departmental silos:

    • Integration of data into a single database (a primary solution).

    • Revisions to applications and processes to remove duplicate data.

In-Class Activity: Making a Box Cake

  • Steps outlined:

    1. Read instructions.

    2. Gather ingredients and measurements.

    3. Measure and pour the ingredients into a bowl.

    4. Dump premade mix into the bowl.

    5. Mix using a spatula.

    6. Transfer to a greased pan.

    7. Place in the oven.

    8. Set a timer.

    9. Remove when fully baked.

    10. Allow to cool.

  • Inefficiencies observed:

    • Incorrect measurements.

    • Forgetting to preheat the oven.

  • Proposed solutions for information silo issues:

    1. Machine to measure ingredients accurately.

    2. Machine to operate the oven automatically.

Integration of Processes and Technologies

  • Role of enterprise systems:

    • Foster stronger and quicker linkages in the value chain.

    • Challenges:

    • Complex and costly implementation processes.

    • Often require high-level skills and considerable time investment.

  • Emergence of three major enterprise applications:

    • Customer Relationship Management (CRM):

    • Manages customer interactions through four phases of the customer life cycle:

      1. Marketing.

      2. Customer acquisition.

      3. Relationship management.

      4. Loss/churn management.

    • Supports a customer-centric organization; notable principle:

      • Pareto Principle: 80% of business revenue typically comes from 20% of customers.

    • Enterprise Resource Planning (ERP) Systems:

    • Comprised of applications, a database, and a set of processes consolidating business operations into a unified platform.

    • Primary purpose: Integration enabling real-time updates.

    • Enterprise Application Integration (EAI):

    • Connects isolated systems and facilitates data sharing.

    • Provides a layered integration while maintaining existing operational functions.

    • Allows phased transition to ERP.

Implementation Challenges of Enterprise Systems

  1. Collaborative Management:

    • Absence of a single responsible manager.

    • Involves the use of committees and steering groups.

  2. Identification of Requirement Gaps:

    • Limited product alignment; licensed products rarely meet every need.

    • The complexity of product features complicates gap identification.

  3. Transition Problems:

    • Need for careful planning and staff training.

  4. Employee Resistance:

    • Importance of communicating the necessity for change.

    • Provision of training, coaching, and incentives to facilitate acceptance.

  5. New Technology:

    • Emerging technologies introduce uncertainties.

Future Projections: What to Expect in 2034?

  • Anticipations regarding ERP vendors and the adaptation of cloud-based ERP systems.

  • Hybrid model expected where:

    • Majority of data is stored on vendor-managed cloud servers.

    • Sensitive information retained on local servers.

  • Considerations:

    • Mobility will persist as a potential security challenge.

Regulatory Standards

  • Importance of government and financial standards in compliance monitoring for organizations.

  • Discussion of how machines are capable of employing ERP systems autonomously (future advancements).

  • Anticipation of AI as a contributing factor in business innovation and management.