Presentation+2+-+Information+Systems+and+Business+Processes

Introduction to Information Systems

Overview

  • Definition of Information Systems (IS)

  • Components of Information Systems

  • Classification of IS in organizations (Vertical vs. Horizontal View)

  • Enterprise Information Systems (EIS)

  • Definition and significance of Business Processes

  • Types of Business Processes

  • Examples of Business Processes

  • Understanding Process Quality

  • Business Process Modeling (BPM)

  • The role of IS in improving Process Quality

  • Business Process Management (BPM)

  • Integration of Business Processes

  • Reasons behind IS/IT Success and Failure

What is a System?

  • Definition of a System:

    • A group of interrelated components working towards a common goal by accepting inputs and producing outputs through a transformation process.

  • Types of Systems:

    • Physical Systems: Example: Solar System

    • Biological Systems: Example: Human Body

    • Technological Systems: Example: Oil Refinery

    • Socioeconomic Systems: Example: Firm

The Organizational System

Components

  • Organizational processes as subsystems consist of:

    • Control: Managing organizational activities.

    • Inputs: Information, data, and other resources.

    • Outputs: Products, services, profits, and reports.

    • Feedback: Incorporating metrics to improve performance.

Schematic View of an Information System

  • INPUTS: Identifying business problems and opportunities; incorporating data and instructions.

  • PROCESSING: Utilizing programs, people, and equipment for data manipulation.

  • OUTPUTS: Delivering solutions, reports, graphics, analysis, and recommendations.

  • CONTROL: Role of Decision Makers in utilizing output for improvement.

Functional Areas in an Organization

Vertical View

  • Hierarchical Structure: Reflects functional areas (finance, marketing, resources).

  • Functional Information Systems: Designed to enhance efficiency in specific departments but may lack compatibility across functions, potentially inhibiting overall organizational performance.

Process View of an Organization

Horizontal View

  • A focus on organizational processes for agility and efficiency.

  • Enterprise Information Systems (EIS): Support multiple departments.

    • Examples: ERP, CRM, SCM.

Enterprise Resource Planning (ERP)

Functionality

  • ERP systems integrate software modules and a central database for real-time access to business activities across departments.

  • Example of ERP Process: Sales order processing that includes credit verification, scheduling shipments, updating forecasts, and tracking orders.

Supply Chain Management (SCM)

Overview

  • SCM involves a network connecting suppliers, manufacturers, distribution centers, and customers.

  • Inefficiencies: Issues arise from poor information flow leading to excessive costs and inventory.

  • Effective SCM enables just-in-time inventory strategies and minimizes uncertainties.

Customer Relationship Management (CRM)

Importance

  • Shift from product sales to customer ownership and long-term value.

  • Data Needed for CRM: Customer identification, contact details, service costs, preferences, and spending.

CRM Systems Functions

  • Integrate customer data, analyze for insights, and foster better customer relationships and service.

  • Analytical CRM: Provides understanding of customer lifetime value and profitability.

What is a Business Process?

  • Defined as a network of activities aimed at accomplishing a business function.

  • Business processes can be functional (within one department) or cross-functional (spanning multiple departments).

Types of Business Processes

Functional Processes

  • Examples across departments include: product assembly, customer identification, financial reporting, and employee evaluations.

Cross-Functional Processes

  • Example: Order generation and fulfillment transcending various functional areas.

Measuring Process Quality

  • Effective processes align with organizational strategy; efficient processes balance benefits against costs.

Business Process Management (BPM)

Methodology

  • BPM ties people, processes, and technology to improve strategic performance.

  • Includes creating, assessing, altering processes, and employing tools such as workflow management and process modeling.

Stages of the BPM Cycle

  1. Create Components

  2. Model Processes

  3. Implement Processes

  4. Assess Results

Business Process Integration

Trends with Internet Technology

  • Shift from isolated systems to integrated workflows using Internet technology, aiding collaboration and information sharing.

Reasons for Success and Failure of IS/IT

Success Factors

  • Continuous user involvement.

  • Management support;

  • Clear requirements and realistic expectations.

Failure Factors

  • Lack of user input;

  • Incomplete requirements or technological incompetence.

Conclusion

  • Properly addressing process improvement requires a comprehensive BPM strategy enhancing visibility and identifying bottlenecks for better performance.