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Processes, Systems, and Information: An Introduction to M I S

Third Edition

Chapter 2

Business Processes, Information Systems, and Information

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Front Cover: Processes, Systems, and Information: An Introduction to MIS, Third Edition; by Earl H. McKinney, Jr. and David M. Kroenke

Learning Objectives

Q2-1 What is a business process?

Q2-2 What is an information system?

Q2-3 How do business processes and information systems relate?

Q2-4 How do structured and dynamic processes vary?

Q2-5 What is information?

Q2-6 What are necessary data characteristics?

Q2-7 How can I use these topics at work?

In the previous chapter, we defined MIS as the management and use of business processes, information systems, and information. Here we’ll spend some time getting a better understanding of what these things are and their relationships.

What is a Business Process? (1 of 7)

Sequence of activities for accomplishing a function

Activities are tasks within a business process

Example: Purchasing textbooks from the bookstore

A business process is a sequence of activities for accomplishing a function. Activities are the tasks within the business process. As an example, booking a flight online is a business process that includes several activities. First, you must enter dates, times, and number of passengers to search for available flights. Once available flights are presented, the next activity is to select from the alternatives. Once these are selected, you will need to enter passenger information. Another activity will be to make seating assignments and/or enter baggage requirements. When this is completed, yet another activity is to confirm your details and enter payment information. Finally, you’ll receive a confirmation of the flight details that you can print or save to a file. As you can see, this seemingly simple process involves multiple activities or tasks.

What is a Business Process? (2 of 7)

Documenting business processes

Business Process Model and Notation (B P M N)

Global standard for documentation

Roles and Actors

Swimlanes

We document business processes by creating an abstraction of the process using standardized techniques. Business Process Model and Notation (BMPN) is a global standard used for this very purpose. This standard also involves roles, which indicate a subset of business activities that are performed by an actor. An actor could simply be a person. These roles are often identifiable in the abstraction or model using swimlanes that separate the various roles in the process model. The following slides include diagrams from your textbook that show the abstract model with swimlanes, as well as a key that helps identify the various symbols used.

What is a Business Process? (3 of 7)

Documenting business processes using B P M N

Figure 2-1 Fast Food Restaurant Drive-Thru B P M N Diagram

In this slide, let’s focus on the design. You see various roles identified using vertical swimlanes. As an example, the first role is the Cashier. The activities performed by this role are shown using various symbols that we will discuss in the next slide. Keep in mind, the role of Cashier is performed by an actor that we define as a person.

What is a Business Process? (4 of 7)

Documenting business processes using B P M N

Figure 2-2 Summary of B P M N Symbols

As we mentioned in the previous slide, roles perform various activities in the process. BPMN uses symbolization to help organize the process and distinguish between what is taking place in the process. As you can see, an activity is defined using a rectangular shape. If you recall from the previous slide, the role of Presenter also included a decision, which we see here can be indicated using a diamond shape with arrows stemming from it to show alternative courses of action depending on the results of the decision. These symbols are global standards used in BPMN.

What is a Business Process? (5 of 7)

Documenting business processes using B P M N

How much detail is enough?

Avoid ambiguity

A valid question regarding the creation of these abstract models is how much detail is enough? Ideally, we should include as many activities as required to avoid ambiguity. Some steps are unnecessary and don’t need to be included in the model. For those activities requiring additional detail, we can use the symbol that indicates that we will document the details of that specific activity elsewhere. This helps keep the model simple, yet thorough.

What is a Business Process? (6 of 7)

Why do organizations standardize business processes?

Enforce policies

Produce consistent results

Allow for scalablity

Reduce risk

Organizations choose to standardize business processes because they provide benefits. First, standardized business processes help enforce rules. In our earlier example of purchasing an airline flight online, a standardized process would require the customer to enter the names of all passengers before continuing with the process. Regulations require that all passengers be identified, and the standardized process enforces that. Also, standardized processes provide consistent results because regardless of the actor playing a role in the process, the activities and decisions are performed in a consistent manner. Standardized processes also allow for scalability. That is, to be able to replicate the process and implement it in new areas as an organization grows. Finally, standardized business processes reduce risk. One of the ways it reduces risk is by reducing the potential for error that exists when different employees do things differently.

What is a Business Process? (7 of 7)

Sequence of activities to accomplish a function

Standardized using B P M N

A business process, as we’ve seen, is a sequence of activities to accomplish a function. But we also noted that there are benefits to standardizing these processes. One technique used to do this is the Business Process Model and Notation. BPMN provides an abstract model of the standardized process using standardized symbols, roles, actors, and swimlanes.

What is an Information System? (1 of 3)

System

Group of components interacting to achieve some purpose

Information system (I S)

Group of components to produce information

Five components

Computer hardware, software, data, procedures, and people

To define an information system, we should first understand what a system is. A system can be defined as a group of components interacting to achieve a purpose. An information system is then a system that interacts to produce information. Furthermore, we can identify five components that make up an information system. They are computer hardware, software, data, procedures, and people. Let’s take a closer look at an information system in the next slide, which shows us a diagram of how this interaction takes place.

What is an Information System? (2 of 3)

Five components of an information system

Figure 2-4 Five Components of an Information System

In this diagram, we see the five components of an information system. The hardware and people do things, while the software tells the hardware what to do, and the procedures tell the people what to do. Data is the bridge between the machine side (hardware and software) and the human side (procedures and people). These five components are common to all information systems, regardless of size.

What is an Information System? (2 of 3)

Components of an information system

What is an Information System? (2 of 3)

What is an Information System? (3 of 3)

How can I use the Five-Component Model?

Recognize that you are the key

Make each component work

Estimate the scope of a new I S

Prioritize components by difficulty and disruption

Appreciate that information systems are more than technology

Recognize that any information system can only be as good as the people who are a component in the system – the most important component. By using the five-component model, it is easier to troubleshoot issues when they arise. Rather than point to the wrong component, you have the ability to interrogate more suspects.

The five-component model will also allow you to think more completely and assess the impact of new technologies. You will be better able to assess the scope of new systems. Finally, the five-component model lists the components in a particular order. They are listed in order of ease of change and extent of organizational disruption. Quite simply, it’s easier and less disruptive to replace a computer with a new one, than it is to replace a person.

How Do Business Processes and Information Systems Relate? (1 of 3)

Figure 2-1 Fast Food Restaurant Drive-Thru B P M N Diagram

If we look at the earlier example, we see four distinct roles. Three of these roles are performed by a person, while only one role (Order Tracker) is performed by a computer-based system. Based on this, we can say the Drive-Thru process is supported by a single IS – the Order Tracker IS. It’s possible to have multiple IS supporting this process. Quite frankly, you can have as many as you need. As an example, if there was a motion detecting system used to record the traffic patterns of cars that join the drive-thru line, then we would have a second IS. It is also quite possible that an IS will support more than one process. We will look at this in the next slide.

How Do Business Processes and Information Systems Relate? (2 of 3)

An information system can support several processes

Figure 2-6 Processes and the Two I S at the Fast Food Restaurant

This slide provides more clarity into the relationship between information systems and processes. Here we can see that a single IS, such as the Order Tracker IS, not only supports the Drive-Thru process, but several other processes as well. Examples are in-store ordering, and daily revenue. Some processes, such as the opening and closing of the fast food restaurant, do not rely on an IS.

How Do Business Processes and Information Systems Relate? (3 of 3)

The role of procedures

Set of instructions for a person to follow when operating an I S

Different procedure for different processes

A procedure, as we mentioned before, is a set of instructions for a person that must be followed to operate the information system. Because an information system can support more than one process, it will have multiple procedures. In short, an information system will have a different procedure for each process it supports. Should the information system change, or the process change, the procedures will also change accordingly.

How Do Structured and Dynamic Processes Vary? (1 of 2)

Characteristics of structured processes

Characteristics of dynamic processes

Figure 2-8 Differences Between Structured and Dynamic Processes

Characteristics of Processes

Structured Processes	Dynamic Processes
Formally defined process, fixed flow	Informal process
Process change slow and difficult	Process change rapid and expected
Control is critical	Adaptation is critical
Innovation not expected	Innovation required
Efficiency and effectiveness important	Effectiveness typically more important
IS procedures are prescriptive	I S procedures are supportive

How Do Structured and Dynamic Processes Vary? (2 of 2)

Figure 2-8 [continued]

Chapters in This Textbook

Structured Processes	Dynamic Processes
Chapter 8: Procurement	Chapter 10: Collaboration
Chapter 9: Sales	Chapter 11: Social Media
blank	Chapter 12: Business Intelligence
blank	Extension 3: Systems Design

Examples at the Fast-Food Restaurant

Structured Processes	Dynamic Processes
Scheduling	Landscaping
Drive-Thru	Community outreach
Opening & Closing	Hiring

As we can see in this slide, there are basically two categories to help categorize processes. Among the many processes within an organization, some of them are considered structured. Characteristics of a structured process are listed here, but in general, structured processes are for formally defined, standardized processes. Dynamic processes are less specific, more adaptive, and even intuitive.

What is Information? (1 of 3)

Information

Knowledge derived from data

Data presented in a meaningful context

Processed data

A difference that makes a difference

Defining information can be challenging. Here we see four common definitions for information, though not a single one is perfect. Information can be defined as knowledge derived from data, where data simply refers to records or facts. It can also be defined as data presented in a meaningful context. Some say information is data that is processed or manipulated – this means data, once processed, provides information. Finally, information can be defined as a difference that makes a difference. An example of this would be noticing a discrepancy in data that could lead to making a valuable difference in a business scenario. Again, none of these are perfect, so we’ll incorporate all of them into a framework to help define information.

What is Information? (2 of 3)

Common elements in the definitions

Information:

Is not data, it is more

Varies from person to person

Is located inside of you

Of the definitions we saw in the previous slide, there are some common elements. Information is more than just data, because it is meaningful. Meaningful information has the power to change minds. Because “meaning” is unique to the individual, information can vary from person to person. What we mean by saying “it is located inside of you,” is that information is data that a person processes with their brain.

What is Information? (3 of 3)

How can I use these ideas about information?

Assume it is hard to communicate

Recognize that all new information systems are frustrating at first

Understand how to be effective on a team

Stay curious

Realize that people share data but believe it is information

Take responsibility for your own learning

Now that we have an understanding of what information is, we can begin to understand how to use information. One of the first steps in using information is to again realize that everyone interprets information differently, so it is a challenge to communicate information. In addition to information being hard to communicate, once users get used to working with information, changes to information systems can be quite traumatic and frustrating. It can take a great deal of time to once again identify new differences that define information. Working on teams can also be an effective way to understand and identify new differences that are meaningful for each other. Finally, stay curious. Because information is something you process in your brain, keep interested in order to ensure your brain is staying informed.

What Are Necessary Data Characteristics?

Accurate

Timely

Relevant

To context

To subject

Just sufficient

Worth its cost

As we have just seen, information can be derived from data, so it’s important to have quality data. The characteristics seen here can be used to evaluate data quality. First, data must be accurate. If one is expected to derive information from the data, it is essential for the data to be accurate, correct, and complete. Second, the data must be timely. This means the data must be available in time for its intended use; otherwise, it serves little purpose. Data should also be relevant both to the context and to the subject – it needs to be appropriate for the user and its purpose. ”Just sufficient” means the data needs to be sufficient for the purpose for which it is generated, but just barely so. Too much data typically requires a need to sift through it in order to filter out data that needs to be ignored. Finally, data is not free. The data maintained needs to provide value and in most cases, the value of the data must exceed its cost.