isds 352
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Lecture04-BusinessProcesses.pptWhat is a Business Process?
- Network of activities for accomplishing a business function
- Such as: buying & managing inventory, making sales to customers, paying bills, collecting revenue, and hundreds of other business functions
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Type of Business Processes
- Managerial processes
- Operational processes
- Supporting processes
- ….
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Process Symbols (BPMN Standard)
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Components of a Business Process
- Activities – Transform resources and information of one type into another type
- Decisions – A question that can be answered Yes or No
- Roles – Sets of procedures
- Resources – People, or facilities, or computer programs assigned to roles
- Repository – Collection of business records
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Business Process Reengineering
- Business process reengineering (redesign)
- “analysis & design of work flows & processes”
- Reengineering
- “fundamental rethinking & radical redesign of business processes to achieve dramatic improvements”
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Process Thinking
- Processes
- are organised around outcomes, not people
- are performed in a natural order
- Decentralisation enabled by IT
- single point of contact for customers
- work performed where it makes most sense
- capture information once & at source
- build control into the process
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BPR Methodology
- Develop business vision & process objectives
- Identify processes to be redesigned
- Understand & measure existing processes
- Identify IT levers
- Design & build a prototype of the process
OR: Redesign, Retool (IT) & Reorchestrate
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Death of BPR?
Outcomes
- dramatic improvements in processes
- decline in overall results; lower profits
- demoralised workforce
- took longer, involved more resources & presented unexpected problems
- gold rush for consultants
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BPR: Postscript
- “Deep Change: How Operational Innovation can Transform your Company” –Hammer, HBR, 2004
- According to Michael Dell, Dell’s success goes beyond the business model but is founded on “disciplined, consistent execution”, including world-class manufacturing, excellent supply chain logistics & cash flow management (HBR 2005)
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- Needs to understand its existing processes and to identify the problems they have.
- Needs to redesign its current processes.
- Needs to know where and how to save costs?
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Existing Business Process Using BPMN
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Revised Process Using BPMN
Buyers and Operations share a single, integrated repository of vendor data
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Fulfillment by Amazon (FBA)
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| Sold via Amazon.com | Sold elsewhere | |
| Order handling (per order) | $1.00 | $4.75 (+) |
| Pick & pack (per item) | $1.00 | $0.75 |
| Weight handling (per pound) | $0.37 | $0.45 (+) |
| Storage (cubic foot per month) | Minimum $0.45 (rates vary by time of year) | Minimum $.045 (rates vary by time of year) |
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How Can Information Systems Improve Process Quality?
- Dimension of Process Quality
- Effectiveness:
- Business process enables organization to accomplish its strategy.
- Efficiency
- Ratio of benefits to costs
- Costs – time and infrastructure
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Effectiveness and Efficiency
- Effectiveness
- Do the right thing.
- Efficiency
- Do things right
Using Information Systems
to Improve Process Quality
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What Is Information?
Knowledge derived from data, where data is defined as recorded facts or figures
Data presented in a meaningful context
Processed data, or data processed by summing, ordering, averaging, grouping, comparing, or other similar operations
A difference that makes a difference
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Where Is Information?
- Graph is not, itself, information
- Graph is data you and others perceive, use to conceive information
- Ability to conceive information from data determined by cognitive skills
- People perceive different information from same data
- Visualization of Business Processes
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Data on General Sports
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Most Important Part of Any Information System
YOU!
Quality of your thinking, your ability to conceive information from data, determined by your cognitive skills
Information is value you add to information systems.
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What Data Characteristics Are Necessary for Quality Information?
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Empathetic Thinking
- Important skill in all business activities
- Skilled negotiators always know what other side wants; effective salespeople understand customers’ needs
- Buyers who understand problems of their vendors get better service
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Understanding Perspectives and Points of View
- Everyone speaks and acts from a personal perspective.
- Everything we say or do is based on and by that point of view.
- Conflicting perspectives can all be true.
- Ability to discern and adapt to perspectives and goals of others will make you much more effective.
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Understanding Perspectives and Points of View (cont’d)
- A “problem” is a perceived difference between what is and what ought to be
- Development team needs a common definition and understanding of problem in order to communicate
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Understanding Perspectives and Points of View (cont’d)
- You buy a new laptop and it fails within a few days. Repeated calls to customer support produce short-term fixes, but your problem continues.
- Three plausible reasons for the problem
Customer service does not have data about prior customer contacts.
Customer support reps recommended a solution that did not work.
Company is shipping too many defective laptops.
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