2. This Could Happen to You
• In order for Dee to get a budget approved for the
blog she needs to:
– Provide specific details
– Provide answers to:
• How will this blog impact the sales process?
• How will the salespeople use it?
• How will it help gain sales?
• What else will the CFO want to know?
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3. Q1: How Did This Stuff Get Here?
• Business processes must work together as
an integrated system
• A business must:
– Obtain payments for its goods and services
– Cover costs
– Make profit
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4. Q2: What Is a Business Process?
• A network of activities, resources,
facilities, and information that interact
to achieve some business function.
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5. Q2: What Is a Business Process?
(cont’d)
• Business process is a network of:
– Activities (processes)
– Resources (inputs)
– Facilities (inputs)
– Information (both inputs and outputs)
• Processes interact to achieve business
function
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6. Q2: What Is a Business Process?
(cont’d)
• Business systems are integrated processes
• Examples:
– Inventory management processes
– Manufacturing processes
– Sales and support processes
– Accounting systems
– HRM
2-6
7. Q3: What Are the Component of a
Business Process?
• Activities – transform resources and information of one type
into resources and information of another type.
• Resources – items of value, such as customers, suppliers,
employees, distributors, and so on
• Facilities – structures used within resources. Ex: inventories,
databases
• Information – activities use information to know how to
transform inputs to outputs.
2-7
9. Inventory Management
Business System Processes
1. Purchasing (activity) queries Inventory Database (facility)
and obtains QuantityOnHand (information)
2. If reorder needed, Purchasing generates Order
(information) to Supplier (resource)
3. Order Placement (activity) sends copy to Receiving
(activity)
4. Receiving puts goods into Inventory (facility)
5. Record (Info) sent to Inventory Database (facility) and
Payment (activity)
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10. Inventory Management
Business System, (cont’d)
6. Supplier sends ShippingInvoice (info) to Payment
7. ShippingInvoice compared to Order, generates
Check (info and resource)
8. Counter Sales (activity) interacts with Customer
(resource), Inventory (resource), and Inventory
Database (facility)
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11. Activities
• Transform resources and information from one
form into another
• Follow rules and procedures
• Can be manual, automated, or combination
• Example:
– Payment (activity) transforms QuantityReceived
(information) and ShippingInvoice (information)
into PaymentToSupplier (resource)
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12. Resources
• Items of value
• External to organization
• Examples:
– Customers
– Suppliers
– Consultants
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13. Facilities
• Structures used within business process
• Places where things are produced or stored, or
equipment, machines, buildings
• Examples:
– Inventories
– Databases
– Factories
– Equipment
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14. Information
• Used by activities
• Determines how to transform inputs into
outputs
• So, what is information and how is it
different than data?
2-14
15. Q4: What Is Information?
• Knowledge is derived from data
• Data is processed and presented in meaningful context
• Data is processed by summing, ordering, averaging,
grouping, comparing, or other similar operations
• Information is “a difference that makes a difference”
Data Processes Information Knowledge
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16. Characteristics of Good Information
1. Accurate
– Correct and complete
– Crucial for management
– Cross-check information to ensure accuracy
2. Timely
– Produced in time for intended use
3. Relevant to both:
– Context
– Subject
2-16
17. Characteristics of Good Information,
(cont’d)
4. Just Barely Sufficient
– Sufficient for purpose for which generated
– Do not need too much or extraneous information
5. Worth its cost
– Relationship between cost and value
– Information systems cost money to develop,
maintain, and use
– Must be worth the cost (time and money)
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18. Q5: What Is the Role of Information in
Business Processes?
• Business processes generate information by giving
context to data:
– Process gives context to data
– May turn low-level information into high-level
information
• Useful for management and strategy decisions
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19. Q6: How Do Information Systems
Support Business Processes?
• IS supports activities in a business process
– Several activities may use one information system
– Activity may have own information system
– Activity may use several information systems
• Systems designers determine relationship of activities
to information systems
– Relationships are determined during systems
development
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20. What Does It Mean To Automate a
Process Activity?
2-20
21. What Does It Mean To Automate a
Process Activity? (cont’d)
• Automation of processes
– Transfers work done by people to
computers
– People follow procedures (instructions)
– Computers follow software instructions
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23. An Information System to Support
Counter Sales (cont’d)
• Fully automated (McDonald’s new drive-up window technology)
– Cashiers do not require extensive training
– Cashiers do not work directly with programs on
computer
• Computer in cash register communicates with
computer connected to the Inventory Database
• Programs record sales and make changes
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25. An Information System to
Support Payment (cont’d)
• Payment receives QuantityReceived and
ShippingInvoice and produces SupplierPayment
• Mostly manual
– Accounts Payable Clerk reads documents and
issues payment or investigates discrepancies
– Processing exceptions complicated
• Programming expensive
• Probably not effective
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27. An Information System to
Support Purchasing (cont’d)
• Purchasing clerk’s computer runs program that
queries database and identifies stock levels
and generates PurchaseOrder
• Designers decided to balance work between
automation and manual activity
– Searching database is repetitive
• Automated process
– Selecting suppliers is complicated
• Manual process
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28. MIS in Use: The Need for Business
Processes
• To understand the need for business
processes, the importance of process design,
and the role that information systems play in
support of such processes
• A seemingly simple business process can be
unexpectedly complex
1-28
30. What Is Your Role?
• Your mind and your thinking are the most
important part of information system.
• The quality of your thinking is a large part of the quality
of the information system.
• You can dramatically improve the quality of your
thinking if you are able to use information systems
effectively.
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31. How Does the Knowledge in This
Chapter Help Dee and You?
• After reading this chapter, Dee and you should:
– Understand the need for business processes, the importance
of process design, and the role that information systems play
in support of these processes
– Be able to create process diagrams to show information
needed
– Understand the usefulness of blogs as a facility that contains
information that makes a difference
– Be able to answer the three questions Dee’s boss asked
2-31
35. 어느날 T사의 공장 현장 책임자에게 들은 이야기
원재료에서 완성까지 대략 4일 정도 걸립니다. 한 달에 20만대 정도를 이
공장에서 출하하고 있습니다. 우리 그룹에서 두 번째로 큰 공장이지요.
이곳에서는 크게 나누어 다섯 가지 공장을 거칩니다. 먼저 매입한 부품을
확인하고, 그것을 조립할 수 있도록 준비합니다. 다음으로 조립을 하고,
완성된 제품을 검품합니다. 아, 조립 라인에서 일하는 사람들 중에 지금은
40%가 외국인입니다. 그건 그렇고, 검품에서 문제가 없으면 이곳에서 출하
준비를 보냅니다. 사내에서는 부품의 확인과 매입을 사전 작업, 검품과 출하
준비를 후반 작업이라고 부릅니다. 이 생산 라인도 여러 번 개선을
거듭하면서 조업할 때는 생산성이 50% 가까이 올라갔습니다. 굉장하죠?
다만 최근 갑자기 대형 오더가 들어와서 부품을 제때 조달하지 못하는
문제도 갂갂히 발생하고 있습니다. 좀 더 빨리 수요를 알 수 있으면 좋을
텐데요……… 조립 라인은 아무래도 인력이 많이 필요해서 외국인의 비율이
높지만, 다른 공정은 그 정도는 아닙니다. 시스템이 잘 구축되어 있어서
경력 사원 몇 명이 운영하고 있습니다. 부품은 가까운 곳에 있는 여섯 굮데
협력 공장에서 저렴하게 들여옵니다. 출하는 지바에 있는 창고로 전량
납입하여 그곳에서 각 영업소로 배송됩니다.
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39. Active Review
Q1: How did this stuff get here?
Q2: What is a business process?
Q3: What are the components of a business process?
Q4: What is information?
Q5: What is the role of information in business
processes?
Q6: How do information systems support business
processes?
2-39
