Chapter 1 - Essential of BP book

Information revolution data, documents, voice, video  Global enterprise needs to share information quickly  Design, forecasts, material availability, etc... Knowledge worker Understa

Organizations, Processes and Information Systems

Chapter 1

 Business Processes and IT

 Global competition, Information revolution, knowledge worker

 Key business processes

 Functional organizational structure

 Paper based processes

 Processes using functional systems

 Processes using enterprise systems

 A framework for understanding processes and IT

 Role of ES in organizations

 Functional impact of processes

Global competition

 Examples: Nike, apple, P&G

 In different parts of the world

 Global markets vs local

 Pressures to be more efficient and effective

Information revolution

 data, documents, voice, video

 Global enterprise needs to share information quickly

 Design, forecasts, material availability, etc.

 Monitoring

Knowledge worker

use information

 Sales executive, production managers, product manager,

financial analyst

Knowledge worker

 Understand data and impact of work on others and impact of others’ work; big picture

 Customer service representatives, accounting clerks, insurance claims processor

 Very narrowly focused

Knowledge worker

 Strategic thinking: big picture, process view

 Information literacy: find and use needed information

 Communication and collaboration: project teams

Business processes

convert them into desired inputs

 Procurement

 Fulfillment

 Production

Figure 1: A generic process

Process Steps

Business process - example

 What are some parts of a skateboard

 What are some steps in the buying process

 Who performs these steps

 What are some steps in the selling proces

 Who performs these steps

Receive Goods

Receive Invoice From Supplier

Send Payment

To Supplier

Fulfillment Process

Receive

Customer Order

Prepare Shipment

Send Shipment

Send Invoice

To Customer

Receive Payment

Functional structure

 Who does what where?

 Characterize processes - who is responsible for the process?

Functions vs processes

The Silo effect

 What must be communicated?

 What information must be exchanged?

 How is this coordinated

Paper-based process

Create/

Update Paperwork

Accounting

Receive Payment

Send Invoice

Create/

Update Paperwork

Warehouse

Send Shipment

Prepare Shipment

Send Paperwork Send Paperwork

Delay! Delay! Delay! Delay! Delay!

Consequences of delays

 Delays

 Increased lead times

 Increased cycle times

 Excess inventory

 “just in case”

 Lack of visibility across the process

 Status: “where is my order”

 How is the process doing

 Why accept these delays?

Delays are no longer acceptable

Process using functional systems

Accounting

Receive Payment

Send Invoice

Warehouse

Send Shipment

Prepare Shipment

Enter/Update Data

Sales

Information

System

Warehouse Information System

Accounting Information System

Enter/Update Data

Enter/Update Data

Processes using Enterprise Systems

Enterprise Information

Accounting

Receive Payment Send

Invoice

Warehouse

Send Shipment Prepare

Enter/Update Data Enter/Update

Data

Enter/Update Data

Is this for MIS/IT majors?

 Not just for IT majors!

 Recall skills of a knowledge worker…

 Strategic thinking / big picture

 How processes work

 How does my work impact the process

 How will my failures impact the process

 How does others’ work impact my work

 What must I do well to ensure that the process is successful

 Communication and collaboration

 Project teams!

Framework: Key process flows

Information Flow

Data & Document Flow

Physical Flow

Enterprise Information System

Role of ES in organizations

 Inform, provide data, help complete steps

 automation

 Embedded in the process

 Examples in procurement and fulfillment

Role of ES in organizations

 Automatic capture

 Entered from outside the system

 Examples in procurement and fulfillment

Role of ES in organizations

 Instance level information (status)

 Process level information (aggregate)

 Examples in procurement and fulfillment

2.94 2.12

4

Total Late Orders

15 11

7

Total Orders

March February

January Q1 Order Summary

2.94 2.12

4

Total Late Orders

15 11

7

Total Orders

March February

January Q1 Order Summary

Delay Causes January 08

Shipping Delay 14%

Out of Stock 29%

Packing Delay 14%

On Time 43%

Shipping Delay 3

$ 653.45 01/18/08

01/16/08

Saginaw Dawgs

123462

Out of Stock 3

$ 234.22 01/16/08

01/14/08

MI Sporting Company

123461

Packing Delay 5

$ 556.43 01/20/08

01/12/08

Flying Acrobats, Inc

123460

On Time 2

$ 342.53 01/12/08

01/10/08

West Michigan Sporting Goods, Inc.

123459

Out of Stock 4

$ 123.43 01/11/08

01/08/08

"Waldo" Autry

123458

On Time 2

$ 245.65 01/08/08

01/06/08

Extreme Skateboard Sports, Inc.

123457

On Time 1

$ 300.18 01/06/08

Order-Ship Date

Order Date Customer Name

Order

Number

Order Details: January

Shipping Delay 3

$ 653.45 01/18/08

01/16/08

Saginaw Dawgs

123462

Out of Stock 3

$ 234.22 01/16/08

01/14/08

MI Sporting Company

123461

Packing Delay 5

$ 556.43 01/20/08

01/12/08

Flying Acrobats, Inc

123460

On Time 2

$ 342.53 01/12/08

01/10/08

West Michigan Sporting Goods, Inc.

123459

Out of Stock 4

$ 123.43 01/11/08

01/08/08

"Waldo" Autry

123458

On Time 2

$ 245.65 01/08/08

01/06/08

Extreme Skateboard Sports, Inc.

123457

On Time 1

$ 300.18 01/06/08

Order-Ship Date

Order Date Customer Name

Order

Number

Order Details: January