Chapter 7: Processes, Organizations, and Information Systems

  • Q7-1: What are the basic types of processes?
    • Transforming inputs into outputs = network of activities that generate value > business process
      • Organization is one big problem > need to break down into smaller problems = processes for each
      • Human processes / machine-assisted processes / machine processes
    • How do structured processes differ from dynamic processes?
      • Structured processes - stable, almost fixed activities/data flows > day-to-day operations & standardized/formally defined processes 
        • Support operational and structured managerial decisions/activities
        • Customer returns, payroll, etc.
      • Dynamic processes - less structured and often creative > adaptive processes that are flexible/informal and involve less structured/strategic managerial decisions and activities
        • Support strategic and less structured/specific managerial decision/activities
        • Opening a new store, collaboration, social networking, etc.
    • How do processes vary by organizational scope? (three levels, the wider = the more challenging)
      1. Workgroup processes - allowing workgroups to fulfill goals, purpose, and charter of particular department/group
        • Sales & marketing / operations / manufacturing / accounting / HR / customer service, etc. departments // e.g. midterm, final, blog, etc. processes
        • Workgroup information system - one or more processes support
        • Functional information system - two or more different IS to support department processes; e.g. operations management system / general ledger
          • Functional application - program component of FIS
      2. Enterprise processes - support activities across an organization in multiple departments 
        • e.g. processes spanning across SJSU
        • Enterprise information system - support 1+ EP
      3. Inter-enterprise processes - support 2 or more independent organizations
        • e.g. when companies made special website for gov't companies
        • Inter-enterprise information system - support 1+ IEP
  • Q7-2: How can information systems improve process quality?
    • Two dimensions of process quality: 
      1. Process efficiency - ratio measure of process outputs to inputs (correctly)
      2. Process effectiveness - measures success / how well achieved strategy of the organization (doing right things)
    • How can processes be improved?
      • Change the process structure - reorganizing the process
      • Change process resources - change allocation of resources (IS & humans)
      • Change BOTH process structure & resources
    • How can information systems improve process quality?
      • Performing (entirety of) an activity
      • Augmenting a human performing an activity
      • Controlling data quality process flow
  • Q7-3: How do information systems eliminate the problems of information silos?
    • Information silo - when there is an isolation of data in separated info systems
    • What are the problems of information silos?
      • Data duplication / disjointed processes / increased expense / limited info / lack of integrated info / isolated decisions > inefficiencies
      • Data integrity problem - when data is inconsistent or duplicated
    • How do organizations solve the problems of information silos?
      • Revise applications to use database < integrate data into single database
  • Q7-4: How do CRM, ERP, and EAI support enterprise processes?
    • The need for business process engineering
      • Business process reengineering (BPR) - taking advantage of new information systems by designing new business processes/altering existing ones
        • e.g. engineering student changed everything & start all over
      • Integrated data & enterprise systems offered potential substantial improvements in process quality (difficult, slow, & expensive)
    • Emergence of enterprise application solutions
      • Inherent processes - procedures for the usage of software products that are predesigned
    • Customer Relationship Management (CRM) - managing all interactions with customer from lead generation to customer service through a database, suite of applications, and inherent processes (customer-centric organization)
      • Customer life cycle - four phases: marketing (attract) > customer acquisition (sell) > relationship management (support and resell) > and loss/churn (categorize)
      • CRM database = relationship management apps + customer support apps + sales apps + lead management apps
    • Enterprise resource planning (ERP) - consolidating business operations - through a database, modules (ERP application programs), and inherent processes - into single, consistent, computing platform
      • ERP System - ERP technology-based information system
      • e.g. SJSU's Oracle > mysjsu.edu managing everything
    • Enterprise application integration (EAI) - providing layers of software that connect applications together to integrate existing systems through a suite of software applications
      • Enables organizations to use existing apps while eliminating serious problems of isolated systems
  • Q7-5: What are the elements of an ERP system?
    • Five components of ERP solution:
      1. Hardware
      2. ERP application programs
        • Applications that integrate: supply chain / manufacturing / CRM / HR / accounting
      3. ERP databases, their two types of program code:
        • Trigger - when certain conditions arise, this computer program stored within database will run and keep database consistent
        • Stored procedure - enforce business rules through a computer program stored in the database
      4. Business process procedures
        • Process blueprints - ERP solution's defined inherent processes
      5. Training and Consulting
        • Train the trainer - vendors train the organization's employees (super users) to reduce expenses since they become in-house trainers
    • Industry-specific solutions - starter kits for specific industries ERP vendors provide to reduce the work of customizing ERP apps to a particular customer
    • Which companies are the major ERP vendors?
      • Microsoft Dynamics / Sage / Infor / Oracle / SAP
  • Q7-6: What are the challenges of implementing and upgrading enterprise information systems?
    • Collaborative management 
      • Enterprise systems have no clear boss, the groups that manage are slow and expensive
    • Requirement gaps 
      • Organizations purchase licenses that already have specific functions and features, but never a perfect fit for the specific organization > gaps between organization's requirements & application's capabilities
    • Transition problems 
      • Difficult, require careful planning and substantial training + inevitable problems
    • Employee resistance
      • Self-efficacy - person's belief in themselves for being successful at his or her job
    • New technology
  • Q7-7: How do inter-enterprise IS solve the problems of enterprise silos?
    • Distributed systems - distributing applications processing across multiple computing devices
  • Q7-8: 2026?
    • Hybrid model - ERP customers store most of their data on cloud servers managed by cloud vendors + sensitive data on servers they manage themselves