1. PART IV: Chapter Topics
Chapter 10: Business Process & Information Systems Development
Two closely related and overlapping themes are examined
Chapter 11: Information Systems Management
Goal of the chapter is to give an appreciation for the responsibilities of IS management and to be an effective consumer of IS services
Chapter 12: Information Security Management
Provides an overview of the major components of information systems security

2. Fox Lake
Chapter 10
Examines how Fox Lake could define new business processes and an information system to support those processes
Chapter 11
Investigates what Fox Lake is and is not doing with regard to management of IS resources
Chapter 12
Discusses why Fox Lake’s information systems are particularly vulnerable to computer misuse and crime

3. Chapter 10 Business Process and Information Systems
Jason C. H. Chen, Ph.D.
Professor of MIS
School of Business Administration
Gonzaga University
Spokane, WA 99258

4. “You’re Not Going to Take Your Vera Wang Gown into a Porta Potty.”
Bathrooms not cleaned on busy Saturdays or repaired on weekends
Plumbing not designed for large crowds
Didn’t think through consequences of wedding events business.
Didn’t know how wedding business would impact everything else.
Business analyst, Laura, hired to help

5. Study Questions
Q1: Why do organizations need to manage business processes? Q2: What are the stages of Business Process Management (BPM)? Q3: How can BPMN process diagrams help identify and solve process problems? Q4: Which comes first, business processes or information systems? Q5: What are systems development activities? Q6: Why are business processes and systems development difficult and risky? Q7: What are the keys for successful process and systems development projects? Q8: 2022?

6. Video
The Golden Rules for Managers 119 Incredible Lesson for Leadership Success (2:09)

7. What are Business Process and Business Process Management?
Business process: A set of logically related tasks performed to achieved a defined business outcome
Business process management (BPM) is a management approach focused on aligning all aspects of an organization with the wants and needs of clients. It is a holistic management approach[1] that promotes business effectiveness and efficiency while striving for innovation, flexibility, and integration with technology.
Dr. Chen, The Trends of the Information Systems Technology
TM -7

8. BUSINESS VALUE & FOCUS –IS Perspective
IS/E-BUSINESS
Customer
centric
SCM
CRM
BPR
ERP
Demands
Products/
Services
Value
What they need/want?
How many they need/want?
When they need/want?
How to reach them?
Who are the customers?
Where are the customers?
Their purchasing habits
HOW TO REACH THEM?
IT/INTERNET/E-BUSINESS
Business Models & Strategies

9. Q1: Why Do Organizations Need to Manage Business Processes?
Reasons for change
Improve process quality
Change in technology
Change in business fundamentals
Market
Product lines
Supply chain
Company policy
Company organization
Internationalization
Business environment

10. Steps in Processing an Order
Fig 10-1: Steps in Processing an Order

11. 2: What Are the Stages of Business Process Management (BPM)?
Systematic process of creating, assessing, altering business processes (and is an iteration process).
Four stages of BPM
Create model of business process components
Users review and adjust model
“As-is model” documents current process; it is changed to solve process problems
Create system components
Uses five elements of IS (hardware, software, data, procedures, people)
Implement business process
Create policy for ongoing assessment of process effectiveness
Adjust and repeat cycles

12. Stages in the BPM Cycle [2] [1] [3] [4] policy creation and assessment
Four stages of BPM
Create model of business process components
- Users review and adjust model
- “As-is model” documents current process; it is changed to solve process problems
Create system components
- Uses five elements of IS (hardware, software, data, procedures, people)
3. Implement business process
Create policy for ongoing assessment of process effectiveness
- Adjust and repeat cycles
MRV never designed its processes, had no assessment program
[4] policy creation and assessment
Fig 10-2: Stages in the BPM Cycle

13. Q/A
T/F: Business Process Management (BPM) is a one-time process for systematically creating, assessing, and altering business processes.
Answer: ______
In business process management, once the as-is model is created, the team must ________.
A) obtain feedback about implementation
B) assess the results of the changes
C) create system components
D) implement changes in the organization
Answer: ________

14. Scope of Business Process Management
Fig 10-3: Scope of Business Process Management
BPM can apply only to commercial, profit-making organizations but also nonprofit and government organizations

15. Q3: How Can BPMN Process Diagrams Help Identify and Solve Process Problems?
Critical for a team to agree on both what is and what ought to be.
Must have some notation for documenting processes and one common standard for creating process documentation.
Dozens of definitions are used by authors, industry analysts, and software products.

16. Need for Standard for Business Processing Notation
These differences and inconsistencies can be problematic when two different organizations with two different sets of definitions must work together.
Object Management Group (OMG) created a standard set of terms and graphical notations for documenting business processes.
That standard, called Business Process Modeling Notation (BPMN), is documented at

17. Fig 10-4:
Business
Process
Management
Notation
(BPMN)
Symbols

18. Documenting the As-Is Business Order Process: Existing Ordering Process
Each role in the business process is given its own swim lane.
Fig 10-5: Existing Ordering Process

19. Fig 10-6: Check Customer Credit Process

20. BPMN: Business Process Management _________
Notation
Q/A
T/F: In a BPMN process diagram, the swim-lane layout is used to simplify process diagrams and to draw attention to interactions among components of the diagram.
Answer: ________

21. Using Process Diagrams to Identify Process Problems
Operations Manager allocates inventory to orders as processed
Credit Manager allocates customer credit for orders in process.
Allocations correct, if order accepted
If rejected, allocations not freed, inventory still allocated and credit extended for orders not processed
Possible fix: Define an independent process for Reject Order (UYK#3 p.383)

22. How Can Business Processes Be Improved?
Add more ________
Adds costs unless efficiencies of scale
Change _______ structure
Reduce work and costs
Increase costs and increase effectiveness to offset
_________

23. Fig 10-7: Revised Order Process

24. Fig 10-8: Fox Lake Wedding Planning and Facilities Maintenance Processes

25. Q4: Which Comes First, Business Processes or Information Systems?
Fig 10-9: Fox Lake Processes Showing IS Components

26. Fig 10-10: Many-to-Many Relationship of Business Processes and Information Systems

27. Build Business Processes First
[2]
next stage
[1]
[3]
Starting from processes and working toward Information Systems (IS) is likely to work well for the business process under consideration, but will cause problems later, for other processes that use the same IS.
-- why? 1) Cause IS resource constraint, 2) conflict of IS requirements etc.
[4] policy creation and assessment
Starting from processes and working toward Information Systems (IS) is likely to work well for the business process under consideration, but will cause problems later, for other processes that use the same IS.
Fig 10-11: BPM and Systems Development

28. Build Information System First
This development process makes business processes a poor step-child of the IS development process as BP can include many activities that are not part of the IS.
Fig 10-12: Classic Five-Step Systems Development Life Cycle

29. Why systems development is needed?
While you may be able to purchase an off-the-shelf software program, you won’t be able to do that with information systems. Here are some of the reasons why:
You must construct or adapt procedures to fit the business and the people who will be using the system. You can’t buy procedures.
People must be trained to use the information system effectively. You can’t buy that.
Users must take ownership of their system. That’s the single most important criterion for the success of an information system.
Information system maintenance involves two things:
Fixing a system to make it do what it should have done in the first place, or
Adapting it to changing requirements.

30. Systems Development Is Not Just for Techies
Establishing the system’s goals, setting up the project, and determining requirements require business knowledge and management skill.
Tasks such as building computer networks and writing computer programs require technical skills.
Developing the other components requires nontechnical, human relations skills.

31. Nontechnical, Human Relations Skills Required
Creating data models requires the ability to interview users and understand their view of the business activities.
Designing procedures, especially those involving group action, requires business knowledge and an understanding of group dynamics.
Developing job descriptions, staffing, and training all require human resource and related expertise.
Coordinated teamwork of both specialists and nonspecialists with business knowledge.

32. How Do Businesses Use the SDLC Process?
Systems definition
Management’s statement of objective and goals for new system
Requirements analysis
Identify features and functions
Component design (hardware, software, network)
Based on approved user requirements
Implementation
Purchase, build, test, and convert to new system
System maintenance (fix or enhance)
Repair, add new features, maintain
See

33. Another Factor: Off-the-Shelf Software
If starting with business processes first
Likely to choose package for processes being developed, but not for later processes
If starting with information systems first
Likely to choose package that works for all users, but, business processes will get short shrift.

34. And the Answer Is . . . In theory: In practice:
Better to start with ___________________
More likely to result in processes and systems that are aligned with the organization’s strategy and direction
In practice:
Organizations take both approaches
Off-the-shelf software:
Start with business processes and select “off-the-shelf” application that works for those processes
Why?
Off-the-shelf software:
Start with business processes and select “off-the-shelf” application that works for those processes
Why? – ease of development and use (end-user can develop the apps by their own)

35. And the Answer Is . . . In theory: In practice:
Better to start with ___________________
More likely to result in processes and systems that are aligned with the organization’s strategy and direction
In practice:
Organizations take both approaches
Off-the-shelf software:
Start with business processes and select application that works for those processes

36. Q/A
Which of the following is true for the relationship between business processes and information systems?
A) Developing information systems before business processes ensures that all activities are considered in the development process.
B) Information systems incorporate all business process activities, and hence should be developed before business processes.
C) Starting from processes and working toward information systems is the best option to anticipate future demands and new business processes.
D) Starting with processes and working toward systems is more likely to result in processes and systems that are aligned with the organization's strategy and direction.
Answer: ______

37. SDLC What does SDLC stand for? List the phases of SDLC
Systems Development Life Cycle
List the phases of SDLC
Analysis
Design
Implementation
Maintenance

38. 4: What Are Systems Development Activities?
Systems definition
Management’s statement of objective and goals for new system
Requirements analysis
Identify features and functions
Component design (hardware, software, network)
Based on approved user requirements
Implementation
Purchase, build, test, and convert to new system
System maintenance (fix or enhance)
Repair, add new features, maintain
Analysis

39. 4: What Are Systems Development Activities?
[1]
[2]
[3a]
[3b]
(Feasibility Study)
What is it and Why it is important?
[4]
[5]
Fig 10-13: BPM Provides Requirements for Systems Development

40. Define System Goals and Scope
Fig 10-14: SDLC: System Definition Phase

41. How Is System Definition Accomplished?
(b.) Define scope for new system
Defined by customers, users involved, business processes impacted, physical location, functional area
Clear definition of scope simplifies
Requirements determination
Coordination and other work

42. Assess Feasibility Dimensions of feasibility ______ feasibility Cost
Approximated, “back-of-the-envelope” analysis
Purpose: eliminate infeasible ideas early
Consider cost of previous projects, operational and labor costs
__________ feasibility
Ball park estimate
Is it technically likely to meet needs?
_____________ feasibility
Fit with customs, culture, charter, legal requirements of organization
___________________ feasibility
Is the proposed system legally?
Cost
Schedule
Technical
Organizational

43. Systems Definition/Investigation (Feasibility Study)
What are new from the last slide?
Economic
Feasibility
Operational
Feasibility
Can we afford it?
Will it be accepted?
Schedule
Feasibility
Technical
Feasibility
iTeaching Tip: Consider redisplaying slide 5 “Traditional Systems Development Life Cycle”, before beginning discussion of this lecture slide.
As pointed out earlier, all application development methodologies share certain common activities. During the remainder of this lecture we will discuss these activities. We will begin by discussing systems investigation.
The Investigation Phase begins the preliminary study of the proposed information system solution to meet the E-Business needs. Its focus is to seek to answer the questions: What are our opportunities, what are our priorities, and can IS be used to address these needs?
Because the process of application development can be costly both in time and resources, the system investigation phase begins with a Feasibility Study. The goal of feasibility studies is to evaluate alternative systems and to propose the most feasible and desirable systems. Feasibility is assessed across four major categories:
Organizational Feasibility. This focuses on how well a proposed information system supports the objectives of the organization.
Technical Feasibility. This ascertains whether reliable hardware and software capable of meeting the needs of the proposed system can be acquired or developed.
Operational Feasibility. This refers to the willingness and ability of the management, employees, customers, suppliers, and others to operate, use, and support a proposed system.
Economic Feasibility. This is concerned with whether the proposed IS benefits are greater than its costs. This area is particularly concerned with financial affordability -- whether the firm can pay to develop the system. A cost/benefit analysis is used to weigh the total costs a new system is likely to incur against the total anticipated benefits to be gained. This includes determining tangible costs (such as hardware and software purchases and employee salaries) and intangible costs such as effects on employee morale and disruptions in productivity during the installation of the new system. Benefits too can be either tangible (such as reduced inventory and carrying costs) or intangible (higher customer satisfaction).
Economic feasibility study – (cost-benefit analysis) – identifies the financial benefits and costs associated with the systems development project
Operational feasibility study – examines the likelihood that the project will attain its desired objectives
Technical feasibility study – determines the organization’s ability to build and integrate the proposed system
Schedule feasibility study – assesses the likelihood that all potential time frames and completion dates will be met
Legal and contractual feasibility study – examines all potential legal and contractual ramifications of the proposed system
Which type of feasibility study would be appropriate for each of the following:
Implementation of a new payroll system
Implementation of a new CRM system
Implementation of a new module to an existing CRM system
Implementation of a new ERP system
Implementation of a additional functionality to an existing KM system
Will it be completed by
the deadline?
Does the IT
capability exist?
Organizational
Feasibility
Legal and
Contractual Feasibility
(Is it a good fit –
objective of the organization
Is the proposed
system legally?

44. Form a Project Team Typical three personnel on a development team are:
Manager (or mangers for larger projects)
Specialist:
System analysts
Programmers
Software testers
or, other functional specialist such as accounting, finance, and marketing
Users:
Users must be involved in most of SDLC phases
Depending on nature of project, team may also include hardware and communications specialists, database designers and administrators, and other IT specialists.

45. Form a Project Team Team composition changes over time.
During requirements definition, the team will be heavy with systems analysts.
During design and implementation, it will be heavy with programmers, testers, and database designers.
During integrated testing and conversion, the team will be augmented with testers and business users.

46. Business and Systems Analysts
Business Analysts
Someone who are well versed in Porter’s models, organizational strategy, and system alignment theory and who also understand the proper role for technology.
IS professionals
who understand both business and technology.
They are active throughout the systems development process and play a key role in moving the project through the systems development process.
Systems analysts integrate the work of the programmers, testers, and users.

47. Fig 10-15: Focus of Personnel Involved in BPM and Systems Development

48. Phase Two: Requirements Analysis
System Analysts are IS professionals who understand both business and technology.
The most important phase in the SDLC process is to determine system requirements. If the requirements are wrong, the system will be wrong. Seven activities occur in this phase as the diagram shows.
Users are a critical part of this phase. They must approve the requirements before moving to the next phase.
Fig SDLC: Requirements Analysis Phase

49. Phase Three: Component Design: Design Tasks Pertain to Each of the Five IS Components
All five components require attention in the design phase:
Hardware—Determine the specifications and evaluate alternatives against the requirements. Purchase it, lease it, or lease time from hosting service
Programs—Decide whether to use off-the-shelf software, off-the-shelf with alterations, or custom-developed software.
Database—Convert the data model to a database design.
Procedures—Design procedures for users, operations personnel, and for normal, backup, and failure recovery tasks.
People—Design job descriptions for users and operations personnel. You may have to add new jobs or alter existing jobs.
Fig 10-17: SDLC: Component Design Phase

50. Q/A
T/F: If a project involves off-the-shelf programs, then little database design needs to be done.
Answer: ________

51. Phase Four: Implementation
Focuses on implementing the system and includes the tasks of
building each of the five system components
testing the system
and
converting users to the new system.
Fig 10-18: SDLC: Implementation Phase

52. System Conversion Approaches
Pilot
Implement entire system in limited portion of business
MRV uses system for selected customers.
Advantage: limits exposure to business if system fails
Phased
System is installed in phases or modules.
Each piece is installed and tested.
Parallel
Complete new and old systems run simultaneously
Very safe, but expensive
Plunge (or direct)
High risk if new system fails, no old system to fall back on
Only used if new system is not vital to company operation

53. Installation Conversion Methods: 4 Ps
Cut-over time
Old System
New System
Parallel
Old System
New System
Pilot
When the development of a system will replace or improve a current system, a conversion process will be needed. Conversion methods are used for managing system change and managing both the cost and risk associated with a failure of the new system..
Four major forms of system conversion are common:
Parallel. This involves operating both the old and the new system at the same time for some period until the project development team and end user management agree to switch over completely to the new system. This is the least risky approach but the most costly, since resources must be used to keep both the new and old system operational.
Pilot. Here one department or often an off-site office gives the new system a trial run to see how it works and to catch any problems before the system is implemented company-wide. This is a less costly approach. Risk of failure is isolated to the department or office which receives the new system.
Phased. Here the new system is implemented gradually throughout the organization according to some diffusion plan, such as department by department, section by section, or even floor by floor. This approach exposes the organization to more risk, but is less costly.
Plunge. This "cold turkey" approach ends use of the old system and begins use of the new system all at once. This approach has the highest risk, but is the least costly to implement. Can be considered for non-critical applications, or application improvements that are marginal.
Old System
New System
Phased
Old System
New System
Plunge/
Direct

54. Design and Implementation for the Five Components
Fig 10-19: Design and Implementation for the Five Components

55. SDLC: System Maintenance Phase (5)
Fig 10-20:

56. Causes of Information Systems Failures
35+ years of research on causes of information systems failures
Lack of user __________
Unclear, incomplete, and inconsistent ___________
Changing requirements and specifications
Many businesses __________ research findings
involvement.
requirements.
ignore

57. Q6: Why Are Business Processes and Systems Development Difficult & Risky?
SDLC ________
Sequence of nonrepeated phases
It rarely works smoothly, causing development team to go back and forth, raising costs and delaying project
Requirements documentation difficulty
Business requirements sometimes change making documented requirements incomplete or obsolete
“Analysis paralysis”—projects spend so much time on documentation that it hampers progress
Scheduling and budgeting difficulties
Time and cost estimates for large project are usually way off
People who make initial estimates know little about how long it will take or cost

58. Q6. Why Are Business Processes and Systems Development Difficult & Risky? (cont.)
Changing Technology
While the project is underway, technology continues to change.
Diseconomies of Scale
As development teams become larger, the average contribution per worker decreases.
Brooks’ Law:
Adding more people to a late project makes the project later.

59. 1a 1b 2 3 4 Fig 10-21: Major Challenges to System Development
Requirements documentation difficulty
Business requirements sometimes change making documented requirements incomplete or obsolete
“Analysis paralysis”—projects spend so much time on documentation that it hampers progress
Scheduling and budgeting difficulties
Time and cost estimates for large project are usually way off
People who make initial estimates know little about how long it will take or cost
Changing Technology
While the project is underway, technology continues to change.
Diseconomies of Scale
As development teams become larger, the average contribution per worker decreases.
Brooks’ Law:
Adding more people to a late project makes 4
Fig 10-21: Major Challenges to System Development

60. Q7: What Are the Keys for Successful Process and Systems Development Projects?
Create a work-breakdown structure (WBS)
Break project into smaller tasks until each task is small enough to estimate and manage
Every task results in deliverables
Estimate time and costs
Create a project plan
Adjust the plan via trade-offs
Manage development challenges

61. Fig 10-22: Create a Work-Breakdown Structure (WBS)

62. Gantt Chart of the WBS for the Definition Phase of a Project

63. Create a Project Plan: Gantt Chart with Assigned Resources & Critical Path

64. Project Triangle (Project Management Trade-offs)
Time
Cost
The center of project triangle is
________
Scope (Requirements)
The objective of the PM is to define project’s scope realistically and ultimately deliver quality of product/service on time, on budget and within scope.

65. Trade-Offs in Requirements, Cost, and Time?
Balancing development drivers
Requirements (scope)
Cost
Time
Trade-offs
Elaborate requirements increase costs and time
Time can be reduced to a point w/o adding costs
Increasing time may reduce or increase costs
If schedule needs to be shortened, two alternatives available: reduce requirements or add labor
Adding more people creates diseconomies of scale (Brooks’ Law)

66. Insert Figure 10-12 here (Figure CE19-2 in Experiencing MIS 2/e)
Adjust Plan via Trade-offs: Trade-offs Among Requirements, Schedule, and Cost?
Insert Figure here (Figure CE19-2 in Experiencing MIS 2/e)

67. Manage Development Challenges
Critical Factors
Coordination
Diseconomies of scale
Configuration control
Unexpected events
Team morale

68. Q8: 2022? Users more knowledgeable and demanding
More agile systems using SOA and other techniques
More Cloud-based development
Emergence of new software vendor business models

69. End of Chapter 10