1. ©1999 Addison Wesley Longman Slide 1.1 Business Processes 3

2. ©1999 Addison Wesley Longman Slide 1.2 Table 3.1 Ford’s New Payables System

3. ©1999 Addison Wesley Longman Slide 1.3 Table 3.1 Ford’s New Payables System CUSTOMER Ford’s suppliers Ford’s manufacturing and purchasing departments

4. ©1999 Addison Wesley Longman Slide 1.4 Table 3.1 Ford’s New Payables System PRODUCT Verification that the the order was fulfilled correctly by the supplier Payment to the supplier

5. ©1999 Addison Wesley Longman Slide 1.5 Table 3.1 Ford’s New Payables System BUSINESS PROCESS Major Steps: Order material Receive shipments Reconcile receipts with purchase orders Pay suppliers Rationale: store purchase orders in a shared database accept shipments only if they match the purchase order pay on receipt, not invoice

6. ©1999 Addison Wesley Longman Slide 1.6 Table 3.1 Ford’s New Payables System PARTICIPANTS Purchasing department Receiving department Accounts payable department INFORMATION Purchase order Receipt confirmation TECHNOLOGY Computer system supporting a shared database

7. ©1999 Addison Wesley Longman Slide 1.7 Figure 3.1 Symbols used in data flow diagrams

8. ©1999 Addison Wesley Longman Slide 1.8 Figure 3.2 Context diagram for the Ford purchasing system

9. ©1999 Addison Wesley Longman Slide 1.9 Figure 3.3 Data flow diagram showing the main processes in Ford’s original purchasing system

10. ©1999 Addison Wesley Longman Slide 1.10 Figure 3.4 Data flow diagram dividing PCH 1 into four subprocesses

11. ©1999 Addison Wesley Longman Slide 1.11 Figure 3.5 Standard flowchart symbols

12. ©1999 Addison Wesley Longman Slide 1.12 Figure 3.6 Flowchart showing the rules governing a procedure

13. ©1999 Addison Wesley Longman Slide 1.13 Table 3.2 Impacts of Architectural Characteristics of Business Processes DEGREE OF STRUCTURE Problem if the level is too high: People doing the work are prevented from their judgement. People doing the work feel like cogs in a machine because they have too little autonomy. Problem if the level is too low: Easily forseeable errors occur because well-understood rules are not applied consistently. Outputs are inconsistent. RANGE OF INVOLVEMENT Problem if the level is too high: Work is slowed down because too many people get involved before steps are completed. Problem if the level is too low: Work is performed based on narrow or personal considerations considerations, resulting in decisions that may not be the best for the overall organization.

14. ©1999 Addison Wesley Longman Slide 1.14 Table 3.2 Impacts of Architectural Characteristics of Business Processes LEVEL OF INTEGRATION Problem if the level is too high: Steps in the process are too intertwined. Participants in different business processes get in each other’sway. To change one step it is necessary to analyze too many other steps or processes. Problem if the level is too low: Steps in the processes are too independent. The process needs greater integration to produce results. COMPLEXITY Problem if the level is too high: Participants, managers, and programmers have difficulty understanding how the system operates or what will happen if it is changed. Problem if the level is too low: The system cannot handle the different cases that it should be able to handle.

15. ©1999 Addison Wesley Longman Slide 1.15 Table 3.2 Impacts of Architectural Characteristics of Business Processes DEGREE OF RELIANCE ON MACHINES Problem if the level is too high: People become disengaged from their work. People’s skills may decrease. Mistakes occur because people overestimate what the computers are programmed to handle. Problem if the level is too low: Productivity and consistency decrease as bored people perform repetitive work that computers could do more efficiently. ATTENTION TO PLANNING, EXECUTION, AND CONTROL Problem if the level is too high: Too much effort goes into planning and controlling within the process, and not enough goes into execution. Problem if the level is too low: Insufficient effort in planning and control leaves the business process inconsistent and unresponsive to customer requirements

16. ©1999 Addison Wesley Longman Slide 1.16 Table 3.2 Impacts of Architectural Characteristics of Business Processes TREATMENT OF EXCEPTIONS, ERRORS, AND MALFUNCTIONS Problem if the level is too high: The process focuses on exceptions and becomes inefficient and inconsistent. Problem if the level is too low: The process fails altogether or handles exceptions incorrectly, resulting in low productivity or poor quality and responsiveness perceived by customers.

17. ©1999 Addison Wesley Longman Slide 1.17 Table 3.3 Different Levels of Imposing Structure on Work DEGREE TO WHICH STRUCTURE IS IMPOSED Highest: Substitution of technology for people High: Enforcement of rules or procedures Low: Access to information or tools

18. ©1999 Addison Wesley Longman Slide 1.18 Figure 3.8 Five levels of integration between business processes

19. ©1999 Addison Wesley Longman Slide 1.19 Figure 3.8, continued Five levels of integration between business processes

20. ©1999 Addison Wesley Longman Slide 1.20 Figure 3.8, continued Five levels of integration between business processes

21. ©1999 Addison Wesley Longman Slide 1.21 Figure 3.9 Planning, execution, and control

22. ©1999 Addison Wesley Longman Slide 1.22 Table 3.4 Comparison of Planning, Execution, and Control PLANNING Time focus: Future Important issues related to information: Having reliable methods of projecting into the future by combining models, assumptions, and data about the past and present EXECUTION Time focus: Present Important issues related to information: Providing information that tells people what to do now to meet the plan and adjust for any problems that have occurred recently Using current information to identify problems or errors in current work Collecting information without getting in the way of doing the work CONTROL Time focus: Past Important issues related to information: Having reliable methods of using data about the past to develop or adjust plans, and to motivate employees Provide information current enough current enough that it can be used to guide current actions

23. ©1999 Addison Wesley Longman Slide 1.23 Table 3.5 Finding the Right Level for Each Process Performance Variable RATE OF OUTPUT Problem if the level is too high: Lower productivity and consistency due to increasing rates of errors and rework Problem if the level is too low: Lower productivity due to the cost of unused capacity PRODUCTIVITY Problem if the level is too high: Too much emphasis on cost per unit and too little emphasis on quality of the output Problem if the level is too low: Output unneccessarily expensive to produce CONSISTENCY Problem if the level is too high: Inflexilbility, making it difficult to produce what the customer wants Problem if the level is too low: Too much variability in the output, reducing quality perceived by the customer

24. ©1999 Addison Wesley Longman Slide 1.24 Table 3.5 Finding the Right Level for Each Process Performance Variable CYCLE TIME Problem if the level is too high: Lack of responsiveness to customer Excess costs and waste due to delays Problem if the level is too low: Product produced too soon is damaged or compromised before the customer needs it Delivery before the customer is ready FLEXIBILITY Problem if the level is too high: Too much variability in the output, reducing quality perceived by the customer Problem if the level is too low: Inflexibilty, making it difficult to produce what the customer wants or to modify the process over time SECURITY Problem if the level is too high: Excess attention to security gets in the way of doing work Problem if the level is too low: Insufficient attention to security permits security breaches

25. ©1999 Addison Wesley Longman Slide 1.25 Table 3.6 Process Performance Variables and Related Roles of Information Systems PROCESS PERFORMANCE VARIABLE Rate of output Productivity Consistency Cycle Time Flexibilty Security

26. ©1999 Addison Wesley Longman Slide 1.26 Figure 3.10 Control chart for monitoring consistencey of a business process

27. ©1999 Addison Wesley Longman Slide 1.27 Figure 3.11 Identifying the causes of long cycle times

28. ©1999 Addison Wesley Longman Slide 1.28 Figure 3.12 Automation versus flexibilty

29. ©1999 Addison Wesley Longman Slide 1.29 Figure 3.13 Using an eye scanner for controlling access

30. ©1999 Addison Wesley Longman Slide 1.30 Figure 3.14 Information systems related to Mintzberg’s management roles

31. ©1999 Addison Wesley Longman Slide 1.31 Table 3.7 Common Sources of Management Information FORMAL, COMPUTER-BASED Internal sources: Key indicators generated by internal tracking systems External sources: Public databases FORMAL, DOCUMENT-BASED Internal sources: Planning reports, internal audits External sources: Industry reports, books, magazines FORMAL, VERBAL Internal sources: Scheduled meetings External sources: Industry forums INFORMAL Internal sources: Lunch conversations, gossip, management-by-walking-around External sources: Trade shows, personal contacts