1. Information Technology Management
Business Processes

2. A Business Process According to Pearlson
A beginning and end
Inputs and outputs
A set of tasks that turn inputs into outputs
A set of metrics that turn inputs into outputs
“This may seem like a simplistic model of a process, but the truth is that a process is simply a set of tasks that are done to effect transformation of inputs into outputs”

3. Typical business processes
Examples of business processes include:
Customer order fulfillment,
Manufacturing planning and execution,
Claim processing
Stock trade
Mortgage application processing
Financial reporting
Procurement
Each business processes includes the following:
A beginning and an end
Inputs and outputs
Sub-processes that turn inputs into outputs
(Should include) A set of metrics for measuring effectiveness

4. Traditional Representation & Characterization of a Business Process
Yes No
Start Here
End Here Or
Follow the Arrows
Drivers: Tasks & Sequence
Characteristics
Well Structured
Linear
Consistent/Standardized

5. Simple Procurement Process
Receive
requirement
for goods/
services
Create and
send
purchase
order
Receive
goods
Verify
invoice
Pay
vendor

6. Mortgage Loan Workflow Process
Sub-process
Measure Home
Rate Quality
Identify Comps
Analyze Value
Input Address
Output Value
Input
Complete Application
Financial Status
Appraisal
Credit History
Request Approval
Approval/Denial
Reject
Title Search No
Yes
Output
Complete Documents
Close

7. What is the Value of Workflow Business Process
Yes No
Start Here
End Here Or
Follow the Arrows
Define/Understand How Work Gets Done
Streamline & Optimize to Increase Efficiency – Take out
Time
Cost
Assure Quality
Enable Automation

8. Information Systems Support Options
Automate or support “as is” process
Incrementally/continuously improve the process (Total quality management –TQM- is an example of this)
Radically redesign before supporting ( Business process reengineering –BPR)
Re-define the process to match package software process definition

9. Hierarchical Structure with “as is” Process View
Functional groups within a firm tend to complete their portion of a process and “throw it over the wall” to the next group in the value chain.
Supporting “as is” processes with IS perpetuates
Duplicate information
Communications problems
Ineffective organizations

10. Managing from a Business Process Perspective Increases Efficiency & Effectiveness
Functions
Business Processes
A process focus creates value by:
Identifying the customers of processes
Identifying these customers requirements
Clarifying the value that each process adds to the overall goals of the organization

11. Incremental Change Mapping “as is” process Key Metrics
Process engineers begin process mapping by defining the scope, mission and boundaries of the process
Next, the engineer will develop a high-level”flowchart” (description) of the process.
Next, he/she develops a detailed “flow diagram” (description) of everything that happens in the process.
Key Metrics
Customer Satisfaction
Quality
Operating Costs
Revenue

12. Business Process Reengineering (BPR)

13. Enterprise Information Systems
An enterprise system is a comprehensive software package that incorporates all modules needed to run the operations of a business (like ERP)
It should include the following modules:
Manufacturing
Accounting
Human resources
Sales
The most widely used enterprise system is offer by a German company, SAP.
Among many competing products are those produced by PeopleSoft, Baan and Oracle.

14. Benefits of Enterprise Systems
In an enterprise system, all information system modules communicate with each other, offering enormous efficiencies over stand-alone systems.
For example, manufacturing and accounting may keep their own vendor records and these accounts are kept in somewhat different form.
Implementing an EIS will also require that business processes be redesigned to achieve optimal performance of the integrated modules.
The EIS has some flexibility as well, since, once developed it is a relatively simple matter to change parameters in a process.

15. When an EIS is appropriate
Situations in which it is appropriate for an EIS to drive business process design include:
When an organization is just starting out and processes do not yet exist.
When an organization doesn’t rely on its operational business processes as a source of competitive advantage.
When current systems are in crisis and there is not enough time, resources or knowledge in the firm to fix them.
But it is not appropriate when the business derives strategic advantage from the processes that the EIS would support

16. What about Other Processes
Product innovation
Web site design
Learning
Executive decision to buy a company
Complex system sales
Development of an ad campaign
Does this definition work?
“This may seem like a simplistic model of a process, but the truth is that a process is simply a set of tasks that are done to effect transformation of inputs into outputs”
Does the picture work?

17. Relationship Process Model
Customer Request
Performer Acceptance
Performer Fulfills
Customer Declares Satisfaction
Source: Action Technologies

18. Putting Requests and Responses Together

19. Compare the Pictures Push Pull Efficient Reduces cost Reduces time
Improves Quality
Push
Task Driven
Flexible
Increases customer satisfaction
Enables innovation
Pull
Relationship Driven

20. Business Process
Definition: Recurrent set of business rules that is linked to other processes through an interface
Recurrent: If it is not done over and over than it is just a decision and why invest resources to do it well
Business Rules: This is the structure of the process that defines how the business handles a request
Interface: The linkage to other processes
Source:Peter G.W. Keen

21. Business Strategic Context
Future State
Current State

22. Could We Combine the Best of Both Worlds?
Flexibility & Efficiency

23. We Need a Business Services View of Processes to Create Flexibility
New Business Services
Custom Business Services
Customers
Contracting & Fulfillment Manager
Standard Business Services

24. Relationship View of Processes
Customer
Business Services
Contracting & Fulfillment Manager
Relationship
Collaborative Contracting
Proxies (Authority)
Events (Dynamics)
Fulfillment
Contract Boundaries Define Business Services Inputs & Outputs
Workflows within Business Services for Efficiency

25. We Need a Relationship View of the Loan Process
Home Improvements
Insurance
Documents
Credit
Appraisal
Approval
Customers
Apply
Title
Contracting & Fulfillment Manager
Other Services

26. Loan Process Based on Relationships & Events
Appraisal
Title
Financial Checks
Apply
Quick/Complete/ Existing Customer
Customer
New Services
Contracting & Fulfillment Manager
Approval
Pre & Post
Document
Business Services