1. Week 5: Business Processes and Process Modeling MIS 2101: Management Information Systems

2. 2 Learning Objectives Introduction to business process Describe each major phase of the system development process Understand the concepts of Business Process Modeling Describe process characteristics and design tradeoffs Understand development options

3. 3 Examining Business Processes Business process - a standardized set of activities that accomplish a specific task, such as processing a customer’s order Business processes transform a set of inputs into a set of outputs (goods or services) for another person or process by using people and tools

4. 4 Examining Business Processes Customer facing process - results in a product or service that is received by an organization’s external customer Business facing process - invisible to the external customer but essential to the effective management of the business

5. 5 Process Redesign Why change processes? Process Improvement Incremental improvements to existing processes Process Reengineering (BPR) Discard old processes and adopt new ones

6. 6 Business Process Design

7. 7 Learning Objectives Introduction to business process Describe each major phase of the system development process Understand the concepts of Business Process Modeling Describe process characteristics and design tradeoffs Understand development options

8. 8 Steps in the Systems Development Process Systems development life cycle (SDLC) Arrows flowing down represent flow of information Arrows flowing up represent the possibility of returning to a prior phase

9. 9 Phase 1: Systems Identification, Selection and Planning

10. 10 Evaluation Criteria for Systems Projects Usually multiple criteria examined for each project

11. 11 Phase 2: Systems Analysis Designers gain understanding of current processes

12. 12 Phase 3: System Design

13. 13 Phase 4: System Implementation Transformation of design into a working information system

14. 14 System Conversion and installation What are advantages and disadvantages of each of these approaches?

15. 15 Learning Objectives Introduction to business process Describe each major phase of the system development process Understand the concepts of Business Process Modeling Describe process characteristics and design tradeoffs Understand development options

16. 16 Why Business Processes? An understanding of business processes indicates where Information Technology can fit in How to understand business processes Process modeling Process characteristics

17. 17 Process Model – Part of Analysis Business process model - a graphic description of a process, showing the sequence of process tasks, which is developed for a specific As-Is process model To-Be process model Illustrates processes or activities performed and how data moves among them Can use process mode to document current system or proposed system Identifying business processes and breaking them down Can help identify inefficiencies Can help identify where Information Technology can improve efficiency

18. 18 Data Flow Diagram - DFD Data Flow Diagram: graphical display of component processes, flow of data Defines system inputs, processes, outputs Partitions system into subsystems or modules Logical, graphical model of information flow

19. 19 DFD Symbols

20. 20 DFD Components - Process Process: activity or function performed for specific business reason May be manual or computerized Starts with verb and ends with noun i.e. Create Appointment, Register Patient 1 process relates to 1 activity Every process must have 1 output data flow Each process USUALLY has at least one input data flow since normally need input to create output

21. 21 DFD Components – Data Store Data Store: Collection of data stored in some way which is described in the physical model Noun Depiction of data added to or retrieved from data stored: If data flow coming from data store, shows information retrieved from data store If data flow going into data store, information added to data store When a process updates a data store (retrieve record from data store, update information, store update), data flow in and out of store

22. 22 DFD Component – External Entity External entity: person organization, or system external to system that interacts with it – normally someone who uses the info from the system to perform other processes or decide info added to the system Noun with name May or may not be part of the organization

23. 23 Data Flows A data flow connects the output of an entity or process to the input of another process or entity. It represents intermediate data within a computation. The value is not changed by the data flow. Flows on the boundary of the DFD, (from or to an external entity) are inputs and outputs. All data flows MUST be labeled (indicate what data is flowing)

24. 24 Illegal Construction Data may not flow from a data store to another data store unless there is a process box in between. An external entity may not read or write directly in to a data store. Data may not flow directly from one external entity to another.

25. 25 Context Diagram Context Diagram display context of business process Always depicted as 1 process with data flows and and from external entities Data stores not shown

26. 26 Simple DFD Example Buying CDs - Context diagram Shopper UPS Order CDs CD title / Account Info Shipping List Invoice

27. 27 Level 0 Diagram Displays all the process at the first level numbering including: Data stores External entities Data flows Depicts high level process and how interrelated

28. 28 Data Flow Diagram 1 Compute order total EE2 UPS EE2 UPS 4 Prepare shipping list 3 Prepare invoice 2 Update customer credit account balance EE1 Shopper EE1 Shopper CD title Customer Acct number Order data Old balance New balance D1 Customer credit Order data Invoice Shipping list Invoice D2 Invoice File

29. 29 A Simple DFD Example: Customer Order Process for CD On-Line Customers select the CDs they would like to order and communicate their selected CD item numbers and their customer account number to CD On-Line. Based on the customer’s selection, the order is processed by calculating the order total amount. The order total and customer account number as well as the customer’s old credit balance (from the customer credit database) are used to update the customer’s new credit balance. The new balance should be recorded on the customer credit database.

30. 30 A Simple DFD Example: Customer Order Process for CD On-Line (cont’d) The detailed order data from order processing and updated customer credit balance information are used to prepare a customer invoice and updated into the invoice file. The invoice is sent to the customer on-line and the invoice data is used to prepare a shipping list and. The shipping list information is sent to UPS. (Based on a partnership relationship between CD On- Line and UPS, UPS warehouses the CDs and ships the CDs to the customers based on the shipping list).

31. 31 Translating into DFD Vocabulary External Entities Customer UPS Internal Entity: CD On-Line Data Store Customer credit Invoice File

32. 32 Translating into DFD Vocabulary Process Compute order total Update customer credit account balance Prepare invoice Prepare shipping list Data Flows CD item numbers Customer account number Old/New balance Order data

33. 33 Data Flow Diagram 1 Compute order total EE2 UPS EE2 UPS 4 Prepare shipping list 3 Prepare invoice 2 Update customer credit account balance EE1 Customer EE1 Customer CD item numbers Customer Acct number Order data Old balance New balance D1 Customer credit Order data Invoice Shipping list Invoice D2 Invoice File

34. 34 Learning Objectives Introduction to business process Describe each major phase of the system development process Understand the concepts of Business Process Modeling Describe process characteristics and design tradeoffs Understand development options

35. 35 Process Characteristics – Some Key Decisions Required Degree of structure Range of involvement Complexity Degree of reliance on machines Attention to errors and exceptions

36. 36 Degree of Structure Imposing structure via Information Technology easier when the task is structured Computers are not as effective with unstructured tasks (Decision Support Systems) Too high: can be stifling and hamper productivity Too low: can lead to poor quality and chaos

37. 37 Range of Involvement Organizational span of people involved in a business process Do people just “do their jobs” or is their effect on other participants considered? Too high: decisions never get made because everyone has input Too low: decisions aren’t made with the “big picture” in mind

38. 38 Complexity How many elements a system contains and the number and nature of their interactions Manage complexity through standardization Too high: difficult to understand and manage Too low: not flexible enough to accommodate needs of the system

39. 39 Degree of Reliance on Machines Too high Participants no longer understand the business process When mistakes occur, there is no recourse Too low Leave participants with mundane work Missed opportunities for greater efficiency through automation

40. 40 Attention to errors and exceptions Too high Catering too much to all possible conditions can be a waste of resources Increases system complexity Too low Every time something unexpected happens it can shut down the process Unexpected conditions simply never get processed, resulting in poor quality

41. 41 Learning Objectives Introduction to business process Describe each major phase of the system development process Understand the concepts of Business Process Modeling Describe process characteristics and design tradeoffs Understand development options

42. 42 External Acquisition vs building Purchasing an existing system is similar to the process of deciding which car best meets your needs When is it appropriate? When is it not appropriate?

43. 43 Outsourcing Turning over responsibility for some or all of an organization’s IS development and operations to an outside firm Your IS solutions may be housed in their organization Your applications may be run on their computers They may develop systems to run on your existing computers (within your organization) They may replace functions in your organization.... Even the CIO! When is outsourcing appropriate? When is it not?

44. 44 Questions!