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Experiencing M I S

Ninth Edition

Chapter 8

Processes, Organizations, and Information Systems

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This chapter explores processes and their supporting information systems within levels of an organization.

Investigate three types of processes and the scope of information systems that they use; investigate the concept of process quality and explain how information systems can be used to increase it; discuss how the use of information systems at one level of organization leads to information silos, explain the problems of such silos, and show how those problems can be solved by information systems at the next level of organization; discuss how enterprise systems such as CRM, ERP, and EAI can help eliminate information silos; wrap up by showing how interenterprise IS can solve problems of enterprise-level silos.

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“I Got the Email, but I Couldn’t Download the Attachment.”

Difficult for everyone to attend meetings
Wastes time covering old ground
Cell phone calls interrupt meeting
Felix not reading meeting minutes

“I got the email, but I couldn’t download the attachment.”

Poor communication
Interpersonal conflicts

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Study Questions

8-1 What are the basic types of processes?

8-2 How can information systems improve process quality?

8-3 How do enterprise systems solve the problems of departmental silos?

8-4 How do CRM, ERP, and EAI support enterprise processes?

8-5 What are the challenges of implementing and upgrading enterprise information systems?

8-6 How do inter-enterprise IS solve the problems of enterprise silos?

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Figure 8-1 Business Process with Three Activities

8-1 What are the basic types of processes?

Figure 8-1 Business Process with Three Activities

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Figure 8-2 Structured Versus Dynamic Processes

8-1 What are the basic types of processes?

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Figure 8-3 Common Workgroup Processes

8-1 What are the basic types of processes?

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Figure 8-4 Characteristics of Information Systems

8-1 What are the basic types of processes?

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Improving Process Quality

8-2 How can information systems improve process quality?

Process efficiency

Ratio of outputs to inputs

Process effectiveness

How well a process achieves organizational strategy

How can processes be improved?

Change process structure
Change process resources
Change both

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Improving Process Quality (con’t)

8-2 How can information systems improve process quality?

Performing an activity

Partially automated, completely automated

Augmenting human performing activity

Ex: Common reservation system

Controlling data quality

Ensure data complete and correct before continuing process activities

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Eliminating Information Silos

8-3 How do enterprise systems solve the problems of departmental silos?

What are the problems of information silos?

Data duplicated.
Data inconsistency.
Data isolated.
Disjointed processes.
Lack of integrated enterprise information.
Inefficiency: decisions made in isolation.
Increased cost for organization.

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Problems Created by Information Silos

8-3 How do enterprise systems solve the problems of departmental silos?

Figure 8-5 Problems Created by Information Silos

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Solving the Problems of Information Silos (1 of 2)

8-3 How do enterprise systems solve the problems of departmental silos?

Integrate into single database.
Revise applications.
Allow isolation, manage to avoid problems.

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Solving the Problems of Information Silos (2 of 2)

8-3 How do enterprise systems solve the problems of departmental silos?

Figure 8-6 Information Silos as Drivers

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An Enterprise System for Patient Discharge

8-3 How do enterprise systems solve the problems of departmental silos?

Figure 8-7 Example Enterprise Process and Information System

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Business Process Reengineering

8-4 How do CRM, ERP, and EAI support enterprise processes?

Business Process Reengineering (B P R)

Integrated data, enterprise systems create stronger, faster, more effective linkages in value chains.
Difficult, slow, exceedingly expensive.
Key personnel determine how best to use new technology.
Requires high-level and expensive skills and considerable time.

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Emergence of Enterprise Application Solutions

8-4 How do CRM, ERP, and EAI support enterprise processes?

Inherent processes

Predesigned processes for using application.
“Industry best practices.”

Customer relationship management (C R M).
Enterprise resource planning (E R P).
Enterprise application integration (E A I).

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Customer Relationship Management (C R M)

8-4 How do CRM, ERP, and EAI support enterprise processes?

Suite of applications, database, set of inherent processes.
Manage all interactions with customer through four phases of customer life cycle.

Marketing, customer acquisition, relationship management, loss/churn.

Supports customer-centric organization.

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Customer Life Cycle

8-4 How do CRM, ERP, and EAI support enterprise processes?

Figure 8-8 The Customer Life Cycle

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C R M Applications

8-4 How do CRM, ERP, and EAI support enterprise processes?

Figure 8-9 C R M Applications

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Digital Dining?

So What?

CaliBurger started testing a burger-flipping robot named Flippy in its Pasadena restaurant
Cooks about 150 burgers per hour
Plans to deploy Flippy robots in 50 of its locations
Payback in a few years:

Run around the clock
No personal/vacation days
No onboarding, training, or management

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Digital Dining? (con’t)

So What?

The robotic barista from Café X costs $25,000

Makes 150 cups of custom coffee per hour
Doesn’t need to be tipped
Payback period is about 2 years

Will major chains adopt robotic workers?

Can they remain competitive with human workers?

The company selling these robots will employ a lot of well-paid people to make, sell, maintain, and replace these machines increasing human jobs

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E R P Applications

8-4 How do CRM, ERP, and EAI support enterprise processes?

E R P is a suite of applications
The primary purpose of an E R P system is integration
Integration allows real-time updates

Figure 8-10 E R P Applications

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Purpose of E R P Systems

8-4 How do CRM, ERP, and EAI support enterprise processes?

Suite of applications, database, and inherent processes
Consolidates business operations into a single, consistent computing platform
C R M plus accounting, manufacturing, inventory, and human resources applications
S A P offers industry-specific customize packages

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Enterprise Application Integration (E A I)

8-4 How do CRM, ERP, and EAI support enterprise processes?

Connects system “islands”
Enables communicating and sharing data
Provides integrated information
Provides integrated layer on top of existing systems while leaving functional applications “as is”
Enables less expensive, gradual move to E R P

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Design and Implementation for the Five Components

8-4 How do CRM, ERP, and EAI support enterprise processes?

Figure 8-11 Enterprise Application Integration (E A I) Architecture

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Factors that Make Implementing ERP Challenging

8-5 What are the challenges of implementing and upgrading enterprise information systems

Collaborative Management
Requirements Gaps
Transition Problems
Employee Resistance
New Technology

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Enterprise I S Solve the Problems of Information Silos

8-6 How do inter-enterprise I S solve the problems of enterprise silos?

Figure 8-12 Information Silos Without A R E S

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Inter-enterprise A R E S System

8-6 How do inter-enterprise I S solve the problems of enterprise silos?

Figure 8-13 Inter-enterprise A R E S System

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How Does the Knowledge in this Chapter Help You?

You understand the basic types of processes found in business and how information systems can support those processes and improve process quality
You are aware of the problems posed by departmental silos and the types of solutions made possible by CRM, ERP, and EAI
You learned how best to implement and upgrade enterprise information systems
You are able to apply these concepts to inter-enterprise systems

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Paid Deletion (1 of 2)

Ethics Guide

A company experiences negative press.

Manufacturing company dealing with environmental protection violations.
A popular chain of restaurants had a long list of healthcode violations.

Companies offer Eric money to tweak the results of Web searches using key terms relevant to these negative incidents.
Eric buries or deletes negative results without his employer knowing.

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Paid Deletion (2 of 2)

Ethics Guide

What happens if someone finds out search results are being manipulated?

Eric could be fired
Company could be severely harmed
Robin could lose her job too

How might have Eric rationalized his fraudulent behavior?
Even if Eric were caught, would he be guilty of a crime?

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Software/Platform Engineer

Career Guide

Ben Peters at Anaconda, Inc.

Q. What attracted you to this field?

A. “I love working to solve the challenges the industry faces and having the potential to change the world. When I was exploring majors in college, I looked at factors like job demand outlook and salary potential, too. I wanted to be a part of a growing industry with lots of potential.”

Q. What advice would you give to someone who is considering working in your field?

A. “Practice, practice, and more practice! Try to get as much hands-on experience as you can while you are in school so you will stand out to future employers. Focus on grasping the fundamentals of software development, design, and architecture, and you will have a great career.”

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Active Review

8-1 What are the basic types of processes?

8-2 How can information systems improve process quality?

8-3 How do enterprise systems solve the problems of departmental silos?

8-4 How do CRM, ERP, and EAI support enterprise processes?

8-5 What are the challenges of implementing and upgrading enterprise information systems?

8-6 How do inter-enterprise IS solve the problems of enterprise silos?

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A Tale of Two Interorganizational I S

Case Study 8

Access C T

Enrolled 208,301 and model for state-run exchanges.

Cover Oregon

Spent $250 million for system clearly inoperable.
Exchange’s board of directors decided to stop development and utilize the federal exchange.

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Healthcare Exchange Interorganizational IS

Case Study 8

Figure 8-16 Healthcare Exchange Interorganizational I S

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Access C T (1 of 2)

Case Study 8

Exchange went live in only 12 months.
Counihan

More than 30 years of experience working in insurance industry.
Key player in development of Massachusetts healthcare system.

Hired senior staff with deep experience in insurance.

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Access C T (2 of 2)

Case Study 8

Wadleigh director of application development for C I G N A, a health services organization.
Primary assignment

Hire and manage an outside contractor to develop exchange website and support back-end code and to manage implementation of exchange information system.

Created project plan and began search for contractor to develop the site.

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Cover Oregon (1 of 3)

Case Study 8

Did not hire a supervising contractor for project, instead took an active role in software’s development.
Agency suffered high employee turnover, and had difficulty hiring and keeping qualified personnel.

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Cover Oregon (2 of 3)

Case Study 8

O H A hired software development company to create major software components.

Two of three finalists dropped out at last minute, leaving Oracle Corporation a sole source vendor.
Oracle negotiated time and materials contracts instead of contract for specific deliverables at specific prices.
When problems developed, Oracle was paid tens of millions of additional money for change orders on same time and materials basis.

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Cover Oregon (3 of 3)

Case Study 8

Oregon legislature required state to hire a quality assurance contractor, Maximus Corporation, to oversee project.
Maximus reported significant problems involving divided control, lack of clear requirements, inappropriate contracting methodology, lack of project planning, and lack of progress.
Unclear who got those reports or what was done with them.
Head of O H A project threatened to withhold Maximus’ payment.
End result: Exchange development failed.

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Copyright