Transcript Business Process Modelling Examples

CHAPTER 2
Decision Making and
Business Processes
Opening Case:
Information Systems
Improve Business Processes
at Grocery Gateway
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Chapter Two Overview
• SECTION 2.1 - DECISION-MAKING AND
INFORMATION SYSTEMS
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Decision Making
Transactional Data & Analytical Information
Measuring Decision Success
TPS, DSS, and EIS
Artificial Intelligence
• SECTION 2.2 – BUSINESS PROCESSES
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Understanding the Importance of Business Processes
Business Process Improvement
Business Process Re-engineering
Business Process Modelling
Business Process Management
Business Process Modelling Examples
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LEARNING OUTCOMES
1.
Explain the difference between transactional data and
analytical information, and between OLTP and OLAP.
2.
Explain how organizations use TPS, DSS, and EIS to
make decisions and how each can be used to help
make unstructured, semi-structured, and structured
decisions.
3.
Describe what AI is and the five types of artificial
intelligence systems used by organizations today.
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LEARNING OUTCOMES
4.
Describe how AI differs from TPS, DSS and EIS.
5.
Describe the importance of business process
improvement, business process re-engineering,
business process modelling, and, business process
management to an organization and how information
systems can help in these areas.
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SECTION 2.1
DECISION-MAKING AND
INFORMATION SYSTEMS
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Making Good Business Decisions
Learning
Outcomes
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• Managerial decision-making challenges
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Analyze large amounts of information
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Apply sophisticated analysis techniques
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Make decisions quickly
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Decision-making
Learning
Outcomes
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Decision-making
and problemsolving occur at
each level in an
organization
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Operational Decision-Making
Learning
Outcomes
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• Operational decision making Employees develop, control, and
maintain core business activities
required to run the day-to-day
operations
• Structured decisions - Situations
where established processes offer
potential solutions
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Managerial Decision-Making
Learning
Outcomes
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• Managerial decision making –
Employees evaluate company
operations to identify, adapt to,
and leverage change
• Semi-structured decisions –
Occur in situations in which a few
established processes help to
evaluate potential solutions, but
not enough to lead to a definite
recommended decision
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Strategic Decision-Making
Learning
Outcomes
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• Strategic decision making –
Managers develop overall
strategies, goals, and objectives
• Unstructured decisions –
Occurs in situations in which no
procedures or rules exist to guide
decision makers toward the
correct choice
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Learning
Outcomes
2-1
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Transactional Data & Analytical
Information
• Moving up through the organizational pyramid, users move
from requiring transactional information to analytical
information
Figure 2.3
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Metrics: Measuring Success
Learning
Outcomes
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• Metrics – Measurements that evaluate results
to determine whether a project is meeting its
goals
• Common Types – KPIs – Key Performance Indicators
– Efficiency and Effectiveness
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Benchmarking
Learning
Outcomes
2-2
• Benchmark – Baseline values the
system seeks to attain
• Benchmarking – A process of
continuously measuring system
results, comparing those results to
optimal system performance
(benchmark values), and identifying
steps and procedures to improve
system performance
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Key Performance Indicators
Learning
Outcomes
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• Key performance indicators (KPIs) – The
quantifiable metrics a company uses to evaluate
progress toward critical success factors
– Turnover rates of employees
– Number of product returns
– Number of new customers
– Average customer spending
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Efficiency and Effectiveness Metrics
Learning
Outcomes
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• Efficiency metrics – Measure the
performance of IS itself, such as
throughput, transaction speed, and
system availability
• Effectiveness metrics – Measures
the impact IS has on business
processes and activities, including
customer satisfaction and customer
conversation rates
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Learning
Outcomes
Common Types of Efficiency IS
Metrics
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Throughput
Transaction
Speed
System
Availability
Web Traffic
Response
Time
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The amount of information that can travel
through a system at any point in time.
The amount of time a system takes to perform a
transaction.
The number of hours a system is available for
users.
Includes a host of benchmarks such as the
number of pages viewed, the number of unique
visitors and the average length of viewing time.
The time it takes to respond to interactions such
as a mouse click.
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Learning
Outcomes
Common Types of Effectiveness IS
Metrics
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Usability
Customer
Satisfaction
Conversion
Rates
Financial
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The ease with which people perform
transactions and/or find information.
Measured by such benchmarks as satisfaction
surveys, customer retention percentages, and
increasing revenue per customer.
The number of customers an organization
“touches” for the first time and persuades to
purchase a product/service.
Such as Return on Investment (the earning power
of an organization’s assets), Cost/Benefit Analysis
and Break Even Analysis.
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Efficiency and Effectiveness Metrics
Learning
Outcomes
2-2
• Efficiency and Effectiveness metrics are interrelated. The
ideal operation occurs in the upper right corner.
Figure 2.7
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Transaction Processing Systems
Learning
Outcomes
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• Transaction processing system (TPS) –
Basic business system that serves the
operational level and assists in making
structured decisions
• Online transaction processing (OLTP)
- Capturing of transaction and event
information using technology to process,
store, and update
• Source document – The original
transaction record
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Decision Support Systems
Learning
Outcomes
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• Decision support system
(DSS) – Models information to
support managers and
business professionals during
the decision-making process
• Online analytical processing
(OLAP) – Manipulation of
information to create business
intelligence in support of
strategic decision making
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Decision Support Systems
Learning
Outcomes
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• Three quantitative models used by DSS include
1. What-if analysis
2. Sensitivity analysis
3. Goal-seeking analysis
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Decision Support Systems
Learning
Outcomes
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Figure 2.8
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What-If Analysis in Microsoft Excel
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Decision Support Systems
Learning
Outcomes
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Figure 2.9
Goal-Seeking Analysis
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Decision Support Systems
Learning
Outcomes
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Figure 2.10
Interaction Between TPSs and DSSs
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Executive Information Systems
Learning
Outcomes
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• Specialized DSS supporting executive decisionmaking.
Figure 2.11
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Executive Information Systems
Learning
Outcomes
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Information Levels Throughout An Organization
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Digital Dashboards
Learning
Outcomes
2-2
• Digital dashboard – integrates information
from multiple components and presents it
in a unified display
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Digital Dashboards
Learning
Outcomes
2-2
• Verison’s “Wall of Shaygan” updates the
company’s performance every 15 seconds.
Figure 2.13
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Artificial Intelligence (AI)
Learning
Outcomes
2-3
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Artificial intelligence (AI) – Simulates human
intelligence such as the ability to reason and
learn
•
Intelligent system – Various commercial
applications of artificial intelligence
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Artificial Intelligence AI
Learning
Outcomes
2-3
Five most common categories of AI include:
Expert systems, Neural Networks,
Genetic algorithm, Intelligence Agent and
Virtual Reality
1. Expert system – Computerized advisory
programs that imitate the reasoning
processes of experts in solving difficult
problems
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Artificial Intelligence (AI)
Learning
Outcomes
2-3
2. Neural Network – Attempts to emulate the
way the human brain works
• Neural networks are most useful for decisions that
involve patterns or image recognition
• For example its use in the finance industry to
discover credit card fraud finding common elements
in millions of fraudulent transactions
– Fuzzy logic – A mathematical method of
handling imprecise or subjective information
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Artificial Intelligence
Learning
Outcomes
2-3
3. Genetic algorithm – An
artificial intelligent system that
mimics the evolutionary,
survival-of-the-fittest process to
generate increasingly better
solutions to a problem
- Shopping bot – Software that
will search several retailer
websites and provide a
comparison of each retailer’s
offerings including price and
availability
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Artificial Intelligence (AI)
Learning
Outcomes
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4. Intelligent agent – Special-purpose knowledgebased information system that accomplishes
specific tasks on behalf of its users
5. Virtual reality - A computer-simulated
environment that can be a simulation of the real
world or an imaginary world
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OPENING CASE QUESTIONS
1.
Information Systems Improve Business Processes
at Grocery Gateway
What information systems are used at Grocery
Gateway? Would you classify these systems as TPS,
DSS, or EIS?
2.
How do these systems support operational, analytical
or strategic level decisions?
3.
What steps could the company take to leverage the
transactional information that is collected by the
information systems outlined in the case to help make
analytical and strategic decisions for the company?
4.
Identify a few key metrics that Grocery Gateway
marketing executives might want to monitor on a
digital dashboard. How can these metrics be used to
improve organizational decision making?
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SECTION 2.2
BUSINESS PROCESSES
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Learning
Outcomes
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Understanding the Importance of
Business Processes
Sample Business Processes
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Learning
Outcomes
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Understanding the Importance of
Business Processes
Customer facing processes – result in a
product or service that is received by an
organization’s external customer.
Business facing processes – are invisible
to the external customer but are essential
to the effective management of the
business
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Evaluating Business Processes
Learning
Outcomes
2-5
The Order-to-Delivery Process
Figure 2.17
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Business Process Re-engineering
Learning
Outcomes
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Business process – a standardized set of
activities that accomplish a specific task, such
as processing a customer’s order
Business process improvement – attempts to
understand and measure current processes and
upgrade them.
Business process re-engineering (BPR) – the
analysis and redesign of workflow within and
between enterprises
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Business Process Improvement
Learning
Outcomes
2-5
• Business Process Improvement is a cyclical
activity. Metrics at the end are feedback for a
new round of improvements.
Figure 2.19
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Finding Opportunity Using BPR
Learning
Outcomes
2-5
• A company can improve the
way it travels the road by
moving from foot to horse
and then horse to car
• BPR looks at taking a
different path, such as an
airplane which ignores the
road completely
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Finding Opportunity Using BPR
Learning
Outcomes
2-5
• Progressive Insurance mobile claims process
Figure 2.22
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Finding Opportunity Using BPR
Learning
Outcomes
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Figure 2.23
• Types of
change an
organization
can achieve,
along with the
magnitudes of
change and the
potential
business
benefit
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Business Process Modelling
Learning
Outcomes
2-5
• Business process modeling (or mapping) - The
activity of creating a detailed flow chart or process
map of a work process showing its inputs, tasks,
and activities, in a structured sequence
• 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
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Business Process Modelling
Learning
Outcomes
2-5
As-Is and To-Be Process Model for Ordering a Meal
Figure 2.24
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Business Process Modelling
Learning
Outcomes
2-5
As-Is and To-Be Process Model for Order Fulfillment
Figure 2.25
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Business Process Modelling
Learning
Outcomes
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Customer Service As-Is and To-Be Process Model
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Business Process Management
Learning
Outcomes
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Business Process Management (BPM) – integrates all of
an organization’s business processes to make individual
processes more efficient.
Key reasons for using BPM:
Figure 2.27
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Learning
Outcomes
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Business Process Modelling
Examples
Figure 2.28 Online Sales Process Model
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Learning
Outcomes
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Business Process Modelling
Examples
Online Banking Process Model
Figure 2.29
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Learning
Outcomes
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Business Process Modelling
Examples
Order Fulfillment Process Model
Figure 2.30
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Learning
Outcomes
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Business Process Modelling
Examples
eBay Buyer Business Process Model
Figure 2.31
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Learning
Outcomes
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Business Process Modelling
Examples
eBay Seller Business Process Model
Figure 2.32
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Learning
Outcomes
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Business Process Modelling
Examples
Business Process Improvement Model
Figure 2.26
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OPENING CASE QUESTIONS
Information Systems are Central at Grocery
Gateway
5.
What does Grocery Gateway’s customer order
process look like?
6.
Describe how Grocery Gateway’s customer Web site
supports Grocery Gateway’s business processes.
7.
Describe how Descartes’ fleet management software
improved Grocery Gateway’s logistics business
processes.
8.
How does the business process affect the customer
experience? The company’s bottom line?
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OPENING CASE QUESTIONS
Information Systems Improve Business Processes
at Grocery Gateway
9.
What other kinds of information systems could be
used by Grocery Gateway to improve its business
processes?
10. Comment on the need for integration between the
various types of information systems at Grocery
Gateway. What benefits from integration do you see
for the company’s various business processes? What
challenges to you think will exist in facilitating such
integration?
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CLOSING CASE ONE
Information Systems Are Critical For Take-Off in
Canada’s Airline Industry
1. What advantages are there for an airline to
use a revenue management system.
2. Are revenue management systems a
competitive advantage or simply a new
necessity for doing business in the airline
industry today?
3. What type of decisions could a revenue
management system be used to help make?
4. Is a revenue management system a TSP,
DSS, or an EIS?
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CLOSING CASE ONE
Information Systems Are Critical For Take-Off in
Canada’s Airline Industry
5. Would the revenue management system
described in the case contain transactional
data or analytical information?
6. What types of metrics would an airline
executive want to see in a digital dashboard
displaying revenue information?
7. How could AI enhance the use of an airline’s
revenue management system for decision
support?
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CLOSING CASE TWO
Leveraging the Power and Avoiding the Pitfalls of
BPM
1. How can BPM help improve global outsourcing?
Records management? Supply chain management?
2. What other business activities are excellent candidates
for BPM?
3. Which of the five pitfalls mentioned above do you think is
the most important? Why?
4. Which of the five pitfalls mentioned above do you think is
the most common pitfall that organizations face when
undergoing BPM? Why?
5. What is the advantage of treating BPM as a project, as
opposed to some other type of business activity?
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CLOSING CASE THREE
Improving Business Processes at UK’s Woburn
Safari Park
1. What were the benefits of creating “As-Is”
models of current business processed at WSP?
2. How did information systems help identify
problem areas in the feed logistics process?
3. How did information systems help improve the
management of feed logistics?
4. Are information systems necessary for business
process improvements? Explain.
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