Transcript Business process model

Business Driven Information Systems 2e
CHAPTER 2
STRATEGIC DECISION MAKING
McGraw-Hill/Irwin
©2009 The McGraw-Hill Companies, All Rights Reserved
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Chapter Two Overview
• SECTION 2.1 - DECISION-MAKING SYSTEMS
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Decision Making
Transaction Processing Systems
Decision Support Systems
Executive Information Systems
• SECTION 2.2 – BUSINESS PROCESSES
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Understanding the Importance of Business Processes
Business Process Improvement
Business Process Reengineering
Business Process Modeling
Business Process Management
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Chapter Two Overview
• Decisionenabling,
problemsolving, and
opportunityseizing
systems
SECTION 2.1
DECISION-MAKING
SYSTEMS
McGraw-Hill/Irwin
©2009 The McGraw-Hill Companies, All Rights Reserved
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LEARNING OUTCOMES
1. Explain the difference between transactional
information and analytical information. Be sure
to provide an example of each
2. Define TPS, DSS, and EIS and explain how
an organization can use these systems to
make decisions and gain competitive
advantages
3. Describe the three quantitative models
typically used by decision support systems
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LEARNING OUTCOMES
4. Describe the relationship between digital
dashboards and executive information
systems
5. Identify the four types of artificial
intelligence systems
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DECISION MAKING
• Reasons for the growth of decision-making
information systems: People must:
– Analyze large amounts of information
– Make decisions quickly
– Apply sophisticated analysis techniques
– Protect the corporate asset of organizational
information
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DECISION MAKING
• Model – a simplified representation or
abstraction of reality
• IT systems in
an enterprise
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TRANSACTION PROCESSING
SYSTEMS
• Moving up users move from requiring transactional
information to analytical information
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TRANSACTION PROCESSING
SYSTEMS
• Transaction processing system (TPS) - basic
business system that serves the operational level
• Online transaction processing (OLTP) – capturing
of transaction and event information using
technology
• Online analytical processing (OLAP) –
manipulation of information to create business
intelligence in support of strategic decision making
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DECISION SUPPORT SYSTEMS
• Decision support system (DSS) – models
information to support managers and business
professionals during the decision-making process
• Three quantitative models used by DSSs include:
1. Sensitivity analysis
2. What-if analysis
3. Goal-seeking analysis
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DECISION SUPPORT SYSTEMS
• What-if analysis
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DECISION SUPPORT SYSTEMS
• Goal-seeking analysis
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DECISION SUPPORT SYSTEMS
• Interaction between a TPS and a DSS
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EXECUTIVE INFORMATION SYSTEMS
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Executive information system (EIS) – a
specialized DSS that supports senior level
executives within the organization
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Most EISs offering the following capabilities:
– Consolidation
– Drill-down
– Slice-and-dice
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EXECUTIVE INFORMATION SYSTEMS
• Interaction between a TPS and an EIS
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Digital Dashboards
• Digital dashboard – integrates information
from multiple components
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ARTIFICIAL INTELLIGENCE (AI)
• Intelligent system – various commercial
applications of artificial intelligence
• Artificial intelligence (AI) – simulates
human intelligence such as the ability to
reason and learn
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ARTIFICIAL INTELLIGENCE (AI)
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Four most common categories of AI include:
1. Expert system – computerized advisory
programs that imitate the reasoning processes
of experts in solving difficult problems
2. Neural Network – attempts to emulate the way
the human brain works
– Fuzzy logic – a mathematical method of handling
imprecise or subjective information
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Artificial Intelligence (AI)
• Four most common categories of AI include:
3. Genetic algorithm – an artificial intelligent
system that mimics the evolutionary, survival-ofthe-fittest process to generate increasingly
better solutions to a problem
4. Intelligent agent – special-purposed
knowledge-based information system that
accomplishes specific tasks on behalf of its
users
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Data Mining
• Data-mining systems sift instantly through
information to uncover patterns and
relationships
• Data-mining systems include many forms
of AI such as neural networks and expert
systems
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OPENING CASE QUESTIONS
Second Life: Succeeding in Virtual Times
1. How could companies use Second Life for
new product or service decision making?
2. How could financial companies use neural
networks in Second Life to help their
businesses?
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OPENING CASE QUESTIONS
Second Life: Succeeding in Virtual Times
3. How could a company such as Nike use
decision support systems on Second Life to
help its business?
4. How could an apparel company use Second
Life to build a digital dashboard to monitor
virtual operations?
SECTION 2.2
BUSINESS PROCESSES
McGraw-Hill/Irwin
©2009 The McGraw-Hill Companies, All Rights Reserved
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LEARNING OUTCOMES
6. Describe business processes and their
importance to an organization
7. Differentiate between customer facing
processes and business facing processes
8. Compare business process improvement
and business process reengineering
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LEARNING OUTCOMES
9. Describe the importance of business
process modeling (or mapping) and
business process models
10. Explain business process management
along with the reason for its importance to
an organization
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UNDERSTANDING THE IMPORTANCE OF
BUSINESS PROCESS
• Businesses gain a competitive edge when they
minimize costs and streamline business
processes
• Business process – a standardized set of
activities that accomplish a specific task, such
as processing a customer’s order
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UNDERSTANDING THE IMPORTANCE
OF BUSINESS PROCESS
• 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
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UNDERSTANDING THE IMPORTANCE
OF BUSINESS PROCESS
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UNDERSTANDING THE IMPORTANCE
OF BUSINESS PROCESS
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UNDERSTANDING THE IMPORTANCE
OF BUSINESS PROCESS
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UNDERSTANDING THE IMPORTANCE
OF BUSINESS PROCESS
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BUSINESS PROCESS
IMPROVEMENT
• Companies are forced to improve their
business processes because customers are
demanding better products and services
• Business process improvement – attempts to
understand and measure the current process
and make performance improvements
accordingly
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BUSINESS PROCESS
IMPROVEMENT
• Business process improvement model
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BUSINESS PROCESS REENGINEERING
• Business process reengineering (BPR) analysis and redesign of workflow within and
between enterprises
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Finding Opportunity Using BPR
• 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 ignore the
road completely
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Finding Opportunity Using BPR
• Progressive Insurance mobile claims process
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Finding Opportunity Using BPR
• Types of
change an
organization can
achieve, along
with the
magnitudes of
change and the
potential
business benefit
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Selecting a Process to Reengineer
• Criteria to determine the importance of the process
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Is the process broken?
Will reengineering of this process succeed?
Does it have a high impact on the strategic direction?
Does it significantly impact customer satisfaction?
Is it antiquated?
Does it fall far below best-in-class?
Is it crucial for productivity improvement?
Will savings from automation be clearly visible?
Is the return on investment high?
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BUSINESS PROCESS
MODELING
• 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
MODELING
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BUSINESS PROCESS
MODELING
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BUSINESS PROCESS
MANAGEMENT
• Business process management (BPM) - integrates all of
an organization’s business process to make individual
processes more efficient
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BPM Examples
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BPM Examples
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BPM Examples
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BPM Examples
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BPM Examples
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BPM Examples
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BPM Examples
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OPENING CASE QUESTIONS
Second Life: Succeeding in Virtual Times
5. How could a company use Second life to
revamp its customer service process?
6. How could a company use second Life to
revamp its order entry process?
7. How could a company use Second Life to
reinvent relationships with customers, partners,
and employees?
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CLOSING CASE ONE
DARPA
1. How is the DoD using AI to improve its
operations and save lives?
2. Why would the DoD use an event, such
as the DARPA Grand Challenge, to
further technological innovation?
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CLOSING CASE ONE
DARPA
3. Describe how autonomous vehicles
could be used by organizations around
the world to improve business efficiency
and effectiveness
4. Describe the potential business impacts
of the Ansari X competition
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CLOSING CASE TWO
Revving Up Sales at Harley-Davidson
1. How does Talon help Harley-Davidson
employees improve their decision-making
capabilities?
2. Identify a few key metrics a Harley-Davidson
marketing executive might want to monitor on
a digital dashboard
3. How can Harley-Davidson benefit from using
decision support systems in its business
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CLOSING CASE TWO
Revving Up Sales at Harley-Davidson
4. How can Harley-Davidson use business
process improvement to increase customer
satisfaction?
5. How can Harley-Davidson use business
process reengineering to improve its supplier
relationships?
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CLOSING CASE THREE
Delta Airlines Plays Catch-Up
1. What business risks would Delta be taking if it
decided not to catch up with industry leaders in
using IT to gain a competitive advantage?
2. What competitive advantages can an airline gain
by using DSS and EIS?
3. What other industries could potentially benefit
from the use of yield management systems?
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CLOSING CASE THREE
Delta Airlines Plays Catch-Up
4. How can American and United use
customer information to gain a
competitive?
5. What types of metrics would Delta
executives want to see in a digital
dashboard?
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BUSINESS DRIVEN BEST
SELLERS
• Reengineering the Corporation, by
Michael Hammer and James Champy
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BUSINESS DRIVEN BEST
SELLERS
• The First 90 Days, by Michael Watkins
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BUSINESS DRIVEN BEST
SELLERS
• Execution, by Larry Bossidy and Ram
Charan