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Chapter 2

BUS 237 Chapter Notes - Chapter 2: Business Process Model And Notation, Business Process Management, Business Process

Business Administration
Course Code
BUS 237

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What Is a Business Process?
- Business process - a network of activities, resources, facilities, and
information that interact to achieve some business function
- Sometimes called a business system
- Examples of business processes include inventory management processes,
manufacturing processes, sales processes, and custom support processes
- The inventory management process works to balance the demands of customers
with the inventory purchased from suppliers
- Purchasing is an important activity in the inventory management process
What Are the Components of a Business Process?
- Activities - transform resources and information of one type into resources and
information of another type; can be manual or automated
- Resources - items of value
- Inventory or funds; both suppliers and customers are considered
resources because they have value in this process
- Facilities - structures used within the business process; resources can be
stored within facilities
- Information - knowledge derived from data, where the term “data” is defined as
recorded facts or figures
- Data presented in a meaningful context
- Data processed by summing, ordering, averaging, grouping, comparing,
or other similar operations
- A difference that makes a difference
- Business Process Modelling Notation (BPMN) - a standard set of terms and
graphical notations for documenting business processes
What Is Information?
- Information is knowledge derived from data
- The term data is defined as recorded facts or figures
- Information is data presented in a meaningful context
- Information is processed data
- Information is defined as a difference that makes a difference
Characteristics of Good Information
- Accurate information - information that is factual and verifiable
- The information system (IS) function can develop a bad reputation in the organization
if the system is known to produce inaccurate information
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- Timely information - information that is produced in time for its intended use
- Relevant - information that is appropriate to both the context and the subject
- Information should be relevant to the subject at hand
Just Barely Sufficient
- Sufficient - adequate information to perform the task
- Just barely so - information that meets the purpose for which it is generated,
but just barely so
Worth Its Cost
- Worth its cost - when an appropriate relationship exists between the cost of
information and its value
What Is the Role of Information in Business Processes?
- The information generated by a business process is important
- Lets us know when we need to make payments for goods or services
- Keep track of what we have delivered and what has not been delivered
- Keeps our inventory up to date
Business Process Management
- BPM is a field of management that promotes the development of effective and
efficient processes through continuous improvement and innovation
- Total quality management (TQM) - a business process improvement method
focused on improving quality
- Six sigma - a business process improvement method developed by Motorola
that focuses on developing quality
- Lean production - a manufacturing method focused on using resources as
efficiently as possible
How Do Information Systems Support Business Processes?
- Information systems are used by the activities in a business process, but the
particular relationship varies among the processes
What Does It Mean to Automate a Process Activity?
- Automated system - an information system in which the hardware and software
components do most of the work
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