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Chapter 2

Chapter 2 - business processes, information and decision making.docx

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Computer Science
Computer Science 1032A/B

Chapter 2- Business processes, information and decision making Q1- how did this stuff get here Q2- What is a business process? - Business process – network of activities, resources, facilities and information that interact to achieve some business objective o Aka. Business system o Ex. Inventory management processes, manufacturing processes, sales processes, and customer-support processes - Managing this inventory is a business process – ensure that there is enough inventory to fulfill customers’ requests while at the same time making sure there is not too much inventory - Inventory management process works to balance the demands from customers with the inventory purchased from suppliers (purchasing is an important activity), supports the process by collecting information o An inventory database keeps track of what the customers have ordered (quantity ordered) what is currently in inventory (Quantity on hand) o Critical point : the reorder point – the system lets the manager of the restaurant know that it is time to order new supplies (each good can have its OWN reorder point) o Purchase order is created in order to reorder , lists the items ordered and the quantity desired -> sends to the supplier -> ships the goods with the shipping invoice to the restaurant o The shipped goods are first checked to make sure the restaurant received what was ordered o The newly received goods are then placed in inventory and the inventory database is updated with the quantity received - There are many different ways of represetnign a business process o Understanding o Modeling o Redesigning business processes are a big part of what business analysts do Q3- what are the components of a business process? - A business process consists of activities, resources, facilities and information - Activities: transform resources and information of one type into resources and information of another type o Payment activity transforms quantity received and shipping invoice into a supplier payment (resource) o An activity can consist or be made up of strictly manual activities (people following procedures) be automated or controlled by computers (hardware directed by software) or as is often the case be a combination of manual and automated activities - Resources: items of value o Customers and suppliers are resources too but they are external and hence not under the restaurant’s direction and control - Facilities : structures used within the business process (ex. Inventories and databases) …others are factories, pieces of equipment etc - Information – activities use information to determine how to transform the inputs they receive into the outputs they produce o It has activities and resources but it uses the term repository for facility and the term business item for data o Differences and inconsistencies can be problematic esp when 2 diffferent organizations with 2 different sets of definitions must work together - Objective management group (OMG)- created a standard set of terms and graphical notations for documenting business processes o Standard called : business process modeling notation (BPMN)  Provides 4 graphical elements that can be used to document a process Q4 – What is information? - Information is knowledge derived from data; data is defined as recorded facts or figures (ex. Recording wages) - Average wage : knowledge that is derived from the data of individual wages - Information is data presented in a meaningful context - Information is processed data, or that information is processed by summing, ordering, averaging, grouping, comparing, or performing other similar operations o We do something to data to produce information - Bateson defines information as a difference that makes a difference – if you get new information and it does not make a difference to your decision , is what you received really information? - Characteristics of good information o All information is not equal: some information is better than other information o Accurate: good information is accurate information – correct and complete data (reliable)  The IS function can develop a bad reputation in the organization if a system is known to produce inaccurate information  When you begin to use an information system be sceptical, begin with scepticism and keep in mind that over time information may lose its level of accuracy o Timely : timely information – produced in time for its intended use  Timelieness can be measured against a calendar or against events  When you participate in the development of an IS, timeliness will be part of the requirements you will request  Expensive to produce on time information  Information system that will not deliver ads over the web, but will also enable you to determine how frequently customers click on those ads  Determining click ratios in near real time can be very expensive, saving the data and processing it some hours alter may be much easier and cheaper and sufficient for your needs o Relevant  Information should be relevant both to the context and to the subject  Need information that is summarized to an appropriate level for your job  A list of wage rate is bad, average wage rate is good o Just barely sufficient  Information needs to be sufficient for the purpose for which it is generated but just barely so, critical decision that each of us must make each day is what information to ignore  The more information you have the more information you will need to ignore due to time o Worth its cost  Information is not free  For information to be worth its cost, there must be an appropriate relationship between the cost of information and its value  Information and information systems should be subject to the same financial analyses to which other assets are subjected Q5- What is the role of information in business processes? - What does information have to do with real business processes that move actual goods and provided services to real people? - Any time a good is moved or a service is provided, data and ifnromation are always created - Anytime there is a physical flow there is the potential to capture a flow of information - Flow of service are always accompanied by a potential flow of data and information - Payment process: compares the quantity received to the shipping invoice (generates a supplier payment) - Thus, a business process generates information by bringing together important items of data in a context
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