Chapter 2 business processes, information, and decision making
What is a business process?
A business process is a network of activities, resources, facilities, and information that
interact to achieve some business objective.
A business process is a system, which is sometimes also referred to as a business system.
Examples of business processes include inventory-management processes, manufacturing
processes, sales processes, and customer-support processes.
What are the components of a business process?
Activities transform resources and information of one type into resources and information
of another type.
Follow rules and procedures
Manual and/ or automated
Ex: payment (activity) transforms quantity received (information) and shipping
invoice (information) into payment to supplier (resource)
Resources are items of value.
External to organization
Ex: workers, customers, suppliers, cheque
Facilities are structures used within the business process.
Typically are inventories and databases. Other examples of facilities are factories,
prices of equipment, trucks, filling cabinets 灌装柜, and the like 类似物.
Activities use information to determine how to transform the inputs they receive into
the outputs they produce.
The standard, called Business Process Modeling Notation (BOMN) provides four
graphical elements that can be used to document a process.
Data vs information
Important to understand the difference
Data – hourly wage
Information – average wage
Facts or figures
Not meaningful on its own
What is information?
Information is knowledge derived from data; data is defined as recorded facts or figures.
Information is Data presented in meaningful context
Information is Data processed by summing, ordering, averaging, grouping, comparing
Information is A difference that makes a difference
Characteristics of good information
Good information is based on correct and complete data, and it has been
processed correctly as expected.
Good information is timely information – produced in time for its intended use.
Information should be relevant both to the context and to the subject.
Just barely 勉强 sufficient
Information needs to be sufficient for the purpose for which it is generated, but
just barely so.
Worth its cost
For information to be worth its cost, there must be an appropriate relationship between the cost of information and its value.
What is h role of information in business processes?
Any time a good is moved or service is provided; data and information are always created.
Business processes generate information:
Bring together items of data in a context
At higher level
Useful for management and strategy decision
EX: payment transforms Quantity Received and Shipping invoice into Payment To
Business process management (BPM)
A field of management that promotes development of effective and efficient processes
through continues improve and innovation.
Methods of BPM
Total Quality Management (TQM)
Information about the process helps to manage the process itself.
How do information systems support business processes?
IS used by activities
Several activities may use one system
Activity may have own system
Activity may use several systems
Relationship of activities to IS determined by system designers during systems
Automated system means that work formerly done by people following procedures has
been moved so that computers now do that work y following instructions in software. Thus,
the automation of a process activity consists of moving work from the right side to the left
An information system to support counter sales
The cashiers need to be trained only in how to use the cash register; they never need
to work directly with the sales-recording programs on the computer.
The designers of this system decided to fully automate it because the cashier’s job is a
low-skill-level position with high turnover.
An information system to support payment
The information system that supports the payment activity is mostly manual system
The designers of this system choose to leave it as a manual system because processing
exceptions is complicated 复杂: there are many different except