CompSci 1021 A Taylor Ward September 27, 2011
Chapter Two: Business Processes, Information, and Decision Making
1. How did this stuff get here?
Hundreds, or thousands, of different processes successfully interact to bring you products, services, ideas. The
processes had to work in such a way that all the companies and people covered their costs and earned a profit
(set prices, instructions, etc.). All of this activity comes about through the interaction of business processes.
Business processes are central to what every organization does therefore, understanding business processes is
critical to understanding the information systems that support them.
2. What is a business process?
A business process is a network of activities, resources, facilities, and information that interact to achieve some
business objective (sometimes referred to as a business system). Examples of business processes include
inventory-management, manufacturing, sales, and customer-support processes.
Inventory-management process works to balance the demands from customers with the inventory
purchased from suppliers. It collects information of what is currently in inventory and lets the manager know
when stock has reached the Reorder Point.
3. 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
(payment activity transforms quantity received into a supplier payment). An activity may consist of manual
activities, automated by computers, or a combination of the two.
Resources: items of value (case of milk, person working, cheque, customer’s cash, etc.) external to the
Facilities: structures used within the business process like inventories and databases (factories, pieces of
equipment, trucks, filing cabinets, etc.
Information: determines how to transform the inputs received into outputs produced.
4. What is information?
Definition of Information: knowledge derived from data; data is defined as recorded facts or figures. Also, it is
processed data, or that information is processed by summing, ordering, averaging, grouping, comparing, or
performing other similar operations (do something to data to produce information). Bateson defines
information as a “difference that makes a difference”. Example: data (hourly wage), information (average wage)
Characteristics of Good Information: all information is not equal: some is better than other.
Good information is
a. Accurate Information
- Correct and complete data
- Has been processed correctly as expected
- Accurate and reliable (bad reputations develop in organization if IS function produces inaccurate info)
- Difficult to be sceptical of information delivered with beautiful, active graphics but you must do cross-
referencing to be sure the information is correct
b. Timely Information
- Produced in time for its intended use (monthly report given 6 weeks late is useless)
- Can be measured against a calendar or event
- In IS, developing systems that provide information near real time is more difficult and costly in comparison
to producing information a few hours later
c. Relevant Information
- Should be relevant to the context and the subject
d. Just Barely Sufficient Information CompSci 1021 A Taylor Ward September 27, 2011
- Each of us make critical decisions on what information to ignore
- With a large amount of information given, and because there is only so much time, more information will be
e. Worth Its Cost
- Information is not free
- Costs associated with developing an information system (operating, maintaining, employees)
- Must be an appropriate relationship between the cost of information and its value
- Information and IS should be subject to the same financial analyses to which other assets are subjected
5. What is the role of information in business processes?
Any time a good is moved or service is provided, data and information are created. Is quantity received an