PERSPECTIVES ON IS

From the software developer’s perspective

• Software is mostly a collection of software “components” assembled and reused

as needed (like Lego blocks)
• Developers created these components to accumulate in the marketplace over time
– Once only automated small subset of tasks
– Components now exist for just about any business function
– Now have components for sale individually at one extreme and bundled
together as Inter-organizational services at the other
• “Applications” don’t really exist except as a way to describe a set of “software
services”
– Sold based on marketing and sales
– Many services share components but are bundled and marketed differently
based on user group and task
– Sales staff may end up selling multiple software “systems” that are
actually 90%+ the same code to your firm.
–
From the end user’s perspective

– Different software helps different groups of users at different levels within

business hierarchy
– Services are marketed based on
• what level in the hierarchy user is located and
• what goal they are using the system for
Overview of Operational Level Systems: Produces routine answers. Nuts and bolts of the
business.
Overview of Strategic Level Systems: Information Systems that Support Long-Range
Planning of Senior Management.

• Marketing terms for services at different levels

• Level 1-Transaction Processing Systems (TPS)
• Level 2-Management Information Systems (MIS)
• Level 2-Decision Support Systems (DSS)
• Level 3-Executive Support Systems (ESS)
• Let’s discuss each…

Lowest Level (operational)-

Transaction Processing Systems (TPS):

Inputs: Transactions or events
Processing: Sorting; listing; merging; updating
Outputs: Detailed reports; lists; summaries
Users: Operational personnel; supervisors

A computerized system that performs and records daily routine transactions necessary to
the conduct of the business

Example: payroll system; production instructions

Level two (management level)-
Management Information System (MIS):

• Inputs: Summary transaction data

• Processing: Simple models; low level analysis
• Outputs: Summary reports
• Users: Middle managers
Example: Weekly, monthly, and annual resource allocation. Not five year plans and not
daily details, but something in between.
Level two (management level)-

Management Information System (MIS):

• Inputs: Summary transaction data

• Processing: Simple models; low level analysis
• Outputs: Summary reports
• Users: Middle managers

Example: Weekly, monthly, and annual resource allocation. Not five year plans and not
daily details, but something in between.
Also level two (management level)-

Decision Support System (DSS):

• Inputs: databases optimized for statistical analysis
• Processing: Interactive. Simulations and statistical analysis
• Outputs: Responses to queries; statistical test results.
• Users: Professionals, staff
• Example: Could answer the following query:
“We need to trim 5% of our menu offerings to limit complexity in operations. Which
items are the worst performing; are most likely to lead to sales of other products left on
the menu, and have the most ingredients unique to their recipes?”
Top level (strategic level)-

Executive Support System (ESS):

• Inputs: Aggregate data. Internal and external
• Processing: Interactive and graphical simulations
• Outputs: Projections
• Users: Senior managers

Example: 5-year operating plan. Answer question like “what are long-term industry cost
trends and how are we doing relative to them?”

• Gets data from all internal IS plus external industry data bases

Characteristics of Executive Support Systems (ESS)

• Top level management
• Designed to the individual
• Ties CEO to all levels
• Very expensive to keep up
• Extensive support staff
INTERRELATIONSHIPS:
- These systems can share data and be interconnected
- TPS generally feed all other systems
- MIS generally indicate when a DSS is needed and provide input for them to
crunch
- ESS take all internal data but usually only summary data from MIS and DSS level

Output data from one is input data for others to process

• When talking to sales staff with these terms, what matters here is (1) who is using
the system and (2) what is their objective
• A single software package like Microsoft Office or even an application like
Microsoft Excel could be classified as any or all of the following: DSS, TPS,
MIS, or ESS (albeit, a trivial ESS, DSS, etc.)
• A service is provided by the CBIS is a solution. It is a DSS, etc., depending on
what solution in the corporate hierarchy it serves.
– Analogy: a BMW is either a luxury car or an expensive paper weight
depending on what you use it for. But it can be either or both.

FROM THE BUSINESS PROCESS PERSPECTIVE

• We now understand what the types of systems are sold based on hierarchy within
an organization
• Services are also marketed based on business process
Business processes
• Def: manner in which work is organized, coordinated, and focused to produce a
valuable product or service
• Buying software based on business process perspective (continued)
• Has specialists who develop, sell, implement, and maintain just those
niche processes
• Within a given industry, each specialized type of software exists
• Usually, specialists exist within each functional area and industry
(e.g., my old firm hired technologists and taught them about foodservice, or
foodservice people and taught them about technology…but both skills were needed for
foodservice management software)
 • Google on a function and industry and see for yourself what is available
• Not all business processes are contained within a single functional area
• Many business processes are cross-functional
•
• Cross-Functional Business Processes
• Def: Transcend boundary between sales, marketing, manufacturing, and research
and development (e.g., order fulfillment process…)

• Not all business processes are contained within a single functional area
• Many business processes are cross-functional

Cross-Functional Business Processes

• Def: Transcend boundary between sales, marketing, manufacturing, and research
and development (e.g., order fulfillment process…)

What is a Business Process

Davenport & Short (1990) define business process as "a set of logically
related tasks performed to achieve a defined business outcome." A
process is "a structured, measured set of activities designed to
produce a specified output for a particular customer or market. It
implies a strong emphasis on how work is done within an organization"
(Davenport 1993). In their view processes have two important
characteristics: (i) They have customers (internal or external), (ii) They
cross organizational boundaries, i.e., they occur across or between
organizational subunits. One technique for identifying business
processes in an organization is the value chain method proposed by
Porter and Millar (1985).
Processes are generally identified in terms of beginning and end
points, interfaces, and organization units involved, particularly the
customer unit. High Impact processes should have process owners.
Examples of processes include: developing a new product; ordering
goods from a supplier; creating a marketing plan; processing and
paying an insurance claim; etc.

Administrative Coordination and Support Services

SIS: Collaborative Work Systems`

Human Resources Management

SIS: Employee Skills Database Systems
Support
Processes Technology Development
SIS: Computer-Aided Engineering and Design

Procurement of Resources
SIS: Electronic Data Interchange with Suppliers
Competitive
Advantage
Marketing
Inbound Operations Outbound Customer
and Sales
Logistics Logistics Service
SIS:
SIS:
Primary SIS: Computer- SIS: Online SIS: Help
Interactive
Automated Aided Point-of- Desk Expert
Business Just-in-Time Flexible Sale and
Targeted
System
Processes Marketing
Warehousin Manufac- Order
g turing Processing

Processes may be defined based on three dimensions (Davenport &

Short 1990):

. Entities: Processes take place between organizational entities. They

could be Interorganizational (e.g. EDI, i.e., Electronic Data
Interchange), Interfunctional or Interpersonal (e.g. CSCW, i.e.,
Computer Supported Cooperative Work).

. Objects: Processes result in manipulation of objects. These objects

could be Physical or Informational.

. Activities: Processes could involve two types of activities: Managerial

(e.g. develop a budget) and Operational (e.g. fill a customer order).
How does information technology enhance business processes?
• Information systems help organizations achieve great efficiencies by automating
parts of processes

• IS also contributes to completely rethinking processes.

• Business processes typically span several different functional areas.

• Change flow of information and work flow

• Allows shared information throughout the organization

• Lots more…

MANAGEMENT CHALLENGES

1. Integration: Different systems serve variety of functions, connecting

organizational levels difficult, costly
2. Enlarging scope of management thinking: Huge system investments, long
development time must be guided by common objectives
3. Management and employee Training: dealing with employee turnover, new
systems, new job tasks, new skills.
4. Accounting for Costs: effectively manage information costs to provide benefits
within cost parameters.

What is BPM?
The concept of Business Process Management [BPM] has its roots in Operation
Transformation and enables flexible design, deployment, monitoring and tracking,
process focus and efficiency.

BPM Explained
• Business Process Management (BPM) Involves
• End to end Automation of business processes
• Blending machine machine and manual operations
• Straight Through Processing (STP)
BPM Uses
• Workflow
• Imaging & Document Management
• EAI: Integration with Business Systems
• Measurements, ng, reporting and Control
• Analysis, Simulation, Optimisation and re-deployment

BPM in Operational Excellence

Process
Process Mapping Deployment Process Improvement
Discover Design Deploy Analyze Optimize

Identify Integrate Redesign

Model the
process
Key process participa- • Measure
to
Processes with its ting time taken
Rules & systems a) Per work remove
rules and
Roles for Train step, bottle-
roles on
each stakehold b) Per Person necks
to the c) Per Process
process system ers of the
process • Identify
bottlenecks

BPM Challenge

• Make processes visible

• Components, diagrams,
• The static view for definition, validations, understanding
 • Operations view for insight, for management
• Build for change
• Separate IT functions from processes
• Processes will change much more often