Sei sulla pagina 1di 51

INF10003

Introduction to Business Information Systems

INF10003 Introduction to Business Information Systems Lecture 3 Organizational Process and Systems Business Process

Lecture 3

Organizational Process and Systems

Business Process Decision Making Systems

Acknowledgement to Dr. Paul Scifleet, Dr. Jason Sargent & Dr. Adi Prananto for contributions to unit content.

& Dr. Adi Prananto for contributions to unit content. DULN004(Q) KP(JPS)5195/IPTS/1144 05 June 2004 Co. No.

DULN004(Q) KP(JPS)5195/IPTS/1144

05 June 2004 Co. No. 497194-M

& Dr. Adi Prananto for contributions to unit content. DULN004(Q) KP(JPS)5195/IPTS/1144 05 June 2004 Co. No.

Lecture Objectives

At the end of this session you should be able to:

Objectives At the end of this session you should be able to:  Explain what is

Explain what is meant by business process management (BPM), its role and value.

Apply the basic symbols of BPMN (business process modelling notation) to develop a business process model.

Demonstrate the value of business process modelling .

Explain the importance of decision making for managers at each of the three primary organisational levels, along with characteristics associated with decision making at each level.

Define critical success factors (CSFs) and key performance indicators (KPIs), and explain how managers use them to measure the success of MIS projects.

Explain how managers can use Decision Support Systems to support decision making.

can use Decision Support Systems to support decision making. DULN004(Q) KP(JPS)5195/IPTS/1144 05 June 2004 Co. No.

DULN004(Q) KP(JPS)5195/IPTS/1144

05 June 2004 Co. No. 497194-M

use Decision Support Systems to support decision making. DULN004(Q) KP(JPS)5195/IPTS/1144 05 June 2004 Co. No. 497194-M

Business Processes

“A Business Process is a standardised set of activities that accomplish a specific task, such as

processing a customer’s order”.

Activities

(Baltzan, Lynch & Fisher 2015, p. 118)

o

Transform resources and information of one type into resources and information of another type

o

Can be manual, automated or a combination

The moment a customer places an order through a simple business process dozens if not hundreds of other business processes are set into action.

Value chain analysis:

views the company as a series of business processes that each add value to the product or service (i.e. a value-chain is a network of value-creating activities)

a value-chain is a network of value-creating activities) DULN004(Q) KP(JPS)5195/IPTS/1144 05 June 2004 Co. No.

DULN004(Q) KP(JPS)5195/IPTS/1144

05 June 2004 Co. No. 497194-M

a value-chain is a network of value-creating activities) DULN004(Q) KP(JPS)5195/IPTS/1144 05 June 2004 Co. No. 497194-M
Business Processes 1. Setting the scope, creating a model of business process components  Users

Business Processes

1. Setting the scope, creating a model of business process components

Users review and adjust model

As-isdocuments current process; it is changed to solve process problems

to-bemodel

2. Creating plan for Information System Components

Analysis considering five elements of IS (hardware, software, data, procedures, people) and required input, output, feedback

3. Creating and implementing a new business process

4. Create policy and procedures for ongoing assessment of process effectiveness

Adjust and repeat cycles

of process effectiveness  Adjust and repeat cycles DULN004(Q) KP(JPS)5195/IPTS/1144 05 June 2004 Co. No.

DULN004(Q) KP(JPS)5195/IPTS/1144

05 June 2004 Co. No. 497194-M

of process effectiveness  Adjust and repeat cycles DULN004(Q) KP(JPS)5195/IPTS/1144 05 June 2004 Co. No. 497194-M

Business Processes

• •
Functional processes
Functional processes
Business Processes • • Functional processes – Activities in a single department or function – Problem:

Activities in a single department or function

Problem: may lead to ‘islands of automation’

Cross-Functional processes
Cross-Functional processes

Activities among many business departments

Eliminate or reduce isolated systems and data

– Eliminate or reduce isolated systems and data • Example: processes involved in Product

Example: processes involved in Product return/exchange/or recall, Sales, Finance, Marketing, Inventory, Operations, Logistics

Sales, Finance, Marketing, Inventory, Operations, Logistics DULN004(Q) KP(JPS)5195/IPTS/1144 05 June 2004 Co. No.

DULN004(Q) KP(JPS)5195/IPTS/1144

05 June 2004 Co. No. 497194-M

Sales, Finance, Marketing, Inventory, Operations, Logistics DULN004(Q) KP(JPS)5195/IPTS/1144 05 June 2004 Co. No. 497194-M
Business Processes • Inter-Organisational processes – Activities that cross organisational boundaries – Business

Business Processes

•
Inter-Organisational processes
Inter-Organisational processes

Activities that cross organisational boundaries

Business processes that involve activities in another business or organisation

Usually as a part of Supply Chain Management (SCM)

Example: Credit card transaction processing

More difficult than functional and cross-functional systems

Requires negotiation,

Contracts, Litigation to resolve conflicts between organisations

»

Litigation to resolve conflicts between organisations » Example: tracking of purchase through outsourced delivery,

Example: tracking of purchase through outsourced delivery, e.g. courier or Australia post website

outsourced delivery, e.g. courier or Australia post website DULN004(Q) KP(JPS)5195/IPTS/1144 05 June 2004 Co. No.
outsourced delivery, e.g. courier or Australia post website DULN004(Q) KP(JPS)5195/IPTS/1144 05 June 2004 Co. No.

DULN004(Q) KP(JPS)5195/IPTS/1144

05 June 2004 Co. No. 497194-M

How does a business process look like?

Business process mapping refers to activities involved in defining

what a business entity does,

who is responsible,

to what standard a business process should be completed, and

how the success of a business process can be determined.

The main purpose behind business process mapping is to assist organisations in becoming more effective.

A clear and detailed business process map or diagram allows consulting firms to come in and look at whether or not improvements can be made to the current process.

Job Started Job Finished
Job Started
Job Finished
be made to the current process. Job Started Job Finished DULN004(Q) KP(JPS)5195/IPTS/1144 05 June 2004 Co.
be made to the current process. Job Started Job Finished DULN004(Q) KP(JPS)5195/IPTS/1144 05 June 2004 Co.

DULN004(Q) KP(JPS)5195/IPTS/1144

05 June 2004 Co. No. 497194-M

Using tools to visualize Business Processes

Business process mapping, also known as process charts, has become much more prevalent and understood in the business world in recent years. Process maps can be used in every section of life or business.

The Major Steps of Process Improvement using Process Mapping

Process identification - identify objectives, scope, players and work areas.

Information gathering - gather process facts (what, who, where, when) from the people who do the work.

Process Mapping - convert facts into a process map.

Analysis - work through the map, challenging each step (what-why?, who- why?, where-why?, when-why?, how-why?)

Develop/Install New Methods - eliminate unnecessary work, combine steps, rearrange steps, add new steps where necessary

Manage process - maintain process map in library, review routinely, and monitor process for changes

library, review routinely, and monitor process for changes DULN004(Q) KP(JPS)5195/IPTS/1144 05 June 2004 Co. No.

DULN004(Q) KP(JPS)5195/IPTS/1144

05 June 2004 Co. No. 497194-M

library, review routinely, and monitor process for changes DULN004(Q) KP(JPS)5195/IPTS/1144 05 June 2004 Co. No. 497194-M

Using the symbols used in flowcharts

Simple Process Map

Using the symbols used in flowcharts • Simple Process Map Start or End point Decision Process
Using the symbols used in flowcharts • Simple Process Map Start or End point Decision Process
Using the symbols used in flowcharts • Simple Process Map Start or End point Decision Process

Start or End point

Decision

Process Step

Simple Process Map Start or End point Decision Process Step Connector DULN004(Q) KP(JPS)5195/IPTS/1144 05 June 2004
Simple Process Map Start or End point Decision Process Step Connector DULN004(Q) KP(JPS)5195/IPTS/1144 05 June 2004

Connector

Map Start or End point Decision Process Step Connector DULN004(Q) KP(JPS)5195/IPTS/1144 05 June 2004 Co. No.

DULN004(Q) KP(JPS)5195/IPTS/1144

05 June 2004 Co. No. 497194-M

Map Start or End point Decision Process Step Connector DULN004(Q) KP(JPS)5195/IPTS/1144 05 June 2004 Co. No.

Using the symbols used in flowcharts

Ordering a burger

Approach sales counter
Approach sales
counter
Look at menu Order burger Value Adding Receive burger Want yes (end) Order fries fries?
Look at
menu
Order
burger
Value Adding
Receive burger
Want
yes
(end)
Order fries
fries?
no
Want
yes
Pay cashier
Order drink
drink?
no
fries? no Want yes Pay cashier Order drink drink? no DULN004(Q) KP(JPS)5195/IPTS/1144 05 June 2004 Co.

DULN004(Q) KP(JPS)5195/IPTS/1144

05 June 2004 Co. No. 497194-M

fries? no Want yes Pay cashier Order drink drink? no DULN004(Q) KP(JPS)5195/IPTS/1144 05 June 2004 Co.
fries? no Want yes Pay cashier Order drink drink? no DULN004(Q) KP(JPS)5195/IPTS/1144 05 June 2004 Co.

Using the symbols used in flowcharts

Ordering a burger (improved process)

Approach sales counter Look at menu Order Combo meal Pay cashier Receive burger (end)
Approach sales
counter
Look at
menu
Order
Combo meal
Pay cashier
Receive burger
(end)
menu Order Combo meal Pay cashier Receive burger (end) DULN004(Q) KP(JPS)5195/IPTS/1144 05 June 2004 Co. No.
menu Order Combo meal Pay cashier Receive burger (end) DULN004(Q) KP(JPS)5195/IPTS/1144 05 June 2004 Co. No.

DULN004(Q) KP(JPS)5195/IPTS/1144

05 June 2004 Co. No. 497194-M

menu Order Combo meal Pay cashier Receive burger (end) DULN004(Q) KP(JPS)5195/IPTS/1144 05 June 2004 Co. No.
menu Order Combo meal Pay cashier Receive burger (end) DULN004(Q) KP(JPS)5195/IPTS/1144 05 June 2004 Co. No.

Using the symbols used in flowcharts

Ordering a burger (benefits of the improved process)

• Ordering a burger (benefits of the improved process)  Less complex (customer perspective)  Less

Less complex (customer perspective)

Less complex from employee perspective

Less time to complete order

Less key presses by the operator

Less errors

Less complaints

Improved turn around time from order to fulfillment.

Open opportunities for other value adding features.

 Open opportunities for other value adding features. DULN004(Q) KP(JPS)5195/IPTS/1144 05 June 2004 Co. No.
 Open opportunities for other value adding features. DULN004(Q) KP(JPS)5195/IPTS/1144 05 June 2004 Co. No.

DULN004(Q) KP(JPS)5195/IPTS/1144

05 June 2004 Co. No. 497194-M

 Open opportunities for other value adding features. DULN004(Q) KP(JPS)5195/IPTS/1144 05 June 2004 Co. No. 497194-M

Business Process Management

Business processes will change over time:

Management • Business processes will change over time: – Improvements (often continuous, may include

Improvements (often continuous, may include streamlining, adapting etc.)

Re-engineering (significant change)

Automation

Business Process Management (BPM)

Systematic process of creating, assessing, and altering business processes

Involves a sequence of well-managed steps

https://www.youtube.com/watch?v=hAsRTy7UlN4

steps • https://www.youtube.com/watch?v=hAsRTy7UlN4 DULN004(Q) KP(JPS)5195/IPTS/1144 05 June 2004 Co. No.

DULN004(Q) KP(JPS)5195/IPTS/1144

05 June 2004 Co. No. 497194-M

steps • https://www.youtube.com/watch?v=hAsRTy7UlN4 DULN004(Q) KP(JPS)5195/IPTS/1144 05 June 2004 Co. No. 497194-M
Business Processes Modelling • The activity of creating a graphic description (detailed flow chart or

Business Processes Modelling

The activity of creating a graphic description (detailed flow chart or map) of business processes and activities in their structured sequence

Developed both for as-is models and to incorporate change in to-be models

Today BPMN (business process modelling notation) is a standard notation for creating business process documentation

notation for creating business process documentation DULN004(Q) KP(JPS)5195/IPTS/1144 05 June 2004 Co. No.
notation for creating business process documentation DULN004(Q) KP(JPS)5195/IPTS/1144 05 June 2004 Co. No.

DULN004(Q) KP(JPS)5195/IPTS/1144

05 June 2004 Co. No. 497194-M

notation for creating business process documentation DULN004(Q) KP(JPS)5195/IPTS/1144 05 June 2004 Co. No. 497194-M

Basic Symbols of BPMN (Business Process Modelling Notation)

Artefact Data object Transation details
Artefact
Data object
Transation
details
Connections Process flow Message flow -- |Annotations can be added Annotations
Connections
Process flow
Message flow
-- |Annotations can be added Annotations

Pool & Swim Lanes

Pool

Pool

Lane 2

Lane 1

Events Start event End event Timer event
Events
Start event
End event
Timer event
Activities Activity Task Activity Sub process +
Activities
Activity
Task
Activity
Sub process
+
Gateways Generic + Parallel Fork/Join X Exclusive Decision/Merge
Gateways
Generic
+
Parallel Fork/Join
X
Exclusive Decision/Merge
Generic + Parallel Fork/Join X Exclusive Decision/Merge DULN004(Q) KP(JPS)5195/IPTS/1144 05 June 2004 Co. No.
Generic + Parallel Fork/Join X Exclusive Decision/Merge DULN004(Q) KP(JPS)5195/IPTS/1144 05 June 2004 Co. No.

DULN004(Q) KP(JPS)5195/IPTS/1144

05 June 2004 Co. No. 497194-M

Business Processes Modelling with Swim Lane diagrams Activity Start End Basic Structure of a Swim

Business Processes Modelling with Swim Lane diagrams

Activity

Business Processes Modelling with Swim Lane diagrams Activity Start End Basic Structure of a Swim Lane

Start

Processes Modelling with Swim Lane diagrams Activity Start End Basic Structure of a Swim Lane Diagram
Processes Modelling with Swim Lane diagrams Activity Start End Basic Structure of a Swim Lane Diagram

End

Basic Structure of a Swim Lane Diagram

Activity Start End Basic Structure of a Swim Lane Diagram DULN004(Q) KP(JPS)5195/IPTS/1144 05 June 2004 Co.

DULN004(Q) KP(JPS)5195/IPTS/1144

05 June 2004 Co. No. 497194-M

Activity Start End Basic Structure of a Swim Lane Diagram DULN004(Q) KP(JPS)5195/IPTS/1144 05 June 2004 Co.

Business Processes Modelling with Swim Lane diagrams

Scenario for PR Consulting: The consultant submits to his manager an expense report with information
Scenario for PR Consulting: The consultant submits to his manager an expense
report with information on costs he has incurred for the job. The manager
checks if the report is correct in terms of allowable expenditures and pricing. If
it is not correct the manager returns the report to the consultant. If it is correct
the manager forwards the report to the Data Entry clerk who enters the data
into the system.
Expense Reporting
ConsultantData
Entry Clerk
Manager

Starting a Simple Swim Lane Diagram on Expense Reporting

Starting a Simple Swim Lane Diagram on Expense Reporting DULN004(Q) KP(JPS)5195/IPTS/1144 05 June 2004 Co. No.

DULN004(Q) KP(JPS)5195/IPTS/1144

05 June 2004 Co. No. 497194-M

Starting a Simple Swim Lane Diagram on Expense Reporting DULN004(Q) KP(JPS)5195/IPTS/1144 05 June 2004 Co. No.
Starting a Simple Swim Lane Diagram on Expense Reporting DULN004(Q) KP(JPS)5195/IPTS/1144 05 June 2004 Co. No.

Business Processes Modelling with Swim Lane diagrams

Activity Data
Activity
Data

his manager an

with Swim Lane diagrams Activity Data his manager an Scenario for PR Consulting: The consultant submits

Scenario for PR Consulting: The consultant submits to

information on costs he has incurred for the job. The

terms of allowable expenditures
terms of allowable expenditures

expense report with

manager checks if the report is correct in

and pricing. If it is not correct the manager returns the report

If it is not correct the manager returns the report Data Entry clerk who to the

Data Entry clerk who

to the consultant. If it is correct the manager forwards the report to the

enters the data into the system.

Expense Data System Expense Reporting Data Entry Clerk Manager Consultant
Expense
Data
System
Expense Reporting
Data Entry Clerk
Manager
Consultant

End

Start

End

Decision

Gateway

Clerk Manager Consultant End Start End Decision Gateway Finalising a Simple Swim Lane Diagram on Expense

Finalising a Simple Swim Lane Diagram on Expense Reporting

Finalising a Simple Swim Lane Diagram on Expense Reporting DULN004(Q) KP(JPS)5195/IPTS/1144 05 June 2004 Co. No.

DULN004(Q) KP(JPS)5195/IPTS/1144

05 June 2004 Co. No. 497194-M

Business Processes Modelling with Swim Lane diagrams Activity Data Start Submit letter Registration Write Reject

Business Processes Modelling with Swim Lane diagrams

Activity

Data

Processes Modelling with Swim Lane diagrams Activity Data Start Submit letter Registration Write Reject

Start

Submit letter Registration Write Reject Application letter complete Min Standard met Suitable for Write Write
Submit
letter
Registration
Write Reject
Application
letter
complete
Min
Standard
met
Suitable for
Write
Write
program
Reject
Accept
letter
letter
Decision
Gateway
Submit letter Registration Application Write Reject complete letter Min Standard met Write Suitable for Accept
Submit
letter
Registration
Application
Write Reject
complete
letter
Min
Standard
met
Write
Suitable for
Accept
program
letter
Standard met Write Suitable for Accept program letter End Two Swim Lane Diagrams – as-is and

End

Two Swim Lane Diagrams – as-is and to-be

letter End Two Swim Lane Diagrams – as-is and to-be DULN004(Q) KP(JPS)5195/IPTS/1144 05 June 2004 Co.

DULN004(Q) KP(JPS)5195/IPTS/1144

05 June 2004 Co. No. 497194-M

Business Processes Modeling

Swim Lane Diagrams Vertical alignment Example

Take Manual Application Form Manual This is the result of Fill Application Form action Application
Take Manual
Application Form
Manual
This is the result of
Fill Application Form
action
Application
Form
Add Manual
Application
Form To Bank
System
Manual Record
This is the result of
Add Manual
Application Form
action to Bank System
Digital Record
End

Start

Activity

-- | Indicates this is an annotation

Data -- | This Swim Lane does not have a Gateway
Data
-- | This Swim Lane does not have a Gateway

DULN004(Q) KP(JPS)5195/IPTS/1144

05 June 2004 Co. No. 497194-M

Data -- | This Swim Lane does not have a Gateway DULN004(Q) KP(JPS)5195/IPTS/1144 05 June 2004
Data -- | This Swim Lane does not have a Gateway DULN004(Q) KP(JPS)5195/IPTS/1144 05 June 2004

CustomerBank

Business Processes Modeling

Swim Lane Diagram – alternative to previous example, Horizontal alignment

– alternative to previous example, Horizontal alignment Filll in form manually Completed form Activity Data
Filll in form manually Completed form Activity
Filll in form
manually
Completed
form
Activity

Data

Deliver form to bank
Deliver form to
bank
Completed form Activity Data Deliver form to bank Recieve customer form Enter manual form to System

Recieve

customer form

Enter manual form to System

Enter manual form to System
Enter manual form to System
Enter manual form to System
to bank Recieve customer form Enter manual form to System Digital form Start End -- |
Digital form
Digital
form
customer form Enter manual form to System Digital form Start End -- | This Swim Lane

Start

form Enter manual form to System Digital form Start End -- | This Swim Lane does

End

form Enter manual form to System Digital form Start End -- | This Swim Lane does

-- | This Swim Lane does not have a Gateway

form Start End -- | This Swim Lane does not have a Gateway DULN004(Q) KP(JPS)5195/IPTS/1144 05

DULN004(Q) KP(JPS)5195/IPTS/1144

05 June 2004 Co. No. 497194-M

Business Processes Modeling Swim Lane Diagram – another example, Vertical alignment Employee Database 05 June

Business Processes Modeling

Swim Lane Diagram – another example, Vertical alignment

Employee Database 05 June 2004 Co. No. 497194-M
Employee
Database
05 June 2004 Co. No. 497194-M

Start

Decision

Activity

Gateway

Data

Database 05 June 2004 Co. No. 497194-M Start Decision Activity Gateway Data End DULN004(Q) KP(JPS)5195/IPTS/1144
End
End

DULN004(Q) KP(JPS)5195/IPTS/1144

What can happen when a company fails to correctly model its transactions and even more importantly its Business Processes?

and even more importantly its Business Processes? One Tel: Australian telecommunications company - Went bust
and even more importantly its Business Processes? One Tel: Australian telecommunications company - Went bust
and even more importantly its Business Processes? One Tel: Australian telecommunications company - Went bust
and even more importantly its Business Processes? One Tel: Australian telecommunications company - Went bust

One Tel: Australian telecommunications company - Went bust in 2001

Rapid expansion, global ambitions

Complex Marketing – Billing System couldn’t address the level of complexity

Billing delayed up to 6 weeks with inevitable impact on cash flow

Krispy Kreme & Starbucks – not successful in Australia

rapid expansion

poor marketing – reliance on Brand name

assumed knowledge of Australian customer

Borders – Went bust in 2011

huge brick and mortar stores

did not adapt to changing market

Initially relied on Amazon for online presence

market • Initially relied on Amazon for online presence DULN004(Q) KP(JPS)5195/IPTS/1144 05 June 2004 Co. No.
market • Initially relied on Amazon for online presence DULN004(Q) KP(JPS)5195/IPTS/1144 05 June 2004 Co. No.

DULN004(Q) KP(JPS)5195/IPTS/1144

05 June 2004 Co. No. 497194-M

Management Key Concepts

Organisations

Management Key Concepts • Organisations – People working together and coordinating their actions to achieve specific

People working together and coordinating their actions to achieve specific goals

Goal

A desired future condition that the organisation seeks to achieve

It may be to make a profit, raise more money for a charity or to improve the benefit to members of a club

Adapted from Jones, G & George, J 2004, Essentials of Contemporary Management, McGraw-Hill Irwin, USA

of Contemporary Management , McGraw-Hill Irwin, USA DULN004(Q) KP(JPS)5195/IPTS/1144 05 June 2004 Co. No.

DULN004(Q) KP(JPS)5195/IPTS/1144

05 June 2004 Co. No. 497194-M

of Contemporary Management , McGraw-Hill Irwin, USA DULN004(Q) KP(JPS)5195/IPTS/1144 05 June 2004 Co. No. 497194-M

What is Management?

Management

What is Management? • Management – The planning, organising, leading, and controlling of human and other

The planning, organising, leading, and controlling of human and other resources to achieve organisational goals effectively and efficiently.

Managers

The people responsible for supervising the use of an organisation’s resources to meet its goals.

Adapted from Jones, G & George, J 2004, Essentials of Contemporary Management, McGraw-Hill Irwin, USA

of Contemporary Management , McGraw-Hill Irwin, USA DULN004(Q) KP(JPS)5195/IPTS/1144 05 June 2004 Co. No.

DULN004(Q) KP(JPS)5195/IPTS/1144

05 June 2004 Co. No. 497194-M

of Contemporary Management , McGraw-Hill Irwin, USA DULN004(Q) KP(JPS)5195/IPTS/1144 05 June 2004 Co. No. 497194-M

Organisational Resources

All forms of resources are an organisations assets

Human resources

resources are an organisations assets • Human resources – Not only people but their talent, skills

Not only people but their talent, skills and knowledge

Financial resources

Capital investments to support ongoing and long-term operations

Physical Assets

Land and Raw materials; office and production facilities, and equipment

Information

Usable data and information

Griffin, R Management (9 th Edition), Houghton Mifflin Company, USA, 2007

(9 t h Edition), Houghton Mifflin Company, USA, 2007 DULN004(Q) KP(JPS)5195/IPTS/1144 05 June 2004 Co. No.

DULN004(Q) KP(JPS)5195/IPTS/1144

05 June 2004 Co. No. 497194-M

(9 t h Edition), Houghton Mifflin Company, USA, 2007 DULN004(Q) KP(JPS)5195/IPTS/1144 05 June 2004 Co. No.

Why do we need information?

Why do we need the information?

do we need information? • Why do we need the information? – So managers at various

So managers at various levels can make informed decisions

Thus the information has to be accurate, timely, worth its cost, barely sufficient and relevant

If it is not, then managers cannot make good decisions and hence they are at a distinct disadvantage

good decisions and hence they are at a distinct disadvantage DULN004(Q) KP(JPS)5195/IPTS/1144 05 June 2004 Co.

DULN004(Q) KP(JPS)5195/IPTS/1144

05 June 2004 Co. No. 497194-M

decisions and hence they are at a distinct disadvantage DULN004(Q) KP(JPS)5195/IPTS/1144 05 June 2004 Co. No.

Utilising Information Systems

Information Systems is increasingly used to help managers.

How can Information Systems help?

to help managers. • How can Information Systems help? – Provide a better cross-departmental view of

Provide a better cross-departmental view of their organisation.

Make more and better information about the organisation available to outsiders

Empower employees at all organisational levels

Help managers carry out their roles more effectively and efficiently

Increase awareness of competitive opportunities

Make the organisation more responsive to its customers

Adapted from Jones, G & George, J 2004, Essentials of Contemporary Management, McGraw-Hill Irwin, USA

of Contemporary Management , McGraw-Hill Irwin, USA DULN004(Q) KP(JPS)5195/IPTS/1144 05 June 2004 Co. No.

DULN004(Q) KP(JPS)5195/IPTS/1144

05 June 2004 Co. No. 497194-M

of Contemporary Management , McGraw-Hill Irwin, USA DULN004(Q) KP(JPS)5195/IPTS/1144 05 June 2004 Co. No. 497194-M

Management Information Systems – Systems Thinking

Systems thinking is a way of looking at a problem holistically. It “requires you to model the components of the system and to connect the inputs and outputs among those components into a sensible whole - one that explains the phenomenon observed”

(Kroenke, Bunker & Wilson, 2014 p.8)

observed” • (Kroenke, Bunker & Wilson, 2014 p.8) (Baltzan, Lynch & Fisher 2015, p.22) Systems Thinking:

(Baltzan, Lynch & Fisher 2015, p.22)

Wilson, 2014 p.8) (Baltzan, Lynch & Fisher 2015, p.22) Systems Thinking: A cautionary Tale (Cats in
Wilson, 2014 p.8) (Baltzan, Lynch & Fisher 2015, p.22) Systems Thinking: A cautionary Tale (Cats in

Systems Thinking: A cautionary Tale (Cats in Borneo) https://www.youtube.com/watch?v=17BP9n6g1F0 (3.09 min)

https://www.youtube.com/watch?v=17BP9n6g1F0 (3.09 min) DULN004(Q) KP(JPS)5195/IPTS/1144 05 June 2004 Co. No.

DULN004(Q) KP(JPS)5195/IPTS/1144

05 June 2004 Co. No. 497194-M

Management Levels & Responsibilities

Strategic Senior Managers Long-range planning Strategic decisions Middle Middle Managers Implement goals
Strategic
Senior Managers
Long-range planning
Strategic decisions
Middle
Middle Managers
Implement goals
Make tactical decisions
Plan & control operations
Operational
Operational Managers
(First Line Managers)
Sales
Manufacturing &
Production
Finance &
Human
& Marketing
Accounting
Resources
Manage general
workforce
Monitor day-to-day
events
Make operational
decisions
DULN004(Q) KP(JPS)5195/IPTS/1144
05 June 2004 Co. No. 497194-M

Decision Types

Strategic Approve capital budget; decide corporate objectives
Strategic
Approve capital
budget;
decide
corporate objectives

Middle

to plan
to
plan

Allocate

managers; develop a marketing

resources

Operational Restock inventory; determine special offers to customers
Operational
Restock
inventory;
determine special offers to
customers

Novel, non-routine decisions requiring judgment and insights

Only part of decision has clear-cut answers provided by accepted procedures

Routine decisions with definite procedures

Sales &

Manufacturing & Production

Finance & Accounting

Human

Marketing

Resources

Finance & Accounting Human Marketing Resources DULN004(Q) KP(JPS)5195/IPTS/1144 05 June 2004 Co. No.

DULN004(Q) KP(JPS)5195/IPTS/1144

05 June 2004 Co. No. 497194-M

& Accounting Human Marketing Resources DULN004(Q) KP(JPS)5195/IPTS/1144 05 June 2004 Co. No. 497194-M

Management Levels

Organisations often have 3 levels of managers:

Levels • Organisations often have 3 levels of managers: – Top Managers: Responsible for the performance

Top Managers: Responsible for the performance of all departments and have cross-departmental responsibility. They establish organisational goals and monitor middle managers.

Middle Managers: Supervise first-line managers. They are also responsible to find the best way to use departmental resources to achieve goals.

First-line Managers: responsible for day-to-day operation. They supervise the people performing the activities required to make the good or service.

Jones, G, George, Hill, C., J 2000, Contemporary Management, (2 nd Edition), McGraw-Hill Irwin, USA

Management , (2 n d Edition), McGraw-Hill Irwin, USA DULN004(Q) KP(JPS)5195/IPTS/1144 05 June 2004 Co. No.

DULN004(Q) KP(JPS)5195/IPTS/1144

05 June 2004 Co. No. 497194-M

Management , (2 n d Edition), McGraw-Hill Irwin, USA DULN004(Q) KP(JPS)5195/IPTS/1144 05 June 2004 Co. No.

How do Decision vary by Level?

Decisions occur at three levels

Strategic

Broader-scope, organisational issues

Executive information systems

Managerial

Allocation and utilisation of resources

Management information systems

Decision Support Systems

Operational

Day-to-day activities

Transaction processing systems

Day-to-day activities – Transaction processing systems DULN004(Q) KP(JPS)5195/IPTS/1144 05 June 2004 Co. No.

DULN004(Q) KP(JPS)5195/IPTS/1144

05 June 2004 Co. No. 497194-M

Day-to-day activities – Transaction processing systems DULN004(Q) KP(JPS)5195/IPTS/1144 05 June 2004 Co. No. 497194-M
Day-to-day activities – Transaction processing systems DULN004(Q) KP(JPS)5195/IPTS/1144 05 June 2004 Co. No. 497194-M

Structured vs Unstructured Decisions

The type of decision making is different at each level

Structured decisions

Understood and accepted decisions

Formula for computing reorder quantity

Standard method for allocating furniture

Unstructured decisions

No agreed-on decision-making method

Not standardised

No agreed-on decision-making method – Not standardised • Predicting future direction of economy • Assessing

Predicting future direction of economy

Assessing how well-suited an employee is for performing a task

how well-suited an employee is for performing a task DULN004(Q) KP(JPS)5195/IPTS/1144 05 June 2004 Co. No.

DULN004(Q) KP(JPS)5195/IPTS/1144

05 June 2004 Co. No. 497194-M

how well-suited an employee is for performing a task DULN004(Q) KP(JPS)5195/IPTS/1144 05 June 2004 Co. No.

Types of Information Systems

Top (Strategic)
Top (Strategic)
Middle Management
Middle Management

ESS (Executive Support Systems)

Middle Management ESS (Executive Support Systems) DSS (Decision Support Systems) MIS (Management Information

DSS (Decision Support Systems)

(Executive Support Systems) DSS (Decision Support Systems) MIS (Management Information Systems) Operational Level

MIS (Management Information Systems)

Operational Level Systems
Operational Level Systems
TPS (Transaction Processing Systems)
TPS (Transaction Processing Systems)
Level Systems TPS (Transaction Processing Systems) DULN004(Q) KP(JPS)5195/IPTS/1144 05 June 2004 Co. No.

DULN004(Q) KP(JPS)5195/IPTS/1144

05 June 2004 Co. No. 497194-M

Level Systems TPS (Transaction Processing Systems) DULN004(Q) KP(JPS)5195/IPTS/1144 05 June 2004 Co. No. 497194-M

Transaction Processing Systems

The basic business systems that serve one functional area at the operational level of the organisation.

A TPS is a computerised system that performs and records the daily routine transactions necessary to conduct the business.

routine transactions necessary to conduct the business. • sales order entry • hotel reservation systems •

sales order entry

hotel reservation systems

payroll

employee record keeping

shipping.

• payroll • employee record keeping • shipping. DULN004(Q) KP(JPS)5195/IPTS/1144 05 June 2004 Co. No.

DULN004(Q) KP(JPS)5195/IPTS/1144

05 June 2004 Co. No. 497194-M

• payroll • employee record keeping • shipping. DULN004(Q) KP(JPS)5195/IPTS/1144 05 June 2004 Co. No. 497194-M
Transaction Processing Systems • Operational Level • Tasks, resources, and goals are predefined and highly

Transaction Processing Systems

Operational Level

Tasks, resources, and goals are predefined and highly structured

In one functional area

predefined and highly structured • In one functional area The decision: Whether to approve a withdrawal.

The decision:

Whether to approve a withdrawal.

Current Balance?

Adequate Identification?

This decision is so routine it can be easily automated. All that must be determined is whether the criteria are satisfied.

must be determined is whether the criteria are satisfied. DULN004(Q) KP(JPS)5195/IPTS/1144 05 June 2004 Co. No.

DULN004(Q) KP(JPS)5195/IPTS/1144

05 June 2004 Co. No. 497194-M

must be determined is whether the criteria are satisfied. DULN004(Q) KP(JPS)5195/IPTS/1144 05 June 2004 Co. No.
Example: Inventory Management • Inventory management IS assists with computing appropriate reorder points (minimise

Example: Inventory Management

Inventory management IS assists with computing appropriate reorder points (minimise stock while avoiding “stock-outs”).

Model requires re-ordering the of stock when inventory drops to a pre-determined re-order point.

Quantity Reorder Point Lead Time Time
Quantity
Reorder
Point
Lead Time
Time
re-order point. Quantity Reorder Point Lead Time Time DULN004(Q) KP(JPS)5195/IPTS/1144 05 June 2004 Co. No.

DULN004(Q) KP(JPS)5195/IPTS/1144

05 June 2004 Co. No. 497194-M

re-order point. Quantity Reorder Point Lead Time Time DULN004(Q) KP(JPS)5195/IPTS/1144 05 June 2004 Co. No. 497194-M

Types of Information Systems

Top (Strategic)
Top (Strategic)
Middle Management
Middle Management

ESS (Executive Support Systems)

Middle Management ESS (Executive Support Systems) DSS (Decision Support Systems) MIS (Management Information

DSS (Decision Support Systems)

(Executive Support Systems) DSS (Decision Support Systems) MIS (Management Information Systems) Operational Level
MIS (Management Information Systems)
MIS (Management Information Systems)
Operational Level Systems
Operational Level Systems

TPS (Transaction Processing Systems)

Level Systems TPS (Transaction Processing Systems) DULN004(Q) KP(JPS)5195/IPTS/1144 05 June 2004 Co. No.

DULN004(Q) KP(JPS)5195/IPTS/1144

05 June 2004 Co. No. 497194-M

Level Systems TPS (Transaction Processing Systems) DULN004(Q) KP(JPS)5195/IPTS/1144 05 June 2004 Co. No. 497194-M

Management Information Systems (MIS)

Provide managers with reports or with on-line access to the organisation’s current performance and historical records.

organisation’s current performance and historical records. – Oriented almost exclusively to internal, not external

Oriented almost exclusively to internal, not external events

Concentrate on one functional area

Primarily serve the functions of planning, controlling, and decision making at the middle management level

Again in one functional area

middle management level – Again in one functional area DULN004(Q) KP(JPS)5195/IPTS/1144 05 June 2004 Co. No.

DULN004(Q) KP(JPS)5195/IPTS/1144

05 June 2004 Co. No. 497194-M

middle management level – Again in one functional area DULN004(Q) KP(JPS)5195/IPTS/1144 05 June 2004 Co. No.
Management Information Systems (MIS) • Depend on underlying TPS for their data (the inputs). •

Management Information Systems (MIS)

Depend on underlying TPS for their data (the inputs).

MIS summarise and report on the company’s basic operations in one functional area.

The MIS system is then used by middle level managers

The basic transaction data from TPS are compressed and are usually presented in long reports that are produced on a regular basis (e.g. weekly, monthly, etc).

are produced on a regular basis (e.g. weekly, monthly, etc). DULN004(Q) KP(JPS)5195/IPTS/1144 05 June 2004 Co.

DULN004(Q) KP(JPS)5195/IPTS/1144

05 June 2004 Co. No. 497194-M

produced on a regular basis (e.g. weekly, monthly, etc). DULN004(Q) KP(JPS)5195/IPTS/1144 05 June 2004 Co. No.

Management Information Systems (MIS)

• MIS provides routine periodical reports.
MIS provides routine periodical reports.

Laudon, C, & Laudon, J, 2003, Management Information Systems: Managing the Digital Firm, (8th Edition), Prentice Hall, USA

the Digital Firm , (8th Edition), Prentice Hall, USA DULN004(Q) KP(JPS)5195/IPTS/1144 05 June 2004 Co. No.

DULN004(Q) KP(JPS)5195/IPTS/1144

05 June 2004 Co. No. 497194-M

the Digital Firm , (8th Edition), Prentice Hall, USA DULN004(Q) KP(JPS)5195/IPTS/1144 05 June 2004 Co. No.
the Digital Firm , (8th Edition), Prentice Hall, USA DULN004(Q) KP(JPS)5195/IPTS/1144 05 June 2004 Co. No.

TPS and MIS Report Compared

A TPS Report

TPS and MIS Report Compared A TPS Report  Each salesperson would receive a report showing

Each salesperson would receive a report showing a summary of transactions with each of their clients.

The salesperson would have some idea about how their sales are going and try to target certain customers (a form of CRM)

going and try to target certain customers (a form of CRM) An MIS Report  A

An MIS Report

A manager would get a summary of sales for a region They examine the report and take action on some matter such as employ more staff or train staff in a certain region

such as employ more staff or train staff in a certain region DULN004(Q) KP(JPS)5195/IPTS/1144 05 June
such as employ more staff or train staff in a certain region DULN004(Q) KP(JPS)5195/IPTS/1144 05 June

DULN004(Q) KP(JPS)5195/IPTS/1144

05 June 2004 Co. No. 497194-M

Metrics: Measuring success

A business undertakes many activities and projects

Each activity/project has a goal/s

and projects • Each activity/project has a goal/s • How does a business know it is
and projects • Each activity/project has a goal/s • How does a business know it is

How does a business know it is on track to reach these goals?

The business needs metrics

Measurements that evaluate results to determine whether a project is meeting its goals

results to determine whether a project is meeting its goals DULN004(Q) KP(JPS)5195/IPTS/1144 05 June 2004 Co.
results to determine whether a project is meeting its goals DULN004(Q) KP(JPS)5195/IPTS/1144 05 June 2004 Co.

DULN004(Q) KP(JPS)5195/IPTS/1144

05 June 2004 Co. No. 497194-M

results to determine whether a project is meeting its goals DULN004(Q) KP(JPS)5195/IPTS/1144 05 June 2004 Co.

Metrics: Critical Success Factors (CSFs)

Crucial steps that companies perform to achieve their goals and objectives and implement their business strategies. For example:

Create high-quality products

Retain competitive advantages

Reduce product costs

Increase customer satisfaction

Recruit and retain the best professionals

satisfaction – Recruit and retain the best professionals DULN004(Q) KP(JPS)5195/IPTS/1144 05 June 2004 Co. No.
satisfaction – Recruit and retain the best professionals DULN004(Q) KP(JPS)5195/IPTS/1144 05 June 2004 Co. No.

DULN004(Q) KP(JPS)5195/IPTS/1144

05 June 2004 Co. No. 497194-M

satisfaction – Recruit and retain the best professionals DULN004(Q) KP(JPS)5195/IPTS/1144 05 June 2004 Co. No. 497194-M

Metrics: Key Performance Indicators (KPIs)

The quantifiable metrics a company uses to evaluate progress towards its critical success factors. For example:

Turnover rates of employees

Number of product returns

Number of new customers

Average customer spending

– Number of new customers – Average customer spending – https://www.youtube.com/watch?v=9Co8slUvYj0 (1.52min)
– Number of new customers – Average customer spending – https://www.youtube.com/watch?v=9Co8slUvYj0 (1.52min)

https://www.youtube.com/watch?v=9Co8slUvYj0 (1.52min)

KPIs help measure the progress of the CSF

One CSF can have multiple KPIs

the progress of the CSF • One CSF can have multiple KPIs DULN004(Q) KP(JPS)5195/IPTS/1144 05 June
the progress of the CSF • One CSF can have multiple KPIs DULN004(Q) KP(JPS)5195/IPTS/1144 05 June

DULN004(Q) KP(JPS)5195/IPTS/1144

05 June 2004 Co. No. 497194-M

the progress of the CSF • One CSF can have multiple KPIs DULN004(Q) KP(JPS)5195/IPTS/1144 05 June

Components of a DSS

A decision support system (DSS) is a computer system designed to provide assistance, guidance and resources to allow someone to make informed and well supported decisions.

allow someone to make informed and well supported decisions. A DSS collects, organises and analyses business

A DSS collects, organises and analyses business data in all forms to facilitate quality business decision-making for management, operations and planning.

decision-making for management, operations and planning. DULN004(Q) KP(JPS)5195/IPTS/1144 05 June 2004 Co. No.

DULN004(Q) KP(JPS)5195/IPTS/1144

05 June 2004 Co. No. 497194-M

decision-making for management, operations and planning. DULN004(Q) KP(JPS)5195/IPTS/1144 05 June 2004 Co. No. 497194-M

Components of a DSS

DSS applications are used in many diverse fields, including medical diagnosis, credit loan verification, evaluating bids on engineering projects, business and business management, agricultural production as well as in government and public services areas.

A typical DSS consists of three basic components:

1. The database

2. The model base

3. The user interface.

1. The database 2. The model base 3. The user interface. DULN004(Q) KP(JPS)5195/IPTS/1144 05 June 2004
1. The database 2. The model base 3. The user interface. DULN004(Q) KP(JPS)5195/IPTS/1144 05 June 2004

DULN004(Q) KP(JPS)5195/IPTS/1144

05 June 2004 Co. No. 497194-M

1. The database 2. The model base 3. The user interface. DULN004(Q) KP(JPS)5195/IPTS/1144 05 June 2004

DSS User Interfaces

The user interface integrates the two into a consistent system and provides the decision maker with controls for and possibly feedback about managing the data and the models.

possibly feedback about managing the data and the models. Most DSS systems utilise a spreadsheet style

Most DSS systems utilise a spreadsheet style environment (Excel), with the flexibility of being able to change or modify some key points (for example, tax rate).

Look familiar?

some key points (for example, tax rate). Look familiar? DULN004(Q) KP(JPS)5195/IPTS/1144 05 June 2004 Co. No.
some key points (for example, tax rate). Look familiar? DULN004(Q) KP(JPS)5195/IPTS/1144 05 June 2004 Co. No.

DULN004(Q) KP(JPS)5195/IPTS/1144

05 June 2004 Co. No. 497194-M

DSS User Interfaces

DSS systems generally utilise a dashboard.

User Interfaces DSS systems generally utilise a dashboard. Any time Any place Intelligence A mobile DSS

Any time Any place Intelligence A mobile DSS uses dynamic web-based and mobile dashboards and can interface with a host of intuitive tools to turn data into actionable intelligence.

intuitive tools to turn data into actionable intelligence. DULN004(Q) KP(JPS)5195/IPTS/1144 05 June 2004 Co. No.
intuitive tools to turn data into actionable intelligence. DULN004(Q) KP(JPS)5195/IPTS/1144 05 June 2004 Co. No.

DULN004(Q) KP(JPS)5195/IPTS/1144

05 June 2004 Co. No. 497194-M

intuitive tools to turn data into actionable intelligence. DULN004(Q) KP(JPS)5195/IPTS/1144 05 June 2004 Co. No. 497194-M
Bibliography  Baltzan P, Lynch K & Blakey P 2013, Business driven information systems ,

Bibliography

Baltzan P, Lynch K & Blakey P 2013, Business driven information systems, 2e, McGraw-Hill Australia, NSW.

Baltzan P, Lynch K & Fisher J 2015, Business driven information systems, 3e, McGraw-Hill Australia, NSW

Kroenke D, Bunker D & Wilson D 2014, Experiencing MIS, 3 rd edn, Pearson Australia, Frenchs Forest, Australia

Rainer Jnr RK, Turban E & Potter RE 2007, Introduction to Information Systems: Supporting and Transforming Business, John Wiley & Sons, Hoboken, NJ.

Robbins S, Bergman R, Stagg I & Coulter M 2009, Foundations of Management, 3 rd edn, Pearson Australia, Frenchs Forest, Australia.

Rummler & Brache 1995, Improving Performance: How to manage the white space on the organizational chart, Jossey-Bass, San Francisco.

Stair R, Moisiadis F, Genrich R & Reynolds G 2008, Principles of Information Systems, Thomson, Sth. Melbourne, Australia.

Wood J, Chapman S, Fromholz M, Morrison V, Wallace J, Zeffane R, Schmerhorn J, Hunt J & Osborn R 2009, Organizational Behaviour: A Global Perspective. 3 rd edn, John Wiley & Sons, Brisbane, Australia.

3 r d edn, John Wiley & Sons, Brisbane, Australia. DULN004(Q) KP(JPS)5195/IPTS/1144 05 June 2004 Co.

DULN004(Q) KP(JPS)5195/IPTS/1144

05 June 2004 Co. No. 497194-M

3 r d edn, John Wiley & Sons, Brisbane, Australia. DULN004(Q) KP(JPS)5195/IPTS/1144 05 June 2004 Co.