Dr. Chen, Management Information Systems PART IV: Chapter Topics Chapter 10: Business Process &...

Dr. Chen, Management Information Systems

PART IV:Chapter Topics

Chapter 10: Business Process & Information Systems Development

• Two closely related and overlapping themes are examined

Chapter 11: Information Systems Management• Goal of the chapter is to give an appreciation for the

responsibilities of IS management and to be an effective consumer of IS services

Chapter 12: Information Security Management• Provides an overview of the major components of

information systems security

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Fox Lake

Chapter 10 • Examines how Fox Lake could define new business

processes and an information system to support those processes

Chapter 11 • Investigates what Fox Lake is and is not doing with

regard to management of IS resources

Chapter 12 • Discusses why Fox Lake’s information systems are

particularly vulnerable to computer misuse and crime

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Chapter 10Business Process and Information Systems

Jason C. H. Chen, Ph.D.Professor of MIS

School of Business AdministrationGonzaga UniversitySpokane, WA 99258

[email protected]

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“You’re Not Going to Take Your Vera Wang Gown into a Porta Potty.”

• Bathrooms not cleaned on busy Saturdays or repaired on weekends

• Plumbing not designed for large crowds• Didn’t think through consequences of wedding

events business. Didn’t know how wedding business would impact

everything else.

• Business analyst, Laura, hired to help

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Study Questions

Q1: Why do organizations need to manage business processes?

Q2: What are the stages of Business Process Management (BPM)?

Q3: How can BPMN process diagrams help identify and solve process problems?

Q4: Which comes first, business processes or information systems?

Q5: What are systems development activities?

Q6: Why are business processes and systems development difficult and risky?

Q7: What are the keys for successful process and systems development projects?

Q8: 2022?

5


Video

• The Golden Rules for Managers 119 Incredible Lesson for Leadership Success (2:09)

• http://www.youtube.com/watch?v=pai00rCJSJU&feature=related

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http://www.youtube.com/watch?v=pai00rCJSJU&feature=related

http://www.youtube.com/watch?v=pai00rCJSJU&feature=related


What are Business Process and Business Process Management?

• Business process: A set of logically related tasks performed to achieved a defined business outcome

• Business process management (BPM) is a management approach focused on aligning all aspects of an organization with the wants and needs of clients. It is a holistic management approach[1] that promotes business effectiveness and efficiency while striving for innovation, flexibility, and integration with technology.

Dr. Chen, The Trends of the Information Systems Technology TM -7

http://en.wikipedia.org/wiki/Business_process_management

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http://en.wikipedia.org/wiki/Business_process_management


Customercentric

Who are the customers?Where are the customers?Their purchasing habits

What they need/want?How many they need/want?When they need/want?How to reach them?

DemandsProducts/Services

IS/E-BUSINESS

BUSINESS VALUE & FOCUS –IS Perspective

• SCM• CRM• BPR• ERP

Value

Business Models & Strategies8


Q1: Why Do Organizations Need to Manage Business Processes?

• Reasons for change Improve process qualityChange in technologyChange in business fundamentals

– Market – Product lines– Supply chain– Company policy– Company organization– Internationalization– Business environment

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Steps in Processing an Order

Fig 10-1: Steps in Processing an Order10


• Business Process Management (BPM) Systematic process of creating, assessing, altering business

processes (and is an iteration process).• Four stages of BPM

1. Create model of business process components Users review and adjust model “As-is model” documents current process; it is changed to solve

process problems

2. Create system components Uses five elements of IS (hardware, software, data, procedures,

people)

3. Implement business process4. Create policy for ongoing assessment of process

effectiveness Adjust and repeat cycles

2: What Are the Stages of Business Process Management (BPM)?

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Stages in the BPM Cycle

12

[2]

[1] [3]

[4] policy creation and assessment

Fig 10-2: Stages in the BPM Cycle


Q/A

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T/F: Business Process Management (BPM) is a one-time process for systematically creating, assessing, and altering business processes.Answer: ______

In business process management, once the as-is model is created, the team must ________.A) obtain feedback about implementationB) assess the results of the changesC) create system componentsD) implement changes in the organizationAnswer: ________


Scope of Business Process Management

Fig 10-3: Scope of Business Process Management

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BPM can apply only to commercial, profit-making organizations but also nonprofit and government organizations


• Critical for a team to agree on both what is and what ought to be.

• Must have some notation for documenting processes and one common standard for creating process documentation.

• Dozens of definitions are used by authors, industry analysts, and software products.

Q3: How Can BPMN Process Diagrams Help Identify and Solve Process Problems?

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• These differences and inconsistencies can be problematic when two different organizations with two different sets of definitions must work together.

• Object Management Group (OMG) created a standard set of terms and graphical notations for documenting business processes.

• That standard, called Business Process Modeling Notation (BPMN), is documented at www.bpmn.org.

Need for Standard for Business Processing Notation

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Fig 10-4:BusinessProcessManagementNotation(BPMN)Symbols

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Documenting the As-Is Business

Order Process: Existing Ordering Process

Fig 10-5: Existing Ordering Process

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Each role in the business process is given its own swim lane.


Fig 10-6: Check Customer Credit Process

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Q/A

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T/F: In a BPMN process diagram, the swim-lane layout is used to simplify process diagrams and to draw attention to interactions among components of the diagram.Answer: ________

BPMN: Business Process Management _________Notation


Using Process Diagrams to Identify Process Problems

• Process problems1. Operations Manager allocates inventory to

orders as processed2. Credit Manager allocates customer credit for

orders in process. Allocations correct, if order accepted If rejected, allocations not freed, inventory still

allocated and credit extended for orders not processed

Possible fix: Define an independent process for Reject Order (UYK#3 p.383)

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How Can Business Processes Be Improved?

1. Add more ________• Adds costs unless efficiencies of scale

2. Change _______ structure• Reduce work and costs• Increase costs and increase effectiveness to

offset

3. _________

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Fig 10-7: Revised Order Process

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Fig 10-8: Fox Lake Wedding Planning and Facilities Maintenance Processes24


Q4: Which Comes First, Business Processes or Information Systems?

Fig 10-9: Fox Lake Processes Showing IS Components25


Fig 10-10: Many-to-Many Relationship of Business Processes and Information Systems26


Build Business Processes First

Fig 10-11: BPM and Systems Development27

Starting from processes and working toward Information Systems (IS) is likely to work well for the business process under consideration, but will cause problems later, for other processes that use the same IS.

next stage[2]

[1] [3]

[4] policy creation and assessment


Build Information System First

Fig 10-12: Classic Five-Step Systems Development Life Cycle 28

This development process makes business processes a poor step-child of the IS development process as BP can include many activities that are not part of the IS.


Why systems development is needed?• While you may be able to purchase an off-the-shelf

software program, you won’t be able to do that with information systems. Here are some of the reasons why: You must construct or adapt procedures to fit the business and the

people who will be using the system. You can’t buy procedures. People must be trained to use the information system effectively.

You can’t buy that. Users must take ownership of their system. That’s the single most

important criterion for the success of an information system.

• Information system maintenance involves two things: Fixing a system to make it do what it should have done in the first

place, or Adapting it to changing requirements.

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Dr. Chen, Management Information Systems 30

Systems Development Is Not Just for Techies

• Establishing the system’s goals, setting up the project, and determining requirements require business knowledge and management skill.

• Tasks such as building computer networks and writing computer programs require technical skills.

• Developing the other components requires nontechnical, human relations skills.


Nontechnical, Human Relations Skills Required

• Creating data models requires the ability to interview users and understand their view of the business activities.

• Designing procedures, especially those involving group action, requires business knowledge and an understanding of group dynamics.

• Developing job descriptions, staffing, and training all require human resource and related expertise.

• Coordinated teamwork of both specialists and nonspecialists with business knowledge.


How Do Businesses Use the SDLC Process?

1. Systems definition Management’s statement of objective and goals for new

system

2. Requirements analysis Identify features and functions

3. Component design (hardware, software, network) Based on approved user requirements

4. Implementation Purchase, build, test, and convert to new system

5. System maintenance (fix or enhance) Repair, add new features, maintain

See http://www.learn.geekinterview.com/it/sdlc/sdlc-methodology-steps.html


Another Factor: Off-the-Shelf Software

• If starting with business processes first– Likely to choose package for processes being

developed, but not for later processes

• If starting with information systems first – Likely to choose package that works for all

users, but, business processes will get short shrift.

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And the Answer Is . . .• In theory:

Better to start with ___________________ More likely to result in processes and systems that

are aligned with the organization’s strategy and direction

• In practice: Organizations take both approaches

•Off-the-shelf software:Start with business processes and select “off-the-

shelf” application that works for those processesWhy?

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And the Answer Is . . .

• In theory: Better to start with ___________________ More likely to result in processes and systems

that are aligned with the organization’s strategy and direction

• In practice: Organizations take both approaches

•Off-the-shelf software:Start with business processes and select

application that works for those processes

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Q/A

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Which of the following is true for the relationship between business processes and information systems?A) Developing information systems before business processes ensures that all activities are considered in the development process.B) Information systems incorporate all business process activities, and hence should be developed before business processes.C) Starting from processes and working toward information systems is the best option to anticipate future demands and new business processes.D) Starting with processes and working toward systems is more likely to result in processes and systems that are aligned with the organization's strategy and direction.Answer: ______


SDLC

• What does SDLC stand for?Systems Development Life Cycle

• List the phases of SDLCAnalysisDesignImplementationMaintenance

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4: What Are Systems Development Activities?

1. Systems definition Management’s statement of objective and goals for new

system

2. Requirements analysis Identify features and functions

3. Component design (hardware, software, network) Based on approved user requirements

4. Implementation Purchase, build, test, and convert to new system

5. System maintenance (fix or enhance) Repair, add new features, maintain

Analysis


4: What Are Systems Development Activities?

Fig 10-13: BPM Provides Requirements for Systems Development39

[1]

[2]

[4]

[3a]

[3b]

[5]

(Feasibility Study)What is it and Why it is important?


Define System Goals and Scope

Fig 10-14: SDLC: System Definition Phase40


How Is System Definition Accomplished?

1. (b.) Define scope for new system Defined by customers, users involved, business

processes impacted, physical location, functional area

Clear definition of scope simplifies Requirements determination Coordination and other work


Assess Feasibility

Dimensions of feasibility• ______ feasibility

Approximated, “back-of-the-envelope” analysis Purpose: eliminate infeasible ideas early Consider cost of previous projects, operational and labor costs

• __________ feasibility Ball park estimate

• __________ feasibility Is it technically likely to meet needs?

• _____________ feasibility Fit with customs, culture, charter, legal requirements of

organization ___________________ feasibility

Is the proposed system legally?

Cost

Schedule

Technical

Organizational


Systems Definition/Investigation (Feasibility Study)

OperationalFeasibility

ScheduleFeasibility

EconomicFeasibility

TechnicalFeasibility

Can we afford it? Will it be accepted?

Does the ITcapability exist?

Will it be completed bythe deadline?

Legal and Contractual Feasibility

Is the proposed system legally?

Organizational Feasibility(Is it a good fit –

objective of the organization43

What are new from the last slide?


Form a Project Team• Typical three personnel on a development team are:

Manager (or mangers for larger projects) Specialist:

System analysts Programmers Software testers or, other functional specialist such as accounting,

finance, and marketingUsers:

Users must be involved in most of SDLC phases • Depending on nature of project, team may also include

hardware and communications specialists, database designers and administrators, and other IT specialists.


Form a Project Team

• Team composition changes over time. • During requirements definition, the team will be

heavy with systems analysts. • During design and implementation, it will be

heavy with programmers, testers, and database designers.

• During integrated testing and conversion, the team will be augmented with testers and business users.


Business and Systems Analysts

• Business AnalystsSomeone who are well versed in Porter’s models,

organizational strategy, and system alignment theory and who also understand the proper role for technology.

• IS professionals who understand both business and technology. They are active throughout the systems development

process and play a key role in moving the project through the systems development process.

Systems analysts integrate the work of the programmers, testers, and users.


Fig 10-15: Focus of Personnel Involved in BPM and Systems Development47


Fig 10-16 SDLC: Requirements Analysis Phase

System Analysts are IS professionals who understand both business and technology.

The most important phase in the SDLC process is to determine system requirements. If the requirements are wrong, the system will be wrong. Seven activities occur in this phase as the diagram shows.

Users are a critical part of this phase. They must approve the requirements before moving to the next phase.

Phase Two: Requirements Analysis

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Phase Three: Component Design:Design Tasks Pertain to Each of the Five IS Components

Fig 10-17: SDLC: Component Design Phase

All five components require attention in the design phase: Hardware—Determine the specifications and evaluate alternatives

against the requirements. Purchase it, lease it, or lease time from hosting service

Programs—Decide whether to use off-the-shelf software, off-the-shelf with alterations, or custom-developed software.

Database—Convert the data model to a database design.

Procedures—Design procedures for users, operations personnel, and for normal, backup, and failure recovery tasks.

People—Design job descriptions for users and operations personnel. You may have to add new jobs or alter existing jobs.

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Q/A

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T/F: If a project involves off-the-shelf programs, then little database design needs to be done.Answer: ________


Phase Four: Implementation

51Fig 10-18: SDLC: Implementation Phase

Focuses on implementing the system and includes the tasks of building each of

the five system components

testing the system

and converting users to

the new system.


System Conversion Approaches

1. Pilot Implement entire system in limited portion of business MRV uses system for selected customers. Advantage: limits exposure to business if system fails

2. Phased System is installed in phases or modules. Each piece is installed and tested.

3. Parallel Complete new and old systems run simultaneously Very safe, but expensive

4. Plunge (or direct) High risk if new system fails, no old system to fall back on Only used if new system is not vital to company operation


Installation Conversion Methods: 4 Ps

Old SystemOld System New SystemNew System

Old SystemOld System

New SystemNew System

Old SystemOld System New System

Old SystemOld System New System

Parallel

Pilot

Phased

Plunge/Direct

Cut-over time

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Design and Implementation for the Five Components

Fig 10-19: Design and Implementation for the Five Components54


SDLC: System Maintenance Phase (5)

Fig 10-20:55


Causes of Information Systems Failures

•35+ years of research on causes of information systems failures

1. Lack of user __________

2. Unclear, incomplete, and inconsistent ___________

3. Changing requirements and specifications

•Many businesses __________ research findings

involvement.

requirements.

ignore


Q6: Why Are Business Processes andSystems Development Difficult & Risky?

• SDLC ________ Sequence of nonrepeated phases It rarely works smoothly, causing development team to go back

and forth, raising costs and delaying project

• Requirements documentation difficulty Business requirements sometimes change making documented

requirements incomplete or obsolete “Analysis paralysis”—projects spend so much time on

documentation that it hampers progress

• Scheduling and budgeting difficulties Time and cost estimates for large project are usually way off People who make initial estimates know little about how long it

will take or cost

10-57


Q6. Why Are Business Processes andSystems Development Difficult & Risky? (cont.)

• Changing TechnologyWhile the project is underway, technology continues to

change.

• Diseconomies of ScaleAs development teams become larger, the average

contribution per worker decreases.Brooks’ Law:

Adding more people to a late project makes the project later.

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Dr. Chen, Management Information Systems Fig 10-21: Major Challenges to System Development 59

1a

1b

2

3

4


Q7: What Are the Keys for SuccessfulProcess and Systems Development Projects?

• Create a work-breakdown structure (WBS)– Break project into smaller tasks until each task is small

enough to estimate and manage– Every task results in deliverables

• Estimate time and costs• Create a project plan• Adjust the plan via trade-offs• Manage development challenges

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Fig 10-22: Create a Work-Breakdown Structure (WBS)

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Gantt Chart of the WBS for theDefinition Phase of a Project

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Create a Project Plan: Gantt Chart with Assigned Resources & Critical Path

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Project Triangle (Project Management Trade-offs)

Time Cost

Scope (Requirements)

The objective of the PM is to define project’s scope realistically and ultimately deliver quality of product/service on time, on budget and within scope.

The center of project triangle is

________


Trade-Offs in Requirements, Cost, and Time?

• Balancing development drivers1. Requirements (scope) 2. Cost 3. Time

• Trade-offs 1. Elaborate requirements increase costs and time

2. Time can be reduced to a point w/o adding costs

3. Increasing time may reduce or increase costs

4. If schedule needs to be shortened, two alternatives available: reduce requirements or add labor

5. Adding more people creates diseconomies of scale (Brooks’ Law)


Adjust Plan via Trade-offs:Trade-offs Among Requirements, Schedule, and Cost?

Insert Figure 10-12 here (Figure CE19-2 in Experiencing MIS 2/e)

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Manage Development Challenges

Critical Factors1. Coordination

2. Diseconomies of scale

3. Configuration control

4. Unexpected events

5. Team morale

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Q8: 2022?

1. Users more knowledgeable and demanding

2. More agile systems using SOA and other techniques

3. More Cloud-based development

4. Emergence of new software vendor business models

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• End of Chapter 10

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Dr. Chen, Management Information Systems PART IV: Chapter Topics Chapter 10: Business Process &...

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