Information Technology Table of Contents S. No.Chapter Name 1.Business Process Management & IT...
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Transcript of Information Technology Table of Contents S. No.Chapter Name 1.Business Process Management & IT...
Information Technology
Table of Contents
S. No. Chapter Name
1. Business Process Management & IT
2. Information Systems and IT Fundamentals
3. Telecommunication and Networks
4. Business Information Systems
5. Business Process Automation through
Application Software
Chapter [1]
Business Process Management
& IT
What is a PROCESSEngineering perspective~
A Sequence of steps that convert given input into desired output.
Business perspective ~ Coordinated and standardized sequence of events; Performed by people and machines; Surpass functional boundaries; To achieve business objective and to create value
for customers.Example : Accounting, Marketing, Costing,
Budgeting, Operations, SCM etc.
Functional v/s Process Organization
Factors Functional Process
Work Unit Department Team
Key person Functional Executive Process Owner
Benefits
• Functional Excellence• Easier to implementation• Clear management
direction
• Market responsiveness• Improved communication &
coordination between dept.• Performance measurement
with process goal.
Weakness
• Barrier to communicate between depts.
• Poor customer services.• Lack of optimizing
organit’al performance
• Duplication of expert• Inconsistency of functional
performance• Increased operational
complexity
Strategy Cost-leadership Differentiation
Process Management
PM is a planned efforts to map and improve organizational process.
It involves following tasks ~• Define the Process and Roles involved.• Establish performance measures• Develop organizational setup to standardize the
process.
Business Process Management
“The achievement of an organizational objectives through the improvement, management and control of essential business process.”
It is a combination of methods and tools for ensuring processes are improved to achieve enterprises objectives.
Characteristics BPM results in increase effectiveness, cost
reduction and enhancing value creation. It is achieved through proactive and reactive
management It uses business tools such BPR, Six Sigma and
TQM. BPR : Business Process Re-engineering Six Sigma : creates defects free output TQM : Total Quality Management
BPM Terminology Achievement : Realizing strategic objectives
Organization : Independent entity with which process is associated end-to-end.
Objectives : Strategic goals or defined process output.
Improvement : Increased efficiency and effectiveness.
Management : People or Process performance measurement.
Control : Check to ensure adherence to standard. Plan-Do-Check-Act cycle.
Essential : That contributes to achieve strategic goals and values creation to customer
Business : Economic activities
Process : Sequence of steps
Processes are Assets
Value to Customers
Continuous Improvement
Involved Technology
BPMPrinciples
BPM : Practices Develop process oriented structure Appoint process owner Top management’s commitment to BPM Follow bottom-up approach for implementation Involve IT Work boundary less collaboration. Continuous training and improvement Performance related incentives Use of radical approach viz. TQM, BPR
Some Common Business Process
Classification of Business Process
Business process
Organizational
Operational
Business Strategy
Goals
Organizational BP
Operational BP
Implemented BP
determine
determine
determine
determine
realize
realize
realize
realize
Organizational v/s Operational
• Combination of many operational process
• Described in plain text and diagrams in semiformal notation
• Works in non-technical environment
• Specify tasks by their input, output and interdependencies
• E.g. Production process
• Part of an organizational process
• Described as steps of a procedure
• Executes in technical environment
• Performs the tasks.
• E.g. Quality control
Needs for BPM Implementation Enhances future capabilities Increases cost-effectiveness Increases customer satisfaction Continuous improvement Radically re-engineering Removes cultural barriers Developing leadership Empowering employee
KEY FACTORS IN BPM IMPLEMENTATION
Scope • Process, department, company
Goals • efficiency, automation, effectiveness, satisfaction
Methods • TQM, Six Sigma, BPR, BPMLC
Skills • Employee training, certification, consultant
Tools • White board, drawing sheets, mapping s/w, simulation s/w, BPMS
Investment • Training program, tools and time
Support • Top mgmt, dept. mgrs, process owners, employee level
Automation in BPM
Improve delivery time
Improve quality
Customize
Cost reduction
Handle Workload
Handle Complexity
Challenges in BPA Implementation
Growing number of user interfaces. Increase complexity due to product, service price
options. Suite of build and buy applications with its own
data format. Budgetary control. Automation does not guaranty improvement. Linking existing application by process layer in the
system. Skill requirements. Change in organizational structure.
BPM TechnologyIt is automation of BPs and to create a process layers by linking various application to execute a single end-to-end process. BPM technology provides ~
Better management of flow of activities. Better administration of people. Reduce delivery time Performance monitoring Support audit for compliance Maximize ROI
Value Chain Analysis
Value chain is a set of activities within and around an organization to provide value-for-money product/services.
VC analysis is a useful tool to identify activities involved in the process and assessing the value added by each of them.
It helps to identify the ways in which we enhance value creation for customers.
SupportActivities
Primary Activities
Firms Infrastructure
Human Resources Management
Technology Development
InboundLogistics
Operations
OutboundLogistics
Marketing& Sales Services
Procurement
Accounting Information System
• System of collection, storage, processing and reporting of financial and accounting data.
• Collection : pre-numbered, properly designed Sr. document.
• Storage : chronological recording in journals.
• Safeguarding : controls to ensure accurate processing.
Collect
Safeguard
Record
Processing CyclesFinancing cycle
Human Resource cycle
Expenditure cycle
General ledger and reporting cycle
Revenue cycle
Production cycle
Funds
Funds
Data
DataData
Data
Data
labor Raw Material
Finished goods
Funds
Financing Cycle ~• It includes collection and storage of transaction
involving acquisition of funds and utilization of funds.
Revenue Cycle ~• It includes collection and storage of transaction
involving Sales and Marketing, A/Cs Receivable, Inventory.
Expenditure Cycle~• It includes collection and storage of transaction
involving Purchasing, A/Cs Payable, Cash disbursement.
Human Resource Cycle ~• It includes collection and storage of transaction
involving Payroll, Job, Taxation.
Production Cycle ~• It includes collection and storage of transaction
involving Operations, Quality, Inventory.
General Ledger and Reporting Cycle~• It includes collection and storage of transaction of
all other cycles to post them into related ledgers and generate various reports as financial statement.
Data Processing Cycle ~• It is a back end cycle concerned with storage and
updation of data in many files.• It works in on-line real time basis to keep the file
always updated.• It generates audit trail to support auditing of other
cycles.• It maintains three type of data file :
Master file Transaction file Reference file
Impact of IT on BPM1 • Business involvement in designing
IT based processes
2 • Ability to integrate people and system participating in the process
3 • Ability to simulate business processes
4• Ability to real time monitoring,
controlling and improvement in the process
5• Ability to change existing process
in real time without elaborate efforts.
Benefits of IT on BPM
• Automating repetitive processes1• Loosely coupling with existing
applications2• Operational saving : Cost and
Time3• Reduction in Administration
activities : Audit and Compliance4• Freeing up of employee time :
No manual activities5
Risk of failure of IT Inadequate investment in training Lack of corporate policy Lack of top management involvement Poor project management Failure in gap analysis Customization of software Not enough flexibility Compatibility with systems of partners Fail to meet business need Technological obsolescence
Business Process Re-engineering
BPR focuses on core business processes and attempt to change them with best practice.
Definition –– Business Process Re-engineering is the
fundamental rethinking and radical re-designing of processes to achieve dramatic improvement in critical and contemporary measures of performance such as cost, quality, service and speed.
Fundamental Re-thinking ~
Radical Re-designing ~
Dramatic Improvement ~
BPR Success factors Organization wide commitment
– Strong leadership and support and sponsorship from top management
Team Composition– Consultant, top management, process owner and
users
Business Need Analysis– Which current processes need re-engineering
Adequate IT infrastructure– Set of appropriate hardware, software, network, and
facilities
Effective change management– To change people behavior, organization culture,
processes, technology
On-going Continuous Improvement– Gradual on-going improvement through continuous
learning.
System Mapping tools
Mapping Tools
ER-diagram
DFD
Flow chart
Outline chart
Decision table/Tree
ER-diagram
System FlowchartDiagrammatic representation of data flow, data storage, manual and automated steps of processing taken place in an IS.
Data Flow Diagram
CustomerSalesman
S.O.P.
Sales fileManagement
Flowchart v/s DFDS.No. Flowchart DFD
1. Steps of process Flow of data
2. Do not show external source and destination
Describes path from external to internal source
3. Timing and sequence of process is shown Not described
4. How system functions What functions are performed by system.
5. Used to design a process Describe path of data within the process
6. Type ~ System , Program, Type ~ physical, Logical
Outline Chart
Decision Table
Credit eligibility R1 R2 R3 R4
C1 Experience >= 5 years Y Y N N
C2 Credit limit OK Y N Y N
A1 ACCEPT X
A2 REJECT X X X
Decision Tree
Play 9Don’t play 5
Play 2Don’t play 3
Play 4Don’t play 0
Play 3Don’t play 2
Play 2Don’t play 0
Play 0Don’t play 3
Play 0Don’t play 2
Play 3Don’t play 0
sunnyover cast
rainy
<=70 >70 windy Non-windy