MIS 2000Instructor: Bob Travica

Class 9Process View of Organization

and Information Systems

Updated: May 2015

Outline

• Cases of IS roles in business processes (expanding over Chapter 5)

– IS impacts on process design optimization

– Impacts of process design on process performance

• Typologies of information systems

• Summary

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• Recalling from the last lecture, IS has three roles in business processes:– Technological characteristics of IS make the building block in

process design– IS Functionality makes IS the process optimizer– Non-functional characteristics of IS are the process

performance booster

Information System

Technological Properties

Functi

onality

Non-Functional

Characteristics

DESIGN OPTIMIZER ROLE

BUILDING BLOCK ROLE

PERFORMANCE BOOSTER ROLE

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Focus in this lecture is on relationships marked below:

• IS and Process Design

• Process design and Process Performance

Organizational Performance

Process Design

Process Performance

Information System• Non-functional characteristics

• Functionality• Technological properties

IS and Process Composition

IS can help to optimize Process Composition.

IS can influence the selection of activities, performers (workers), departments, and organizations to be included in a process.

• Example: A new Purchasing TPS implemented at Ford made its purchasing order process: different work activities than those used before.

• Example: A computer network linking information systems at Kia and service shops in support to inter-organizational quality control process.

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IS and Process Complexity

IS and Process Complexity: IS can absorb complexity or simplify process a process looking from the perspective of process performers. The number of manual steps is reduced. This is possible because IS performs some activities and decisions instead of people (automation).

• Example: A Decision Support System performs very complex calculations so that a decision maker is spared of such steps – decision process looks simpler.

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IS and Process Coordination

IS and Process Coordination: IS can enhance coordination among the process activities and process performers.

• Example: The supply process at Walmart uses inventory management systems linked via a corporate network; data transfer across supply chain between Walmart stores, Walmart distribution centres, and suppliers.

• Group decision making process that includes a GDSS makes it possible for decision makers to brainstorm in parallel rather than in sequence. IBM was a big user of GDSS.

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Facilitator drives thesession

Decision makers

IS and Process Design - Flexibility

IS and Process Flexibility: IS can contribute to controlling variation in a process.

Think of variation in terms of availability of options (usually desirable), and deviation from a benchmark (usually undesirable).

Example A: Various reservation processes (hotel, travel, university course) could be done with the start activities supported by different technologies (telephone, cell phone, Website, email). The process has several versions.

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Example B: The quality control process in manufacturing rests on controlling variation between a part under production and desired benchmarks (size, etc.). Today, quality control process is automated and IS continuously inspect and report on the state of production.

Process Design and Process Performance

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Process Design Aspect Impacted

by IS

Process Performance Aspect

Time Cost Customer Value

Composition improvement

Savings in process time at Ford

Labor reduced at Ford Quality improved at Kia

Complexity reduction

Savings in decision making process

Fewer people needed for calculations

Better decisions

Coordination improvement

- Efficiencies in Walmart’s supply chain

- Savings in meeting time with GDSS

Price of saved labor hours (cost avoidance)

- Shorter meetings, reduced opportunity cost

- Satisfied partners in Walmart supply

chain

- Better ideas for mgmt.

Flexibility Automated quality control in car produ- ction streamlined

Waste reduction due to better quality control

- Product quality gains

Based on cases discussed so far:

Typologies of Information Systems Time Focus

Information systems studied in this course:

• Transaction Processing system (TPS) • Management Information System (MIS) • Decision Support System (DSS) • Knowledge Work System (KWS)• Group Support System (GSS)• Communication Systems • Office Automation System (OAS)• Enterprise Resource Planning System (ERPS)

Typologies show similarities and differences between these systems looking from different angels.

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Typologies of Information Systems:Organizational Function & Time Focus

• Based on time focus:• Past/present focused:

– Supporting & recording current operations

– Reporting on the past business

• Future focused – Planning, predicting– Longer range decision

making

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• Based on Org. Function: - Production system - Accounting IS- HRIS- Sales system…- Usually TPS & MIS

• Different data content – look back at schemas for different business domains

Past Now Future

TPS, MIS DSS

Typologies of Information Systems (IS): User Focus

Different systems serve different groups of users.

System types have different level of detail, processing capabilities, and

outputs.

Transaction Processing system (TPS) - Daily operations control

Supervisory Management

Mid-levelManagement

Management Information System (MIS) - Mid-range performance control & planning

ExecutiveManagement

Decision Support System (DSS) - Strategic decision making

Knowledge Work Systems

(professionals)

Communication Systems

(everybody)

Group Support Systems

(any teams)

Office Automation Systems

(clerks, others)

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Typology of Information Systems: Cross-referencing

Organizational Function-based IS

User-based IS Type

Human Resources IS (HRIS)

TPS MIS DSS

Management Level

Supervisory Middle Executive

Database of travel claims with some queries

Atop TPS; more queries and reports with aggregate travel expenses for longer periods

Atop MIS; aggregate annual figures, and projecting future expenses and budget needs

• Relationship between IS types based on org. function and management user groups:

Summary

• IS can help to optimize process design (Composition, Complexity, Coordination, Flexibility)

• Improvements in process design reflect in process performance (Customer Value, Cost, Time)

• IS types can be differentiated on the bases of organizational function, time, and user group.

• IS types serving management groups are TPS, MIS and DSS.

• IS typologies can be cross-referenced (same system shown as different types).

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