Business Processes, Information Systems, and Information Chapter 2 Business Processes, Information Systems, and Information Copyright © 2015 Pearson Education, Inc.

Copyright © 2015 Pearson Education, Inc. Learning Objectives Q1. What is a business process? Q2. What is an information system? Q3. How do business processes and information systems relate? Q4. How do structured and dynamic processes vary? Q5. What is information? Q6. What are necessary data characteristics? In the previous chapter, we defined MIS as the management and use of business processes, information systems, and information. Here we’ll spend some time getting a better understanding of what these things are and their relationships. Copyright © 2015 Pearson Education, Inc.

What Is a Business Process? Sequence of activities for accomplishing a function Activities are tasks within a business process A business process is a sequence of activities for accomplishing a function. Activities are the tasks within the business process. As an example, booking a flight online is a business process that includes several activities. First, you must enter dates, times, and number of passengers to search for available flights. Once available flights are presented, the next activity is to select from the alternatives. Once these are selected, you will need to enter passenger information. Another activity will be to make seating assignments and/or enter baggage requirements. When this is completed, yet another activity is to confirm your details and enter payment information. Finally, you’ll receive a confirmation of the flight details that you can print or save to a file. As you can see, this seemingly simple process involves multiple activities or task. Copyright © 2015 Pearson Education, Inc.

What Is a Business Process? Documenting business processes Business Process Model and Notation (BPMN) Global standard for documentation Roles and Actors Swimlanes We document business processes by creating an abstraction of the process using standardized techniques. Business Process Model and Notation (BMPN) is a global standard used for this very purpose. This standard also involves roles, which indicates a subset of business activities that are performed by an actor. An actor could simply be a person. These roles are often identifiable in the abstraction or model using swimlanes that separate the various roles in the process model. The following slides include diagrams from your textbook that show the abstract model with swimlanes, as well as a key that helps identify the various symbols used. Copyright © 2015 Pearson Education, Inc.

What Is a Business Process? Documenting business processes using BPMN In this slide, let’s focus on the design. You see various roles identified using vertical swimlanes. As an example, the first role is the Cashier. The activities performed by this role are shown using various symbols that we will discuss in the next slide. Keep in mind, the role of Cashier is performed by an actor that we define as a person. Copyright © 2015 Pearson Education, Inc.

What Is a Business Process? Documenting business processes using BPMN As we mentioned in the previous slide, roles perform various activities in the process. BPMN uses symbolization to help organize the process and distinguish between what is taking place in the process. As you can see, an activity is defined using a rectangular shape. If you recall from the previous slide, the role of Presenter also included a decision, which we see here can be indicated using a diamond shape with arrows stemming from it to show alternative courses of action depending on the results of the decision. These symbols are global standards used in BPMN. Copyright © 2015 Pearson Education, Inc.

What Is a Business Process? Documenting business processes using BPMN How much detail is enough? Avoid ambiguity A valid question regarding the creation of these abstract models is how much detail is enough? Ideally, we should include as many activities as required to avoid ambiguity. Some steps are unnecessary and don’t need to be included in the model. For those activities requiring additional detail, we can use the symbol that indicates that we will document the details of that specific activity elsewhere. This helps keep the model simple, yet thorough. Copyright © 2015 Pearson Education, Inc.

What Is a Business Process? Why do organizations standardize business processes? Enforce policies Produce consistent results Scalable Reduce risk Organizations choose to standardize business processes because they provide benefits. First, standardized business processes help enforce rules. In our earlier example of purchasing an airline flight online, a standardized process would require the customer to enter the names of all passengers before continuing with the process. Regulations require that all passengers be identified, and the standardized process enforces that. Also, standardized processes provide consistent results because regardless of the actor playing a role in the process, the activities and decisions are performed in a consistent manner. Standardized processes also allow for scalability. That is, to be able to replicate the process and implement it in new areas as an organization grows. Finally, standardized business processes reduce risk. One of the ways it reduces risk is by reducing the potential for error that exists when different employees do things differently. Copyright © 2015 Pearson Education, Inc.

What Is a Business Process? Sequence of activities to accomplish a function Standardized using BPMN A business process, as we’ve seen, is a sequence of activities to accomplish a function. But we also noted that there are benefits to standardizing these processes. One technique used to do this is the Business Process Model and Notation. BPMN provides an abstract model of the standardized process using standardizes symbols, roles, actors, and swimlanes. Copyright © 2015 Pearson Education, Inc.

What Is an Information System? Group of components interacting to achieve some purpose Information system Group of components to produce information Five components Computer hardware, software, data, procedures, and people To define an information system, we should first understand what a system is. A system can be defined as a group of components interacting to achieve a purpose. An information system is then a system that interacts to produce information. Furthermore, we can identify five components that make up an information system. They are computer hardware, software, data, procedures, and people. Let’s take a closer look at an information system in the next slide, which shows us a diagram of how this interaction takes place. Copyright © 2015 Pearson Education, Inc.

What Is an Information System? Five components of an information system In this diagram, we see the five components of an information system. The hardware and people do things, while the software tells the hardware what to do, and the procedures tell the people what to do. Data is the bridge between the machine side (hardware and software) and the human side (procedures and people). These five components are common to all information systems, regardless of size. Copyright © 2015 Pearson Education, Inc.

What Is an Information System? How Can I Use the Five-Component Model? Recognize that you are the key Make each component work Estimate the scope of new information systems Order components by difficulty and disruption Recognize that any information system can only be as good as the people who are a component in the system – the most important component. By using the five-component model, it is easier to troubleshoot issues when they arise. Rather than point to the wrong component, you have the ability to interrogate more suspects. The five-component model will also allow you to think more completely and assess the impact of new technologies. You will be better able to assess the scope of new systems. Finally, the five-component model lists the components in a particular order. They are listed in order of ease of change and extent of organizational disruption. Quite simply, it’s easier and less disruptive to replace a computer with a new one, than it is to replace a person. Copyright © 2015 Pearson Education, Inc.

How Do Business Processes and Information Systems Relate? If we look at the earlier example, we see four distinct roles. Three of these roles are performed by a person, while only one role (Order Tracker) is performed by a computer-based system. Based on this, we can say the Drive-Thru process is supported by a single IS – the Order Tracker IS. It’s possible to have multiple IS supporting this process. Quite frankly, you can have as many as you need. As an example, if there was a motion detecting system used to record the traffic patterns of cars that join the drive-thru line, then we would have a second IS. It is also quite possible that an IS will support more than one process. We will look at this in the next slide. Copyright © 2015 Pearson Education, Inc.

How Do Business Processes and Information Systems Relate? An Information System can support several processes This slide provides more clarity into the relationship between information systems and processes. Here we can see that a single IS, such as the Order Tracker IS, not only supports the Drive-Thru process, but several other processes as well. Examples are in-store ordering, and daily revenue. Some processes, such as the opening and closing of the fast food restaurant, do not rely on an IS. Copyright © 2015 Pearson Education, Inc.

How Do Business Processes and Information Systems Relate? The Role of Procedures Set of instructions for a person to follow when operating an IS Different procedure for different processes A procedure, as we mentioned before, is a set of instructions for a person that must be followed to operate the information system. Since an information system can support more than one process, it will have multiple procedures. In short, an information system will have a different procedure for each process it supports. Should the information system change, or the process change, the procedures will also change accordingly. Copyright © 2015 Pearson Education, Inc.

How Do Structured and Dynamic Processes Vary? Characteristics of Structure Processes Characteristics of Dynamic Processes As we can see in this slide, there are basically two categories to help categorize processes. Among the many processes within an organization, some of them are considered structured. Characteristics of a structured are listed here, but in general, structured processes are for formally defined, standardized processes. Dynamic processes are less specific, more adaptive, and even intuitive. Copyright © 2015 Pearson Education, Inc.

Copyright © 2015 Pearson Education, Inc. What Is Information? Information Knowledge derived from data Data presented in a meaningful context Processed data A difference that makes a difference Defining information can be challenging. Here we see four common definitions for information, though not a single one is perfect. Information can be defined as knowledge derived from data, where data simply refers to records or facts. It can also be defined as data presented in a meaningful context. Some say information is data that is processed or manipulated – this means data, once processed, provides information. Finally, information can be defined as a difference that makes a difference. An example of this would be noticing a discrepancy in data that could lead to making a valuable difference in a business scenario. Again, none of these are perfect, so we’ll incorporate all of them into a framework to help define information. Copyright © 2015 Pearson Education, Inc.

Copyright © 2015 Pearson Education, Inc. What Is Information? Common elements in the definitions Information: Is not data, it is more Varies from person to person Is located inside of you Of the definitions we saw in the previous slide, there are some common elements. Information is more than just data, because it is meaningful. Meaningful information has the power to change minds. Because “meaning” is unique to the individual, information can vary from person to person. What we mean by saying “it is located inside of you,” is that information is data that a person processes with their brain. Copyright © 2015 Pearson Education, Inc.

Copyright © 2015 Pearson Education, Inc. What Is Information? How can I use these ideas about information? Assume it is hard to communicate Recognize that all new information systems are frustrating at first Understand how to be effective on a team Stay curious Now that we have an understanding of what information is, we can begin to understand how to use information. One of the first steps in using information is to again realize that everyone interprets information differently, so it is a challenge to communicate information. In addition to information being hard to communicate, once users get used to working with information, changes to information systems can be quite traumatic and frustrating. It can take a great deal of time to once again identify new differences that define information. Working on teams can also be an effective way to understand and identify new differences that are meaningful for each other. Finally, stay curious. Since information is something you process in your brain, keep interested in order to ensure your brain is staying informed. Copyright © 2015 Pearson Education, Inc.

What Are Necessary Data Characteristics? Accurate Timely Relevant To context To subject Just sufficient Worth its cost As we have just seen, information can be derived from data, so it’s important to have quality data. The characteristics seen here can be used to evaluate data quality. First, data must be accurate. If one is expected to derive information from the data, it is essential for the data to be accurate, correct, and complete. Second, the data must be timely. This means the data must be available in time for its intended use; otherwise, it serves little purpose. Data should also be relevant both to the context and to the subject – it needs to be appropriate for the user and its purpose. “Just sufficient” means the data needs to be sufficient for the purpose for which it is generated, but just barely so. Too much data typically requires a need to sift through it in order to filter out data that needs to be ignored. Finally, data is not free. The data maintained needs to provide value and in most cases, the value of the data must exceed its cost. Copyright © 2015 Pearson Education, Inc.

Copyright © 2015 Pearson Education, Inc. Ethics Guide Informing About Misinforming Consider the scenario Discussion Questions This ethics guide is interesting because many of us may not give consideration to what it means to misinform. Take the time to read this and then review the discussion questions that follow. Copyright © 2015 Pearson Education, Inc.

Copyright © 2015 Pearson Education, Inc. Conclusion Q1. What is a business process? Q2. What is an information system? Q3. How do business processes and information systems relate? Q4. How do structured and dynamic processes vary? Q5. What is information? Q6. What are necessary data characteristics? In this presentation, we began with a discussion of business processes. We defined a business process as a sequence of activities for accomplishing a function and identified tools like BPMN to help describe various business processes. We also discussed an information system, stating it is a system designed to produce information. Information contains five components: hardware; software; data; processes; and people. These five components appear in all business processes, thus supporting the processes. We also addressed how business processes and information systems relate to one another. To enhance our understanding of that, we also gained knowledge of the differences between structured and dynamic processes. In the end, to bring this discussion full circle, we defined information and the characteristics of quality data. Copyright © 2015 Pearson Education, Inc.

Copyright © 2015 Pearson Education, Inc. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America. Copyright © 2015 Pearson Education, Inc.