Business Process and Information Systems Development Using MIS 4e Chapter 10 Business Process and Information Systems Development

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 2021? Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Q1: Why Do Organizations Need to Manage Business Processes? Activities—Transform resources and information of one type into resources and information of another type Decisions— A question that can be answered Yes or No Roles— Sets of procedures Resources—People, or facilities, or computer programs that are assigned to roles Repository—Collection of business records Business Process Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Steps in Processing an Order Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Why Does This Process Need Management? Processes that don’t work or work well Change in technology Change in business fundamentals: Market (new customer category), product lines, supply chain, company policy, company organization (merger/acquisition), internationalization, business environment Video Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Why Does This Process Need Management? Does not produce desired result, or confusing Misaligned with organization’s goals, objectives, or competitive strategy Processes that don’t work or work well Entire process needs to be evaluated when new technology changes any process activity in a significant way Change in technology Market (new customer category), product lines, supply chain, company policy, company organization (merger/acquisition), internationalization, business environment Change in business fundamentals Video Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Q2 What Are the Stages of Business Process Management (BPM)? Continuous process improvement new model as-is model Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Scope of Business Process Management Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Model business processes Q3 How Can BPMN Process Diagrams Help Identify and Solve Process Problems? Blueprint for new process and system components. If models are incomplete and incorrect, components cannot be created correctly. Model business processes Created a standard set of terms and graphical notations for documenting business processes called Business Process Modeling Notation (BPMN), documented at www.bpmn.org. Object Management Group (OMG) Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Business Process Management Notation (BPMN) Symbols) Business Process Modeling Notation (BPMN) Object Management Group (OMG) Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Documenting the As-Is Business Order Process: Existing Ordering Process Process flow or sequence of activities Flow of messages and data Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Check Customer Credit Process Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Using Process Diagrams to Identify Process Problems Operations Manager allocates inventory to orders as they are processed Credit Manager allocates credit to customer of orders in process. Allocations are correct if order is accepted If rejected, allocations are not freed, and inventory is allocated that will not be ordered, and credit is extended for orders not processed Possible fix: Define an independent process for Reject Order Figures 10-5 and 10-6 have process problems Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

How Can Business Processes Be Improved? Brute-force approach Don’t change process Add more people or equipment Change structure of process Without changing resource allocations Add resources Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Revised Order Process Add resources to credit checking and change sequence of inventory and credit checking Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Fox Lake Wedding Planning and Facilities Maintenance Processes Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Q4: Which Comes First, Business Processes or Information Systems? Information systems and business processes are not same thing Information system are embedded within business processes, There are activities in business processes not part of information system A business process can utilize zero, one, or more information systems A particular information system may be used by one or more business processes How Are Business Processes and Information Systems Related? Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Fox Lake Processes Showing IS Components Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Many-to-Many Relationship of Business Processes and Information Systems Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Which Comes First? Business Processes First Identify System Need Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Information System First Classic Five-Step Systems Development Life Cycle Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Factor that overtakes all is off-the-shelf software And the Answer Is . . . Better to start with business processes More likely to result in processes and systems that are aligned with the organization’s strategy and direction In theory Organizations today take both approaches. In practice If organization starts with business processes and selects application that works for those processes, most likely, application has features and functions needed by other business processes to be designed in future Factor that overtakes all is off-the-shelf software Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Q5 What Are Systems Development Activities? Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

SDLC: System Definition Phase Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

How Is System Definition Accomplished? Purpose: Increase revenue from wedding events Goals: Eliminate or at least reveal schedule conflicts and improve maintenance tracking Scope: Specify users or business processes that will be involved, or facilities, functions, and events that will be involved Define scope for new Fox Lake system Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Form a Project Team Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Determine Requirements Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Design System Components Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Implementation Activities Conversion types Pilot Phased Parallel Plunge Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

System Conversion Choices Pilot Implement entire system in limited portion of business Advantage—limits exposure to business if system fails Phased System installed in phases or modules Each piece is installed and tested Parallel Complete new and old systems run simultaneously Very safe, but expensive Plunge High risk if new system fails, no fall back system Only used if new system not vital to company operation Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Design and Implementation for the Five Components Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

System Maintenance Phase Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Q6: Why Are Business Processes and Systems Development Difficult & Risky? Many projects are never finished. Those that finish often 200–300% over budget. Some projects finish within budget and on schedule, but never satisfactorily accomplish their goals. Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Five Major Challenges to Systems Development Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Five Major Challenges to Systems Development (cont’d) What specifically is system to do? How does wedding planner use new system to reserve a room or building? What does data entry screen look like? How does planner add/reduce facilities once wedding scheduled? What should system do when a wedding cancelled? Facility schedule system interface with accounting systems? How? Does system need to reserve floor or refrigerator space in restaurant kitchen? Difficulty of requirements determination Must create environment where difficult questions are asked and answered. Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Five Major Challenges to Systems Development (cont’d) Changing requirements Large, long projects aim at moving target Scheduling and budgeting difficulties How long to build it? How long to create data model? How long to build database applications? How long to do testing? How long to develop and document procedures? How long for training? How many labor hours? Labor cost? What’s the rate of return on investment? Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Five Major Challenges to Systems Development (cont’d) Changing Technology Do you want to stop your development to switch to the new technology? Would it be better to finish developing according to the existing plan? Why build an out-of-date system? Can you afford to keep changing the project? Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Five Major Challenges to Systems Development (cont’d) Diseconomies of scale Brooks’ Law “Adding more people to a project makes the project later.” New staff must be trained by productive members who lose productivity while training new members. Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

• Create a work-breakdown structure Q7: What Are the Keys for Successful Process and Systems Development Projects? • Create a work-breakdown structure • Estimate time and costs • Create a project plan • Adjust the plan via trade-offs Manage development challenges Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Create a Work-Breakdown Structure (WBS) WBS for Definition Phase of Order-Entry System Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

How Does a Work-Breakdown Structure Drive Project Management? Hierarchy of tasks required to complete a project Each task ends with deliverables Documents, designs, prototypes, data models, database designs, working data entry screens, etc. Identifies task dependencies Estimate task duration, cost, and labor needed Created with project management software, such as Microsoft Project Work-Breakdown Structure (WBS) Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Estimate Time and Costs License packages that include both business processes and information systems components Avoid major schedule risks and never develop systems and software in-house Only loose commitments made regarding completion date and final system functionality “We don’t know” Past projects, if any Lines of code and industry or company averages to estimate time required http://sunset.usc.edu/csse/research/COCOMOII/cocomo_main.html Best estimates Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Gantt Chart of the WBS for the Definition Phase of a Project Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Create a Project Plan: Gantt Chart with Resources Assigned Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Critical Path Analysis Sequence of activities that determine earliest completion date Longest path through network of activities Tasks dependencies compressed as much as possible Tasks may be moved to noncritical paths to shorten critical path Tasks on path, if late, will delay project completion Move critical path tasks to noncritical path to shorten project schedule (sometimes) Baseline WBS (final WBS) Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Adjust Plan via Trade-offs Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Manage Development Challenges Independent groups might reside in different locations Coordination Adding people leads to exponential interactions, makes project later Diseconomies of scale Set of management policies, practices, tools to maintain control over resources Configuration control Chance of disruption from unanticipated events Unexpected events Pure thought stuff leads to wasted hours, increased costs, poor morale Maintaining team morale over time Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Q8: 2021? Continuing focus on aligning business processes and information systems with business strategy, goals, and objectives Computer systems will be more easily changed and adapted in the future Emergence of new software vendor business models Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Active Review Q1: What is systems development? Q2: Why is systems development difficult and risky? Q3: What are the five phases of the SDLC? Q4: How is system definition accomplished? Q5: What is the users’ role in the requirements phase? Q6: How are the five components designed? Q7: How is an information system implemented? Q8: What are the tasks for system maintenance? Q9: What are some of the problems with the SDLC? How does the knowledge in this chapter help Fox Lake and you? Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall