301
IT MIS in Business
Spring 2008 Class #3 Chapter 2
Elota Patton
IROM Department
McCombs School of Business
IT Could Happen to You
To get her blog budget approved:
Dee needs specifics Dee needs answers
How will this blog impact sales process? How will salespeople use it? How will it help gain sales?
Study Questions
How did this stuff get here? What is a business process? What are business process components? What is information? What role does information play in business processes? How do information systems (IS) support business processes? How does this knowledge help Dee?
How Did This Stuff Get Here?
Business processes must work together Each business must
Obtain payment Cover costs Make a profit
UT Football Name Business Components
What is a Business Process?
A network of
Activities Resources Facilities Information
That interact to achieve business function
Portion of Inventory Mgmt System
Figure 2-1
Business Process Activities
Transforms resources and information from one type into another
Follows rules and procedures Manual, automated, or combination Example:
Payment(activity) transforms QuantityReceived(information) and ShippingInvoice(information) into PaymentToSupplier(resource)
Business Process Resources
Items of value External to organization Examples:
Customers Suppliers
Business Process Facilities
Factory
Example business process structures
Inventories Databases Factories Equipment
Database
Business Process Information
Used by activities
Determine how to transform inputs into outputs Difficult to define
What is Information?
Knowledge derived from data Data presented in meaningful context Processed data Data processed by summing, ordering, averaging, grouping, comparing A difference that makes a difference
Good Information
Accurate
Correct and complete Crucial for management Cross-check information to ensure accuracy
Timely
Produced in time for intended use
Relevant
Context Subject
Good Information, cont.
Just Barely Sufficient
Sufficient for purpose for which generated Do not need additional, extraneous information
Worth Its Cost
Relationship between cost and value Information systems cost money to develop, maintain, and use Must be worth the cost
Good Information Characteristics
SMART Goals S specific M measurable A attainable R relevant T timely
SMART Information S sufficient M worth Money A - accurate R relevant
to context to subject
T timely
Business Process Components 1. Activities 2. Resources 3. Facilities 4. Information
Inventory Management System
Purchasing (activity) queries Inventory Database (facility) obtains QuantityOnHand (information)
If reorder needed, Purchasing generates Order (information) to Supplier(resource)
Order Placement (activity) sends copy to Receiving (activity)
Receiving puts goods into Inventory (facility)
Record sent to Inventory Database and Payment (activity)
Role of IS in Business Processes
Business processes generate information
Bring together items of data in a context May be higher level
Useful for management and strategy decisions
Dell 2006 PC sales up 9.8% in 2006 Dell 2006 PC sales up 15.2% in 2007 WHY?
Dell sells $548 Inspiron 1501 at Wal-Mart and Sam's Club
ISs Support Business Processes
Used by activities in business process
Several activities may use one system
Activity may have own system Activity may use several systems
Systems designers determine relationship of activities to information systems
Relationship determined during systems development
What Does Mean It to Automate a Process Activity?
Insert 2-3
Process Activity Automation
Transfer work done by people to computers People follow procedures Computers follow software instructions
IS supports counter sales
IS Supports Counter Sales
Fully automated
Cashiers don't need extensive training Cashiers don't work directly with computer programs
Computer in cash register communicates with computer hosting Inventory Database Programs record sales and adjust inventory
IS Supports Payment
Figure 2-5
IS Supports Payment
Payment receives QuantityReceived and ShippingInvoice and produces SupplierPayment Mostly manual
Accounts Payable Clerk reads documents and issues payment or investigates discrepancies
Processing exceptions complicated
Programming expensive Probably not effective
IS Supports Purchasing
Figure 2-6
IS Supports Purchasing
Purchasing clerk computer
Runs program Queries database Identifies stock levels Generates PurchaseOrder
Designers balanced work between automation and manual activity
Searching database repetitive - automated Selecting suppliers complicated - manual
Your Role in IS
You are part of system (people) Most important component
Must be able to use system Quality of thinking helps determines system value
Solving Business Problem Requires Shared Problem Definition
PROBLEM - perceived difference between what is and what ought to be
IS development team must have common problem definition Understanding and definition come substantially from empathetic thinking
Ethics Guide
Egocentric thinking
Centers on self "Real view" "What really is"
Empathetic thinking
View one possible interpretation Learn what others are thinking
Ethics Guide
Egocentric thinking
Centers on self "Real view" "What really is"
Empathetic thinking
View one possible interpretation Learn what others are thinking develop a YOU-attitude
Ethics Guide
"Professor Jones, I missed class on Monday. Did we do anything important?"
Egocentric
Doesn't take professor's view into account Implies professor lectured on nothing important
a class about nothing
Ethics Guide
"I couldn't come to class, but I got the notes from Mary. I read through them, and I have a question..."
Empathetic thinking Minimize impact of absence on professor Consider situation from professor's side Professor must do something extra to help you recover
For bosses or profs, make action EASY
Ethics Guide
You buy a new laptop and it fails within a few days. Repeated calls to customer support produce short-term fixes, but problem continues Three different views:
Customer service does not have data about prior customer contacts Customer support recommended a solution that did not work Company is shipping too many defective laptops
Implications of each view?
Ethics Guide
What happens if you meet with three people who have these views and they are engaging in:
Egocentric thinking?
Empathetic thinking?
How does this ethics discussion relate to Dee creating her blog?
Active Review
How did this stuff get here? What is a business process? What are the components of the business process? What is information? What role does information play in business processes? How do information systems support business processes? How does Ch. 2 knowledge help Dee?
For Next Class
Readings for Wed, 1/23
Prepare your Organization to Fight Fires Blogs Will Change Your Business
Readings for Fri, 1/25
Robust Adaptive Strategies The Billion Man Research Team
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