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Chapter 2 Business Process, Management and Decision Making

Business Process (aka business system)
is the response to a stimulus
ie. the set of activities needed to answer to that stimulus
create, use and store information
Inventory Management System
collects info to balance demands of the customers with the inventory purchased by suppliers to optimize profit
Microsoft Visio
drawing program used to create a database diagram (DFD)
Quantity ordered
What is ordered by customers
Reorder Point
when system advises manager to order more supplies
Purchase Order
lists the items ordered by manager and is sent to the supplier
Quantity Received
newly received goods that are placed in inventory and inventory database is updated
1) Activities
2) Resources
3) Facilities
4) Information
4 Elements of the Business Process
structures used within the business process, where resources are stored (Ex. database, trucks, factories filing cabinets)
items of value which are used by organization to provide value to customers and successful outcomes for the owners
use and transform resources and information of one type into resources and information of another type by following rules and procedures
used by activities to determine how to transform the inputs received ? outputs ie. Data presented in a meaningful context
recorded facts and figures
Object Management Group (OMG)
a software industry standards organization that created Business Process Modeling Notation (BPMN)
Business Process Modeling Notation (BPMN)
a standard set of terms and graphical notations for documenting business processes
Easier for different companies of suppliers and buyers to know one set of lingo to avoid confusion
Information definition “difference that makes a difference” was made by who?
1) Accurate
2) Timely
3) Relevant
4) Just Barely Sufficient
5) Worth It’s cost
5 Characteristics of Information
IS produces correct and complete results with cross-check info to ensure accuracy
produced on time for its intended use
1) To Context CEO needs wage summary not list of every single wage
2) To Subject Report should correspond to the info needed and should be presented clearly
2 Types of Relevant
enough to meet the needs of the situation and ignores insignificant info
Worth its cost
pertains to the relationship between cost and value; is it to expensive ?
Business Process Management (BPM)
a field of management that promotes the development of effective and efficient processes through continuous improvement and innovation
Automated System
handles an activity in a business process in which work formerly done by people who followed procedures has been replaced by computers who now do work by following instructions in software
Counter sales
automated activity that receives customer’s order, takes items from inventory and receives customer’s payment; more automation=less training and lower wage expense for high-turnover cashiers
Sales Recording Information
activity that is mostly automated (computers+software) and manual (cashier)
Payment System
mostly manual b/c it is a more complecated process that requires different responses (A/P clerk= analyzes invoices+ issues payment authorization)
Information System to Support Purchasing
balance of manual + automated
Manual: Clerk chooses supplier, variety of items
Automated: PC signals when stock is low
Business process Design
aims to improve organization
1) Business Process Automation (BPA)
2) Business Process Improvement (BPI)
3) Business Process Transformation
3 types of Business Process Design
Business Process Improvement
changes are made to the way things are done; computer system and business system
Business Process Automation
“Paving the cow path” focuses on detailing the as-is system leaving the manual system unchanged but makes processes more efficient by automating them
Business Process Transformation
a radical and fundamental rethinking of the business processes currently used; radical and risky improvements
Operational decisions
concern day-to-day activities that are short-term; weekly, daily)
Managerial decisions
concern the allocation and utilization of resources
Strategic decisions
concern broader-scope organizational issues
Transaction Processing Systems TPS
ISs that support operational decision making
Management Information Systems (MIS)
ISs that support managerial decision making
Executive Information Systems
ISs that support strategic decision making
Structured Decision
process where there is an understood or accepted method for making the decision (formula calculating reorder, standard procedures)
Unstructured Decision
process where there is no agreed upon decision making method and varies from person to person
1) Intelligent Gathering
2) Alternatives Formulation
3) Choice
4) Implementation
5) Review
Steps of decision making
Intelligence Gathering
decision makers determine what is to be decided, criteria for decision, what data is available (Ex. Communications apps (e-mail), data analysis apps)
Alternatives Formulation
stage in which decision makers lay out and analyze alternatives (Ex. Communications apps (web conferencing))
choosing the best alternative (Ex. spreadsheets, financial modelling)
putting the alternative into action
evaluate results of decisions (Ex. Communications, query and reporting)

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