Chapter 7
Processes, Organizations, and
Information Systems
“How much money does a system own?”
• Who do we sell it to, and how do we induce them to buy?
• Doctors?
– Care about medicine and operations, and some care most
about expensive operations. If they cared about exercise,
they’d own health clubs.
• Insurance companies?
– Exercise doesn’t prevent disease.
– When you get in good shape, you last longer, and their care
expenses increase.
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Who Will Pay?
• Health clubs
• Employers
• Revenue selling ads to health clubs and
manufacturers
• Social media–driven
• Can PRIDE support 10,000 people spinning at
the same time?
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Study Questions
Q1: What are the basic types of processes?
Q2: How can information systems improve process quality?
Q3: How do CRM, ERP, and EAI support enterprise processes?
Q4: How do information systems eliminate problems of information silos?
Q5: What are the elements of an ERP system?
Q6: What are the challenges of implementing and upgrading enterprise
information systems?
Q7: How do inter-enterprise IS solve the problems of enterprise silos?
Q8: 2025?
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Q1: What Are the Basic Types of Processes?
Business Process
with Three Activities
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How Do Structured Processes Differ from Dynamic
Processes?
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How Do
Processes
Vary by
Organizational
Scope?
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Characteristics of Information Systems
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Q2: How Can Information Systems Improve
Process Quality?
• Process efficiency
– Ratio of process outputs to inputs
• Process effectiveness
– How well a process achieves organizational
strategy
• How Can Processes Be Improved?
– Change process structure
– Change process resources
– Change both
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How Can Information Systems Improve Process
Quality?
• Performing an activity
– Partially automated, completely automated
• Augmenting human performing activity
– Common reservation system
• Controlling data quality process flow
– Ensure data complete and correct before
continuing process activities
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Q3: How Do Enterprise Systems Eliminate the Problem of
Information Silos?
• What are the problems of information silos?
– Data are duplicated
– Data inconsistency
– Data isolated
– Business processes disjointed
– Lack of integrated enterprise information
– Inefficiency: decisions are made in isolation
– Increased cost for the organization
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Problems Created by Information Silos
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How Do Organizations Solve the Problems of
Information Silos?
• Integrate data
into single
database
• Revise
applications
• Allow isolation,
manage to
avoid problems
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An Enterprise System for Patient Discharge
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Q4: How Do CRM, ERP, and EAI Support
Enterprise Processes?
• Business Process Reengineering
– Integrated data, enterprise systems create stronger,
faster, more effective linkages in value chains
– Difficult, slow, and exceedingly expensive
– Key personnel determine how best to use new
technology
– Requires high-level and expensive skills and
considerable time
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Emergence of Enterprise Application Solutions
• Inherent processes
– Predesigned procedures for using software
products
– Based on “industry best practices”
• Customer relationship management (CRM)
• Enterprise resource planning (ERP)
• Enterprise application integration (EAI)
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Customer Relationship Management (CRM)
• Suite of applications, a database, and a set of
inherent processes
• Manage all interactions with customer through four
phases of customer life cycle:
– Marketing, customer acquisition, relationship
management, loss/churn
• Intended to support customer-centric organization
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Customer
Life Cycle
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CRM Applications
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ERP
Applications
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Pre-ERP Information System: Bicycle
Manufacturer
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ERP Information Systems
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ERP Enabled Sales Dashboard
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Enterprise Application Integration (EAI)
•
•
•
•
Connects system “islands.”
Enables communicating and sharing data.
Provides integrated information.
Provides integrated layer over the top of existing
systems while leaving functional applications “as is.”
• Enables a gradual move to ERP.
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Design and Implementation for the Five
Components
Virtual
Integrated
Database
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