CS 330 Business Processes Fall 2024 PDF

Topic 5 - Business Processes and Types of Information Systems Key Concepts Business Processes (BP) Customer Relationship Management (CRM) Supply Chain Management (SCM) Accounting Information System (AIS) Human Resources Information System (HRIS) Transaction Proces...

Topic 5 - Business Processes and Types of Information Systems Key Concepts Business Processes (BP) Customer Relationship Management (CRM) Supply Chain Management (SCM) Accounting Information System (AIS) Human Resources Information System (HRIS) Transaction Processing Systems (TPS) Decision-support Systems (DSS) Management Information Systems (MIS) Executive Support Systems (ESS) Enterprise Resource Planning (ERP) References course text, Chapter 1.2 and Chapter 2. CS 330 Fall 2024 300  Business Processes An Experiment in Behavioral Economics Ask people for help getting a car out of a pothole. Three Different Conditions 1. randomly asked people passing by ⇒ many were willing to help 2. told people if they helped, they would get $10 ⇒ only a few helped 3. after helping, he gave the volunteer a gift worth $1 ⇒ all happily accepted the gift and thanked him What is going on here? CS 330 Fall 2024 301  Business Processes An Experiment in Behavioral Economics He concluded: - We live in both a capital market (financial considerations, maximizing profit) and a social market (following the rules of society). Each has its own rules and value systems. - Different markets, different rules, different returns, different focus and different value systems. Our goal: - Understand the role of an IS both in both the capital market and in the social market (i.e. as opposed to personal use of an information system). CS 330 Fall 2024 302  Business Processes The Essence of a Business The basic operation of a business is to convert resources into products and services. A business can also be seen as a collection of business processes. Business processes are the collection of activities required to produce a product or service (course text pg. 32). - I.e. how is work organized, coordinated, focused. - E.g. customer places an order, what steps happen next? Goal: examine business processes with a view to understanding how they might be improved by using information systems to achieve greater efficiency, innovation and customer service (course text pg. 34). CS 330 Fall 2024 303  Business Processes Major Business Functions for an Organization Each business is a collection of business functions, e.g. Function Purpose Course text, Table 1-2 Manufacturing Producing and delivering products and and Production services. Sales and Selling the organization’s products and Marketing services. Finance and Managing the organization’s financial Accounting assets and records. Human Attracting, developing and maintaining Resources the organization’s labour force. Each business function is a collection of business processes... CS 330 Fall 2024 304  Business Processes Examples of Business Processes (BP) Course text, Table 2-1 CS 330 Fall 2024 305  Business Processes Business Processes and Functions A business process might run across several business functions, e.g. order fulfillment Course text, Figure 2-1 CS 330 Fall 2024 306  Business Processes How does an Information System (IS) fit in? Since we are taking a sociotechnical approach, consider 1. Technical aspect (i.e. can we?) - First understand how the existing business process works. - Which parts of the business process steps be automated? - Can we modify the process to enable more automation? (e.g. line for date vs. boxes for digits on a cheque). - What changes need to be made? 2. Behavioral aspect (i.e. should we?) e.g. social market - What is its impact on people and the organization? - What is the impact on the organization’s structure and culture. CS 330 Fall 2024 307  Business Processes How does an Information System (IS) fit in? Our goal is to use the information to enhance business processes through (partial or full) automation. Ask… - Can we enforce policy or regulation better? - Can we enable a new product or service that can transform the business? - Can we increase the efficiency of existing processes?, e.g. ▪ Which parts of a hiring process can be automated? ▪ Which parts of an order fulfillment process can be automated? e.g. Amazon warehouses. Once a process is automated, can we use that data to make better decisions? CS 330 Fall 2024 308  Class Exercise: Managing Travel Expenses A Business Process Example Travelling is expensive. 1. manager preapproval Processing expense claims 2. confirm budget adds to the cost. 3. collect receipts On average, it takes $48 4. itemize US to process one claim. 5. manager approval What work needs to be 6. expense clerk approval done to process a claim? 7. notify payroll 8. get money via direct deposit CS 330 Fall 2024 309  Class Exercise: Managing Travel Expenses BP Automation What part of the process can be automated? - pretty well every step, to a certain extent What changes need to be made? - Get an electronic copy of receipt or scanning it in. - Use credit card companies that itemize receipts for us - Linking up systems - Create software CS 330 Fall 2024 310  Class Exercise: Managing Travel Expenses Business Intelligence (BI) Once a process is automated, what information can we obtain? Recall: Business intelligence is information technologies to help users make better business decisions. 1. Collect data What kind of business data can you obtain? 2. Extract information to support decision making What kind of information can you extract and you would like to extract? 3. Create business intelligence How can you use this information to improve performance by making better decisions? CS 330 Fall 2024 311  Class Exercise: Managing Travel Expenses Creating Business Intelligence (BI) After automating the processing of a traveling claim, you observe the following facts: - Lots of business travels to California during the winter time. - Lots of taxi fares to and from the Pearson Airport. - Lots of international calls during business trips. How would this information help you improve your business? CS 330 Fall 2024 312  Class Exercise: Managing Travel Expenses Deriving Information Now focus on efficiency or enabling new business processes - Can the BP be improved by this technology? ▪ Negotiate better rates, e.g. taxis - Will this new technology bring new product/service? ▪ Someone to negotiate prices CS 330 Fall 2024 313  Types of Information Systems Approach for the Next Few Slides For each of these major business functions (from 304-305) A. Sales and Marketing B. Manufacturing and Production C. Finance and Accounting D. Human Resources Ask the following questions… 1) Which business processes can be automated? 2) What data can be gathered? 3) What information can help improve business? CS 330 Fall 2024 314  Types of Information Systems A. Sales and Marketing 1) Which business processes can be automated? - Ordering process, order fulfillment, order inquiry, advertising and promotion etc. 2) What data can be gathered? - Individual orders: who ordered what, when, where, when was it filled, was there is any issues? - Customer data: name, contact info, purchases, returns. CS 330 Fall 2024 315  Types of Information Systems A. Sales and Marketing 3) What information can help improve business? - Purchase habits: who likes what, when and where sales trends: what is popular, when and where, efficiency of fulfillment, return rates. - Promotion strategy, production schedule, inventory level etc. Terminology: called a Customer Relationship Management (CRM) system. - Provides: Customer support, sales and marketing. For some examples see: https://www.capterra.com/customer-relationship-management-software/ CS 330 Fall 2024 316  Types of Information Systems A. Sales and Marketing A point of sales system (partially) automates the in-store checkout process. It often produces standard sales-related (sales performance and sales trends) and customer-related information (like customer base). Can you think of other useful information it might produce? - Say, employee-related information … CS 330 Fall 2024 317  Types of Information Systems B. Manufacturing and Production 1) Which business processes can be automated? - Making of individual parts, assembling, testing, stocking/shelving etc. 2) What data can be gathered? - Inventory of parts (input) and products (output), when, where, how many, whether there are any issues? CS 330 Fall 2024 318  Types of Information Systems B. Manufacturing and Production 3) What information can help improve business? - Efficiency of the production process, defective rate, production/schedule status, - suppliers of defective parts, sources of error in process. Terminology: called a Supply Chain Management (SCM) system - Linked with suppliers and ensure materials and parts are available when needed. For some examples see: https://www.capterra.com/supply-chain-management-software/ CS 330 Fall 2024 319  Types of Information Systems Limitations of Manufacturing and Production Software Based on the data stored in these systems, can you answer the following questions: - If there is something wrong with an item sold to a customer, can you trace where it was sold and who the customer was? - Who else bought the same product? - Can you link it to a particular shipment? - Can you find out which sales representative handled the transaction? To answer these sorts of questions we need another type of system… CS 330 Fall 2024 320  Types of Information Systems C. Finance and Accounting 1) Which business processes can be automated? ▪ Everything to do with money 2) What data can be gathered? Just a sample... ▪ Inventory: what parts do you have ▪ Purchase Order: records company’s orders of inventory ▪ Accounts payable (A/P): bills owed by your company ▪ Sales Order: records customer’s orders ▪ Billing: produces invoices for clients/customers ▪ Accounts receivable (A/R): payment received by your company CS 330 Fall 2024 321  Types of Information Systems C. Finance and Accounting ▪ Cash Book: collections and payments made with cash ▪ Tax information: needed for tax returns ▪ Sales reports: summaries of sales information ▪ Payroll: payments to your employees 3) What information can help improve the business? - match purchase order, goods received, invoice paid - match customer order, invoice, receive payment - Cash flow, financial status of the firm … Terminology: called an Accounting Information System (AIS) For some examples see: https://www.capterra.com/accounting-software/ CS 330 Fall 2024 322  Types of Information Systems D. Human Resources 1) Which business processes can be automated? - automatic deposits (pay cheque), tax forms, pay slips 2) What data can be gathered? - recruiting, hiring and reassignment - scheduling - payroll - time, attendance, absence and leave management - performance appraisal - benefits administration - grievance handling - learning management (CPR, hazardous materials, fire safety) CS 330 Fall 2024 323  Types of Information Systems D. Human Resources 3) What information can help improve the business? - high employee turnover in a certain area - high absenteeism - cost of overtime vs. hiring more employees - trouble filling certain positions Terminology: called a Human Resources Management System (HRMS) or a Human Resources Information System (HRIS). For some examples see: https://www.capterra.com/human-resource-software/ Sometimes a product meant for one area can also handle a task from another area, e.g. AIS that can also handle payroll. CS 330 Fall 2024 324  Types of Information Systems The Scope of IS We have only covered four areas. There are a lot more categories of IS available to businesses, e.g. https://www.capterra.com/categories The IS Challenge Can you name a business process that currently is not automated or has nothing to with IT? - Can you foresee that it might be automated in the future? Can you think of a job that currently has nothing to with IT? - Can you foresee that it might be automated in the future? This avenue of thinking can lead to new business opportunities! CS 330 Fall 2024 325