VUB Information Systems for Business Management Guest Lecture PDF 2024

Information Systems for Business Management 28/11/24 Information Systems for Business Management Guest Lecture – Filip Hendrickx – 28/11/2024 Filip Hendrickx 1 Information Systems for Business Mana...

Information Systems for Business Management 28/11/24 Information Systems for Business Management Guest Lecture – Filip Hendrickx – 28/11/2024 Filip Hendrickx 1 Information Systems for Business Management 28/11/24 An Example Filip Hendrickx 2 Information Systems for Business Management 28/11/24 Information Systems for Business Management 28-11-2024 | 3 https://unsplash.com/photos/_UeY8aTI6d0 Filip Hendrickx 3 Information Systems for Business Management 28/11/24 NOTE-TAKING ▶ Laptop / Tablet ▶ Lenovo Yoga Book ▶ Pen & Paper / Erasable pen ▶ Note taking apps / Note management apps ▶ Apps to take pictures of your notes ▶ OCR ▶ What about handwritten notes? ▶ Graffiti (Palm OS) ▶... Information Systems for Business Management 28-11-2024 | 4 Filip Hendrickx 4 Information Systems for Business Management 28/11/24 Information Systems for Business Management 28-11-2024 | 5 Bambook: https://www.bambook.org/ Filip Hendrickx 5 Information Systems for Business Management 28/11/24 Information Systems for Business Management 28-11-2024 | 6 https://www.cnet.com/how-to/take-better-notes-with-the-echo-smartpen/ Filip Hendrickx 6 Information Systems for Business Management 28/11/24 “Typing might be more efficient, but experts will tell you that writing by hand allows you to learn better, retain more “If technology is the information, and answer, what was the stimulates your brain.” problem?” — Pieter-Jan Pauwels, Innovation Lead Information Systems for Business Management 28-11-2024 | 7 - Why do you take notes? Memorisation, summaries, sharing, collaboration, … à Better study results - Different brain parts are working when writing vs when typing - On the one hand: market changes & opportunities as a driver - On the other hand: technology opportunities as a driver - Many different solutions, with more or less technology, are possible and more or less valuable depending on the business objectives, context, opportunity or problem - Source: recent study: https://www.vrt.be/vrtnws/nl/2024/11/27/laptop-schrijven- hand-papier-hersenen-leren-studie/ Filip Hendrickx 7 Information Systems for Business Management 28/11/24 SOME THOUGHTS & QUESTIONS ▶ What problem does IS/IT solve? What opportunity does it (help) exploit? ▶ What is the role of technology + what do we need beyond technology? ▶ What alternative solution options exist? ▶ How are we organised to create, maintain, operate, support, decommission IS/IT? ▶ What is the value of IS/IT? ▶ Value of data and information ▶ Value of products & services enabled or improved by IS/IT ▶ Internal in the organisation and/or external to the organisation (suppliers, partners, customers, society, …) ▶ … ▶ Note: IS/IT = Information Systems/Information Technology – See next slides Information Systems for Business Management 28-11-2024 | 8 Filip Hendrickx 8 Information Systems for Business Management 28/11/24 Information Systems in a Business Context Technology is a solution, not a goal. It is not a silver bullet. Though technology can be a powerful enabler, it is always a means to a (business) end. The business context should strongly influence technology investments and usage. Filip Hendrickx 9 Information Systems for Business Management 28/11/24 SYSTEM DEFINITIONS A system is ‘a set of inter-related components that work together in a particular environment Business System to perform whatever functions are required to achieve the system’s objective’. – Donella Meadows Information System Information An information system is ‘a system that gets Technology the right information to the right person in the System right place at the right time’. – Keith Gordon — Modelling Business Information, BCS Information Systems for Business Management 28-11-2024 | 10 Example: - IT: (Technology to manage) Product information; Store website and/or app - IS: Supplier and store people keeping information up to date; In-store product management system; Website: Browsing product info and reviews etc.; Online shopping functionality. Also non-technical aspects: in-store information panels; store employee giving tips; … - BS: Business model & value proposition; Entire value chain; Leads to improved customer experience pre-, during- and post-sales (e.g. support, usage and maintenance tips, …) Filip Hendrickx 10 Information Systems for Business Management 28/11/24 I(C)T DEFINITION Information (and Communication) Technologies I(C)T refers specifically to technology, essentially hardware, software and telecommunications networks, including devices of all kinds: computers, sensors, cables, satellites, servers, routers, PCs, phones, tablets; and all types of software: operating systems, data management, enterprise and social applications and personal productivity tools. IT facilitates the acquisition and collection, processing, storing, delivery, sharing and presentation of information and other digital content, such as video and voice. Information Systems for Business Management 28-11-2024 | 11 FYI Source: The Strategic Management of Information Systems: Building a Digital Strategy, 4th Edition https://www.wiley.com/en- be/The+Strategic+Management+of+Information+Systems%3A+Building+a+Digital+Str ategy%2C+4th+Edition-p-9781119215479 Filip Hendrickx 11 Information Systems for Business Management 28/11/24 INFORMATION SYSTEMS DEFINITION Information Systems Information systems (IS) are the means by which people and organizations, increasingly utilizing technology, gather, process, store, use and disseminate information. The domain of interest for IS researchers includes the study of theories and practices related to the social and technological phenomena which determine the development, use and effects of information systems in organizations and society. It is thus concerned with the purposeful utilization of information technology, not the technology per se. IS is part of the wider domain of human language, cognition, behaviour and communication. Information Systems for Business Management 28-11-2024 | 12 FYI Source: The Strategic Management of Information Systems: Building a Digital Strategy, 4th Edition https://www.wiley.com/en- be/The+Strategic+Management+of+Information+Systems%3A+Building+a+Digital+Str ategy%2C+4th+Edition-p-9781119215479 Filip Hendrickx 12 Information Systems for Business Management 28/11/24 INFORMATION SYSTEMS STRATEGY & MANAGEMENT BIG PICTURE Information Systems Strategy Management Results = New Data Data Data capture, storage, Governance & support ↓ aggregation, quality of operations Information assurance, ↓ presentation, … Governance and Insights Business strategy support of Change ↓ Data science & AI Initiatives Decisions & ↓ Operational, tactical, Actions IS/IT strategy strategic ITSM DevOps Access, People, processes, API-first communication, social, rules, technology Data mesh gaming, … Information Systems for Business Management 28-11-2024 | 13 - Information - Organisations want to become ”data-driven” à What does that mean? à Decision-driven - Too much data! More data does not necessarily lead to better decisions. - Decisions - Supporting internal decision making & processes - Supporting external (customer- or partner- (e.g. supplier-) facing) decision making & processes - Feedback loop from results to data - Systems - Data science: hindsight (looking back) à insight (why did this happen?) à foresight (looking forward) - Analysis (of historic data) + analytics (e.g. using statistics, machine learning + business knowledge) to make predictions - A system is ‘a set of inter-related components that work together in a particular environment to perform whatever functions are required to achieve the system’s objective’. – Donella Meadows - Tools: hardware & software Filip Hendrickx 13 Informatics in a Business Context - Information Systems - Computer science point of view: structuring, processing, shaping data - Business & organisational point of view: economic, organisation & communication structure - Non-organisational use of ICT, such as in social networking, computer gaming, mobile personal usage - Strategy - What is the role of IS/IT in relation to the business strategy? - What drives what? Is business strategy driving IS/IT strategy or vice versa? - Link between strategy and decisions + actions - Management: ensure things work well and reliable - “-ilities”: https://en.wikipedia.org/wiki/List_of_system_quality_attributes - FYI: https://en.wikipedia.org/wiki/Software_quality - Governance of operations - Data and information availability and quality - Build – Buy – Borrow IT - Corporate governance: cf. ethical use of data - Risk & Security management - Governance of Change Initiatives - Project management - Project management methodologies, like “waterfall” and “agile” methodologies - Project sourcing - IS/IT implementation in the organisation + towards partners and customers - Product management Informatics in a Business Context 13 Informatics in a Business Context - Some approaches - ITSM: IT Service Management - DevOps tries to bring development (build IT) and operations (run and support IT) closer together to enable continuous delivery of applications and software services to customers. - Sometimes, additional aspects are added, like “Biz” and “Sec”, allthough it can also be argued these are integral parts of DevOps anyway. - “Biz” adds the emphasis on the link with the business context: what value is the delivered software delivering? - “Sec” adds the security component, which needs to be part of the entire software lifecycle and not just a layer on top of it added late in the development, release and support process. - IS & IT-related guidelines & principles: e.g. always follow an API-first approach, technology stack choices - Data mesh, a term first defined by Zhamak Dehghani in 2019, is a sociotechnical approach to building a decentralized data architecture by leveraging a domain-oriented, self-serve design (in a software development perspective), and borrows Eric Evans’ theory of domain-driven design] and Manuel Pais’ and Matthew Skelton’s theory of team topologies. (FYI source: https://en.wikipedia.org/wiki/Data_mesh) One could argue that the strategy pillar drives the other pillars, i.e. an organisation’s strategy determines its information needs, what systems it requires to handle its information (needs) and how it manages data, systems and projects. This is a reasonable approach. However, a feedback loop from the other pillars should influence an organisation’s strategy. For example, do we learn unexpected things from our data and are we open to act upon those learnings, i.e. adapt our strategy? What systems can we realistically put in place (e.g. unavailable people skills may force you to rethink parts of your strategy)? What level of quality management or risk reduction is feasible at what cost? Informatics in a Business Context 13 Information Systems for Business Management 28/11/24 The changing role of IS/IT Filip Hendrickx 14 Information Systems for Business Management 28/11/24 MICHAEL PORTER’S VALUE CHAIN 1985 Information Systems for Business Management 28-11-2024 | 15 - Value chain: https://en.wikipedia.org/wiki/Value_chain - The Complete Guide to Value Chain Modeling: https://www.smartsheet.com/value-chain-model - Retail example - Is this still a good way of positioning technology in a business value chain? Filip Hendrickx 15 Information Systems for Business Management 28/11/24 ARE THESE COMPANIES TECHNOLOGY COMPANIES? What do you think about the positioning of technology in these frameworks? ▶ Is Amazon a retail, logistics or tech company? ▶ Is your bank a financial or tech company? ▶ Are Airbnb, Uber or Netflix tech companies? Some definitions of “tech company” ▶ “A company that sells technology” — e.g. Samsung ▶ “A company that is enabled or driven by technology” — e.g. Google ▶ “A company with technology as its main differentiator” — e.g. Netflix (initially) ▶ “A company that wouldn’t exist if it weren’t for it’s technology” — e.g. Uber ⇒ Today, almost every company is a tech company to some extent. Information Systems for Business Management 28-11-2024 | 16 - Amazon - E-commerce front-end - E-commerce back-end (logistics, warehouses, stores) - AWS - Airbnb, Uber - Their digital platform is their business. - Local example: 4411 or similar parking apps - Netflix - Platform initially is Netflix’ business - Later on, Netflix started creating content à Supporting role of IS/IT - Can you think of a non-tech company? - Restaurants: what if you can’t pay with your credit card due to some technology failure? - Pharmacies: how do they order their medication? - … Filip Hendrickx 16 Information Systems for Business Management 28/11/24 “Information technology and business are becoming inextricably interwoven. I don’t think anybody can talk meaningfully about the one without talking about the other.” — Bill Gates, Microsoft co-founder, 1981 Information Systems for Business Management 28-11-2024 | 17 - By now: “have become” - Tension between the crucial importance of information technology in today’s world vs the importance of not losing sight of technology as an enabler and a source of inspiration, rather than a goal in it’s own right (cf. quote Pieter-Jan Pauwels). Filip Hendrickx 17 Information Systems for Business Management 28/11/24 THE CHANGING ROLE OF IS/IT Support the business Enable the business Be the business Physical retailer E-commerce Platform support processes enable online purely digital core processes support offline business Information Systems for Business Management 28-11-2024 | 18 IS/IT supports / enables / is the business or business model. - Support: IS/IT supports the organisation in running it’s business at scale, speed, quality (“ilities” / non-functionals). - Enable: IS/IT enables the organisation to reach new markets, provides additional (digital) products and services or additional entry points for existing ones, creates differentiators in the organisation’s products and services and value proposition. - Be: The organisation has a digital value proposition and IS/IT provides (most of) the organisation’s entire (digital) value chain. All the enterprise’s core activities are happening digitally. Note that the value is not in the technology itself, but in what the technology provides to the organisation’s customers. Example: Etsy (https://en.wikipedia.org/wiki/Etsy) - Website: from “business card” to full, to main, to only point of contact and sale. - E-commerce/multi-channel: some organisations start from offline sales and add or move to online, some go the other way around. Filip Hendrickx 18 Informatics in a Business Context In practice, organisations often don’t fit exactly in one of these three roles. Different parts of an organisation, for example different lines of business, may use or rely on IS/IT in different ways. It’s also more of a spectrum from left to right rather than a set of distinct roles where, as you move to the right, IS/IT starts playing an increasingly important role in the organisation’s business model and value chain, for example by providing access to online or digital customer segments or by providing value adding digital add-ons or services on top of an offline offer. This ultimately, on the right side, culminates in a purely digital value chain, which may or may not be sensible or desirable for any specific organisation. Informatics in a Business Context 18 Information Systems for Business Management 28/11/24 ASCO AFTER A CYBER-ATTACK 2019 ▶ Asco builds airplane parts. ▶ Admin systems down, but also computer controlled production machines. ▶ Weeks of downtime for 1500 employees. ▶ Cost / Loss of millions of Euros. ▶ About 6 months needed to become fully operational again. “We switched over to pen, paper, WhatsApp and Gmail.” Information Systems for Business Management 28-11-2024 | 19 - http://www.asco.be/ - Is Asco a tech company? - "Overgeschakeld op pen, papier, WhatsApp en Gmail": een reconstructie van de cyberaanval op vliegtuigbouwer Asco - https://www.vrt.be/vrtnws/nl/2020/02/06/woordvoerst-asco-pas- tegen-het-einde-van-dit-jaar-zijn-we-voll/ - Somewhat ironically, even with their systems down, they needed IS/IT systems to continue. Filip Hendrickx 19 Information Systems for Business Management 28/11/24 THE CHANGING ROLE OF IS/IT Support the business Enable the business Be the business Physical retailer E-commerce Platform support processes enable online purely digital core processes support offline business IS/IT has become mission critical Information Systems for Business Management 28-11-2024 | 20 Filip Hendrickx 20 Information Systems for Business Management 28/11/24 “Tech giants are taking over as they are mastering traditional business more quickly than the world's established companies are mastering software delivery.” — Mik Kersten, ‘Project to product’, 2018 Information Systems for Business Management 28-11-2024 | 21 Mik Kersten in 'Project to product’: “Tech giants are taking over as they are mastering traditional business more quickly than the world's established companies are mastering software delivery. Most companies don't have the right set of tools and models to properly assess risk and capitalise on opportunity in the Age of Software. Companies that master the new means of production will displace the companies that take more time to adapt. But if the sector does not move fast enough, the tech giants will move into that market. Instead of displacing specific companies, they will disrupt an entire market.” https://projecttoproduct.org/ Example: Financial services: - PayPal, Apple and Google Pay - Digital only banks - Crowd lending - Block chain, bitcoin & decentralised banking Filip Hendrickx 21 Informatics in a Business Context Additionally, these tech giants are usually much better at data science and, through entering traditional industries, able to collect and combine more data (from their initial and new activities). This helps them target and improve their products and services better than traditional companies. Informatics in a Business Context 21 Information Systems for Business Management 28/11/24 Business Capabilities: Positioning Informatics and Technology in their Business Context How do you realise your value chain? Through Business Capabilities. Filip Hendrickx 22 Information Systems for Business Management 28/11/24 CAPABILITY EXAMPLE Army Troops Deployment Boots on the ground anywhere in the world within 24 hours Information Systems for Business Management 28-11-2024 | 23 - Troops Deployment is an example of a Capability possessed by a military organisation - “Boots on the ground anywhere in the world within 24 hours” is an example of the ambition level, purpose or outcome of this Capability - They both describe what the Capability is about, not how it is implemented or how its ambition level is achieved. Filip Hendrickx 23 Information Systems for Business Management 28/11/24 Capability Map Example Streaming Music Provider Information Systems for Business Management 28-11-2024 | 24 An example of what a (partial) Business Capability Map of a streaming music provider could look like. The Value Chain at the top is strictly speaking not part of the Business Capability Map but helps put the different Capabilities in context and tell the story of the music provider. Filip Hendrickx 24 Information Systems for Business Management 28/11/24 Capability Map Example Information Systems for Business Management 28-11-2024 | 25 Source and more info on capability mapping: https://bizzdesign.com/blog/archimate- 3-0-capability-mapping/ This example distinguishes three kinds of capabilities: strategic, operational and supporting. operational capabilities (more often called “core” capabilties): serve external customers and generate value for them and your organisation (i.e. revenue in for-profit organisations). These are directly linked to your value propostion and value chain and how you differentiate from your competitors. supporting capabilities: serve internal customers to enable them to serve external customers better. strategic capabilities (also called “management” or “steering” capabilities): follow-up on how core and supporting capabilities perform and on activities outside of but important to normal business operations. Filip Hendrickx 25 Information Systems for Business Management 28/11/24 CAPABILITY DEFINITION Capability = Capacity x Ability ▶ Ability: What a system (person, organisation) is able to do (functional perspective) ▶ Capacity: The performance level of the ability, cf. non-functional requirements or ”-ilities” and quality attributes ▶ Level of availability, quality, reliability, response time, throughput, … ▶ Capability ▶ How well and how much a system is able to perform an activity ▶ Focuses on “what we do” rather than “how we do it” ▶ E.g. Market development, Order fulfilment, Recruitment, Application development, Vendor management, Business Intelligence Management Information Systems for Business Management 28-11-2024 | 26 Capabilities describe what a system is able to do and to what performance level. This is relevant for non-IT and IT aspects of organisational activities. Or more precisely: most business capabilities will have non-IT and IT components that together determine their capacity and ability. Source of definition: https://www.linkedin.com/pulse/capability-capacity-x-ability- bas-van-gils/?articleId=6375232866737012738 Further reading: https://www.dragon1.com/terms/capability-definition Non-functional requirements: https://en.wikipedia.org/wiki/Non- functional_requirement Quality attributes: https://en.wikipedia.org/wiki/List_of_system_quality_attributes Business Intelligence Management: Identifying, analysing, transforming and presenting information using business intelligence tools and techniques to support decision making. Filip Hendrickx 26 Information Systems for Business Management 28/11/24 Information Systems for Business Management 28-11-2024 | 27 Let’s check a funny example to illustrate the difference between ability and capacity: a toilet. The different toilets in this slide are all implementations of the same high-level Business Capability “Sanitary Facility Provisioning” yet they encompass more or less specific behaviours like “Hand Cleaning”, “Posterior Washing”, “Seat Heating” and “Noisemaking”. These are examples of (sub-)abilities or functions. They also offer a different level of comfort: their performance level or capacity is different. FYI: - https://www.qssupplies.co.uk/what-is-a-japanese-toilet.html - https://www.japan-talk.com/jt/new/20-common-features-of-japanese-toilets Filip Hendrickx 27 Information Systems for Business Management 28/11/24 Information Systems for Business Management 28-11-2024 | 28 Here’s another example of a different level of capacity, depending on the customer segment. These examples show that, to offer something of potential value to customers, not only the abilities should be considered. (Note: The author now has a very interesting browser history. ;-)) Filip Hendrickx 28 Information Systems for Business Management 28/11/24 A look inside Business Capabilities Capability People & Organisation Processes Information Rules Technology Information Systems for Business Management 28-11-2024 | 29 - How are capabilities realised in organisations? Through people (and how they are organised in teams, departments, …), processes, information and rules, supported by technology. - In other words: People process information in adherence to rules, supported by technology. - Technology: Enterprise Applications: - Enterprise applications are large-scale software solutions designed to streamline and automate various processes of an organization’s operations. These solutions are intended to increase productivity, efficiency and collaboration across departments. (IBM https://www.ibm.com/topics/enterprise-applications) - Enterprise applications are designed to integrate computer systems that run all phases of an enterprise’s operations to facilitate cooperation and coordination of work across the enterprise. The intent is to integrate core business processes (e.g., sales, accounting, finance, human resources, inventory and manufacturing). (Gartner https://www.gartner.com/en/information-technology/topics/enterprise- apps) - Designed for enterprises as opposed to consumer applications. Filip Hendrickx 29 Information Systems for Business Management 28/11/24 ENTERPRISE APPLICATIONS EXAMPLES ▶ ERP = Enterprise Resource Planning ▶ Accounting ▶ Product (Information) Management; Inventory Management; Order Management ▶ Shipping ▶ E-Commerce ▶ Customer Service Management ▶ Personal Information Management ▶ CRM = Customer Relationship Management ▶ SCM = Supply Chain Management ▶ Marketing & Sales Management ▶ HRM = Human Resources Management ▶ BI = Business Intelligence ▶ … Information Systems for Business Management 28-11-2024 | 30 Filip Hendrickx 30 Information Systems for Business Management 28/11/24 A look inside Business Capabilities Capability People & Organisation Change Processes Information Rules “Requirements” Benefits Technology Information Systems for Business Management 28-11-2024 | 31 - Change - requirements = desired changes in the way an organisation works, in its capabilities, to make it work “better” - better = the overall expected benefit of the desired change Filip Hendrickx 31 Information Systems for Business Management 28/11/24 Business Processes Filip Hendrickx 32 Information Systems for Business Management 28/11/24 Information Systems for Business Management 28-11-2024 | 33 - What’s your coffee making process? (Or tea making process. ;-)) - Why do you do things this way? “We’ve always done things this way…” Filip Hendrickx 33 Information Systems for Business Management 28/11/24 Information Systems for Business Management 28-11-2024 | 34 Filip Hendrickx 34 Information Systems for Business Management 28/11/24 BUSINESS PROCESS SOLUTION INDEPENDENT MODEL Event Process Step Process Step Result Alarm clock Boil Water Add Coffee Awake! Solution independent = independent from tools, artifacts, materials, application components, … Enable “innovation” = more fundamental re-thinking (vs. local optimisation) Information Systems for Business Management 28-11-2024 | 35 Where does RPA (Robotic Process Automation) fit in? See the Car insurance case for an example of a high level process model Filip Hendrickx 35 Information Systems for Business Management 28/11/24 PROCESS MODELLING IN RETAIL EXAMPLE: SALES ORDER MANAGEMENT Reflections ▶ At this process level, organisational boundaries are crossed. Information is moved across those boundaries to make the process work. ▶ BPMN models are typically much more detailed. BPMN is/was also intended to be executable. ▶ Information (Technology) Systems may support multiple, specific or partial process steps. ▶ Who (role, team, department) in the organisation is “owner” of which process? Information Systems for Business Management 28-11-2024 | 36 Filip Hendrickx 36 Information Systems for Business Management 28/11/24 BUSINESS PROCESSES IN RETAIL: RETURN & REFUND EXERCISE 1. Model your return & refund process 2. Propose some process improvements or optimisations 3. Propose a more fundamental innovation 4. How can IS/IT support your process and your proposed improvements and innovations? 5. Share, compare and reflect Reflections ▶ We easily “lose” ourselves in details ▶ To what extent did you model business rules into your process? Information Systems for Business Management 28-11-2024 | 37 Filip Hendrickx 37 Information Systems for Business Management 28/11/24 Business Concepts, Information and Data Filip Hendrickx 38 Information Systems for Business Management 28/11/24 What is ”Coffee”? Information Systems for Business Management 28-11-2024 | 39 - Define “Coffee” à Many different interpretations à Need for aligment within (and even across) organisations! - What do you think of when I say “Apple”, or “Money”? - What is a “customer”? - Clear definitions needed of these different concepts! - Through a glossary (defining the concepts) and a concept model (specifying the relations between different concepts) Filip Hendrickx 39 Information Systems for Business Management 28/11/24 CONCEPT MODELLING EXERCISE 1. Determine 3 concepts (= types of objects) ▶ Define 1 of these concepts: “A is a with/that.” 2. Determine +3 attributes (across concepts) 3. Determine relationships (at least one per concept) 4. Determine cardinalities for each relation (1, 1.. *, *, …) 5. Share, compare and reflect Information Systems for Business Management 28-11-2024 | 40 Exercise: Create an information model for the classes Lecturer – Student – Course Filip Hendrickx 40 Information Systems for Business Management 28/11/24 CONCEPT MODELLING IN RETAIL EXAMPLE: SALES ORDER MANAGEMENT Reflections ▶ Level of detail depends on context and objective of your model, similar as with process models. ▶ Information (Technology) Systems may support multiple, specific or partial business concepts. ▶ Who (role, team, department) in the organisation is “master” of which information? Information Systems for Business Management 28-11-2024 | 41 You can also add “cardinalities”: A Customer places at least 1 Order, whereas an Order belongs to exactly 1 Customer. An Order contains at least 1 Product, whereas a Product can belong to 0, 1 or more Orders. Note that we are referring to a Product type rather than a single, specific item or instance of that Product (type). This is a very simple or high-level view. You can for example add Invoice, Receipt, Discount, Payment, Supplier, Catalogue, Supplier, Back-Order… FYI: Modelling details: The black diamond on the association or line between Customer and Order indicates that an Order can not exist without a Customer. This is a Composition relation. The white diamond on such an association would indicate that the “child” concept can exist without the “parent”. Indeed: a Product (type) exists regardless of whether it is currently being Ordered by any Customer. This is an Aggregation relation. No diamond indicates there is no parent – child relation between both concepts. (This is a simple Association relation.) Filip Hendrickx 41 Information Systems for Business Management 28/11/24 DATA VALUE CHAIN: DATA-DRIVEN → DECISION-DRIVEN TURNING DATA INTO ACTIONABLE INSIGHTS AND RESULTS ▶ Data à Information à Insights à Decisions à Actions à Results = Outcome ▶ Results are new data = Feedback loop ▶ Every organisation is already taking decisions today. ▶ What is the quality (in the broad sense, including timeliness/time-to-decision) of these decisions? ▶ Can they confidently take good enough decisions based on their current data/info/insights? ▶ Is the data quality and evaluation & decision process good enough? Or should the quality be improved? ▶ How can they improve the quality? E.g. more data, better data, better analytics, …? ▶ See Analytics translator: The new must-have role Information Systems for Business Management 28-11-2024 | 42 - Data: Basic, unprocessed though possibly quality-checked, individual data points; can be measured data and generated data (through simulations) - Information: Structured, filtered and aggregated data providing knowledge - Insights: Analysed and interpreted information providing insight in and understanding of historic trends and possible future scenarios - Decisions: Conclusion or inferred judgment reached after consideration of insights - Actions: Organized activity to accomplish an objective or achieve an impact - Results: The effect, influence, impact or outcome of actions. Examples: Retail - Data: browse events, purchases - Information: products that are often purchased together, conversion of suggested purchases - Insights: purchase behaviour including effect of suggestions - Decision: new suggestions - Action: show suggestions - Result: conversion Filip Hendrickx 42 Informatics in a Business Context Spotify - Data: player events - Information: played songs - Insights: top played songs, music trends - Decisions: song and playlist recommendations - Action: show or play recommended song or playlist - Result: song or playlist has been played or skipped Cf. link with lecture on data science and AI Analytics translator: The new must-have role: https://www.mckinsey.com/business- functions/mckinsey-analytics/our-insights/analytics-translator Informatics in a Business Context 42 Information Systems for Business Management 28/11/24 Using Information (Systems & Technology) Management Reporting Decision Support Competitor Analysis Strategic Market Analysis Business Layer Systems (in the broad sense) Cash flow forecast Tactical Operational Office Automation & Sales Order Control Invoice Application & Transactional Technology Layer Information Systems for Business Management 28-11-2024 | 43 Source: Business Information Systems, sixth edition, Pearson, p. 43 When you have a clear definition of the different concepts relevant for your business, you can think about the data behind these concepts (e.g. how many customers, how many orders, how many product types and products, …) and start using that data and the information behind it to support your business at different levels from transactional to strategic. The operational & tactical level encompasses day to day decisions. The tactical and strategic level span longer time horizons. Example: Retail: Strategic: Price & discount strategy Tactical: Expected supplier prices and competitor pricing tactics Operational: Day to day price change and discount decisions, withing the boundaries set at strategic and tactical level Transactional: Price updates on website, in product management system, … Filip Hendrickx 43 Informatics in a Business Context Example: Retail Strategic: Trend watching, hype prediction, market segment selection Tactical: Back-order products from suppliers based on sales preditions Operational: Order fulfillment process (order to delivery and possibly return) Transactional: Payment, invoice creation Example: Credit approval: Strategic: Customer segmentation & product strategy (types, amounts and size of credits, combination of credit cards with additional services like insurances and extended warranties) Tactical: Tactical actions depending on how well certain credit products sell Operational: Credit (card) sales and approval activities Transactional: Financial transactions Example: Motorcycle glove suppliers: Strategic: Are we moving into the bicycle glove market? Tactical: Next winter season weather prediction à Determine sales potential in different markets and adjust marketing and production accordingly Operational: Shipping Transactional: Payment For your business case / proposed IS/IT investment: What data & information are you working on? What decisions will you influence? What will be the expected effect of your proposed change? Informatics in a Business Context 43 Information Systems for Business Management 28/11/24 Business Rules Filip Hendrickx 44 Information Systems for Business Management 28/11/24 Decision Table Rules Example Information Systems for Business Management 28-11-2024 | 45 - Note that these business rules exist regardless of the presence of a technical implementation to support checking withdrawal requests against these rules. - Depending on how such business rules are implemented, changing them requires more or less technical work. à What flexibility does your business require and how well do business processes and technology support that flexibility? Filip Hendrickx 45 Information Systems for Business Management 28/11/24 BUSINESS RULES IN RETAIL EXERCISE 1. Identify business rules in your return & refund process ▶ Model your rules in your information model, your process, a decision table, a free text note 2. Distinguish strategic, tactical and operational/transactional decisions ▶ Where and how can IS/IT support decision making? ▶ Which decisions could you automate? 3. Share & Reflect Reflections ▶ Where should we implement rules? Why? Information Systems for Business Management 28-11-2024 | 46 FYI: - A fun and short intro on business processes and business rules: https://thebrazilianba.com/2020/04/14/marias-chocolate-candies/ - More information about formally describing business rules: https://www.rulespeak.com/ Filip Hendrickx 46 Information Systems for Business Management 28/11/24 Wrap-up Filip Hendrickx 47 Information Systems for Business Management 28/11/24 WRAP-UP & REFLECTIONS ▶ Information systems is more than technology ▶ (Information) technology is a means to a business end ▶ Information technology and business have become inextricably interwoven ▶ Business capabilities: people & organisation, processes, information, rules, technology ▶ First think strategically and big picture, then think detail ▶ Information Systems support processes and decision-making at different levels of detail, from operational to strategic, and across business domains and organisational boundaries ▶ Enterprise applications support business capabilities Information Systems for Business Management 28-11-2024 | 48 Filip Hendrickx 48 Information Systems for Business Management 28/11/24 QUESTIONS? FEEDBACK? GET IN TOUCH! ▶ [email protected] ▶ linkedin.com/in/filiphendrickx Information Systems for Business Management 28-11-2024 | 49 Filip Hendrickx 49 Information Systems for Business Management 28/11/24 Filip Hendrickx 50