Campbellsville University Managing and Using Information Systems Paper Please take a moment to share your thoughts, ideas, comments and / or questions conc
Campbellsville University Managing and Using Information Systems Paper Please take a moment to share your thoughts, ideas, comments and / or questions concerning Week 5’s reading assignment lecture.need a paper of at-least 350 words in APA Format with 2 rferences Managing and Using Information Systems:
A Strategic Approach Sixth Edition
Keri Pearlson, Carol Saunders,
and Dennis Galletta
© Copyright 2016
John Wiley & Sons, Inc.
Chapter 5
IT and Business Transformation
Sloan Valve
What was wrong with their Product
Development Process?
What did Sloan do? What is NPD?
Did it help?
Are all enterprise system implementations this
successful?
© 2016 John Wi ley & Sons, Inc.
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SILO PERSPECTIVE
VERSUS
BUSINESS PROCESS PERSPECTIVE
© 2016 John Wi ley & Sons, Inc.
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Silo (Functional) Perspective
Specialized functions (sales, accounting, production, etc.
Executive Offices
CEO
President
Operations
Marketing
Accounting
Finance
Administration
Advantages:
Allows optimization of expertise.
Group like functions together for transfer of knowledge.
Disadvantages:
Sub-optimization (reinvent wheel; gaps in communication;
bureaucracy)
Tend to lose sight of overall organizational objectives.
© 2016 John Wi ley & Sons, Inc.
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The Process Perspective
Examples of processes:
Fulfill customer orders
Manufacturing, planning, execution
Procurement (see below)
Receive
Requirement for
Goods/Services
Create and Send
Purchase Order
Receive Goods
Verify Invoice
Pay Vendor
Processes have:
Beginning and an end
Inputs and outputs
A process to convert inputs into outputs
Metrics to measure effectiveness
They cross functions
© 2016 John Wi ley & Sons, Inc.
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Cross-Functional Nature of Business Processes
© 2016 John Wi ley & Sons, Inc.
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How to Manage a Process
Identify the customers of processes (who receives
the output?)
Identify the customers requirements (how do we
judge success?)
Clarify the value each process adds to the
organizational goals
Share this perspective so the organization itself
becomes more process focused
© 2016 John Wi ley & Sons, Inc.
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Comparison of Silo Perspective and
Business Process Perspective
Silo Perspective
Business Process
Perspective
Definition
Self-contained functional units
such as marketing, operations,
finance
Interrelated, sequential set of
activities and tasks that turns
inputs into outputs
Focus
Functional
Cross-functional
Goal
Accomplishment
Optimizes on functional goals,
which might be suboptimal for
the organization
Optimizes on organizational
goals, or the big picture
Benefits
Highlighting and developing
core competencies; functional
efficiencies
Avoiding work duplication and
cross-functional communication
gaps; organizational
effectiveness
Problems
Redundancy of information
throughout the organization;
cross-functional inefficiencies;
communication problems
Difficult to find knowledgeable
generalists; sophisticated
software is needed
What do you do when things change?
Dynamic and agile processes
Examples:
Agile: Autos are built with wires and space for
options
Dynamic: Call centers route incoming or even
outgoing calls to available locations and agents
Software defined architectures (see chapter 6)
IT is required to pull this off well
© 2016 John Wi ley & Sons, Inc.
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Techniques to Transform a Static
Process
Radical process redesign
Also known as business process reengineering
Incremental, continuous process
improvement
Including total quality management (TQM) and
Six Sigma
© 2016 John Wi ley & Sons, Inc.
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Incremental Change
Total Quality Management
Often results in favorable reactions from personnel
Improvements are owned and controlled
Less threatening change
Six-Sigma is one popular approach to TQM
Developed at Motorola
Institutionalized at GE for near-perfect products
Generally regarded as 3.4 defects per million opportunities for
defect (6 std dev from mean)
Improvement
Time
© 2016 John Wi ley & Sons, Inc.
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Radical Change
Business Process Reengineering (BPR)
Sets aggressive improvement goals.
Goal is to make a rapid, breakthrough impact on key
metrics in a short amount of time.
Greater resistance by personnel.
Use only when radical change is needed.
Improvement
Time
© 2016 John Wi ley & Sons, Inc.
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Comparing the Two
Improvement
© 2016 John Wi ley & Sons, Inc.
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Key Aspects of Radical Change
Approaches
Need for quick, major change
Thinking from a cross-functional process
perspective
Challenge to old assumptions
Networked (cross-functional organization)
Empowerment of individuals in the process
Measurement of success via metrics tied to
business goals and effectiveness of new processes
© 2016 John Wi ley & Sons, Inc.
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Workflow and Mapping Processes
Workflow diagrams show a picture of the sequence
and detail of each process step
Objective is to understand and communicate the
dimensions of the process
Over 200 products are available to do this
High-level overview chart plus detailed flow
diagram of the process
© 2016 John Wi ley & Sons, Inc.
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BPM
Information systems tools used to enable information
flow within and between processes.
Comprehensive, enterprise software packages.
Most frequently discussed:
ERP (Enterprise Resource Planning),
CRM (Customer Relationship Management),
SCM (Supply Chain Management)
Designed to manage the potentially hundreds of
systems throughout a large organization.
SAP, Oracle, Peoplesoft are the most widely used ERP
software packages in large organizations.
© 2016 John Wi ley & Sons, Inc.
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BPM Architecture
© 2016 John Wi ley & Sons, Inc.
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Standardization vs Integration
Business Process Standardization
Business Process
Integration
Low
High
High
Single face to customers
High needs for reliability,
and suppliers but standards predictability, and sharing;
not enforced internally
single view of process
Low
Decentralized design;
business units decide how
to meet customer needs
Tasks are done the same way
across units, but there is little
need for business units to
interact
Source: J. Ross Forget Strategy: Focus IT on your Operating Model,
MIT Center for Information Systems Research Briefing (December 2005)
© 2016 John Wi ley & Sons, Inc.
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Enterprise Systems (Enterprise Resource
Planning or ERP)
Seamlessly integrate information flows throughout the
company.
Reflect industry best practices.
Need to be integrated with existing hardware, OSs,
databases, and telecommunications.
Some assembly (customization) is required
The systems evolve to fit the needs of the diverse
marketplace.
© 2016 John Wi ley & Sons, Inc.
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ERP Advantages and Disadvantages
Advantages
Disadvantages
Represent best practices
Enormous amount of work
Modules throughout the
organization communicate with
each other
Require redesign of business
practices for maximum benefit
Require customization if special
features are needed
Enable centralized decision-making
Eliminate redundant data entry
Very high cost
Enable standardized procedures in
different locations
Sold as a suite, not individual
modules
Requires extensive training
High risk of failure
© 2016 John Wi ley & Sons, Inc.
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ERP II
Makes information available to external
stakeholders too
Enables e-business applications
Integrates into the cloud
Includes ERP plus other functions (see Figure 5.8)
© 2016 John Wi ley & Sons, Inc.
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ERP and ERP II Functions
© 2016 John Wi ley & Sons, Inc.
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Customer Relationship
Management
Customer Relationship Management (CRM) is a
natural extension of applying the value chain model
to customers.
CRM includes many management activities
performed to
obtain,
enhance relationships with, and
retain customers.
CRM can lead to better customer service, which
leads to competitive advantage for the business.
© 2016 John Wi ley & Sons, Inc.
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CRM
Common systems are:
Oracle
SAP
Salesforce.com (web-based cloud system)
Oracle and SAP integrate into their ERP
systems
© 2016 John Wi ley & Sons, Inc.
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Supply Chain Management (SCM)
An enterprise system that manages the integrated
supply chain
Translation: processes are linked across companies
The single network optimizes costs and
opportunities for all companies in the supply chain
Every part of the supply chain has the latest
information about sales expected and inventories
from source materials at all stages
Bullwhip effect occurs when the supplier at each
stage adds a small buffer for its suppliers in case
demand is higher than expected
© 2016 John Wi ley & Sons, Inc.
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Difficulties in Integrated Supply Chains
Information integration requires agreement of what
information to share, how to share it, and the
authority to view it.
Trust must be established
Planning must be synchronized carefully
Workflow must be coordinated between partners to
determine what to do with the information they
obtain
© 2016 John Wi ley & Sons, Inc.
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Advantages and Disadvantages
of Enterprise Systems
© 2016 John Wi ley & Sons, Inc.
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The Adoption Decision
The enterprise system sometimes should drive
business process redesign when:
Just starting out.
Organizational processes are not relied upon for strategic
advantage.
Current systems are in crisis.
It is inappropriate for the enterprise system to drive
business process redesign when:
Changing an organizations processes that are relied upon for
strategic advantage.
The package does not fit the organization.
There is a lack of top management support.
© 2016 John Wi ley & Sons, Inc.
29
Managing and Using Information Systems:
A Strategic Approach Sixth Edition
Keri Pearlson, Carol Saunders,
and Dennis Galletta
© Copyright 2016
John Wiley & Sons, Inc.
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