BSc (Honours) in Computing /

Information Systems
ICT2405 - Software Engineering

System Engineering

©Lanka Nippon BizTech Institute

System Engineering
Understanding Business Processes and Information
Systems

• Efficient business processes and information systems are

critical components of modern organizations.
• They play a pivotal role in enhancing productivity,
competitiveness, and overall success.
Business Processes

• Business processes are a structured set of activities, tasks,

and workflows that are designed to achieve specific business
objectives or outcomes.
• These processes are a fundamental part of how organizations
operate, enabling them to carry out their day-to-day functions,
deliver products or services, and achieve their strategic goals.
• Business processes can vary widely in complexity and scope,
encompassing various functions within an organization, such
as sales, marketing, finance, production, and customer
service.
Key characteristics of business processes

• Structured Sequence
• Goal-Oriented
• Input and Output: Inputs (such as information, materials, or
resources) into desired outputs (products, services, or
information)
• Roles and Responsibilities
• Efficiency and Effectiveness: Business processes aim to
achieve their goals in the most efficient and effective manner,
minimizing waste, errors, and unnecessary steps.
• Continuous Improvement
Importance of well-defined processes in
achieving organizational goals
• Clarity of Purpose: This clarity ensures that everyone involved
understands the goals and how to work towards them.
• Consistency: Processes establish standardized procedures and
workflows, reducing variations in how tasks are performed.
• Efficiency: This means that resources, time, and effort are used more
effectively, reducing waste and unnecessary costs.
• Resource Allocation: Organizations can allocate resources (human,
financial, and physical) more effectively when they have a clear
understanding of the processes required to meet their goals.
• Measurement and Performance Monitoring: Organizations can track
key performance indicators (KPIs) to ensure that they are progressing
toward their goals and make adjustments as necessary.
• Risk Management: Processes often include safeguards and
controls to mitigate risks.
• Decision-Making: Clear processes can aid decision-making.
• Adaptability: Well-defined processes can be adapted and
improved over time.
• Scalability: As organizations grow, their processes can be
scaled up to handle increased demand and workload.
• Employee Empowerment: Employees are more likely to
excel when they understand their roles and responsibilities
within well-defined processes.
• Customer Satisfaction: Satisfied customers are more likely
to support the organization's goals, whether through repeat
business or positive referrals.
Examples of common business processes

• Sales Process:
• Lead generation
• Qualification of leads
• Sales presentations
• Proposal creation
• Closing deals
• Customer relationship management
• Marketing Process:
• Market research
• Marketing strategy development
• Campaign planning and execution
• Lead nurturing
• Advertising and promotions
• Performance measurement and analysis
• Customer Support Process:
• Customer inquiries and requests
• Issue resolution
• Technical support
• Complaint handling
• Customer feedback collection
• Knowledge base management
• Supply Chain Management: • Quality Control and Assurance:
• Procurement and supplier management • Quality standards and process definition
• Inventory management • Quality inspections and testing
• Order fulfillment • Defect identification and correction
• Demand forecasting • Continuous improvement initiatives
• Logistics and distribution • Product or service quality assurance
• Returns and reverse logistics • Product Development Process:
• Human Resources (HR) Process: • Idea generation and concept development
• Recruitment and onboarding • Design and prototyping
• Employee training and development • Testing and validation
• Performance appraisal and management • Production planning
• Payroll and benefits administration • Launch and marketing
• Employee off boarding • Post-launch evaluation and improvements
• Compliance and policy management • Legal and Compliance Processes:
• Financial Management: • Legal research and consultation
• Budgeting and financial planning • Contract drafting and management
• Accounting and book keeping • Regulatory compliance
• Accounts payable and receivable • Intellectual property protection
• Financial reporting • Litigation and dispute resolution
• Tax management • Ethics and corporate governance
• Audit and compliance • IT Support and Maintenance:
• Project Management: • Helpdesk and technical support
• Project initiation and planning • System maintenance and updates
• Task assignment and scheduling • Troubleshooting and issue resolution
• Project execution and monitoring • Backup and data recovery
• Issue and risk management • Software and hardware procurement
• Project completion and evaluation • Security and data protection
• Documentation and reporting
Business Data Processing

• Business data processing is the systematic method of

collecting, storing, organizing, and manipulating data to
support various business operations and decision-making
processes.
• It involves the use of computer systems, software, and human
resources to manage data in a way that adds value to an
organization.
•
Data is a fundamental component of business
operations, and it can be categorized into various types
based on its purpose and usage. Two common types of
data used in business operations are:
 Transactional Data
 Analytical Data
• Transactional Data:
• Definition: Transactional data consists of records of specific business
transactions or events. These data points are generated in the course of
day-to-day operations and provide a chronological record of business
activities.
• Examples:
• Sales transactions: Records of customer purchases, including items, prices, and
payment details.
• Financial transactions: Data related to payments, invoices, receipts, and
expense reports.
• Inventory transactions: Data on the movement of goods in and out of stock.
• Employee timecards: Records of work hours, attendance, and leave requests.
• Customer interactions: Information about customer service interactions, such as
support tickets or call logs.
• Analytical Data:
• Definition: Analytical data is typically aggregated and processed
transactional data used for analysis and decision-making. It's organized
to support reporting, data analysis, and business intelligence efforts.
• Examples:
• Business reports: Summaries of sales, financial performance, or other key
metrics.
• Data warehouses: Central repositories that store historical and current data for
analysis.
• Dashboards: Visual representations of data that provide real-time insights into
business performance.
• Data mining datasets: Large datasets used for discovering patterns, trends, and
insights.
• Predictive analytics data: Data used to build predictive models for forecasting
and decision support.
• Master Data:
• Master data comprises core data entities that remain relatively static over time. It includes information
about customers, products, suppliers, and employees. Master data is used to maintain consistency
and accuracy across business processes and systems.
• Metadata:
• Metadata is data about data. It provides information on the characteristics and properties of other
data, such as data source, data format, data structure, and data lineage. Metadata is crucial for data
management and data governance.
• Big Data:
• Big data encompasses vast and complex datasets that cannot be easily managed and analyzed with
traditional data processing tools. It includes various types of data, such as structured data (e.g.,
transactional data) and unstructured data (e.g., social media posts, sensor data).
• External Data:
• External data is data that is collected from sources outside the organization, such as market research,
economic indicators, or data from third-party vendors. It can provide valuable insights for strategic
decision-making.
• Time-Series Data:
• Time-series data involves data points recorded over time at regular intervals. This data type is
commonly used for forecasting and trend analysis. Examples include stock prices, weather data, and
website traffic.
Business Data Processing

• Data Collection:
• These sources can include customer interactions, sales transactions,
sensor data, social media, surveys, and more. Data is collected in
raw or semi-structured formats.
• Data Entry:
• Once data is collected, it needs to be entered into a system. This may
involve manual data entry or automated methods, depending on the
source and format of the data.
• Data Storage:
• Data is stored in a structured manner, often within databases or data
warehouses. Organizing data into structured formats makes it easier
to retrieve and process when needed.
• Data Cleaning and Validation:
• Data quality is critical. Data is cleaned and validated to identify and correct
errors, inconsistencies, and missing values. This ensures that the data is
accurate and reliable for subsequent processing.
• Data Transformation:
• Data may need to be transformed to meet specific requirements. This could
involve converting data formats, aggregating data, or performing
calculations to create derived data sets.
• Data Processing:
• Data is processed to derive insights, generate reports, or support various
business functions. This may include statistical analysis, data mining, and
running algorithms to uncover trends, patterns, and relationships in the data.
• Data Integration:
• In many organizations, data from multiple sources needs to be integrated to
provide a comprehensive view of operations. Data integration involves
combining data from different systems and databases.
• Data Analysis and Reporting:
• Analyzing data is a crucial part of business data processing. This involves using
tools and techniques to extract actionable insights from the data. The results are
often presented through reports, dashboards, and visualizations.
• Decision Support:
• Processed data is used to support decision-making within the organization.
Decision-makers rely on the insights gained from data analysis to make
informed choices regarding strategy, resource allocation, and operations.
• Data Storage and Archiving:
• Processed data may be stored for historical and compliance purposes. Data
archiving ensures that valuable information is retained for reference and
regulatory requirements.
• Security and Access Control:
• Business data processing involves implementing security measures to protect
data from unauthorized access, data breaches, and other security threats.
Access controls are put in place to restrict data access to authorized personnel.
• Continuous Improvement:
• Businesses often engage in continuous improvement of data processing
methods and technologies. This includes keeping up with the latest data
processing tools and techniques to enhance efficiency and effectiveness.
Information Systems

• An information system is a set of interconnected components

that work together to collect, store, process, and distribute
data and information within an organization.
• Information systems are designed to support and facilitate
various business processes, decision-making, and
communication, helping organizations operate efficiently and
effectively.
• These systems incorporate hardware, software, data,
procedures, and people to manage and utilize data for a wide
range of purposes.
• Information systems consist of several key components that
work together to collect, process, store, and disseminate
information to support organizational operations and decision-
making.
Components of information systems

• Hardware:
• Computers: Central processing units (CPUs), servers, workstations, laptops, tablets, and other computing devices
that process and manage data.
• Storage Devices: Hard drives, solid-state drives (SSDs), and other storage media used to store data and
applications.
• Input and Output Devices: Keyboards, mouse, monitors, printers, scanners, and other devices that allow users to
interact with and receive information from the system.
• Networking Equipment: Routers, switches, modems, and cables that enable data transmission within and
between systems.
Software:
• Operating Systems: Software that manages hardware resources and provides a platform for running applications.
Common examples include Microsoft Windows, macOS, and Linux.
• Application Software: Programs and applications that perform specific tasks, such as word processing,
spreadsheet analysis, customer relationship management (CRM), and enterprise resource planning (ERP)
software.
• Database Management Systems (DBMS): Software that manages and organizes data in structured databases,
allowing for efficient storage, retrieval, and manipulation of data.
• Middleware: Software that acts as an intermediary between different applications and allows them to communicate
and share data.
• Business Intelligence and Analytics Tools: Software for data analysis, reporting, and visualization to support
decision-making.
• Web Browsers: Software for accessing and interacting with websites and web-based applications.
• Data:
• Data: Raw facts, figures, and records that serve as the foundation of
information systems. Data can be structured (e.g., databases, spreadsheets)
or unstructured (e.g., text documents, images, videos).
• Metadata: Information about the data, including its source, format, and
characteristics, which helps with data management and understanding.
• People:
• End Users: Individuals who interact with the information system to input
data, retrieve information, and make use of the system's capabilities.
• IT Professionals: Personnel responsible for managing, maintaining, and
supporting the hardware, software, and data components of the information
system. This includes system administrators, network administrators, and
database administrators.
• System Analysts and Developers: Professionals who design, develop, and
maintain software applications and databases.
• Managers and Decision-Makers: Executives, managers, and other staff
who rely on the information system to make informed decisions, set
strategies, and monitor performance.
• Data Entry Operators: Personnel responsible for inputting data into the
system accurately and efficiently.
Role of information systems in decision-
making and operations
• Aligning information systems with organizational needs is
essential for staying competitive, efficient, and responsive in
today's fast-paced business environment.
• It enables organizations to leverage technology as a strategic
asset that can drive growth, enhance decision-making, and
meet customer expectations.
• Failing to align information systems can result in wasted
resources, missed opportunities, and a competitive
disadvantage.
Information Systems Development
Phases of development

• Planning
• Analysis
• Design
• Implementation
• Testing
• Maintenance
Importance of aligning information systems with
organizational needs

• Aligning information systems with organizational needs is of

paramount importance in today's business environment.
• This alignment ensures that technology serves as a strategic
asset, facilitating efficiency, innovation, and overall success
Advantages of Information systems in
Business processes
• Improved Productivity
• Cost Reduction
• Enhanced Decision-Making
• Competitive Advantage
• Customer Satisfaction
• Risk Management
• Scalability
• Innovation and Growth
• Data-driven Insights
• Compliance and Governance
Business Process Engineering

• Business Process Engineering (BPE) is a systematic

approach to redesigning, improving, and optimizing an
organization's core business processes for increased
efficiency, effectiveness, and overall performance.
• BPE involves a fundamental rethinking of existing processes,
often with the goal of achieving substantial and transformative
improvements.
• The primary focus is on maximizing value to the organization
and its customers while minimizing waste, redundancies, and
inefficiencies.
• process optimization and redesign are essential for
organizations seeking to maximize efficiency,
competitiveness, and adaptability. It enables them to
operate at their best, meet customer needs, and respond
to changes in the business environment more effectively.
• Process Redesign: The process begins with a critical evaluation of existing processes to
identify areas that can be reengineered or radically improved.
• Customer-Centric Focus: BPE places a strong emphasis on aligning processes with
customer needs and expectations, with the ultimate goal of enhancing customer
satisfaction and value.
• Cross-Functional Teams: It often involves multidisciplinary teams working together to
redesign processes, promoting collaboration and diverse perspectives.
• Streamlining and Simplification: The elimination of unnecessary steps, bottlenecks,
and redundancies is a common objective of BPE, resulting in simpler, more efficient
workflows.
• Technology Integration: The use of technology and automation to streamline processes
is a significant aspect of BPE. This includes the adoption of digital tools and systems.
• Performance Metrics: Clear performance metrics are established to evaluate the
effectiveness and efficiency of the redesigned processes.
• Change Management: The implementation of process changes may require a cultural
shift within the organization. BPE typically involves change management strategies to
ensure a successful transition.
• Continuous Improvement: BPE is not a one-time effort but an ongoing commitment to
continuous process improvement. Organizations frequently reevaluate and refine their
processes to adapt to changing business conditions.
Benefits of streamlining processes for
efficiency and cost reduction
• Cost Savings
• Improved Productivity
• Faster Turnaround Times
• Enhanced Quality
• Resource Optimization
• Customer Satisfaction
• Competitive Advantage
• Risk Reduction
• Innovation and Agility
• Cost Predictability
• Employee Satisfaction
• Environmental Benefits
• Scalability
• Improved Management and Decision-Making
• Regulatory Compliance
Business Process Re-engineering

• Business Process Engineering aims to reshape an

organization's operations, making them more agile, cost-
effective, and capable of delivering higher value to customers.
• It is particularly relevant in a rapidly changing business
environment where adaptability and efficiency are essential for
success.
Role of information Technology in BPR

• IT is an integral part of the BPR process, supporting the

redesign and optimization of business processes by
automating tasks, improving data analysis, facilitating
collaboration, enhancing customer interactions, and ensuring
compliance.
• IT's role in BPR is crucial in achieving the goals of increased
efficiency, competitiveness, and customer satisfaction.
Examples of BPR tools and frameworks

• SIPOC(suppliers, inputs, process, outputs, customers)

• Root cause analysis, gap analysis, benchmarking
• Business process modeling notation (BPMN)
• Unified modeling language (UML)
• Flowcharts
• Swimlane diagrams
• Discrete event simulation
• System dynamics
• Monte Carlo simulation
• Change management
• Project management
• Agile methods
• Lean principles
Case Study

•
Case Study: Amazon.com - Revolutionizing Retail with
Efficient Processes and Information Systems
• Background: Amazon.com, founded in 1994, is one of
the world's largest online retailers. It started as an online
bookstore but has since diversified into a global e-
commerce and cloud computing giant. Amazon's success
is not just attributed to its business model but also to its
relentless focus on optimizing business processes and
information systems.
• Challenges: In its early years, Amazon faced several
challenges, including:
• Rapid Growth: Amazon experienced explosive growth, which strained
its existing processes and systems.
• Inventory Management: Efficient management of a vast inventory of
products was a complex task.
• Customer Experience: Providing a seamless online shopping
experience was essential to customer retention and growth.
• Solutions:
• Supply Chain Optimization:
• Amazon invested heavily in building a sophisticated supply chain management system. Its
advanced warehouses are equipped with robots for order picking and packing, which
significantly reduces order processing times.
• Data-Driven Decision-Making:
• Amazon relies on big data analytics for inventory management, demand forecasting, and
personalization. This data-driven approach helps Amazon predict customer preferences
and optimize pricing and inventory levels.
• Amazon Web Services (AWS):
• Amazon's cloud computing platform, AWS, was launched in 2006. It not only generated
substantial revenue but also improved internal efficiency. AWS allowed Amazon to scale
its IT infrastructure quickly and efficiently, reducing downtime and increasing reliability.
• Customer-Centric Approach:
• Amazon's information systems focus on providing a superior customer experience. The
recommendation engine and personalized shopping experiences drive customer loyalty
and increased sales.
• Automation and Robotics:
• Amazon introduced robots in its fulfillment centers, which work alongside employees to
speed up order processing. This automation has revolutionized the e-commerce industry.
• Results:
• Efficiency Gains:
• Amazon's investments in supply chain optimization and automation have
significantly reduced delivery times and increased operational efficiency. This
has helped them maintain a competitive edge.
• Increased Sales and Market Share:
• The data-driven approach to personalized recommendations and pricing
optimization has led to higher sales and increased market share.
• Profitability:
• Despite its focus on rapid growth, Amazon's efficiency improvements, and
diversified revenue streams, including AWS, have made it consistently
profitable.
• Customer Satisfaction:
• Amazon's relentless focus on the customer experience has led to high levels of
customer satisfaction and loyalty.
• Innovation and Expansion:
• Amazon's efficient processes and information systems have allowed the
company to innovate and expand into various industries, including cloud
computing, digital streaming, and more.
Challenges and Considerations

• 1. Resistance to Change
• 2. Lack of Clear Objectives and Alignment
• 3. Insufficient Resources
• 4. Data Quality and Integration Issues
• 5. Technology Constraints
• 6. Inadequate Change Management
• 7. Inadequate Process Mapping and Documentation
• 8. Complex Regulatory and Compliance Requirements
• 9. Integration Challenges
• 10. Scalability Concerns
• 11. Data Security and Privacy
• 12. Sustainability and Maintenance
• 13. Organizational Culture
• 14. User Training and Adoption
• Addressing these challenges requires careful planning, strong
leadership, effective communication, and a commitment to
continuous improvement. Organizations that successfully
navigate these challenges are better positioned to achieve
efficiency, effectiveness, and long-term success in their
operations.