Introduction of Business process and Information System (5

hrs)

• 1.1. Organization process

• 1.2. Flows in business process
• 1.3. Monitor process performance
• I.4 Application Infrastructure
• 1.5 Information system and business process
• 1.6 Importance of information system (data and
information. Functional information
• 1.7 Functional organizational structure (Delay in
execution the process, excess invention lack of
visibility across processes)
 Organization process

• An organization process refers to a set of coordinated activities or workflows that

help an organization achieve its goals. These processes ensure that work flows
smoothly across departments, resources are efficiently used, and organizational
objectives are met effectively. Here’s a breakdown of key components and types of
organizational processes:
• 1. Key Components of Organizational Processes:
• Inputs: Resources such as time, money, people, materials, and information needed
to begin a process.
• Activities: The specific tasks or actions performed to transform inputs into
outputs.
• Outputs: The final products, services, or results generated by the activities.
• Resources: Tools, technology, and human resources required for completing tasks.
• Feedback: Information about the results that help improve future processes.
• Control: Monitoring mechanisms to ensure processes align with organizational
goals.
 Operations System
converting inputs to desired outputs via transformation process
 Types of Organizational Processes:
• a. Core Processes: These are the primary processes that directly
deliver value to the customer.
• Example: In a manufacturing company, the production process is a
core process.
• b. Support Processes: These processes provide essential support to
core processes but do not directly create value for customers.
• Example: Human Resources (HR), IT support, procurement.
• c. Management Processes: These processes govern the planning,
execution, and monitoring of organizational activities.
• Example: Strategic planning, performance management, budgeting.
• d. Continuous Improvement Processes: These focus on improving
efficiency, reducing waste, and enhancing quality.
• Example: Lean, Six Sigma, Kaizen.
 Benefits of Well-Defined Organizational Processes:
• Efficiency: Streamlines work, reduces duplication, and cuts down on wasted time
or resources.
• Consistency: Ensures that products or services are delivered consistently,
meeting quality standards.
• Accountability: Clearly defines who is responsible for each task, reducing
confusion.
• Scalability: Well-organized processes can be scaled up as the organization grows.
• Risk Reduction: Identifying and addressing bottlenecks or inefficiencies helps
prevent potential problems.
• In conclusion, well-structured organizational processes are essential for driving
productivity, improving quality, and achieving long-term success. They help align
the organization’s goals with day-to-day operations, ensuring a smoother
workflow across departments.
 Flows in business process
• In a business process, flows refer to the movement of tasks, information, or
materials from one stage to another, helping to complete a specific objective.
These flows ensure that processes are executed efficiently and help in streamlining
operations. There are different types of flows in a business process that
interconnect activities, departments, and resources. Below are the key types of
flows in a business process:
• 1. Process Flow:
• Definition: This is the sequence of activities that transform inputs into outputs. It
outlines the specific steps involved in completing a business task or achieving a
particular outcome.
• Example: In a sales process, the flow might include prospecting, qualifying leads,
product demonstration, negotiation, and closing the sale.
• 2. Information Flow:
• Definition: Information flow refers to how data and communication move through
a process. It includes the exchange of critical information between stakeholders,
departments, or systems.
• Example: In a supply chain process, information about inventory levels, order
status, or customer demand needs to flow between suppliers, production units,
and sales teams.
• 3. Material Flow:
• Definition: This refers to the movement of physical goods or raw materials
through a process, from procurement to delivery.
• Example: In manufacturing, material flow involves the transfer of raw
materials from suppliers, through various production stages, and finally to
finished goods delivered to customers.
• 4. Financial Flow:
• Definition: Financial flow deals with the movement of money, such as
payments, revenues, and expenses, through a business process.
• Example: In a procurement process, financial flow includes the approval of
purchase orders, payments to vendors, and tracking of costs and revenues.
• 5. Decision Flow:
• Definition: Decision flow refers to how decision-making authority and
choices move through a process. It shows who is responsible for making
decisions at different stages of the process.
• Example: In a loan approval process at a bank, decision flow
determines which department or manager approves a loan based on
customer data.
• 6. Work Flow:
• Definition: Workflows refer to the series of tasks or actions performed
by different individuals or departments in completing a business
process. Workflow management ensures that tasks are assigned,
tracked, and completed efficiently.
• Example: In a customer service department, a workflow might involve
logging a service request, assigning it to a technician, resolving the
issue, and closing the ticket.
• 7. Document Flow:
• Definition: Document flow tracks the movement of documents or
records within the organization, ensuring they reach the right
departments or people for approval, review, or processing.
• Example: In an employee onboarding process, document flow
includes the submission of contracts, tax forms, and training materials,
which move through HR, finance, and other relevant departments.
• 8. Communication Flow:
• Definition: Communication flow is the exchange of verbal or written messages
between people involved in the process. It ensures that the right information is
conveyed at the right time to the right people.
• Example: In a marketing campaign, communication flow involves coordinating
between the marketing team, the creative agency, and the sales team to ensure a
consistent message is delivered.
• 9. Control Flow:
• Definition: Control flow ensures that tasks are performed in a logical order, and checks
or validations are in place at critical points in the process. It often includes
checkpoints, reviews, or approvals to maintain quality and compliance.
• Example: In an accounting process, control flow may include the review and approval
of financial statements by the finance manager before final submission.
• 10. Knowledge Flow:
• Definition: Knowledge flow refers to how expertise, insights, and best practices are
shared across an organization or within a process. It helps in improving decision-
making and efficiency.
• Example: In a software development company, knowledge flow may involve sharing
coding standards, design guidelines, or project experiences across teams.
Benefits of Understanding and Managing Flows in Business
Processes:
• Efficiency: Ensures that tasks are completed in the correct order
without delays.
• Transparency: Provides a clear understanding of how resources,
data, and decisions move through a process.
• Accountability: Helps in assigning responsibilities and identifying
bottlenecks in the process.
• Continuous Improvement: Understanding flows allows for better
process optimization and identification of areas for automation
or enhancement.
• By optimizing these flows, organizations can improve
coordination, reduce errors, speed up processes, and ultimately
achieve better results.
 Application infrastructure
• Application Infrastructure refers to the foundational
software and hardware systems that support the
development, deployment, and operation of
applications. It encompasses all the resources and tools
required to host, run, and maintain applications
effectively. Here's a breakdown of its key components:
Key Components of Application Infrastructure:
• Servers and Virtual Machines:
– Physical or virtual machines where applications are hosted.
– Cloud infrastructure can also be used (e.g., AWS, Azure, GCP).
• Networking:
– Systems for communication between servers and clients.
– Includes firewalls, load balancers, and network configurations.
• Databases:
– Structured storage solutions for application data.
– Examples include SQL databases (e.g., MySQL, PostgreSQL) or
NoSQL databases (e.g., MongoDB).
• Middleware:
– Software that acts as a bridge between the operating system
and the applications.
– Includes message queues, API gateways, and integration tools.
• Application Servers:
– Platforms where application logic is executed.
– Examples include Apache Tomcat, WebLogic, and Node.js
servers.
• Monitoring and Logging Tools:
– Tools for observing application performance and troubleshooting.
– Examples: Prometheus, Grafana, Splunk.
• Security:
– Components ensuring the application's integrity and data protection.
– Includes encryption, access controls, and intrusion detection systems.
• Storage Solutions:
– Persistent storage for application files and backups.
– Examples: cloud storage (e.g., S3), NAS systems.
• Development and Deployment Tools:
– CI/CD pipelines, version control systems (e.g., GitHub, GitLab), and build automation
tools.
• Cloud and Containerization Technologies:
– Cloud-native solutions (e.g., Kubernetes, Docker) enable scalable and flexible
application hosting.
• Benefits of a Strong Application Infrastructure:
• Reliability: Ensures applications run smoothly with
minimal downtime.
• Scalability: Supports growth in users and data without
performance degradation.
• Security: Protects sensitive data and resources.
• Efficiency: Optimizes resource utilization and cost-
effectiveness.
• Monitoring and Troubleshooting: Provides tools for
identifying and resolving
 Information system and business process

• 1. Information System (IS):

An Information System is a structured system of people, technology,
processes, and data that work together to support decision-making,
coordination, control, analysis, and visualization within an organization.
Examples include ERP (Enterprise Resource Planning) systems, CRM (Customer
Relationship Management) systems, and data management tools.
Components of an Information System:
• Hardware: Physical devices like servers, computers, and networks.
• Software: Programs and applications used to process data (e.g., SAP,
Salesforce).
• Data: The raw information that is processed and analyzed for decision-making.
• People: Users interacting with the system, such as employees, managers, or IT
staff.
• Processes: Defined workflows or procedures that the system supports.
• Business Process:
A business process is a series of structured activities or tasks
performed by individuals, teams, or machines to achieve a
specific goal within an organization. These processes define
how resources and operations are managed to create value.
Examples include order processing, inventory management,
and payroll processing.
• Characteristics of Business Processes:
• Input: Resources or data required to start the process.
• Output: The final product, service, or information produced.
• Stakeholders: Individuals or groups involved in or impacted by
the process.
• Relationship Between Information Systems and Business Processes:
• Information systems are closely intertwined with business processes and often help
automate, optimize, or innovate these processes. Here’s how they interact:
• Automation:
IS reduces manual work and speeds up processes (e.g., automated invoice generation).
• Integration:
IS connects various business processes, ensuring seamless data flow and coordination
(e.g., integrating sales and supply chain systems).
• Decision Support:
IS provides real-time data and insights, allowing managers to make informed decisions
quickly.
• Efficiency and Accuracy:
IS eliminates redundancies and minimizes errors in processes like data entry or
transaction recording.
• Scalability:
As businesses grow, IS enables scaling of operations without proportional increases in
manual effort.
importance of an Information System (IS)
• The importance of an Information System (IS) lies in its ability to support and
enhance organizational operations, decision-making, and strategic goals. Here's
a breakdown of why IS is crucial:

1. Enhances Decision-Making
• Provides accurate, real-time data and reports for better decision-making.
• Helps in analyzing trends and patterns using tools like Business Intelligence (BI)
systems.
• Reduces uncertainty by offering structured and relevant information.

2. Improves Efficiency and Productivity

• Automates repetitive tasks, reducing manual workload and human error.
• Streamlines business processes for faster and more consistent outcomes.
• Increases employee productivity by providing easy access to data and tools.
• 3. Facilitates Communication and Collaboration
• Enables better communication across departments and
geographical locations.
• Supports collaborative tools like email, video conferencing, and
project management platforms.
• Improves information sharing for team coordination.
• 4. Supports Strategic Goals
• Aligns business processes with organizational strategies.
• Offers tools to monitor key performance indicators (KPIs) and
track progress toward goals.
• Helps in resource allocation and forecasting for long-term
planning.
 5. Enhances Customer Experience
• Provides tools like CRM (Customer Relationship Management) systems
to improve service quality.
• Enables businesses to gather feedback and personalize customer
interactions.
• Supports faster response times and better problem resolution.

6. Promotes Innovation
• Drives innovation through technologies like Artificial Intelligence (AI),
machine learning, and big data analytics.
• Supports the development of new business models and revenue
streams.
• Keeps businesses competitive by leveraging the latest technology.
 7. Ensures Data Management and Security
• Centralizes data storage for better management and accessibility.
• Protects sensitive information through advanced security features like
encryption and firewalls.
• Ensures compliance with legal and regulatory requirements.

8. Adapts to Changing Business Needs

• Scalable systems can grow with the organization.
• Flexible IS can adapt to market changes, enabling businesses to remain
competitive.
• Facilitates rapid implementation of changes, like new workflows or
policies.
Functional organizational structure (Delay in execution the process, excess invention
lack of visibility across processes)

• A functional organizational structure groups employees

based on their specialized roles or functions, such as finance,
marketing, production, or HR. While this structure brings
clarity and expertise within departments, it often leads to
several challenges.
• Delays in execution of processes occur because each
department operates independently, requiring approvals or
input from multiple units, which slows down decision-making
and project timelines. Additionally, excess inventory is a
common problem, as poor coordination between
departments—such as production and sales—can result in
overproduction or misaligned supply with actual demand,
leading to high holding costs and wastage.
 Lack of Visibility Across Processes
• Cause: Departments often operate in silos, focusing
only on their responsibilities without understanding
how their actions affect the overall workflow.
• Effect: Limited transparency leads to inefficiencies,
missed opportunities, and difficulty identifying
bottlenecks.
• Example: A finance team may not have visibility into a
production team's expenditure plans, causing
budgeting mismatches or delays in resource allocation.
 Addressing the Challenges
• To overcome these issues, organizations can adopt strategies such as:
• Integrated Information Systems: Implement tools like ERP systems
to provide real-time data visibility across functions.
• Cross-Functional Teams: Promote collaboration by forming teams
with members from various departments for specific projects.
• Streamlined Communication: Introduce regular interdepartmental
meetings or shared dashboards to enhance transparency.
• Process Automation: Use technology to automate routine tasks,
reducing delays and errors.
• Performance Metrics: Develop KPIs that emphasize cross-
departmental coordination and overall organizational goals.
 Monitor process information
A final contribution of enterprise systems is to help to monitor the state of the
processes, that is, to indicate how well the process is executing. An ES performs
this role by evaluating information about the process. This information can be
created either at the instance level (i.e., a specific task or activity) or the process or
aggregate level (i.e., the process as a whole). At the instance level, for example, a
company might be interested in the state of a particular customer order. Where is
the order within the fulfillment process? When was it shipped? Was the complete
order shipped? If it has not been shipped, then when can we expect it to be shipped?
Or, for the procurement process, when was the purchase order sent to the supplier?
What will be the cost of acquiring the material?
At the aggregate level, the ES can evaluate how well the procurement process
is being executed by calculating the lead time, or the time between sending the
purchase order to a vendor and receiving the goods, for each order and each vendor
over time. Figure 1.9 is an example of aggregate-level information regarding the
fulfillment process. This figure provides a summary of customer orders for the
months of January, February, and March (top left) as well as detailed information
about specific orders (bottom). It also graphically depicts reasons for delays in
processing the orders.
Not only can the ES help monitor a process, it can also detect problems with the
process. It performs this role by comparing the information with a standard—that
is, what the company expects or desires—to determine if the process is performing
within expectations. Management establishes standards based on organizational
goals. If the information provided by the ES indicates that the process is falling short
of the standards, then the company assumes that some type of problem exists. Some
problems can be routinely and automatically detected by the system, whereas others
require a person to review the information and make judgments. For example, the
system can calculate the expected date that a specific order will be shipped and
determine whether this date will meet the established standard. Or, it can calculate
the average time taken to fill all orders over the last month and compare this
information to the standard to determine if the process is working as expected.
Monitoring the process, then, helps detect problems with the process. Very
often these ‘‘problems’’ are really symptoms of a more fundamental problem. In
such cases the ES can help diagnose the cause of the symptoms by providing
managers with additional, detailed information. For example, if the average time to
process a customer order appears to be increasing over the last month, this problem
could actually be a symptom of a more basic problem. A manager can then dig
deeper, or drill down, into the information to diagnose the underlying problem. To
accomplish this, the manager can request a breakdown of the information by type
of product, customer, location, employees, day of the week, time of day, and so on.
After reviewing this detailed information, the manager might determine that there
has been a high employee turnover in the warehouse over the last month and that
the delays are occurring because new employees are not sufficiently familiar with the
process. The manager might conclude that this problem will work itself out in time,
in which case there is nothing more to be done. Alternatively, the manager could
conclude that the new employees are not being adequately trained and supervised.
In this case, the company must take some actions to correct the problem. Business
Processes in Practice 1-8 illustrates the performance monitoring capabilities of an ES.