Chapters 2 and 6

Business Process
an ongoing collection of related activities that create a product or service of value to the organization, its business partners, and/or its customers

Ex: managing cash receipts, applying healthcare benefits, collecting sales tax, processing bills of material

Business Process is made up of three elements:
1) Inputs: materials, services, and info that flow through and are transformed as a result of process activities
2) Resources: people and equipment that perform process activities
3) Outputs: the product or a service created by the process
Two fundamental metrics that organizations employ in accessing their processes are:
1) Efficiency: focuses on doing things well in the process
2) Effectiveness: focuses on doing the things that matter, creating outputs of value to the process customer
IS’s vital role in three areas of business process:
1) Executing the process
2) Capturing and storing process data
3) Monitoring process performance
This info can be created either at the INSTANCE LEVEL (specific task) or the PROCESS LEVEL (process as a whole)
Measures of Excellence in Executing Business Processes
-Customer Satisfaction
-Cost Reduction
-Cycle and Fulfillment Time Reduction
-Quality
-Differentiation
-Productivity
Business Process Reengineering (BPR)
a radical redesign of an organization’s business processes to increase productivity and profitability

examines business processes with a “clean sheet” approach

Goals: increase productivity, increase customer satisfaction, optimize operations, reduce waste

Business Process Improvement (BPI)
an incremental approach to move an organization toward business process centered operations; less radical and disruptive than BPR

focuses on reducing variation in process outputs by identifying the underlying cause of the variation in the process itself (ex: broken machine) or among the process inputs (ex: decline in the quality of raw materials purchased from a supplier)

consumes fewer organizational resources, less costly, less risky

Six Sigma
popular methodology for BPI. Goal is to ensure that the process has no more than 3.4 defects per million outputs by using statistical methods to analyze the process

(defect is defined as a faulty product or an unsatisfactory service)

Five Basic Phases of Successful BPI (DMAIC):
1. Define: document the existing “as is” process activities, process resources, and process inputs/outputs
2. Measure: identify relevant process metrics (time/cost) to generate one output (product/service), and collects data to understand how the metrics evolve over time
3. Analyze: examine “as is” process map and the collected data to identify problems with the process and their root causes
4. Improve: identify possible solutions for addressing the root causes, maps the resulting “to be” process alternatives, and selects and implements the most appropriate solution
5. Control: establishes process metrics and monitors the improves process after the solution has been implemented to ensure the process performance remains stable
BPR vs. BPI
BPR: high risk/cost, radical redesign, top-down approach, time consuming, impacts can be overwhelming, high failure rate

BPI: low risk/cost, incremental change, bottom-up approach, takes less time, quantifiable results, all employees trained in BPI

Business Process Management (BPM)
a management system used to support continuous BPI initiatives for core business processes over time

includes methods and tools to support design, analysis, implementation, management, and continuous optimization of core business processes throughout the organization

Globalization
the integration and interdependence of economic, social, cultural, and ecological facts of life, made possible by rapid advances in information technology

technology is leveling global competition, making the world “flat”

Friedman’s Three Eras of Globalization (1.0, 2.0 and 3.0)

Compliance with Government Regulations
-Sarbanes-Oxley Act
-USA PATRIOT Act
-Health Insurance Portability and Accountability Act

Organizations must be in compliance with the regulations contained in these statues. Process of becoming/remaining compliant is expensive/time consuming. Organizations rely on IT support to provide the necessary controls and info for compliance

Ethical Issues
relates to general standards of right and wrong

Issues are:
-Monitoring Employee Email
-Monitoring employee Internet activity at work
-Privacy of customer data

Competitive Strategy
statement identifying a business’s approach to compete, its goals, and the plans and policies required to attain those goals
Porter’s Competitive Forces Model
Identifies 5 major forces that can endanger or enhance a company’s position in a given industry

The best known framework for analyzing competitiveness

1. Threat of Entry of New Competitors (threat is high when entry is easy, low when significant barriers to entry)
2. Bargaining Power of Suppliers (high when buyers have few choices from how to buy, low when many choices)
3. Bargaining Power of Customers/Buyers (high when buyers have many choice from who to buy, low when few choices)
4. Threat of Substitute Products or Services
(if many alternatives, threat high)
5. Rivalry Among Existing Firms within the Industry (high when intense competition among many firms in industry)

Porter’s Value Chain Model
-Value Chain: a sequence of activities through which the organization’s inputs are transformed into valuable outputs
-Primary Activities: relate to production and distribution of products/services
-Support Activities: support primary activities contributing to competitive advantage
Cost Leadership Strategy
strategy for competitive advantage

produce products/services at the lowest cost in the industry Ex: Walmart

I can sell at a lower cost than you

Differentiation Strategy
strategy for competitive advantage

offer different products/services than your competitors Ex: Southwest Airlines

I am better because I am different

Innovation Strategy
strategy for competitive advantage

intro new products/services, add new features to existing ones, or develop new ways to produce them Ex: ATMs

I am doing something new and you can’t catch up

Operational Effectiveness Strategy
strategy for competitive advantage

improve the manner in which a firm executes its internal business processes so that it performs these activities more effectively than its rivals

I can do the same thing more efficiently than you

Customer-Orientation Strategy
strategy for competitive advantage

concentrate on making customer happy!

I treat customers better than you do

Computer Network
is a system that connects computers and other devices via communications media so that data and info can be transmitted among them
Local Area Networks (LAN)
connects two or more devices in a limited geographical region, usually within the same building, so that every device on the network can communicate with every other device

Ex: two desktop computers, three laptops, two smart phones, and a printer

Wide Area Networks (WAN)
a network that covers a large geographical area. Typically connect multiple LAN’s
Enterprise Networks
organizations today have multiple LANs and may have multiple WANs, all of these networks are interconnected to form an Enterprise Network
Networks Transmit info with 2 Basic Signals:
1)Analog Signals: continuous waves that transmit info by altering the characteristics of the waves
→Two Parameters: Amplitude and Frequency

2) Digital Signals: discrete pulses that are either on or off, representing a series of bits (0s and 1s)

Modem or Modulator-Demodulator
function is to convert digital signals to analog signals and analog signals to digital

can convert analog signals to digital signals only and convert digital signals to analog signals only

Ex: DSL or cable modem

Twisted-Pair Wire
made of copper, most prevalent form of communications wiring; it is used for almost all business telephone wiring.
It is inexpensive, widely available, and easy to work with.
Relatively slow for transmitting data, subject to interference from other electrical sources, and easily tapped by unintended receivers to gain unauthorized access to data
Coaxial Cable
made of copper, less susceptible to electrical interference then twisted, can carry much more data.
Commonly used to carry high-speed data traffic as well as television signals.
More expensive/more difficult to work with than twisted-pair wire. Somewhat inflexible.
Fiber Optics
made of thousands of very thin filaments of glass fibers that transmit info via light pulses generated by lasers.
Cable is surrounded by cladding, a coating that prevents the light from leaking out the fiber. Significantly smaller and lighter than traditional cable media.
Also can transmit far more data, provide greater security from interference and tapping

has the HIGHEST security of all wireline communication

Transmission Control Protocol (TCP)
performs 3 basic functions:
1) manages the movements of packets between computers by establishing connection between the computers
2) sequences the transfer of packets
3) acknowledges the packets that have been transmitted
Internet Protocol (IP)
responsible for disassembling, delivering, and reassembling the data during transmission
Packet Switching
the transmission technology that breaks up blocks of text into packets
Four Layers of Packet Switching:
1) Application Layer: enables client application programs to access other layers, and it defines the protocols that applications use to exchange data
2) Transport Layer: provides the application layer with communication and package services
3) Internet Layer: responsible for addressing, routing, and packaging data packets
4) Network Interface Layer: places packets on, and receives them from, the network medium, which can be any networking technology
Distributed Processing
divides processing work among two or more computers
Client/Server Computing
distributed processing

links two or more computers in an arrangement in which come machines (servers), provide computing services for users PCs, called clients (server in charge)

Peer-to-Peer Processing (P2P)
distributed processing

type of client/server distributed processing where each computer acts as BOTH a client and a server (no one in charge of the other)

Internet Service Provider (ISP)
is a company that provides Internet connections for a fee
Application Service Provider (ASP)
email is an application, sometimes a fee
Internet Protocol Addresses (IP)
A unique string of numbers separated by periods that identifies each computer using the Internet Protocol to communicate over a network
Ex: 78.123.0.209.
World Wide Web (WWW)
A system of universally accepted standards for storing, retrieving, formatting, and displaying information via client/ server architecture
Web Site
all pages of a particular company/individual collectively
Web Master
person in charge of an Organizations website
Uniform Resource Locator (URL)
points to the address of a specific resource on the web
Browsers
software applications users access the web through
Search Engine
computer program that searches for specific info by key words and then reports the results
Metasearch engine
more thorough, search several search engines at once
Portal
a web-based, personalized gateway to info and knowledge that provides relevant info from different IT systems and the Internet using advanced search and indexing techniques

Four Types: commercial, affinity, corporate, industry-wide

Commercial Portal
most popular type. Intended for broad and diverse audiences, and it offers routine content, some of it in real time
Affinity Portal
offers a single point of entry to an entire community affiliated interests
Ex: cal poly portal
Corporate Portal
offers a personalized, single point of access through a Web browser to critical business information located inside and outside the organization
Industry-wide Portal
serves entire industries
Unified Communications (UC)
simplifies and integrates all forms of communications (voice, voicemail, fax, chat, email, IM, ect) on a common hardware and software platform
Collaboration
two or more entities working together to accomplish a task

Ex: work group, workflow, virtual team, virtual collaboration, crowdsourcing, and telepresence systems

Work Group
specifically two or more individuals who act together
Workflow
movement of info as it progresses through the sequence of steps that make up an organizations work procedures
Virtual Team
group members working together in different locations
Virtual Collaboration
use of digital technologies that enable organizations/ individuals who are geographically dispersed to collaboratively plan, design, develop, manage, and research products/services
Crowdsourcing
organization outsources a task to an undefined, generally larger group of people in the form of an open call
Synchronous
all team members meet at the same time
Asynchronous
cant all meet at the same time
E-Learning
learning supported by the web
Distance Learning
any learning situation in which teachers and students do not meet face-to-face Ex: Ted Talks
Telecommuting
a process in which highly prized workers are able to work anywhere anytime
Knowledge Workers
being called the distributed workforce, or digital nomads
T or F: broadband refers to a network with high transmission capacity
TRUE
T or F: the internet is managed by a central agency which bears all the cost and responsibility
FALSE
Organizations have implemented corporate portals to…
-Cut costs
-Free up time for busy managers
-Improve profitability
-Offer customer self-service opportunities
Most Internet search engines maintain an index of billions of Web pages. The indexes are updated using:
Automated Webcrawlers
T or F: An Intranet is a scaled-up version of the Internet that uses similar technologies
FALSE
Network Protocols
rules for communicating within the network