Chapter 7: Business Process Management

Q1: Why is business process management important to organizations?

Through Business Process Management (BPM), an organization can create, can assess, and alter business processes.  There are four stages to the process: Implement Processes, Assess Results, Model Processes, and Create Components, which for the most part, include all five elements of every information system. There are three types of processes that organization can plan or develop through BPM.  Functional processes involve activities within a single department or function, but the problem with this process is that they lead to islands of automation, sometimes called information silos because they work in isolation from one another. Cross-Functional Processes involve activities among several business departments.  This type of function eliminates the problems of isolated systems and data. The last type of process is an Interorganizational Process, where a business process crosses into multiple companies.

Q2: How do organizations solve business problems?

Diagrams are drawn out to illustrate the way that processes will be carried out, by who, how, and how the entire system connects. There’s the “assemble and ship equipment” process and the “top-level” business process.  There are three ways of changing business processes: changing a process by adding or removing resources without changing its structure, changing a process by altering process structure, or a business can do both.

Q3: What role do information systems play in business processes?

They provide an alternative for implementing the register clients activity and they facilitate linkages among activities.

Q4: What are the most common functional applications used today?

 A functional application is a computer program that supports or possibly automates the major activities in a functional process. Few businesses develop their own applications, so to reduce costs they license functional application software from a vendor and then adapt. The most functional applications used today are sales and marketing, operations, manufacturing, customer service, human resources, and accounting.

Q5: What are the problems with functional information systems?

One of the main problems is that data is duplicated because each application has its own database. When applications are isolated, processes are disjointed and as a consequence there is lack of integrated enterprise information.

Q6: What are the functions and characteristics of customer relationship management (CRM) information systems?

A customer relationship management (CRM) is a cross-functional application that tracks all interactions with the customer from prospect through follow-up service and support. They integrate all of the primary business activities. There are four phases of the customer life cycle: marketing, customer acquisition, relationship management, and loss/churn. CRM applications store data in a single database.

Q7: What are the functions and characteristics of enterprise resource planning (ERP) information systems?

Enterprise resource planning (ERP) applications provide even more integration than CRM. It integrates the primary value chain activities with human resources and accounting. The primary users are manufacturing companies through the software from SAP.  Major characteristics are that it is cross-functional, has a formal approach based on formal business models, maintains data in a centralized database; offers large benefits but is difficult with challenges & can be slow to implement, and it is often very expensive. The benefits of ERP are that it is successful in business processes, inventory reduction, lead-time reduction, improved customer service, greater real-time insight into organization, and higher profitability.

Q8: 2020?

Service-oriented architecture (SOA) is a design philosophy in which every activity is modeled as an encapsulated service and exchanged among those services are governed by standards. 

  Kroenke, David. "Chapter 7:Business Process Management." Using MIS. Upper Saddle River, NJ: Prentice Hall, 2011. 232-265. Print.