Chapter 2: Business Processes and Decision Making Flashcards Preview

MGMT 250: Information Technology Management > Chapter 2: Business Processes and Decision Making > Flashcards

Flashcards in Chapter 2: Business Processes and Decision Making Deck (46)
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Business process (aka business system)

a series of activities, tasks, or steps designed to produce a product or service. A business process is best thought of as a system


An inventory management system

supports the inventory process by collecting information


An inventory database

might keep track of what the customers have ordered (quantity ordered) and what is currently in inventory (quantity on hand)


reorder point.

When a good in stock hits this point, the inventory management system advises the manager that it is time to order new supplies.


purchase order (PO)

which lists the items ordered and the quantity desired


purchase order (PO) List

This purchase order is sent to the supplier.

The supplier receives the purchase order and then ships the appropriate goods along with the shipping invoice to the restaurant.

The shipped goods are first checked to make sure the restaurant received what was ordered.

The newly received goods are then placed in inventory and the inventory database is updated with the quantity received.

The supplier is then paid for the goods the supplier has shipped.


A business process consists of

1) activities,
3) facilities, and
4) information.



can consist of purely manual actions (people following procedures), automated or controlled procedures used by computers (hardware directed by software), or, as is often the case, a combination of manual and automated procedures.



are items of value. A case of milk is a resource, a person working is a resource, and the customer’s cash is a resource. In Figure 2-1, both suppliers and customers are considered resources because they have value in this process. They are not considered activities because they are external and, therefore, not under the restaurant’s direction and control.



are structures used within the business process. Resources can be stored within facilities. Examples of facilities include factories, pieces of equipment, trucks, filing cabinets, and the like. In the case of digital resources, facilities might include inventories and databases



the fourth element of a business process. Activities use information to determine how to transform the inputs received into the outputs produced. Because this book is about information systems, and understanding the nature of information and ways of defining it are crucial, information created in processes will be our focus.


Business Process Modelling Notation (BPMN)

software industry standards organization called the Object Management Group (OMG) created this

BPMN provides four graphical elements that can be used to document a process


Information definition

Very hard to have one specific one

most common definition is that information is knowledge derived from data, whereas data is defined as recorded facts or figures.


Another definition of information

information is processed data or, sometimes, information is data processed by summing, ordering, averaging, grouping, comparing, or other similar operations.


characteristics of good information.

1) Accurate
2) Timely
3) Relevant
-To context
-To subject
4) Just barely sufficient
5) Worth its cost


1) Accurate information

Information that is factual and verifiable


information system (IS)

Function can develop a bad reputation in the organization if the system is known to produce inaccurate information. In such a case, the IS becomes a waste of time and money as users develop workarounds to avoid the inaccurate data.


2) timely information

produced in time for its intended use.


Relevant information

both to the context and to the subject



Adequate information to perform the task


Just barely so

Information that meets the purpose for which it is generated, but barely so


worth its cost

When an appropriate relationship exists between the cost of information and its value


Any time there is a physical flow,

there is the potential to capture a flow of information.


business process management (BPM)

Process of generating information that will be useful for management and strategy decisions


total quality management (TQM)

Method focussed on improving quality


Six signma

Method focussed on improving quality (motorola)


Lean production

Focused on using resources as efficiently as possible


Automated system

means that work formerly done by people who followed procedures has been changed so that computers now do that work by following instructions in software


Manual system

Done by people without the use of automated processing


information systems support decision making by

providing the information—the raw material—for many decisions.