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Subject Code: 209
Basics of e-Businessand
Decision Support Systems
byProf. Yogendra [email protected]
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Topic II
Understanding Systems from aBusiness View Point
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The Work System Framework A useful way of thinking about information
systems and their relationship to customers andparticipants from the perspective of a business
professional. A work systemis a system that produces
products for internal and external customersthrough a business process performed by human
participants with the help of informationtechnology.
An information systemis a particular type ofwork system that uses information technology tocapture transmit store, retrieve, manipulate, ordisplay information, thereby supporting one or
more other work systems.
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The Work System Framework
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The Need for Frameworks and
Models
Framework= a brief set of ideas &assumptions for thinking about a particularissue
Model= a useful representation of someaspect of reality
Typically based on a frameworks Emphasize some features of reality, while
ignoring others
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A Classification of Models
Iconic Models Analog Models
Mathematical Models
Mental Models
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Iconic and Analog Models
Iconic (scale) models- the least abstract model, is aphysical replica of a system, usually based on a differentscale from the original. Iconic models can scale in two orthree dimensions.
Analog Models- Does not look like the real system, butbehaves like it. Usually two-dimensional charts ordiagrams. Examples: organizational charts depictstructure, authority, and responsibility relationships;maps where different colors represent water ormountains; stock market charts; blueprints of a machine;speedometer; thermometer
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Mathematical Models
Mathematical (quantitative) models - the complexity ofrelationships sometimes can not be representediconically or analogically, or such representations maybe cumbersome or time consuming. A more abstract
model is built with mathematics. Note: recent advances in computer graphics use iconic
and analog models to complement mathematicalmodeling.
Visual simulationcombines the three types of models.
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Mental Models
People often use a behavioral mental model. A mental model is an unworded description of how people
think about a situation.
The model can use the beliefs, assumptions, relationships,
and flows of work as perceived by an individual. Mental models are a conceptual, internal representation,
used to generate descriptions of problem structure, and
make future predications of future related variables.
Support for mental models are an important aspect of
Executive Information Systems. We will discuss this in
depth later.
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Examples of Models
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The Work System Framework
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The Work System Framework
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Elements of the Work SystemFramework: The internal or external customersof the business process
The productsor services generated by the work system.
The steps in the business process.
The participantsin the business process.
The informationthe business process uses or creates. The technologythe business process uses.
Context = organizational, competitive, technical, andregulatory realm within which work system operates.
Infrastructure = shared human or technical resources thework system relies on (even those resources may bemanaged outside the work system).
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The system actually performing the work Business process
Participants
Information
Technology
Outputs: Products & servicesused by the customers
External factors Infrastructure
Context
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The business process is at the core of thework system
The same process can be performed with
drastically different results depending on Who does the work
What information & technology is being used
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Balance Between the Elements
of a Work System
The work system elements must be inbalance
A change in one element usually requires
a change in other elements Well-intended changes may also have
negative impacts
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Viewing Information Systems and
Projects as Work Systems
Information systemInformation system= a work systemdevoted to capturing, transmitting, storing,retrieving, manipulating, and displaying
information Software products (e.g. Oracle, Excel) are
NOT information systems
ProjectProject= a work system that is designedto produce a particular product and thengo out of existence
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Work System Principles
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Work Systems Principles
Please the customers (customers, products &services)
Perform the work efficiently (businessprocesses)
Serve the participants Create Value from information
Minimize effort consumed by technology
Deploy infrastructure as a genuine resource
Minimize unintended impacts and conflicts(context)
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Information System vs. WorkSystems
Interactive system top managers use to monitor their organizationsperformance
Work system supported by the information system: Keeping track of organizationalperformance
Aspects of the work system not included in the information system: Talking to people
to understand their views about what is happening
System that identifies people by scanning and analyzing voice prints
Work system supported by the information system: Preventing unauthorized access to
restricted areas
Aspects of the work system not included in the information system: Human guards,cameras, and other security measures
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Relationships Between Work Systemsand Information Systems
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Reality Check:
Identify some situations in which you haveencountered information systems thatsupport other work systems. Describe the
areas of overlap and non-overlap betweeninformation systems and the work system.
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Need for a Balanced View of a System
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Focus on Business Results Emphasize thecustomers satisfaction with whatever is beingproduced along with concern for the efficiency of
the business process. Focus on People and Organization
Emphasize the work environment, job
satisfaction, and whether the organization isoperating smoothly.
Focus on Technology and Organization
Emphasize the processing of information indatabases, transmission of information, andwhether the technology is operating efficientlyand effectively.
Need for a Balanced View of a System
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Each of the three viewpoints is essential, but anexcessive emphasis on any of them may lead toproblems
The importance of the ongoing collaborationbetween business and IT professionals.
IT professionals may tend to look at the third
viewpoint. It is important that businessprofessionals make sure the first twoperspectives are not lost.
Need for a Balanced View of a System
contd
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Caution: Excessive Emphasis on Business Resultscan lead to superficial
analysis of organizational and technicalcapabilities and wishful thinking of the power of
technology. People and Organizationcan generate too
much concern on how people are getting along
and not enough on business results andwhether technology and information areadequate.
Technology and Informationcan sometimesgenerate technology solutions to minorproblems and have little impact on businessresults or internal operations.
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The Principle-based SystemsAnalysis Method
One of the possible ways toanalyze a work system
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The General Idea of Systems Analysis
Can be applied to the system as a whole and to itssubsystems
Iterative processIterative process
Shortcoming: no guidelines as to what has to be done ateach step
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Organizing the Analysis around
the Work System Principles
The principle-based systems analysisTM
(PBSA)
A practical approachpractical approach for analyzing systems
at various levels of detail Combines the general system analysis
concepts with the work system framework
Converts the four steps of system analysisinto three steps
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Defining the Problem & the WorkSystem
The scope of the work system is not fixed Tradeoff between a too broad or too narrow a
scope
Work system snapshot a tabular summaryof the main aspects of the work system
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Identify constraints and priorities ConstraintsConstraints = limitations that render certain
options unfeasible
Ex.: budgetary limits. Existing technologystandards, etc.
PrioritiesPriorities = statements about the relative
importance of various goals A small number of high priority issues should
remain the primary focus
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Explore the Situation & Search for
Possible Improvements
Each principle is used in turn to focus on adifferent part of the work system
Problems that were not included in the
original problem definition may beuncovered
Some potentially beneficial changes may
negatively impact other parts of thesystem
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Address the Problem While Supportingthe Existing Priorities
The recommendation: What Should you do?
Clearly stated decision criteria to resolve thetradeoffs and uncertainties related to constraints,priorities, and implementation capabilities
Tradeoffs: conflicting needs of work systems, performancevs. price, technical purity vs. business requirements, etc.
Uncertainties: direction of future technology, what is best forthe company, etc.
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Complete recommendations may include: Recommended changes in work systems elements.
Clarification of work system vs. information systemschanges.
Explanation of how proposed improvements willaddress important parts of the problem.
Justification in terms of organizational priorities andfeasibility
Identification of meaningful alternatives Timelines and required resources
Tentative project plan and deliverables
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Applying PBSA to Work Systems, Information
Systems, and Projects
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Limitations & Pitfalls of PBSA
Compromise between complexity andcompleteness
Works well when the business process
consists of identifiable steps thatproduce a recognizable output
Does not work so well when applied to
activities such as management orcommunication
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The Work System Framework
Common Systems Analysis
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Common Systems Analysis
Pitfalls Related to Elements of theWork System Framework
C Pitf ll W k S t
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Common Pitfalls Work System
Elements
Customer ignore customer and the fact that the customer should evaluate
the product.
Treating managers as customers even though they dont use the
product directly. Product
forget that the purpose is to produce a product or service for a
customer. Forget that the product of a work system is often not the product
of the organization.
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Common Pitfalls
Business Process Define process so narrowly that improvement is of littleconsequence.
Define process to widely that it is too complex.
Confuse business process measures(consistency and
productivity) with product measures (cost to the customer andquality perceived by customer).
Think of business process as theory and ignore its support byparticipants, information, and technology
Participants ignore incentives and other pressures
focus on users rather than participants.
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Common Pitfalls
Information assume better information generates better results.
Ignoring the importance of soft information not captured byformal systems.
Technology Believing that the technology is the system.
assume better technology generates better results.
Focus on the technology without thinking about whether it makesa difference in the work system.
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Common Pitfalls
Context Ignoring context issue such as organizational culture and
politics, organizational policies, the competitive environment,and government and industry standards and regulations.
Ignoring non-participant stakeholders.
Infrastructure Ignoring possible failures in technical infrastructure (what
happens when the Internet is down?)
Ignoring the need for human infrastructure to keep the worksystem in operation (Who does on-going training of new staff).
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Measuring Work SystemPerformance
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System architecture= the systems maincomponents, how they are linked, andhow they operate together
System performance= how well thesystem, its components, and its productsoperate
f
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Typical Performance VariablesCustomer satisfaction
CostQuality
Responsiveness
Reliability
Conformance to standards
and regulations
Activity Rate
Output rate
Consistency
Productivity
Cycle Time
Down time
Security
Skills
Involvement
Commitment
Job satisfaction
Quality
Accessibility
Presentation
Security
Functional Capabilities
Ease of Use
Cost of Ownership
Compatibility
Maintainability
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Some important issues to keep in mind: Separately evaluate the performance of
different elements, because improvements in
one area may not be beneficial in others More is not always betterMore is not always better
For some performance variables (e.g., customersatisfaction) more isisbetter
For others, such as consistency, rapid delivery,etc., more is often notis often notbetter
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Efficiency vs. effectiveness
EFFICIENCY involves doing things the rightway An internal view
Focus on how well resources are being used toproduce the outputs
Ex.: productivity, cycle time, etc.
EFFECTIVENESS involves doing the right things
An external view
Focus on improving customer satisfaction Ex.: cost, quality, responsiveness, etc.
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Performance Variables
Performance variables can be describedor measured at different levels of clarity.
Quality experts are adamant that careful
performance measurement is essential forprocess improvement.
Note differences between vaguedescription and measurements.
Comparing Vague Descriptions
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Comparing Vague Descriptions,
Measurements, and InterpretationsACCURACY OF INFORMATION
Vague description: The information doesnt seem very accurate.
Measurement: 97.5% of the readings are correct within 5%.
Interpretation:This is (or is not) accurate enough, given the way the information will be used.
SKILLS OF PARTICIPATION
Vague description: The sales people are very experienced.
Measurement: Every salesperson has 5 or more years of experience; 60% have more than 10 years.
Interpretation:This system is (or is not) appropriate for such experienced people.
CYCLE TIME OF BUSINESS PROCESSVague description: This business process seems to take a long time.
Measurement: The three major steps take an average of 1.3 days each, but the waiting time between the
steps is around 5 days.
Interpretation:This is (or is not) better than the average for this industry, but we can (or cannot) improve by
eliminating some of the waiting time.
QUALITY OF THE WORK SYSTEM OUPUT
Vague description: We produce top quality frozen food, but our customers arent enthusiastic.
Measurement:65% of our customers rate it average or good even though our factory defect rate is only.003%
Interpretation: Our manufacturing process does (or doesnt) seem O.K., but we do (or dont) need to improve
customer satisfaction.
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Important Point Improvements in a work system can often be
found by looking at relationships betweenarchitectureand performanceissues.
Customer satisfactionis largely determined byproduct performance (effectiveness).
Product performanceis often determined by acombination of product architectureand theinternal work system performance(efficiency).
Note: efficiencyvs. effectiveness
F k t hit t t t ti f ti
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From work system architecture to customer satisfaction
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Clarifications Related to theElements of a Work System
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Internal vs. External Customers
External customers - individuals orrepresentatives of other firms orgovernment organizations
The reason the firm exists Internal customers work for the firm &
participate in other work system
Also important for the firm as a whole
Multiple Customers With Different
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Multiple Customers With Different
Concerns
Transforming Customers Into
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Transforming Customers Into
Participants
Self-service work systems Ex.: ATMs, Web sites, etc.
May be beneficial to both firm and
customers Cost reductions
Better feedback, etc.
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Products & Services
Customers evaluate the product Several areas of product performance, such
as: Cost
Perceived quality Reliability, etc.
Separate consideration of each factor helps in
devising new ways to improve customersatisfaction
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Participants
The people that perform the work process Difference between work system
participants and IT users
Focus on work-related aspects as opposed tothe information system itself
Data, Information, Knowledge
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, , g
DataData facts, images, or sounds that may or may not bepertinent or useful for a particular task
InformationInformation data whose form or content areappropriate for a particular use
KnowledgeKnowledge instincts, ideas, rules, and procedure that
guide actions and decisions
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Hard and Soft Data
Hard dataHard data= clearly defined datagenerated by formal systems
Soft dataSoft data= intuitive or subjective
information obtained by informal means Often essential for understanding what really
happened, or whether proposed actions might
encounter resistance
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Technology
INFORMATION TECHNOLOGY=computer and communication hardwareand software
IT has no impact unless it is used within abusiness process
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Infrastructure
The shared human, informational, andtechnical resources on which a worksystem relies in order to operate These resources exist and are managed
outside the work system
Ex.: a shared corporate database, a computernetwork, a support & training organization
The infrastructure should be operatedand managed like any other work system
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Technology vs. Infrastructure
Guidelines: Infrastructure if:Infrastructure if:
It is shared between many work systems
It is owned/managed by a centralized authority
Details are generally hidden from users
Not included in the infrastructure if:Not included in the infrastructure if: Owned & controlled within the work system
Its hands-on users need to understand thetechnical details
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Human Infrastructure
Often less noticed than the hardware &software components, but equallyimportant
Responsibilities include: Managing the IT facilities
Training
Enforcing standards, etc.
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Information Infrastructure
Codified information that is shared acrossthe company
This type of high level of information
sharing is still rare
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Context
The organizational, competitive, technical,and regulatory environment within whichthe work system operates
Includes: External stakeholders
Organizational policies, practices, and culture
Business pressures, etc. May create both incentives and obstacles