Topic II - Understanding Systems From a Business View Point

7/28/2019 Topic II - Understanding Systems From a Business View Point

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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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Basics of e-Business and DSS Yogendra Jagtap3

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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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.



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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.


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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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

Documents

Topic II - Understanding Systems From a Business View Point