INFORMATION MANAGEMENT
(SET OF LECTURES)
PETR WOLF
NORTH KARELIA POLYTECHNIC
Joensuu, Finland
April 2005
©Doc. Ing. Petr Wolf, CSc.
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CONTENTS
1. INFORMATION SOCIETY
1.1
STAGES OF THE INFORMATION SOCIETY
2. DEMANDS FOR MANAGERIAL WORK IN THE ERA OF INFORMATION
SOCIETY
2.1. MANAGER AND THE FUNDAMENTAL CHANGES
2.2. THE DEATH OF THE MASS MARKET
2.3. STRATEGIC MANAGEMENT
2.4. BENEFITS OF SMT
3. INFORMATION SYSTEMS
INFORMATION SOCIETY
/
INFORMATION
TECHNOLOGY
AND
4. DEMANDS FOR MANAGERIAL WORK IN THE ERA OF INFORMATION
SOCIETY
4.1. CRITICAL SUCCESS FACTORS
5. FIRM – COMPANY LIKE SYSTEM
5.1. SYSTEMS THEORY
6. PROCEDURAL MANAGEMENT
6.1. REENGINEERING OF COMPANY PROCESSES
6.2. THE PROCESS IDENTIFICATION STAGE
7. INFORMATION SYSTEMS / INFORMATION TECHNOLOGY (IS/IT)
7.1. THE FOUR SYSTEMS OF BUSINESS
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1.
INFORMATION SOCIETY
We usually speak about the INFORMATION SOCIETY as a society where the quality of life
and the perspective of social changing and economic development are depend of
information and the right using of the information.
The information society is the objective reality. We cannot ignore this fact.
THE USING OF IS/IT, THE COMMUNICATION EQUIPMENT AND NEW TYPE OF THINKING OF
THE GLOBAL INVESTORS HAS CRITICAL INFLUENCE FOR OUR DAILY LIFE.
We have to change our style of thinking.
The change is now truly global.
Never has this statement been moretrue it is today.
The global market is real battlefield and business is about war.
The information society calls for important change of the thinking of the owners,
developers, managers and workers, too. The information society calls for important change of
the thinking of the owners, developers, managers and workers, too.
Information is resource with specific attributes because it is renewable source. It is the
resource what is not consumed. The key carrier of the changes in the information society is
information. The carrier of information is: numbers data, text, sound, picture etc. Information
source is databases and other sources of data. Data have no cost for managers, owners etc.
without their interpretation of information.
INFORMATION and the KNOWLEDGE in the INFORMATION SOCIETY are the SOURCE of the
POWER and the FORTUNE. Who is owner of the information sources, who is able to
transfer information into knowledge is in the advantage, he has power.
INFORMATION SOCIETY
(William J. Martin-„Global Information Society“, Frank Webster-„What Information
Society“, Alvin Tofler-„The Third Wave“, John Naisbitt-„Megatrends-Ten New Directions
Transforming Our Lives“)
POST-INDUSTRIAL SOCIETY
(Daniel Bell-„The Coming of Post-Industrial Society-A Venture in Social forcasting“)
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KNOWLEDGE SOCIETY
(Peter F. Drucker-“Managing in Turbulent Times”, “Innovation and Entrepreneurship”, “The
Age of Discontinuity”, “The Frontiers of Management”, “Post/capitalist Society”, M. J. EarlManagement Strategies for Information Technology”)
1.1 STAGES OF THE INFORMATION SOCIETY
1st stage
The term „INFORMATION MANAGEMENT“ was the first used as early as in 1966 by R.
S. Taylor and his colleagues. It corresponded to their aim at applying the so-called
engineering efficiency in their technical solutions. The notion of information management is
here oriented towards economical solutions of mainly ”hard” technical tasks, i.e. work
efficiency when processing technical information. At the beginning of the 70s, the term of
information management was also used in connection with application of computing
machinery for mass data processing carried out for the purpose of evidence.
2nd stage
At the end of the 70s and especially during the 80s, the „information management“ term
became commonly used mainly among the experts in informatics. They emphasised the
necessity of paying attention to processes of efficient and economical implementation of
projects dealing with creation and functioning of information systems based on the
means of modern information technology (IS/IT). Later definitions of the term already
indicated the tendency to regard information management first and foremost as management
taking advantage of the means of information technologies (IT).
For example, an English author, Michael J. Earl, explains information management as
„management for application of information technology“, which first of all „requires
mutually harmonised methods of planning, checking procedures and organisational
securing”. Naturally, the economical aspect of the processes of creation and utilisation of
IS/IT was not studied then.
A typical feature of the time was that the prospective users of the IS/IT applications
hardly ever took part in the project works. The implementation teams, to a great extent,
used IS/IT in a rather passive way, only to work on assignments or partial modifications of
assignments based on prior non-automated processing. Few people worried about how to take
into consideration such aspects of information processes or systems that could not be
formatted. In the second stage, the notion of information management put focus on its
application in the technologically oriented information science. Questions such as why and
to what extent the automated information processes help to improve the quality and
consequently secure the fulfilment of organisation’s objectives, i.e. the main purpose of
managerial activities, were raised. Consequently, they led to creation of positions of the socalled information managers and chief information officers, etc., who became responsible for
conceptual and economical development of IS/IT applications in an organisation.
Information management was perceived as a system of management-based
recommendations for the processes of IT/IS applications. Its main supporters were IS/IT
designers.
The goal was economy of processing, which can also be explained by means of an
illustrative expression, common among managers – efficiency, or to use a popular slogan by
P. F. Drucker, „doing things right“.
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3rd stage
At the beginning of the 90s, the notion of information management becomes more and
more common in literature on management published in industrially developed countries.
There is always a greater focus on making use of the means of computing machinery and
information technologies in order to secure the quality of managerial work, i.e. efficient
fulfilment of the organisation’s mission and goals.
The idea that information systems based on information technology IS/IT are an
inevitable part of the tools of managerial work becomes more and more recognised in
practice.
Yet, as a result of the influence of new possibilities provided by IS/IT, the goals of
managerial work can be different from the original goals of the past. It is about finding a
new sense, “rethinking” and “redefinition” of the goals. Some managers see the priority
in managerial expedience, which tends to be expressed by means of a term
“effectiveness”, i.e. ”doing the right things”. Only then managers start setting the next
logical objective – that the purpose should be to secured in an economically effective
way (“doing the things right”).
The INDUSTRIAL SOCIETY is transforming to the INFORMATION SOCIETY deal with the
MARKET ECONOMY.
The INFORMATION SOCIETY-we can say-the third wave of developing of the civilisation.
It is spoken about turbulent environment or about chaos.
The first wave was-the agrear wave (to the end of 70th years 19th century), second- industrial
wave (to the end of 50th years 20th century).
The basic of all definition is INFORMATION.
Three classic economic resources are: WORK, FIELD, CAPITAL and now is the fourthINFORMATION.
The Information Society ask-call for important change of the thinking of the owners,
developpers, managers and workers, too.
Information is resource with specific attributes because it is renewable source. It is the
resource what is not consumed.
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The key carrier of the changes in the Information Society is information. The carrier of
information is: numbers data, text, sound, picture etc. Information source is databases and
other sources of data. Data have no cost for managers, owners, etc. whithout their
interpretation of information.
INFORMATION in the INFORMATION SOCIETY is the source of the power and the fortune.
Who is owner of the information sources is in the advantage (f.e. business advantage).
The owner must to dispose of the abilities to interpret – transform DATA to
INFORMATION and continualy to KNOWLEDGES.
Very important changes (deal with global market, globalisation) in social conditions,
economic conditions (especially hyper competition, market of clients), technologic conditions
etc. were in the 80th years in the 20th century. One of the general influens on these changes
has had IS/IT (including local networks and Internet) and commucations equipments.
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2. DEMANDS FOR MANAGERIAL WORK IN THE ERA OF
INFORMATION SOCIETY
2.1
MANAGER AND THE FUNDAMENTAL CHANGES
The top management – top managers should focus strategically on
“DOING THE RIGHT THINGS”.
They are response to:
1st – Establish the destination that the company should be aiming for.
2nd – Chart and then steer the corporate ship along a clearly defined way how
reach a destination, way which:
1. Leads to the desired destination.
2. Is efficient in terms of scarce resources such as time, labour,
customer comfort.
3. Does not expose strategy.
The main role of the top management should be to set the direction that the company
should take, fully taking into account the oportunities and threats of the various
external environments as well as the strenghts and weakness of the company and its
suppliers and distributors.
Due to fundamental changes connected with the transition to information society, some
principles of managerial thinking and acting start not only to lose their importance and
competence but also to undermine the backing of professional qualifications of their holders.
When applying the procedures that are becoming more and more out of date, the conservative
managers are step by step less successful, especially when compared to those who carry out a
timely reassessment of any non-operational procedures and take advantage of the new and
progressive pieces of knowledge.
That is why there is a rising demand for the management theory as well as practice to be
able to
“BREAK WITH THE PAST”.
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The changes in the paradigms of managerial thinking and acting in the 80s and mainly
nowadays in the third wave of the 90s lead to a finding that managers are also required to be
inovative as for their approach to information and ability to process it.
For competent entrepreneurs, managers and other professionals with economic
education, the period of long-term boom has started recently. An important criterion of their
competence appears to be individual ability to work with information on a large scale, based
on the ability to learn and correctly interpret the information available. At present,
managerial work is subject to considerable changes leading towards:



Complexity of problems needed to be solved. This issue deals with the
growing system complexity of task solving with regard to greater number of
items as well as the number and type of their mutual links.
Dynamism and internal contradiction that influence the applicability of
adopted resolutions and their appropriate implementation. This issue deals
with considerably discontinuous changes that cannot enable application of
extrapolation methods and make other classic prognostic methods difficult to
apply.
Rate of uncertainty and risks of entrepreneurial activities, mainly with
regard to competitors’ activities and the uncertainty of innovation policy.
The main principles of the management of the changes are:
1st There is the need to harmonise change measures and processes with normal activies
and management of the company. The problem is particulary acute and delicate in the
company undergoing major changes.
2nd Management has to determine the specific change measures requiring its leadership.
Management decides on the degree and form of its directinvolvement in such measures. The
difficulty of the measures and their importance to the company future is the main criterior.
3rd Various change processes within the company needs to be harmonised with each
other. While this may be easy in a small and simple company it may be quite difficult in a
large and complex one. Often one department develops proposals and other departments will
have to be convinced that they should give up their current systém and accept the best
proposal developedby another unit. Top management has to intervene with fact.
4th Managing change includes dealing with its various aspects f.e.: financial,
technological, procedural, political etc. This is the basic and most difficult management
responsibility ralated to companies change. The change process involves experts who often
try to impose their limited view of complex and multidisciplinary problem.
5th Managing change involves decision on the use of various approches and intervention
techniques that help to make a good start, proceed systematically, gain support and get the
change implemented.
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2.2 THE DEATH OF THE MASS MARKET
The industrial revolution was born of AUTOMATION/INFORMATISATION.
AUTOMATION/INFORMATISATION achieved lower costs (mainly labour and time-related
costs) and large standardised volumes of production.
This gave rise to the mass markets: not much innovation but agreeable prices and
„standard“ features. With increasing customer (both industrial and endconsumer)
sophistication, the trend is towards:





Greather innovation
Faster changes in taste and product/service features demanded
Customised products and services (greater choice)
(The good news) distinct willingness by customers to pay for quality
(Last but by no means least) excellence of customer service
This means that manufacturers and suppliers of goods and services should:





Focus on giving great value to the customer
Deliver a consistent standard of service excellence that results in customer
loyalty
Shorten response time
Eliminate waste, inefficient methods, and unproductive activities
Welcome smaller order-quantities (to cultivate “corn”customers and to reduce
dependency on large customers)
The shortening of product life cycles is an especially strong tendency in product markets
that are driven by innovation. This is certainly the case in consumer electronics. There are
signs, however, in other industries, that some manufacturers have gone too far in the
frequency with which they introduce new „improved“models.
An example is the family saloon and sports car segments of the car industry. There is an
increasingly widespread perception among consumers that Japanese auto manufacturers
innovate too frequently, and that models get replaced too often. Not only does this practice
increase costs, but it also removes an incentive to purchase, as the model one buys is likely to
become „old“ wthin a couple of years.
Businesses must now become increasingly specialised.
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Firms become expert in their chosen segment. By concentrating all their efforts in one
segment (or splitting up their organisation into specialist teams), they get to know their
market(s) better. By adopting this approach, they will avoid spreading their strengths
(resources) over a vast “general” market.
The trend therefore, is toward becoming a big, healthy fish in a smaller pond (although
fishes in different ponds may come from the same family).
When we talk about flexibility as a condition for survival. We are referring to TOTAL
FLEXIBILITY. This encompasses the way we think, the way we deal with clients,
environmental changes, competitors, our people and our technology. Nothing is left out. If
we did omit anything important it could very well prove to be our fatal weak link.
It is therefore important to constantly monitor and regularly review our organisation's
activity chains, chains that include our allies as well as our internal (operational)
activities.
Mass markets are definitely on the rapid decline. Even in banking and financial services,
specialist `boutiques' have taken off, and are already nipping at the heels of established
banking names.
It is no longer possible to fool customers with poor products and services, even if these
come complete with high budget, glitzy packaging and advertising.
The total marketing strategy must be soundly founded on the concept of PERCEIVED
RELATIVE QUALITY (PRQ - the customer's perception of quality, based on what he
needs, wants, values and is willing to pay for, and what is on offer in the market place).
The ultimatum: If we cannot provide our customers with what they want, when they want,
then we will lose them to competitors who can and are willing to do so. With the loss of
customers, we lose the opportunity to provide them with more goods and services or increase
the sale and profit contribution per customer.
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2.3 STRATEGIC MANAGEMENT THINKING
What is the STRATEGIC MANAGEMENT THINKING (SMT)?
The way one thinks determines the way one works and the way one works determines
the results.
While few organisations can influence external environmental factors such as politics,
inflation, exchange rates and international affairs, these factors will invariably influence the
way that businesses operate.
Consequently, SMT begins “outside-in” by investigating the factors that bring about or
inhibit change. Only after thisfirst phase do we consider the entity that will be affected
by the change.
SMT prescribes that action is whithheld until we have seen the “big picture” means that
we have an overview or our relevant operating environment and any likely changes in it in
the foreseeable future. With this awareness and an understanding of our own strenghts and
weaknesses-both existing and potential-we are then able to identify core strategic activities
where we should concentrate our resources. In this way we can minimise waste and plan
away the need for fire-fighting.
The SMT approach is thus characterised by a clear emphasis or being forward looking.
However, the key begin forward looking is to recognise that history need not always repeat
itself. Additionally, it must also be recognised that even the best laid plans and most
thoroughly developed forecasts can go wrong. Contigency planning and the practise of
prudence must therefore be an integral part of SMT.
As opportunities and threats undergo radical change and as our strenghts and
weaknesses alter so our strategic focus may also have to be adapted. Decisions,
especially strategic ones, must thus be tested by asking how well they will position us in
our chosen markets, not only today but also tomorrow.
Market research, technicaldevelop, databeses are to modern business what spies are to
the army.
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Information that is unstructured is seldom capable of providing profound and
advantage to the decision maker. He must see each piece of information as a part of a
jigsaw. His initial challenge is to fit the pieces together so that his insight is complete. Time
and effort must be invested to achieve this.
Insight based on superior use of information is the basis of effective preparation.
Preparation must be sufficiently thorough, so that when action is taken, victory will be
swift. Timing is always a vital ingredient.
2.4 BENEFITS OF SMT
With conscientious practice, SMT can help management to profitably exploit the very
same changes that wreak have on the competition.
The principal practical benefits are:
1. Longer product life-cycle because we are the first or among the first who identify
and exploit the opportunity.
2. Faster and greater certainty in recovering initial costs and achieving early profits
because we exploit the demand or skimming the market prior to the build-up of
competition.
3. Greater efficiency and productivity, i.e. superior returns with lower costs and
wastage, in resource scheduling and control because these are planned for in
advance.
4. Less fire-fighting and crisis management, using Project Management, because
fewer mistakes as the majority of these will have been identified at the planning
stage.
5. Better feedback and learning as the time spent by others fire-fighting will be used
by the champions in systematic monitoring, post-mortems, and design
improvement.
6. Improvement teamwork and “esprit de corps” as workers develop a progressive
team culture based on sharing success instead of being preoccupied with blaming
others for mistakes.
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3. INFORMATION SYSTEMS/INFORMATION
TECHNOLOGY AND INFORMATION SOCIETY
„What to do?“…“effectiveness“
„How to do it?“…“efficiency“
The term „INFORMATION MANAGEMENT“ is relatively new. Purposefully oriented
DATA, INFORMATION and KNOWLEDGE are a KEY SOURCE of and condition for successful
task solving. Moreover, we have to presuppose that the interval of applicability or stability
of certain solutions is becoming shorter and therefore all the solutions made can only be
regarded as temporary. In today’s turbulent and chaotic environment, the lack of
relevant information and knowledge available at the right time and in the right place or
incapability of taking advantage of it can be “fatal” for entrepreneurs as well as managers.
Thus, the ability to acquire adequate working methods when PROCESSING DATA,
INFORMATION and KNOWLEDGE dealing with current problems, forms an inevitable part
of managers’ professional competence and qualifications.
Securing of efficient managerial activities follows from continuously proceeding
processes of timely identification of relevant information, its organised collection and
transfer, purposeful processing and creative utilisation. In fact, all the information gathered
should serve as a source for securing of the required analysis, decision-making and
implementation processes of managerial work. In this respect, some well-approved methods
can be provided by INFORMATION MANAGEMENT.
TOP MANAGEMENT with its badly structured decision processes is not simply a science,
but real art of working with information.
For MANAGERS, the IS/IT applications are not perceived as the final goal themselves.
They are to serve as an efficient tool helping to enable, facilitate, rationalise, but first
and foremost improve their acting.
INFORMATION MANAGEMENT is a interdisciplinary system of knowledge, methods and
recommendations concerning systemic approach and informatics which help to
implement INFORMATION PROCESSES of MANAGERIAL THINKING and ACTING in order to
achieve the objective of an organisation (a firm, an enterprise, a factory, a plant, a
division, a functional sphere, a working team, etc).
INFORMATION MANAGEMENT is understood as an approach penetrating the whole
process of enterprising and the whole organisation.
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We can say that INFORMATION MANAGEMENT is transdisciplinar set of knowledges,
methods and systém recomendations and informatics, what help to realised information
processes of managers thinking and action to do reach goals of firm or its parts.
SYNERGIC EFFECT of integration of INFORMATICS & MANAGEMENT & SYSTEMS sciences
is in INFORMATION MANAGEMENT. We can speak about „cross-fertilization of ideas“.
INFORMATION MANAGEMENT we understand as method what is going through of the
whole process of the entrepreneurship and of the whole firm.
The integration structures, entrepreneurship, intrapreneurship are the base for
SYNERGIC EFFECTS to lead to SUCCESSFUL ENTREPRENEUR.
The APPLICATIONS OF IS/IT are not goals. IS/IT are the effective expedient, what
help them to make, to make easy, make quality the steps of managers and satisfy
themselve information needs.
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4. DEMANDS FOR MANAGERIAL WORK IN THE ERA OF
INFORMATION SOCIETY
There are three types of problems what managers have to solve:
1.
2.
3.
STRUCTURED (for describing there are flowcharts, exact mathematic methods)Technical problems especially
SEMI-STRUCTURED (only part of these problems we can describe)
NOT STRUCTURED (for describing there are not flowcharts, exact mathematic
methods, we use fuzzy sets, heuristics, statistic methods etc.)- Economic systems,
social systems etc. The managers solve especially no structured problems.
The funcions of manager:
1.
2.
3.
4.
5.
PLANNIG
ORGANIZING
STAFFING
LEADING
CONTROLLING
PLANNING: Planning is what you do to try to get yourself or your organization from your
present position to an even better pesition. Planning requires that you set objectives and
develop stralegies and policies for achieving them. Whatever you do in planning lays the
foundation for the other four management tasks.
ORGANIZING: To achieve company goals you must organize all parts of the company in
a coordinated and integrated effort. Organizing is the act of making orderly arrangements and
structures to best use company resources.
CONTROLLING: There you are planned and organized but how do you accomplish the
results? By controlling. This the process by which you establish standards of performance
measure employee resulis, correct mistakes and minimize deviations from the objectives. The
key to control is feedback. Feedback enables you as a manager to head off problems before
they become too severe.
COMMUNICATING- LEADING: Communicating is sharing information with other people
whether face to face or over the phone, via memo or by closed-circuit television.
Communicating may be more important than any of the other four tasks: After all, if you
cannot explain what you are planning and organizing for, how can you expect to accomplish
results?
STAFFING: Satffing has to do with people-selecting them, training them educating them
and developing them.
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With all this, we see that a business organization is a complex enterprise. It consists of
four functional areas, with three levels of managers, performing five management tasks-all of
which must be co-ordinated for the success of the whole endeavor.
The parallel funcions =continuous functions are:
1.
2.
3.
ANALYSIS
DECISION MAKING
IMPLEMENTATION INCL. COORDINATION
Some authors talk together with manager funcions about manager roles:
1. Interpersonal role:
 Figurehead
 Leader
 Liaison
2. Information role:
 Monitor
 Disseminator
 Spokeperson
3. Decission role:
 Entrepreneurial
 Disturbance handler
 Resource allocator
 Negotiator
4.1
CRITICAL SUCCESS FACTORS
The GOAL OF MANAGER is oriented to the activities what is lead to the successECONOMIC SUCCESS.
We can say that whithout creative application of the IS/IT there is not real to
innovate the manager work to deal with the dynamic of the chaotic entrepreneur
situation, hyper competition in these days and the future. See Fig. 4.1
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TURBULENT ENTREPRENUER ENVIRONMENT
EXTERNAL SOCIOECONOMIC ENVRONMENT
EXTERNAL TECHNOLOGICAL ENVIRONMENT
STRUCTURE
STRATEGY
MANAGEMENT
PROCESSES
TECHNOLOGY
INDIVIDUALS & ROLES
ORGANIZATIONAL
BOUNDARY
CULTURE
Fig. 4.1 Components of firm and their relationships
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5.
FIRM-COMPANY LIKE SYSTEM
The systém is abstraction.
We understand that system approaches is the purpose typ of thinking, problem solving.
The investigating phenomena and processes we understand in their complexity, internel and
external coherences. Our goal is to understand, suitably formulate and to solve the problem
for using in information management.
System is the purposely defined the set of elements and linkage relations between
them, see Fig. 5.1. The important is the structure of the system (arrangement of the elements
and reletions). System comprise from subsystems. The environment of the system is
characteristic by the coherences with the system. The systems in the managers’ tasks are
usually open systems. The characteristic of the system approaches you can see on Fig.5.2,
Fig.5.3.
Open system
Close system
Subsysetm 1
Relation 12
Subsystem 2
INPUT
OUTPUT
Internal relation 31
Relations 23; 32
Subsystem 3
External relation
Fig.5.1 System
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The SYSTEM ANALYSIS is the discipline what is oriented on the recognition of the
system. The SYSTEM ENGINEERING is the scietic discipline for projecting wide technical
systems. In the practical life we are working with 4 resources “4 M”
MEN, MACHINES, MATERIALS, MONEY.
growig up the komplexity
Transcendent
systemsS
SYSTEMS OVER OUR KNOWLEDGE
SOCIAL
SYSTEMS
HOMO
SAPIENS
SYMBOLIC FUNKCIONS:
Interpretation of information in the linguistic variables
ANIMALS
GENETIC
SYSTEMS
OPEN
SYSTEMS
LIFE SYSTEMS
NO LIFE SYSTEMS
KYBERNETIC
The matter and the energy are
determined in the system
CLOCKWORKS
FRAMEWORKS
Fig. 5.2 Taxonomy of the systems
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The system approache
THE GENERAL THEORY OF
SYSTEMS
THE APPLIED SYSTEM SCIENCE
OPERATING RESEARCH
KYBERNETIC
(Incl. applications)
SYSTEM ANALYSIS
SYSTEM
ENGINEERING
FORMING/DEVELOP
SOFT SYSTEM METHODOLOGY (SSM)
??? Next application methods
Fig. 5.3 The Characteristic of system approache.
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OF IS
The steps we use in problem solving are following:
1.
2.
3.
4.
5.
To define the problem-system
To determine goals
Design of the system (system analysis)
Develop of the system
Implementation of the system to the reality by engineer methods
The SYSTEM ENGINEERING is the base of the PROJECT MANAGEMENT-the most
effective method of projecting. The main points are followeing:
1.
2.
3.
WHAT I want? (Definition of your goal(s).)
HOW I achieve goal(s)? (Definition of the strategy to achieve the goal(s).)
WHAT I have? (Definition of the actual conditions.)
The firms occupy the special places especially from the points of view of management in
social systems. They have exactly defined the goals deal with the entrepreneurial strategy.
Every firm represents association and communication of artificial system and real-natural
system. From this point of view there are two understanding of the firm:
1.
2.
The firm as rational system. We think firm only from the point of view of the
commision and the goals. The elements and funkcions are subject to them.
The firm as naturel system. We think firm as the set of people with the same
goals.
Both systems are penetrated. How to do it? It depends of internal and external relations
f.e. share holders. The modern manager view is underestanding of the firm as natural system.
There is influence to the information system in firm etc.
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5.1
SYSTEMS THEORY
There are all kinds of systems: biological, political, theological, mechanical, and so on. A
system is defined as a collection of interrelated parts that work together for a common
purpose. The fact that a system does not seem to be working very well does not change the
fact that it is nevertheless a system.
In systems theory there are six important concepts:
1.
2.
3.
4.
5.
6.
INPUTS ar e the elements that enter the system from outside it.
The PROCESSOR is the part that operates on the inputs to transform them into
something else.
OUTPUTS are the products of the processing.
FEEDBACK is communication back to the system, either from within the system or
from outside it.
The ENVIRONMENT is the world outside the system.
The BOUNDARY is the separation line between the system and the environment.
The Fig.5.4 illustrates these six concepts. Note: the input and output act as the
connections-the interfaces-between the system and the environment.
Feedback is used to modify the system's operations; feedback is communication
concerning the effects of the output. Depending on the kind of feedback, a system can be
closed or open. Closed systems are those in which the feedback is only from within the
system. Open systems are those in which feedback is from outside the system. Systems that
have both internal and external feedback are classified as open systems, such as the one
shown in the Fig.5.4.
Fig.5.4. Elements of a system-firm
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Why to study information systems?
That's the same as asking why anyone should study accounting, finance, operations
management, marketing, human resource management or any other major business function.
Information systems have become a vital component of successful business firms and other
organizations. They thus constitute an essential field of study in BUSINESS ADMINISTRATION
and MANAGEMENT. That's why most business majors must take a course or two in
information systems. Since you probably intend to be a manager, entrepreneur or business
professional, it is just as important to have a basic understanding of INFORMATION SYSTEMS
as it is to understand the basics of ACCOUNTING, MARKETING OR OTHER FUNCTIONAL
AREAS IN BUSINESS. Before going any further, we should define some key terms:
INFORMATION: Information is data (for example, raw facts or observations) that have been
put into a meaningful and useful context. This gives the information value for specific persons
and meets their particular information needs. Thus, information is a basic resource that
individuals and organizations must have to survive and succeed in today's society. That's why
information systems are so important.
INFORMATION SYSTEM: A set of people, procedures, and resources that collectes, transforms,
and disseminates information in an organization. They include simple manual (paper-andpencil) information systems and informal (word-of-mouth) information systems. We will
focuse on computer-based information systems that use hardware, software, and people
resources to transform data resources into information products for end users.
MANAGEMENT INFORMATION SYSTEM: Many people use this term as a synonym for
information system. Others use it to describe an information system that provides information
in the form of standardized reports and displays to managers. Management information
systems (MIS) to describe a broad class of information systems that are designed to provide
information needed for effective decision making by managers. The term is used by many
organizations as the title of their computer services departments or the name of business
information systems they develop continuously by many universities as the title of their
departments and academic programs in information systems.
END USER: There is anyone who uses an information system or the information it produces.
This usually applies to most people in an organization as distinguished from the smaller
number of people who are information system specialists such as systems analysts or
professional computer programmers.
MANAGERIAL END USER: There are: manager, entrepreneur or managerial-level professional
who personally uses information systems.
24
INFORMATION is a basic resource in TODAY'S SOCIETY.
We are living in an INFORMATION SOCIETY whose economy is heavily dependent on the
creation, management, and distribution of information resources. We no longer live in
an AGRICULTURAL SOCIETY composed primarily of farmers or even an INDUSTRIAL
SOCIETY where a majority of the work force consists of factory workers. Instead, the
work force today consists mainly of workers in service occupations or knowledge
workers which are people who spend most of their workday creating, using and
distributing information.
The category of knowledge workers includes executives, managers and supervisors;
professionals such as accountants, engineers, scientists, stockbrokers and teachers; and staff
personnel such as secretaries and clerical office personnel. These people all make their living
using information systems to create, distribute, manage and use information resources which
are then used to help them manage the human, financial, material, energy and other resources
involved in their work responsibilities.
INFORMATION is a valuable commodity to knowledge workers, their organizations and
society. A major challenge for the INFORMATION SOCIETY is to manage its INFORMATION
RESOURCES to benefit all members of society.
This means, for example, using INFORMATION SYSTEMS to find more efficient ways of
using the world's limited supplies of material, energy and other resources. For these
reasons INFORMATION SYSTEMS play a vital role in our society dependent as it is on the
effective use and management of information resources.
INFORMATION and INFORMATION SYSTEMS are also valuable organizational resources
that must be properly managed for an organization to succeed. That's because organizations are faced with continual changes in the size, complexity and scope of their
operations.
For example, business firms are continually battling with their competitors to provide
better products and services to a variety of customers at many locations with a minimum
number of employees. Organizations rely on information systems to provide the many types
of information necessary for their efficient operations and effective management. This
information must be reasonably accurate, timely, and tailored to the needs of managers and
end users. It must also help organizations gain strategic advantages over their competitors.
25
Thus, information systems can play a vital role in the success of modern organizations.
However, information systems that do not properly support an organization's strategic
objectives, corporate culture, or employee needs can seriously damage that organization's
prospects for survival and success. The proper management of information systems is thus a
major organizational challenge. For managerial end users, information systems
represent:





A major part of the resources of an organization and its cost of doing business,
thus posing a major resource management challenge.
An important factor affecting operational efficiency, employee productivity
and morale and customer service and satisfaction.
A major source of information and support needed to promote effective
decision making by managers.
An important ingredient in developing competitive products and services that
gives an organization a strategic advantage in the marketplace.
A vital, dynamic and challenging career opportunity for millions of men and
women.
The preceding quotation by MIS scholar Peter Keen emphasizes that managerial end
users need to know how information systems can be employed successfully in a competitive
business environment.
BUSINESS FIRMS and OTHER ORGANIZATIONS need people who can help them manage
their INFORMATION RESOURCES. KNOWLEDGEABLE MANAGERIAL END USERS can play a
major role in INFORMATION RESOURCE MANAGEMENT (IRM). That is, they can manage
information system personnel, hardware, software, data and information resources so
they are used efficiently and effectively for the benefit of the entire organization.
However, what exactly does a managerial end user need to know about information
systems? The answers are as diverse and dynamic as the area itself. Like other areas in
Management and Business Administration, the field of Information Systems is based on a
variety of other academic disciplines and encompasses a great amount of technological and
behavioral knowledge. The field is constantly changing and expanding as dramatic
technological developments and behavioral research findings push back the frontiers of this
dynamic discipline.
COMPUTER SCIENCE, ENGINEERING, and MATHEMATICS are disciplines that contribute to
the TECHNOLOGICAL ASPECTS OF INFORMATION SYSTEMS. It is these disciplines, along
with the information systems, whose research drives developments in COMPUTER
HARDWARE, SOFTWARE, TELECOMMUNICATIONS and other INFORMATION PROCESSING
TECHNOLOGIES.
26
Areas such as Psychology, Sociology, and Political Science, on the other hand
contribute to the behavioral aspects of INFORMATION SYSTEMS.
The research findings of these disciplines and the discipline of information systems
shed light on the effective use and management of technology by individuals and
organizations. Their focus is on adjusting technology to support individual and organizational
goals and helping individuals and organizations take advantage of the benefits of information
systems technology.
Both of these aspects, the technological and the behavioral, are important for
managerial end users. Although COMPUTER-BASED INFORMATION SYSTEMS are heavily
dependent on INFORMATION-PROCESSING TECHNOLOGIES, they are designed, operated and
used by people in a variety of organizational settings. Thus, for managerial end users, the
success of an information system should be means not only by its technical efficiency but also
by its effectiveness in meeting end user and organizational goals.
It is easy to feel overwhelmed by the complex technologies, abstract behavioral
concepts and specialized applications involved in the field of information systems. However,
most people do not have to absorb all of this knowledge. Fig 5.5 illustrates a useful
conceptual framework that outlines what a managerial end user needs to know about
information systems.
It emphasizes that you should concentrate your efforts in live areas of knowledge:
FOUNDATION CONCEPTS, TECHNOLOGY, APPLICATIONS, DEVELOPMENT AND
MANAGEMENT.
FOUNDATION CONCEPT S
What are information systems, and why are they important to end users and their
organizations? In order to answer this question, you need to have knowledge of the generic
components and properties of information systems, which requires an understanding of some
basic concepts in the general systems theory and information processing. However, you
should also appreciate the vital roles played by information systems in businesses and other
organizations. In this context, you should learn some fundamental behavioral and technical
concepts that will help you understand how information systems can play important
operational, managerial and strategic roles in organizations.
DEVELOPMENT
How should managerial end users or information specialists develop information
systems solutions to business problems? To answer this question, you should learn some
basic problem-solving and developmental concepts. You should understand how
methodologies such as the systems approach, the systems development life cycle and
27
prototyping it can be used to construct information systems applications that successfully eet
end user and organizational needs.
Fig. 5.5 Information systems
TECHNOLOGY
What should managerial end users know about the technologies used in computerbased information systems? The answer to this question is that they should have an
understanding of major concepts, developments, and management issues in information
technology (IT) that is: hardware, software, telecommunications, database management and
other information-processing technologies. Technology is so dynamic in this field that a
factual knowledge that concentrates on detailed characteristics and capabilities would soon be
outdated. Instead, you should focus on generic capabilities, major developmental trends and
management challenges in the use of information systems technology.
APPLICATIONS
In what ways can information systems assist end users and organizations in accomplishing
their work activities and meeting their strategic objectives? Answering this question requires
knowledge of the major applications of information systems for end user activities and the
operations, management and strategic advantage of organizations. You should gain a basic
understanding of information systems concepts and applications in areas such as end user
computing, office automation, transaction processing, information reporting, decision support,
executive support and artificial intelligence.
MANAGEMENT
How should managerial end users meet the major challenge of managing the
MANAGEMENT INFORMATION SYSTEMS of their organizations? Answering this question
requires understanding the major challenges and methods involved in managing the resources,
28
technologies and activities of information systems. Developing and using information systems
can be as difficult and costly as it is beneficial to a firm. Thus, you should understand
concepts such as information resource management and information systems planning,
implementation and control.
6.
PROCEDURAL MANAGEMENT
Only companies able to react to the real-world impulsses of the volatile environment of
the global market and whose management will be able to manage the company at the
same time, can become successful. It is clear that such management must carry out
relevant precautions and make instant decisions in the first place. Following these steps is
presently the only way of realistic establishing of the future.
Nowadays, it is unlikely to believe in our ability to control the future. We must
perceive the fact that changes have become a common phenomenon to which we must react
adequately in real time. It is also reasonable to realise that now we are not discussing the
distant future. The process has begun, it is under way and is expanding quickly. Exchange
markets, distributors, company transformations, the development of the Internet and the like,
are all examples of such growth.
In fact, it is the pretence of reengineering positively leads to the endangerment. As an
example out of many others we may mention Vítkovice, a.s. as well as Nová huť, a.s. (Czech
company).
6.1. REENGINEERING OF COMPANY PROCESSES
REENGINEERING
is the tool, which is able to help in such conditions where it is impossible to reach the
necessary improvement within the existing process conditions.
It was necessary to define the procedures of individual stages in the first stage. In the
duration of the works it was necessary to focus on the analysis of individual procedures in the
company and to change or even replace the inefficient processes. The company‘s concern had
to focus primarily on the customer satisfaction. To achieve this it is inevitable to readjust and
optimise individual processes within the company during the individual stages.
29
This involved the introduction of a company management conception by means, which
try to fully focus their attention to „doing the right thing“. Thus we eliminated the processes
and activities, which, although done „correctly“, are unnecessary for the operation of the
company.
If until that time we had mainly focused on the operations, then it was time to
concentrate on the processes themselves.
The differences between an OPERATION and a PROCESS are remarkable and
fundamental.
We consider an operation as a process component, which requires time and expenses.
The former traditional management was concerned mainly about operations
(Operations Management, Operations Research). Such approach to management
considered the manufacturing process to be set and constant.
PROCESS is an organised complex of related activities, which together form a customervalued output.
It was necessary to constantly bear in mind that:
1. It is only the PROCESS that creates value.
2. It is necessary to improve the PROCESS.
3. Each PROCESS has its own customer and the customers must be satisfied with their
PROCESSES and the values of the PROCESSES.
Therefore we did not focus on operations, the individual components of process, as the
TQM approach suggests. It did not matter whether we speed up, improve, or cheapen the
individual components. From experience we know that the least necessary or needless
operations are the easiest to improve (the running of a cafeteria etc.)
Therefore we asked several important questions:
Which operations are worth executing?
Which operations are worthless executing?
Why improve something what adds no value?
Why improve something we should not be doing at all?
To carry out REENGINEERING can be successful only when done according to a
clearly defined, customer and future oriented strategy. This is the only way to choose the
principal processes, which are important in enterprise, and which must be followed
preferentially. Thus while enforcing the REENGINEERING approach we had to create such
organisational environment, which would adjust to these changes and which will also support
these. Moreover staff will also participate as well and thus accept the changes more easily.
30
These are so far the most difficult problems of the transition to the procedural management.
The change is only possible with the help of special seminars for interested persons, who, as
members of the team, will take part in the individual stages of REENGINEERING.
The stages are:
1.
2.
3.
4.
5.
PROCESS IDENTIFICATION
PROCESS PRIORITISATION
PROCESS DIAGNOSE
PROCESS REDESIGN
IMPLEMENTATION OF CHSANGES
The individual stages are tightly connected and create a whole, which represents the process
of the management of restructuring the organisation see Fig. 6.1.
PROCESS
IDENTIFICATION
PROCESS
PRIORITISATION
PROCESS
REDESIGN
DIAGNOSE
IMPLEMENTATION
PROCESS OF THE MANAGEMENT OF RESTRUCTURING
Fig.6.1. Stages in the management of restructuring
6.2. THE PROCESS IDENTIFICATION STAGE
The following diagram proved to work for the process identification:
1. Determine the company‘s policy.
2. Identify the customer.
3. Identify the processes.
The company‘s policy means
 To define the company.
 To consider and decide whether to group the processes or not.
The company identification means
 Identification of outside customers (various types) – the crucial agents in the processes.
 Identification of inside customers.
31
The proces identification is
(EVERYTHING LEADS TO THE CUSTOMER)






Customer processes identification.
Identification of what is important to the customer satisfaction.
Identification of further processes.
The distinction of process types – essential, asset-creating, enabling, controlling.
Denominating of processes.
Process description.
 Process inputs identification.
 Process outputs identification.
 Process vital inputs identification.
 Definition of the basic description of a process – with the aim to the value adding
steps.
 Human resources analysis (% of people contributing to the value of the added
value, the litigant added value, without added value).
 Time analysis (what period of time is spent on activities with the added value, the
litigant added value, without added value).
 The cost analysis (costs with the added value, the litigant added value, without
added value).
 Definition of performance goals (according to benchmarking).
 Definition of the key criteria for the process performances.
 Appointing of responsibilities for successful process performances (process
owners).
 Definition of the information necessary for the process management and their
evaluation.
 Appointing of transfers.
 Identification of reciprocal connections inside the process and amongst the
processes.
 Error and failure analysis.
 Suggestion of individual process changes (redesign).
While executing these steps it was necessary to:
 Focus on goals and final condition rather than actions and means.
 Use titles containing active verbs.
 Bear in mind simplicity (the processes have been described in forms of diagrams).
 Communicate with the relevant staff.
 Ignore the existing authority, organisational charts, running processes.
 Arrange the inputs and outputs so that they are in accordance with the common sense,
using the known, simple terminology.
 Emphasise only the important.
The stage of identification and consequential process description was very demanding, or,
as the case may be, the documentation of this stage is very extensive and the point of this
32
article is not to introduce the details to the reader and specifications connected directly with
the textile factory problems. Therefore only the steps are mentioned and summarised, which
led to the changeover to the procedural management of the aforementioned company, and
which can be generalised.
The results of the transition to the procedural management are then the following
characteristics:





The key and supporting processes are defined.
The ownership of individual processes is established.
The processes are formally displayed and documented.
There exist suitable criteria for monitoring and evaluation of processes.
There exists feedback from the customers, suppliers and staff, which is used to the
management of process improvement.
 Benchmarking of process with other practices is executed.
 The processes are periodically and judiciously analysed and their repeated reengineering is
carried out.
In our case, as in any other organisation, there exist both main and supporting processes.
The main processes are the company‘s operating processes. They result in the production of
outputs demanded by the outside customer. The supporting processes are those that enable the
existence of main processes.
It was proved worth to divide the processes as follows:
A.
ACCORDING TO TYPE:
A.1
A.2
A.3
ESSENTIAL
CREATING ADDED VALUE
SUPPORTING (CONTROLLING, ENABLING)
B.
B.1
B.2
B.3
B.4
ACCORDING TO LEVEL:
MAIN PROCESSES
PROCESSES
SUBPROCESSES
ACTIONS
33
CASE STUDY 1
WOOL-WORKS COMPANY
The author has been working as project manager in the project „Transformation and
Reengineering of the Karnola, a.s. Wool-Works Company“. He had has many experiences
with the transformation and procedural management in any companies with influence of the
specifics of the Czech market. The authors are the leaders of this project and they have as
general experiences with the transformation and reengineering so the practical and the
concrete experiences in this area on the specific Czech market.
My goal was to implement the procedural management of a chosen company. In these
days I can say that this project was successful. The company is the last wool-works company
on the Czech market (in the end of the 2000 it was about 6). Many steps before the start of
this project was necessary to made especially in marketing and business department and
financial management.
The tradition of the Krnov Wool Company is based on well-estabilished textile
production in Silesia, where the beginnings of textile manufacture date back to the Middle
Ages. Karnola’s main production program is the manufacture of pure wool clothes bearing
the international designation “WOOLMARK”, and wool clothes with an admixture of
synthetic fibres. Karnola, a.s. has the competitive product on the global market. There is a
great demand for this company in Europe, Asia, oversea and in domestic market.
First of all, it is necessary to explain the reasons, which lead us to accept this method
of management. As a part of the management of the textile company producing fabric, we
finished the reengineering of the company in 1997-1998 within our capabilities according to
the potentialities given to us by the environment (legislative and economic boundaries
primarily). Such effort brought about reduction in cost bellow the 1993 values, increase in
productivity of labour by approximately 48%, general expenses saving and further positive
results. The company was approaching its maximum during the restructuring, which resulted
in a positive economic upshot after years of stagnation. Nonetheless, the results were not in
correspondence with the efforts taken to achieve them.
For this reason we began to consider a qualitatively higher method during the last
stage of reengineering. It was necessary to find such a method, which would, in a competitive
world, lead to our margin or draw level with advanced competition before it disappears
forever. It was a matter of finding such procedures, which would be able to simplify the
seemingly complicated complex.
I have to say that the successful project is contingent on general economy conditions,
law home and politic will.
We had to withdraw from this idea due to a several-month recess in the production of
a relatively stable company. We resumed in the second half of 1999, when the adoption of this
method was inevitable due to the critical situation of the company, which could not be
handled by means of the existing techniques. The situation also proved that there are many
changes going on in the world.
The project manager in the first phase has made the dividing of the processes under
given standards in the single categories. Then they divided the process of reengineering in the
single follow parts:
1.Identification of the processes.
2.Priorisation of the processes.
34
3.Diagnostication of the processes.
4.Redesign of the processes.
5.Implementation of the changes.
The experiences and knowledge acquired from this project, especially the practical
ones, described in this article could be used in the other projects of the restructuralisation,
transformation and reengineering.
STRATEGY OF THE COMPANY
MAIN PROCESSES
1.
CREATION OF STRATEGY
2.
CREATION OF OFFER
3.
CREATION OF ORDER
PROCESSES
1. MARKETING
2. BENCHMARKING
3. FORMULATION OF THE
STRATEGY
4. ………………………….
………………………………
1. FASHION COLLECTION
2. BASIC COLLECTION
3. ………………………….
…………………………
1.
2.
3.
4.
5.
6.
7.
8.
START OF ORDER
CONTRACT PROCESS
ORDER TO PRODUCTION
PURCHASE
PREPARATIONOF INPUTS
COLOURING
PRODUCTION OF YARNS
…………………………..
MAIN
SUPPORTING PROCESSES
4. SKLADOVÁNÍ
5. ÚDRŽBA
A
FINANCIAL
MANAGEMENT
OPRAVY
PERSONAL
MANAGEMENT
IS/IT
SUPPORTING PROCESSES
1. ACCOUNTING
2. PLANNIG
1. ………………
2. ………………
1.
2.
…………….
…………….
Fig. Exampel of the map of processes for procedural management
4. CONCLUSION
The goal was to implement a reengineering project of a choosen company. The project
was developed and gradually executed. In this CASE STUDY we focused mainly on the first
stage, the process identification.
The first particular result of our work is the renascent interest of the customers in the
production of this textile company. This is also the condition for the consolidation of the
position on the market and stabilisation of the company.
35
CASE STUDY 2
RETREATED TIRES COMPANY
1. INTRODUCTION
The project managers are interested in the application of process management in the
real firm. Deal with this target, authors design the support of IS/IT (information
system/information technology) of this type of management. They are oriented and cocentrate
on process management and its support by IS/IT.
Only companies able to react to the real-world impulses of the volatile environment of
the global market and whose management will be able to manage the company at the same
time can become successful. It is clear that such management must carry out relevant
precautions and make instant decisions in the first place. Following these steps is presently
the only way of realistic establishing of the future.
Process management supported by well design IS/IT is the tool that is able to help in
such conditions where it is impossible to reach the necessary improvement within the existing
process conditions.
2. THE STANDPOINT TO THE PROCESS MANAGEMENT
It was necessary to define the procedures of individual stages in the first stage. In the
duration of the works it was necessary to focus on the analysis of individual procedures in the
company and to change or even replace the inefficient processes. The company‘s concern had
to focus primarily on the customer satisfaction. To achieve this it is inevitable to readjust and
optimise individual processes within the company during the individual stages.
This involved the introduction of a company management conception by means, which
try to fully focus their attention to „doing the right thing“. Thus we eliminated the processes
and activities, which, although done „correctly“, are unnecessary for the operation of the
company.
The process management we can realize in the some levels depends of the depth of detail:
1. Level of the processes-the company is divided to the process deal with various
criterions, f.e.:
1.1
Main processes, processes, subprocesses, actions.
1.2
Operating, source, production, measure.
1.3
Horizontal, vertical, cyclic.
2. Level of the company-the company is understanded like one process. The measurement
is done on the input and output of the company.
3. Level of the activity-every process is devided to the activities:
3.1
Transformational.
3.2
Supervisory.
3.3
Arbitrament.
For our project is the best way (we have had the best experience) with 1.1 system. If until that
time we had mainly focused on the operations, then it was time to concentrate on the
processes themselves. The differences between an operation and a process are remarkable
36
and fundamental. We consider an operation as a process component, which requires time and
expenses. Process is an organised complex of related activities, which together form a
customer-valued output.
In our case, as in any other organisation, there exist both main and supporting processes.
The main processes are the company‘s operating processes. They result in the production of
outputs demanded by the outside customer. The supporting processes are those that enable
the existence of main processes. It was necessary to constantly bear in mind that:
1. It is only the process that creates value.
2. It is necessary to improve the process.
3. Each process has its own customer and the customers must be satisfied with their
processes and the values of the processes.
3. PROCESS MANAGEMENT AND IS/IT
The modern IS/IT are the part of the every reengineering effort. It is not enough only
implement computers on the present problems and wait for authomaticaly running
reengineering. And more, the bad using-application of IS/IT can block up the process
management.
IS/IT brings the positive effect only if is designed as a part of the whole system. When
we can successful manage any company we have to improve the whole system not only some
choosing parts. Measure of the assets of application of IS/IT is obviously depends on the
expanse of the change in the business which we will make or allow by this application.
The modern information system, in this case we mean Management Information
System (MIS), offer information and data in desiderativ form (agregate form, graphic form,
tables, graphs, etc.). These data are in processing by the special (choosed) tools, f.e.:
mathematical analyse. Can be in modelling etc. Important is that this processing can be done
in the real time. This is it what managers need for the support of their decission.
4.THE PROCESSES IN THE COMPANY
This project of the process management was realized in the small company what is
producer of special tires. Relative to the fact that this company is manufacturer is the focus to
the processes combined with production.
Note: To carry out reengineering can be successful only when done according to a clearly
defined, customer and future oriented strategy. This is the only way to choose the principal
processes, which are important in enterprise, and which must be followed preferentially. It is
important to come up that we made the serious steps in this project like:
 Determine the company‘s policy.
 Identify the customer.
 Identify the processes.
Based on the process idetification are defined main processes and processess, look
Table 1. The main processes are usually groups of processes oriented to the one concrete
area and continuously make sequence. The sequence of the main processes we can see on the
Fig.1.
37
MAIN PROCESSES
PROCESSES
MARKETING
SUPPLY
PRODUCTION
CONTROL QUALITY
SELL AND
SERVICE
SERVICE OF
MACHINES
Table 1: Processes of the company.
MARKETING
SELL AND
SERVICE
PRODUCTION
Fig. 1: The sequence of the main processes.
5.THE EXAMPLE OF DESCRITION OF THE PROCESSES
MAIN PROCESS: “ PRODUCTION”
DESCRIPTION OF THE MAIN PROCESS: The main process “PRODUCTION” realises the
added value. The company is oriented to realise profit from the production of the products.
PROCESS: “STORAGE”
DESCRIPTION OF THE PROCESS: The process “STORAGE” provides storage of the
casings. By this way provides the source of material and semiproducts that are needed for
production.
The sequence of the processes in the main process you can see on the Fig.2 and the
description of the subprocess “STORAGE” you can see on the Fig.3.
STORAGE
CASINGS
SUPERVISION
RUBBING
SPRAYING
STUMPING
Fig.2: The sequence of the subproesses in the main process.
38
PRESSING
STORAGE
PRODUCTS
START OF THE
SUBPROCESS STORAGE
INPUT OF THE
CASINGS ON THE
STORE
DISTRIBUTION OF
THE CASINGS
FROM THE STORE
STORAGE
DISTRIBUTION OF
THE REQUEST
FOR THE
PURCHASE OF
THE CASINGS
INPUT OF THE
REQUEST FOR THE
STORAGE OUT
END OF THE SUBPROCESS
STORAGE
Fig.3: Flow chart of the subprocess “STORAGE”.
6. IS/IT SUPPORT OF THE PROCESSES MANAGEMENT
The basic topic of the company is the information support what is rising from the
strategic plan. The result of this way is acquisition very important information and data for
management. These information support is oriented to the quality of analyse of received
information. The information system (IS) we can divide to the part of transaction processing
which supports the running processes and to the analytical part that support the decission of
the management. The main goal of designed information system is the control of production
depends of orders, stores and the control of quality base on the marketing management of the
company. The main asset of the IS is support of management to manage the company the
planning profit. That is the full control on the input material flow, processing, quality and
planning of the orders depends of the given economic inputs and outputs.
Base on the input of information into the system and analyse of the mutual
communication of the processes we can define the tables of the database and their mutual
relationship in E-R model. For example we show the mutual information relationship of the
processes on the Fig.4 and E-R model of database on the Fig. 5.
It is very important to give question myself “It is profitable for the firm?” in every step of
design new information system. The nicely no reasoned investments, many time we can listen
”to the future”, are absolutely negative for the company, for the whole project.
39
We can say after analyse that it has no sence to make new/special software in our project. We
can use the standart packet MS Office. Base on MS Office we designed user software with
using Acces and Excel. We designed like data base server MS SQL SERVER.
Planning
Sale and service
Sevice of machines
defective
quantity and service
Control quality
defective
Fig.4: The mutual information relationship of the processes.
40
defective
Request for
input materials
Request for parts
Supply
defective
Production
Number of
defective
Orders
Plan of production
Marketing
Order
-
Ord_ID (PK)
Ord_date
Ord_client
Ord_number
Ord_delivery
Product
relationship
Process
Prd_ID (PK)
Prd_name
Prd_description
Ord _ID (PFK)
relationship
Activity
Pro_ID (PK)
Pro_name
Pro_description
Prd_ID (PFK)
Ord _ID (PFK)
relationship
relationship
Energy
Parts
Act_ID (PK)
Act_name
Act_time
Act_people
Pro_ID (PK)
Prd_ID (PK)
Ord_ID (PK)
relationship
Equipment
DayReport
Eqp_ID (PK)
Eqp_name
Eqp_capacity
Eqp_group
Act_ID (PK)
Pro_ID (PK)
Prd_ID (PK)
Ord_ID (PK)
Rep_ID (PK)
Rep_date
Rep_number
Rep_match
Act_ID (PK)
Pro_ID (PK)
Prd_ID (PK)
Ord_ID (PK)
relationship
Ene_ID (PK)
Ene_date
Ene_wateron
Ene_wateroff
Ene_steamon
Ene_steamoff
Ene_elmachineson
Ene_elmachinesoff
Ene_elothers
Prt_ID (PK)
Prt_name
Prt_repairnumber
Prt_repairterm
Eqp_ID (PK)
Act_ID (PK)
Pro_ID (PK)
Prd_ID (PK)
Ord_ID (PK)
Fig.5: E-R model of database.
7. CONCLUSION
Ins this CASE STUDY you can see the ground of the project of the process
management supported by the IS/IT. Well, authors inform about main steps in their project
from the point of view of process management and design of IS that supports process
management systém.
It is suitable to sense that named project is real project and it is realize deepend of
requirement of the order-company.
The authors realized successfully similar projects in the others company.
41
7. INFORMATION SYSTEMS/INFORMATION
TECHNOLOGY (IS/IT)
We can see how information-especifically BUSINESS INFORMATION as a system works
on this place. We will see how information is enhanced with COMPUTER-BASED
INFORMATION SYSTEMS.
SYSTEM is a common but loosely used word. Is a freeway system the same as a nervous
system? Is a grading system the same as a betting system? (Some might say so.)
Fig.7.1 The basis of a BUSINESS SYSTEM
Fig.7.1 called an IPO chart (IPO stands for input, processing, and output) shows the
four parts of a system.
For our uses, we will consider a system with four parts:
1.
2.
3.
4.
INPUTS-things that enter the system from the environment.
The PROCESSOR-the part that operates on the inputs to transform them into
something.
OUTPUTS-the products of the processing.
FEEDBACK -communication back to the system, either from the environment or
from within the system itself.
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These four parts are shown in the upper part of Fig. 7.1, which is called an IPO chart.
IPO stands for input, processing, and output. (Incidentally, the term IPO chart is also the
name given to a particular program design form produced by IBM.)
We can see how these parts can be used to describe a number of systems-the circulatory
system of the human body, the electrical power system of New York City, some of ihe
ecosystems of naturebut let us apply them here to information and computers.
All businesses have information systems of some type. In fact, BUSINESS INFORMATION
SYSTEMS are perhaps the single most important type of INFORMATION SYSTEM.
What is the purpose of a business firm?
Beyond simple survival, there are two purposes: to make goods and services, and to
make an amount of effort-the funds of investors, the labors of employees, etc.
As the lower part of Fig. 7.1 shows the purposes and activities of a business can be
described as a system with the same four parts mentioned in the top half of the figure:
1.
INPUT is the investment in materials, money, employees, and facilities.
2.
PROCESSING is the activity of converting the input-the investment and materialsinto a finished product or service and selling it.
3.
OUTPUT consists of the goods and services that are produced and the profit or
perhaps, unfortunately, the loss.
4.
FEEDBACK consists of market forecasts and status reports about the products and
profitability that may suggest there should he more investment if profits are up and
less investment if profits are down.
7.1 THE FOUR SUBSYSTEMS OF BUSINESS
The overview of the business shown in the lower part of Fig. 7.1, Fig.7.1b .The basis
of a system is a macro or overall view of a BUSINESS SYSTEM. But there is also a micro view,
a closer examination of the business in which the system is broken down into smaller parts or
subsyslems. The important subsystems of a business-and the ones that you will see referred to
throughoul this syllabuses-are its four functional areas-namely:
1. MARKETING-the area concerned with sales forecasting, advertising, pricing,
selling, and logistics (the movement of goods to market).
2. ACCOUNTING AND FINANCE-the area concerned with generating and investing
capital (money with accounting operations).
3. PRODUCTION-the area concerned with purchasing raw materials, inventory
control (invenlory consists of physical goods on hand) and production
scheduling.
43
4. RESEARCH AND DEVELOPMENT-the area concerned with developing new
products and improving existing products.
The four functional subsystems (which may be expanded-for instance to include
human resources) of a business are frequently reflected in the firm's organization chart. Fig.
7.2 repeats the macro view of the firm and shows an example of its organization chart. The
role of managers, of course, is to coordinate these subsystems for the common goal of
producing company products and PROFITS.
Note: there are three levels of management within each functional area: TOP, MIDDLE,
and LOWER (or SUPERVISORY), see Fig. 7.3.
44
Fig.7.1b: The basis of a BUSINESS SYSTEM
45
Fig. 7.2 One view of a BUSINESS INFORMATION SYSTEM
Fig. 7.3 Functional area management responsibilities
46
As we saw on Fig. 7.2, the flow of information within the organization can be quite
complex. Information flows across the functional areas. Sales forecasts by the Marketing
department, for instance, are essential to production schedules for the Production department.
The flow of information must also work vertically within a functional area. For example,
middle managers need siatus reports for supervisory personnel below them in order to
coordinate their own work.
The study of how information flows and the creation of information systems are called
SYSTEMS ANALYSIS AND DESIGN. COMPUTER-BASED INFORMATION SYSTEMS can enhance
the flow of information.
Information flows in several ways:
1. Information follows the IP0 model, as was shown in Fig. 7.1. It comes into the
organization as input in the form of employees, materials, facilities and money. It is
processed and stored in the four functional areas of MARKETING, ACCOUNTING AND
FINANCE, PRODUCTION AND RESEARCH AND DEVELOPMENL. It is output as goods
and services and as profit or loss.
2. Within each of the four functional areas-Markering, Accounting and Finance,
Production, Research and Development information flows up and down through three
levels of managements: TOP, MIDDLE, AND LOWER.
3. The managers within ihese three levels and four areas do the ihings managers are paid
to do-namely, make decisions about PLANNING, ORGANIZING, CONTROLLING,
COMMUNICATING, AND STAFFING.
Within each of the three levels of management there is (or should be) some sort of
centralized BUSINESS INFORMATION SYSTEM used by managers in the four functional areas, as
shown in Fig.7.4.
This information system may be a collection of filing cabinetsss but what we are
talking about is a COMPUTERIZED INFORMATION SYSTEM.
If you are a manager, whal this means is that you most likely have a computer
terminal on your desk so that you can make inputs to the information system and draw outputs
from it in order to help you make your decisions.
There are three levels or subsystems of information systems, see Fig.7.5, Fig7.6,
Fig7.7 and Fig7.8. These correspond to the three levels of management:
1. For LOWER OR SUPERVISORY MANAGEMENT: TRANSACTION PROCESSING
INFORMATION SYSTEM (TPS), OFFICE INFORMATION SYSTEM (OIS)
2. For MIDDLE MANAGEMENT: OFFICE INFORMATION SYSTEM (OIS), MANAGEMENT
INFORMATION SYSTEM (MIS), EXPERT SYSTEM (ES)
3. For TOP MANAGEMENT: OFFICE INFORMATION SYSTEM (OIS), DECISION SUPPORT
SYSTEM (DSS), EXPERT SYSTEM (ES), KNOWLEDGE BASED INFORMATION SYSTEM
(KBIS), MANAGEMENT INFORMATION SYSTEM (MIS), EXECUTIVE INFORMATION
SYSTEM (EIS)
Some overlaps occur but each system is intended for a particular level of manager, as
Fig. 7.4 shows. Moreover, each type of information syslem is truly different from the others,
as we shall see.
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Fig. 7.4 The centralized BUSINESS INFORMATION SYSTEM
48
Fig.7.5 Fundamental resources of INFORMATION SYSTEMS
Fig.7.6 INFORMATION SYSTEMS support managers
49
Fig 7.7 A conceptual overview of INFORMATION SYSTEMS
50
Fig.7.8 The relationship of MANAGEMENT INFORMATION SYSTEMS and OPERATIONS
INFORMATION SYSTEMS to BUSINESS OPERATION and the LEVELS OF MANAGEMENT.
51