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Q7-1 What Are the Basic Types of Processes?

“Jared, take a look at those. I suspect employers will respond just as negatively as
insurance companies, but maybe not, at least maybe not some. Find out.”
“OK.”
“You have to show the health clubs how PRIDE adds revenue to them, if it does.
Same with the manufacturers.” Zev looks at Nicki. “So, Nicki, what have you got to
say?”
“Well, I think we should think about selling ads, you know, placing them on our
competition sites and clicks. ”
“Go on.”
“Some sort of an ad revenue model based on use. But for that we need to get our
numbers up. We have to get people using PRIDE in large groups. Maybe some events,
social media–driven.”
“I like that, but is it real? Let’s find out. Jared, you look into the health clubs and
employers. Nicki, you put some meat on your ad revenue idea, and James, you figure
out if PRIDE can support, say, 10,000 people spinning at the same time, in the same
contest. Questions?”
Everyone looks around the table; no one says a word.
“OK, see you next week.”

Chapter preview

This chapter explores processes and their supporting information systems within levels
of an organization. We will extend the business process discussion from Chapter 3 to
investigate three types of processes and the scope of information systems they use.
We will also investigate the concept of process quality and explain how information
systems can be used to increase it. Then we will discuss how the use of information
systems at one level of organization leads to information silos, explain the problems of
such silos, and then show how those problems can be solved by information systems
at the next level of organization. In particular, we’ll discuss how enterprise systems
such as CRM, ERP, and EAI (you’ll learn the meaning of those terms) solve problems
caused by workgroup information silos. ERP systems play a particularly important role,
and we’ll discuss their purpose and components and the major ERP vendors. Then
we’ll survey the major challenges that occur when implementing enterprise systems.
We’ll wrap up the chapter by showing how inter-enterprise IS can solve the problems
of enterprise-level silos and finally, in 2026, discuss the implications of mobility and the
cloud on future enterprise and inter-enterprise IS.

Q7-1 What Are the Basic Types of Processes?

As you learned in Chapter 3, a business process is a network of activities that generate value by
transforming inputs into outputs. Activities are subparts of processes that receive inputs and pro-
duce outputs. Activities can be performed by humans only, by humans augmented by computer
systems, and by computer systems only.
Figure 7-1 shows a simplified view of a three-activity process for approving customer orders.
Each of these activities is, itself, a subprocess of this overall process. You can see that each step—
check inventory, check customer credit, and approve special terms—receives inputs and trans-
forms them into outputs. You will learn how to better diagram such processes in Chapter 12; for
now, just view Figure 7-1 as showing the gist of a typical business process.