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Chapter 7 Processes, Organizations, and Information Systems
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How Can Processes Be Improved?
Organizations can improve the quality (efficiency and/or effectiveness) of a process in one of
three ways:
• Change the process structure.
• Change the process resources.
• Change both process structure and resources.

Change the Process Structure
In some cases, process quality can be changed just by reorganizing the process. The order approval
process in Figure 7-1 might be made more efficient if customer credit was done first and inventory
was checked second. This change might be more efficient because it would save the cost of check-
ing inventory for customers whose credit will be denied. However, that change would also mean
that the organization would pay for a credit check on customers for which it did not have appro-
priate inventory. We will investigate such changes further in Chapter 12. For now, just note that
process structure has a strong bearing on process efficiency.
Changing process structure can also increase process effectiveness. If an organization chooses
a cost-leader strategy, then that strategy might mean that no special terms should ever be approved.
If the process in Figure 7-1 results in the authorization of orders with special terms, then eliminat-
ing the third activity will make it more effective (most likely it will save on operational costs as well).

Change Process Resources
Business process activities are accomplished by humans and information systems. One way to
improve process quality is to change the allocation of those resources. For example, if the pro-
cess in Figure 7-1 is not effective because it takes too long, one way to make it more effective is to
identify the source of delays and then to add more resources. If delays are caused by the check
customer credit activity, one way to increase process effectiveness is to add more people to that
activity. Adding people should decrease delays, but it will also add cost, so the organization needs
to find the appropriate balance between effectiveness and efficiency.
Another way to shorten the credit check process would be to use an information system to
perform the customer credit checks. Depending on the development and operational costs of the
new system, that change might also be less costly and therefore more efficient.

Change Both Process Structure and Process Resources
Of course, it is possible to improve process quality by changing both the process’s structure and
resources. In fact, unless a structure change is only a simple reordering of tasks, changing the
structure of a process almost always involves a change in resources as well.
How Can Information Systems Improve Process Quality?

Information systems can be used to improve process quality by:

• Performing an activity.
• Augmenting a human who is performing an activity.
• Controlling data quality and process flow.

Performing an Activity

Information systems can perform the entirety of a process activity. In Figure 7-1, for example,
the check credit activity could be entirely automated. When you purchase from Amazon or
another major online retailer, information systems check your credit while your transaction is being