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Chapter 7 Processes, Organizations, and Information Systems
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with duplication is not wasted disk storage. Rather, the problem is data inconsistency. Changes to
customer data made in the Sales and Marketing application may take days or weeks to be made
to the Accounting application’s database. During that period, shipments will reach the customer
without delay, but invoices will be sent to the wrong address. When an organization has inconsis-
tent duplicated data, it is said to have a data integrity problem.
Additionally, when applications are isolated, business processes are disjointed. Suppose a busi-
ness has a rule that credit orders over $15,000 must be preapproved by the Accounts Receivable
department. If the supporting applications are separated, it will be difficult for the two activities to
reconcile their data, and the approval will be slow to grant and possibly erroneous.
In the second row of Figure 7-5, Sales and Marketing wants to approve a $20,000 order with
Ajax. According to the Sales and Marketing database, Ajax has a current balance of $17,800, so
Sales and Marketing requests a total credit amount of $37,800. The Accounting database, however,
shows Ajax with a balance of only $12,300 because the accounts receivable application has cred-
ited Ajax for a return of $5,500. According to Accounting’s records, a total credit authorization of
only $32,300 is needed in order to approve the $20,000 order, so that is all the department grants.
Sales and Marketing doesn’t understand what to do with a credit approval of $32,300.
According to its database, Ajax already owes $17,800, so if the total credit authorization is only
$32,300, did Accounting approve only $14,500 of the new order? And why that amount? Both
departments want to approve the order. It will take numerous emails and phone calls, however, to
sort this out. These interacting business processes are disjointed.
A consequence of such disjointed activities is the lack of integrated enterprise information.
For example, suppose Sales and Marketing wants to know if IndyMac is still a preferred customer.
Assume that determining whether this is so requires a comparison of order history and payment
Figure 7-5 history data. With information silos, that data will reside in two different databases and, in one
Problems Created of them, IndyMac is known by the name of the company that acquired it, OneWest Bank. Data
by Information Silos
2TQDNGO 5CNGU CPF /CTMGVKPI #EEQWPVKPI

Data duplication, data inconsistency
Ajax Construction Ajax Construction
Ship to: Reno, NV Ship to: Reno, NV
Bill to: Reno, NV Bill to: Buffalo, NY

Disjointed processes
Request $37,800
Get Credit Approval Approve $32,300 Approve Customer
Credit

Limited information and lack of
integrated information
Order ?? Payment
Data Data
Is IndyMac a preferred customer?

Isolated decisions lead to
organizational inefficiencies
Order Payment
Data Data
Redouble sales efforts at IndyMac. OneWest has been slow to pay.

Increased expense
Sum of problems above.