BA 302 - Introduction: OM + MIS = BPM

Summary

BA 302 integrates core concepts from Management Information Systems (MIS) with those of Operations Management and introduces a process-oriented view of the flows of materials, information and services through and across organizations. All organizations must carefully analyze and document their business processes and must continuously assess the efficiency and effectiveness of these processes in order to minimize cost and maximize value creation.

The course helps you to identify information-bearing events, assess and improve process efficiency, learn to model and analyze business processes, and understand the interactions between human behavior and process design. Hands-on, case-based assignments practice some of the principles addressed.

 

• Classic disciplinary divisions in business schools:

  Accounting Financial accounting Managerial accounting Auditing Tax Etc.

  Finance Personal finance Corporate finance Insurance Banking Etc.

  Management Human resources Organizational behavior Operations mgt. & Operations research Strategic mgt. Etc.

  Marketing Strategic marketing Marketing communications Consumer behavior Etc.

  Mgt. Inf. Systems Information flows Business analysis Software engineering Database administration Networking Etc.

  Entrepreneurship Prod. dev. Innovation mgt. Venture capital Family business Etc.

  International Business

  Etc.

  • Problem: Could you explain what each of those disciplines is about?
  • Problem: What distinguishes one discipline from another?
  • Problem: What do they share?
  • Operations:
    • Processes that produce, market and distribute products.
    • "Production of goods and services; the set of value-added activities that transform inputs into outputs"

    • Problem: What is meant with the term 'value-added?'
    • Examples of 'processes':
    • Oil change operations:
    • Location
    • Personnel
    • Oil (several kinds), filters, gaskets
    • Take order
    • Do the change
    • Wait facility
    • Pay
    • Disposal
    • Etc.

    • Problem: What about grocery shopping?
    • Conducting operations uses resources (money, people, time, space, env. resources, etc.)

  • Information flows:
  • Kock (2006): "Information is knowledge carried by data."
  • Information 'tools' for on-line flight purchase:
  • Flight database
  • (Flight) routing tools
  • Booking information
  • Authentication
  • Payment system
  • Confirmation
  • Data storage & retrieval
  • Etc.

  • Problem: What information exchanges are required to register for a class?

   

• Oil changes, grocery shopping on-line flight purchasing:
• They all follow specific processes; i.e., sequences of actions.
• The actions typically involve different functions and responsibilities.
• All these processes store and handle data and information.
• All these processes have a formal structure; i.e., they are more or less predetermined.
• All these processes are subject to change and randomness.

• All these processes can be modeled and measured.
• All can (most likely) be improved:
• Better customer value (value-add).
• Lower cost.

• New information technologies allow for ever better (OM) process control & improvement.

 

• Traditional view of OM & MIS:
• Operations management (OM) studies processes and their efficiency and effectiveness:
• Production of goods and services; the set of value-added activities that transform inputs into outputs"
• How productive is a process? How do we measure process productivity? How about efficiency?
• What part of a process is value-added? How can we minimize the nonvalue-added parts of a process?
• Do our processes minimize cost and maximize benefit?
• What's the role of quality? Does better quality imply higher cost?
• Role of inventory? Waiting lines? Production capacity?
• Can we model and simulate these processes and proposed process improvements so we can better study them?
• How can we account for uncertainty in processes? Can we include uncertainty in our models?

• Information Systems (IS) studies the information exchanges in processes.
  • All people and organizations generate, process and consume information (in order to survive).
  • MIS studies organizations and their information generation, processing and consumption.
  • Who needs what information when during a process?
  • Which information must we keep (persistent) and which may we forget (transient)?
  • How must this information be structured and formatted?
  • What media types should it be in?
  • How must the information be controlled and checked?
  • Where is this information stored? People? Paper? Electronically?
  • What technologies are available to build these systems?
  • Who controls these technologies?
  • How do we manage the information flows in and between organizations?

• However, increasingly we see OM/IS integrations; especially in service industries:
  

  • 78.9% of US GDP ($13.3T, 2006) is service oriented.
  • Service industries rely heavily and increasingly on information systems.
  • Service processes can be improved with IT ==> higher productivity.
  • Service industries are heavily engaged in process improvement using OM & MIS methods.
  • Services (& information technology) increasingly penetrate nonservice sectors (manufacturing, mining, etc.).
  • New information technologies generate new service industries.
  • Although we discuss lots of examples from manufacturing, emphasis is on the service industry.

     

• Central themes of this course:
  • Doing business requires processes;
    • Executing these processes requires resources;
    • Use of resources increases cost and lowers profits.

  • Every process can be improved ==> lower cost and/or more value-added.
  • IT is a powerful tool in improving processes.
  • Businesses must 'know' their processes before they can improve them!
  • New businesses must design their processes.
  • Processes are stochastic: subject to randomness, uncertainty and variability.
  • Understanding the stochastics allows us to take them into account in our processes planning.