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Kroenke - Using MIS 5th Ed. - Instructor’s Manual
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall
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Structured Processes and
Information Systems
LEARNING OBJECTIVES
1. Describe the basic types of structured processes.
2. Explain how information systems can improve process quality.
3. Explain how enterprise information systems eliminate the problem of information
silos.
4. Describe how CRM, ERP, and EAI support structured enterprise processes.
5. List the elements of an ERP system.
6. Explain the challenges of implementing new enterprise systems.
7. Describe how service oriented architecture (SOA) will impact enterprise information
systems.
8. Discuss implications of SOA-oriented enterprise systems in the cloud in 2022.
CHAPTER OUTLINE
▪ What are the basic types of structured processes?
o How do structured processes differ from dynamic processes?
o How do structured processes vary by scope?
▪ How can information systems improve process quality?
o How can processes be improved?
o How can information systems improve process quality?
▪ How do enterprise systems eliminate the problem of information silos?
o How do information system silos arise?
o What problems do information silos cause?
o How information systems eliminate silos
▪ How do CRM, ERP, and EAI support structured enterprise processes?
o The need for business process engineering
o Emergence of enterprise application solutions
o Customer relationship management (CRM)
o Enterprise resource planning (ERP)
o Enterprise application integration (EAI)
▪ What are the elements of an ERP system?
o ERP application programs
o ERP databases
o Business process procedures
o Training and consulting

o Industry-specific solutions
o What companies are the major ERP vendors?
▪ What are the challenges of implementing new enterprise information systems?
o Collaborative management
o Requirements gaps
o Transition problems
o Employee resistance
▪ How will service oriented architecture (SOA) impact enterprise information systems?
o What is SOA?
o Why is SOA important for enterprise systems?
▪ 2022?
Using MIS InClass 7
Improving the Process of Making Paper Airplanes
1. In teams, diagram the process using BPMN symbols such as roles, swimlanes,
activities, and decisions. Name resources assigned to roles.
NOTE TO INSTRUCTORS: Material on business process modeling and BPMN can
be found in Chapter 10 of this textbook.
A sample process model is available in: InClassEx7Part1.pdf
2. Apply the OMIS model to improve this process. Discuss the objectives of the assembly
line. If you were in charge of the assembly line like this one, do you think your
objectives would be efficiency or effectiveness? Specify the measures used to monitor
progress toward your objective(s).
NOTE TO INSTRUCTORS: Material on the OMIS can be found in the Appendix to
this IM chapter.
The objective of this assembly line is focused on effectiveness – the stated goal of the
exercise is to create 20 high-quality paper airplanes. Efficiency (speed) is not a stated
goal.
You may discover that your students try to work quickly and implicitly strive toward
a speedy performance of their tasks. This is because the measures that are included in
the exercise (measuring time elapsed) suggest that efficiency is a goal. This
illustrated the poor fit between the stated goal (effectiveness) and the measures
applied (time – efficiency).
A more useful measure for the stated goal is quality of the final paper airplanes.
Rather than have observers serve as time keepers, they should be used to evaluate the
exactness of the folds in the airplanes, and record the number of airplanes that pass

the quality standards and the number that fail the quality standards. This measure is
much more in line with the explicit goal stated in the exercise.
3. Assume that the WC folding is done by four machines. In that scenario, the second
run uses different software than the first run. Does this new IS improve an activity,
linkage, or control?
This IS would be providing control over the process by enforcing the work rules that
are applied in the second run.
4. Are any data in an information silo on the first or second runs?
The performance of each individual work station is kept separately from the others –
which suggests an information silo.
5. Which measure changed most significantly from the first to the second run? Did you
anticipate this? Are other processes with other measures just as subject to change
with a similar minor change in information?
The second run will require more time since the workers’ performance will have to be
more synchronized. A worker at a station with more exacting folds (downstream)
will take more time than the upstream stations; but the upstream stations cannot just
keep folding and filling up their WIP boxes—they must wait until their WIP box is
empty. So there will be more dependency between the stations in the second run and
it will take longer.
6. Were there any controls on the assembly process? Could an IS improve the process
by improving control? On which measure(s) will this improvement appear?
There were no real controls in the first run. Workers simply performed their tasks
until the signal that the 20th
airplane was complete was received. In the second run,
the workers’ performance was constrained by the work rules that were applied, but no
real controls were in place. If our stated goal remains effectiveness (quality), the
output of each station could be evaluated for quality before being passed to the next
station. An IS could record the results of the quality inspection at each station and
identify areas where quality performance is weak.
USING YOUR KNOWLEDGE
1. Using the example of your university, give examples of information systems for each
of the three levels of scope shown in Figure 7-4. Describe three departmental
information systems that are likely to duplicate data. Explain how the characteristics
of information systems in Figure 7-4 relate to your examples.
• Departmental—Universities may have several levels of student financial aid

systems that track applications for financial aid, awards of financial aid, and usage
of financial aid awards. Some financial aid may be awarded by individual
academic departments in the university (e.g., accounting, MIS) or the university’s
athletic programs (e.g., football, volleyball). There may also be college-level
systems for administering the awarding of scholarships that are controlled by each
college. A university-level system may exist for administering the awarding of
university-level scholarships. These examples of workgroup systems illustrate
systems that have grown up to serve a specific group of users and that incorporate
specific procedures designed to meet the needs of each group. Each workgroup
understands its own procedures, but probably does not understand the procedures
of other similar systems that serve other workgroups. Even though the systems
deal with monetary awards granted to students, they may be very different from
each other. There will be a significant amount of duplicated data between these
systems, primarily student-related data. Inconsistency of the data can lead to
problems. Change of these systems affects the workgroup.
• Enterprise—The employee benefits administration system is used by virtually all
members of the university in some way. Use is formalized and strict procedures
are needed. There should be very little data duplication and difficult to change.
• Inter-enterprise—The systems used by university food service operations to order
supplies for the university food service facilities have many users across multiple
organizations. Problems and problem resolution affect multiple organizations.
It’s difficult to change; coordination amongst independent organizations is
required.
2. In your answer to question 1, explain how the three departmental information systems
create information silos. Describe the kinds of problems that those silos are likely to
cause. Use Figure 7-8 as a guide.
When financial aid / scholarship information systems are developed to serve the
needs of a specific, small group of users, each system will develop with particular
data and procedures pertinent to each group. Academic departments will create
systems for their needs; athletic departments will create system for their needs, the
colleges will develop systems for their needs, and on and on. These systems are
definitely information silos.
There is no question that these various financial aid / scholarship systems have
significant amounts of data duplication. As a result, data inconsistency is a real
concern. Disjointed processes are very likely because each academic department,
athletic program, and college awards its own scholarships independently of
university-level scholarships, and other types of financial aid may be encompassed in
an entirely separate system. Information will be limited and will not be easily
integrated. Decisions may be very isolated; for example, two colleges might offer
scholarships to a sought-after high school student and may not realize they are
“competing” for the same student, leading to organizational inefficiency.
3. Using your answer to question 2, describe an enterprise information system that will

eliminate the silos. Explain whether your information system is more like that in
Figure 7-9 or more like the one in Figure 7-10. Would the implementation of your
system require process reengineering? Explain why or why not.
A comprehensive scholarship and financial aid system could be created that would
utilize a database of shared resources (similar to Figure 7-9). Academic department,
athletic programs, and colleges would use the system to award their scholarships. At
the university level, scholarships, grants, loans, work-study awards would be awarded
and administered. Because of the shared database, data about students is no longer
duplicated in many places and is much more accessible and accurate. I don’t believe
that process-reengineering would be necessary in this case, but all users of the system
will have to change their procedures to conform to the requirements of the new
system.
4. Using the patient discharge process in Figure 7-10, explain how the hospital benefits
from an ERP solution. Describe why integration of patient records has advantages
over separated databases. Explain the value of industry-specific ERP solution to the
hospital.
An integrated ERP solution will be very beneficial in the hospital setting. For patient
discharge, the physician can use a discharge application that triggers processing in
other related applications to accomplish all of the notifications outlined in Figure 7-5.
Because the applications use an integrated database, there is little chance of anything
being lost or overlooked. If the discharge should get cancelled later, the integration is
immediately beneficial in notifying the various parties of the change in status. An
ERP solution tailored to a hospital environment will be extremely useful because this
organizational setting is unique and has many processes that are not applicable to
other organizational environments.
5. Consider the problem at Fox Lake at the start of this chapter. Explain why this
problem was caused by a lack of integration. In what ways would ERP help Fox
Lake? If Fox Lake decided to implement ERP, which vendors are likely to have
suitable products? Do you think you would recommend ERP to Fox Lake? Why or
why not?
The lack of integration leading to this problem came about because there was no
centralized means of reserving or blocking out the use of the rooms and buildings on
the Fox Lake campus. Anne had no way of knowing that Mike planned to conduct
some required maintenance on one of the rooms she uses for weddings because her
room schedule was completely separate from his room schedule. An ERP system
would have had a room scheduling application that both Mike and Anne could use to
reserve rooms and block out rooms needing maintenance. By using the shared
database and shared application, this conflict would never have occurred. Given the
wide range of products offered, I would think that Infor is a good potential vendor of
ERP software for a country club like Fox Lake. My biggest reluctance about
recommending ERP software for Fox Lake is my reservation that the organization is

able to adapt to the use of such a product. I don’t see the level of top-management
support that will be necessary, and I don’t believe the users are really ready for the
commitment that is required to successfully implement an ERP product.
6. Google or Bing each of the five vendors in Figure 7-19. In what ways have their
product offerings changed since this text was written? Do those vendors have new
products? Have they made important acquisitions? Have they been acquired? Have
any new companies made important inroads into their market share? Update Figure
7-19 with any important late-breaking news.
As of this writing, there have not been any major changes announced for any of these
five vendors. However, there have been findings that will impact these organizations,
such as this announcement:
“Microsoft Dynamics CRM could be needed by businesses after new research
found that 3.4 percent of global advertising spending will be on mobile marketing.
Berg Insight found that global mobile and marketing revenue will grow from 1.7
billion euros (£1.45 billion) in 2009 to 13.5 billion euros (£11.49 billion) in 2015.
This represents a compound annual growth rate of 41 percent as more firms try
and increase their revenue streams, creating the need for customer relationship
programs such as Microsoft Dynamics CRM.”
Accessed 12/22/11, from www.outsourcery.co.uk/news/?story=mobile-marketing-
rise-by-2015-could-see-firms-use&id=2161.
7. Reread the explanation of SOA in Q7. In your own words, explain how a SOA-
designed ERP system enables ERP customers to better integrate existing and new
company applications into the vendor’s ERP package. Explain how SOA creates an
opportunity for smaller companies to develop and sell ERP-related applications.
SOA-designed ERP systems enable ERP customers to better integrate existing and
new company applications into the vendor’s ERP package because the services in the
ERP package are clearly defined by the data they request and provide. All services
are independent and encapsulated and receive requests in a particular format and
respond in a particular format. Knowing the details of these service structures makes
it easier to integrate new and existing applications. Smaller companies can develop
and sell ERP-related applications that are designed to integrate with the service
architecture of the main ERP product.
COLLABORATION EXERCISE 7

The County Planning Office
1. Explain why the processes in Figure 7-25 and 7-26 are classified as enterprise
processes rather than as departmental processes. Why are these processes not
considered to be interorganizational processes?
These processes span the entire enterprise including several different departments, but
do not span separate organizations. Therefore they are considered enterprise systems,
not departmental and not interorganizational.
2. Using Figure 7-8 as an example, redraw Figure 7-25 using an enterprise information
system that processes a shared database. Explain the advantages of this system over
the paper-based system in Figure 7-25.
The process is sequential and each stage can take quite a bit of time. With the old
system, there is no way to know where an application was in the process, and finding
an application sitting in someone’s inbox could be difficult. With the new system, it
will be easy to track the application and know its status, plus it can be routed to the
correct next step immediately.
3. Using Figure 7-10 as an example, redraw Figure 7-26 using an enterprise
information system that processes a shared database. Explain the advantages of this
system over the paper-based system in Figure 7-26.

The advantage of this system over the paper-based system is that there is no expense
to copy the application and send copies to each department for review. The
departments can work simultaneously and can also see the results of the other
departments’ analyses that are recorded in the centralized database.
4. Assuming that the county has just changed from the system in Figure 7-25 to the one
in Figure 7-26, which of your answers in questions 2 and 3 do you think is better?
Justify your answer.
The ability to work simultaneously and also to have access to the results of the other
department’s work tips the balance in favor of the solution in question 3. This
workflow should be more efficient and effective than that shown in question 2.
5. Assume your team is in charge of the implementation of the system you recommend in
your answer to question 4. Describe how each of the four challenges discussed in Q5
pertain to this implementation. Explain how your team will deal with those
challenges.
• Collaborative management—There is no single manager of the process so all of
the departments have to coordinate to complete the process. Disputes will have to
be resolved with a collaborative process, which probably does not currently exist.
• Requirements gaps—An enterprise software solution will probably not fit the
needs of this system exactly, so the organization usually must adapt to the
software’s processes.
• Transition problems—Changing to the new system will be challenging to the
organization and will cause some disruption in productivity.
• Employee resistance—The employee’s natural resistance to change and fear of
change must be overcome through leadership and training.
6. Read the Guide on the Flavor of the Month on page 246, if you have not already done

so. Assume that person is a key player in the implementation of the new system. How
will your team deal with her?
Regarding the “seen it all before” employee—several key points emerge from her
comments that will help the team. First, she does need to be listened to because she
has a wealth of experience in her job. She will be able to make good contributions to
the process. Second, this project needs to be approached so that the changes are not
just imposed from the outside, but instead reflect real ideas from the people on the
inside. They need to understand what is possible with a centralized, enterprise system,
and then we need to listen to their ideas on how to best utilize that capability in the
actual enterprise.
CASE STUDY 7
Process Cast in Stone
1. Identify the key actors in this scenario. Name their employer (if appropriate) and
describe the role that they play. Include as a key player the operations personnel who
move stones in the warehouse as well as who load stone on the fabricators’ truck.
• Client (makes selection and pays for choice)
• Architect (advises client)
• Specialty architect (e.g., kitchen) employed by architect (advises client)
• Interior designer (advises client)
• Stone salesperson—employed by stone vendor (guides selection and purchase
process)
• Stone operations personnel—employed by stone vendor (move and load stones)
• Stone cutter/polisher—employed by stone fabricator (physically prepares stone
for installation at site)
• Stone mover—employed by stone fabricator (unloads raw stone; moves stone;
loads finished stone into truck for site delivery)
• Stone installer—employed by stone fabricator (unloads stone and installs at final
site location)
2. Using Figure 7-20 as an example, diagram the stone selection process. Classify this
process as a personal, departmental, enterprise, or interenterprise process.

This process is a departmental system—the sales activity is described here.
3. The current system is not a paper-based system; it is a stone-based system. Explain
why this is so.
The current system relies on a process that records a stone’s status (available,
reserved, and sold) for each stone. That is why this can be considered a ‘stone-based’
system. There is no centralized way of knowing all available stones, all reserved
stones, or all sold stones without physically reviewing the stone inventory. To find a
given stone’s status, the stone must be looked at physically.
4. Create an enterprise system that uses a shared database. Change the diagram you
created in your answer to question 2 to include this database. (Assume every slab of
stone and every location in the warehouse has a unique identifier). Does the shared
database system solve the problems of the stone-based system? Why or why not?

The centralized database will make some improvements to the process. It should be
much easier for the salesperson to direct the client and designers to the suitable
available stones because the salesperson can run a query to find the potential stones
and their locations before entering the warehouse. This will prevent the problem of
showing a client a stone that he loves, only to look and see that it is reserved or sold.
Additionally, when the client makes the final selection, the database can be updated
immediately so that other salespeople will know. This improves the flow of
information about each stone’s status. Also, the process of choosing a stone can
automatically trigger an action request to the Stone Operations personnel to schedule
the movement of the stone from the sales area to the loading area in preparation for
shipment to the fabricator.
5. Do you think the customers, designers, and fabricators would prefer the stone-based
system or the database system. Explain.
The efficiencies of this system will be valuable to the customers, designers, and
fabricators. There is better information about the status of stones and this information
is more accessible than under the stone-based system. Less time should be wasted
looking at unavailable stones, and purchased stones should be moved to the fabricator
more quickly. The biggest drawback would occur if the client/designers were just
browsing through stones and wondered about the status of a specific stone. They
wouldn’t be able to check the back of the stone for that information—the salesperson
would have to look up the status in the database.
6. Suppose you manage the stone vendor company. If you implement the system in your
answer to question 4, what problems can you expect? If you do not implement that
system, what problems can you expect? What course of action would you take and

why?
If the system with the centralized database is implemented, the salespeople will have
to be trained to utilize the applications to query and update the database. Because
much of the client interaction will have to occur in the stone warehouse, the
salespeople will need mobile devices that can query the stone inventory and record
stone reservations and stone purchases on the spot. If the system is not implemented,
there will continue to be an inefficient system that is subject to information
inaccuracies. If the volume of stone slabs in my organization is large enough that
salespeople cannot easily know the status of every stone in the warehouse, then this
system would be justified. Upscale clients expect efficient and accurate service, and
this system will help the stone vendor provide this.
7. Explain how a knowledge of enterprise systems can help you become a stone slab
client rather than a stone chipper.
Business processes are critical, complex, and dynamic. Enterprise systems provide an
integrated way to enable information to flow throughout the organization, and help
keep the organization’s records up-to-date and accurate. Understanding the way that
an enterprise system links all aspects of the organization together will help students
recognize the value of these systems to organizations and envision their use.

IM CHAPTER 7 APPENDIX
The OMIS Model
Figure 5-6 shows three fundamental steps in a process for improving processes. We call this process the
OMIS model, for Objectives, Measures, and Information Systems.
Process Objectives
Each process has one or more objectives. The first step in the OMIS model, as shown in Figure 5-7, is to
specify and, if possible, improve the objectives for the process.
As mentioned earlier, process objectives can be classified as either efficient or effective. For example, the
Sales process at the pizza shop has two objectives. One is an efficiency objective— reduce the time needed
to place an order by phone—and the other is an effectiveness objective—sell to freshman.
Often a process will have unstated objectives. The OMIS model requires that each process have explicitly
stated objectives. At other times, businesspeople may disagree about the objectives, and this step will force
them to resolve these differences. Finally, processes may have stated objectives that are vague or
inappropriate. For example, a vague objective would be to have a great sales process. Inappropriate
objectives are objectives not matched to strategy. If the strategic plan of the pizza shop is to target
freshman, but the only two promotional process objectives are to promote multi-topping pizzas and salad
orders, the promotional process objectives are inappropriate for the stated strategy.

Process Measures
The second step in the OMIS model, as shown in Figure 5-8, is to specify and, if possible, improve how
each objective is measured. Measures, also called metrics, are quantities assigned to attributes. For
example, a measure of the delivery process is the elapsed time from leaving the store until arrival at the
customer’s location. This attribute is measured using the quantity of minutes and seconds.
Some measures are common, others can be unique. Some processes have commonly accepted ways to
measure them, like delivery time for a pizza. Other processes have measures that are created by managers
for that particular process. In either case, the second step of the OMIS model requires that the measures be
clearly identified and improved, if possible.
Selecting and creating measures can be difficult. Many of the objectives of a process are difficult to
quantify. For example, the pizza shop wants to sell to freshmen so that these students become frequent
customers over their time at the university. However, it is hard to know which customers are freshmen. As
a result, the pizza shop decides to measure the number of deliveries to the dorms as an approximation.
Freshmen are not the only dorm residents, but this is the only measure that is available to the pizza shop.
Although measuring dorm sales is clearly not a perfect measure of freshmen sales, the pizza shop owner
realizes that all measures are imperfect to some degree. Einstein once said, “Not everything that can be
counted counts, and not everything that counts can be counted.” When considering measures, recognize
they all have limitations and that the key business challenge is to select the best ones available and to know
their limits.
The best measures are reasonable, accurate, and consistent. A reasonable measure is a measure that is valid
and compelling. It is reasonable to approximate freshmen pizza orders with dorm orders. Accurate
measures are exact and precise. An accurate measure is 26 pizzas, a less accurate one is “more than last
week.” To accurately assess an objective, it may be appropriate to have multiple measures. For example, to
assess selling to freshmen the pizza shop might also record the number of pizzas delivered to campus
during the freshmen orientation weekend. A final characteristic of a good measurement is consistency. A
business should develop measures of processes that are reliable; that is, the measure returns the same value
if the same situation reoccurs. Having specified and improved the stated objectives and measures, we can
now consider how to improve a process with IS. The results of the improvement will be apparent in the
specified measures.

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