Process Design

A business process describes the the steps followed by a company or organization to produce a particular product or service. With the advent of the Internet and the advancement of other information systems, automating and improving business processes in an effort to reduce costs, increase productivity, and improve quality has become a major goal for companies around the globe. Product managers are seeking to implement new modern technology in their business processes. Information and communication technologies have made these sorts of projects and undertakings successful and useful. Not only that, but they have opened up a whole new business front for businesses to actually be able to sell information service technologies as a service and product. (Christoph, 2011). Information technology staff has been tasked to find ways to utilize the information data collected by their various systems to apply this critical data in a way that helps to meet the goals of lower cost, increased production, and quality standards (Allen, 2011).

Tim Allen helps us to understand the business decisions that can be affected by a business process that uses well-implemented information systems with a concept he calls Horizontal Thinking:

Consider the classic case of procurement incentives: most purchasing departments buy using the purchase price variance (PPV) approach to find the lowest possible cost of goods....But at the best price, goods still have to be transported, handled, and stored...Waste can occur though damage, perishability and quality issues....Horizontal thinking would take into account total cost of ownership (TCO) to procure goods...The result is what's best for the entire business,-rather than the best price.

Source: Allen, 2011

Allen goes on to explain that by redeveloping the procurement business process with a central information system known as a Enterprise Resource Planning System (ERP System), that the total cost of ownership can be found, and procurement decisions can be made based on that critical data, rather than just the cheapest price of goods at one particular time. By taking into account all the costs, (transportation, storage etc..), better decisions can be made, creating a stronger competitive advantage for the organization in the marketplace.

Information systems within a business process - Two Methods

There are two approaches that information technology can make its way into the business process: One, it can be added to an existing process, or two, a new process can be designed, with information technology implemented from