Summary Business Process Integration Lectures
Lecture 1: Introduction
Business function
Business function refers to an activity that a company performs, like order management,
marketing, selling, finances, product design, and so on. Business functions may be carried
out by one or more departments and may be organized hierarchically.
What is a business process?
The complete & coordinated set of collaborative activities that respond to a business
requirement for action, that deliver value to customers (e.g., the purchasing of a certain
product) Needs to add value to the consumers.
Business process integration
Business process integration can be described as the techniques and mechanisms for
managing the movement of data, and the invocation of processes in the correct and proper
order to support the management and execution of common processes that exist in and
between applications.
Implementation: this is what happens inside.
Drivers for BPI
• Business drivers: business demands how to use your sources in a better way, so
that you become more competitive.
• Technology drivers: new technologies emerge you can make products in a more
efficient way
The integration waves
• Process redesign: in the beginning people were talking about redesign doing
things in a different in a way that it is cheaper/better organizational effectiveness
and efficiency.
• Then they started talking about integration. BPI goes beyond organizational retooling
of processes aiming at:
o integration of internal with external processes;
1
, o process models are used to specify cross-organizational process
requirements.
Lecture 2: E-business
Electronic commerce
Electronic commerce is the buying and selling of information, products, and services via
computer networks and distributed media, usually the World Wide Web.
Types of e-commerce:
• Business-to-Consumer: E-commerce between organizations and individual
consumers
• Business-to-business (e-Business): E-commerce between businesses accounts for a
much larger portion of e-commerce than business-to-consumer
• Business-to-administration
• Consumer-to-administration
Electronic business
Electronic business is the conduct of transactions by means of electronic communications
networks (e.g., via the Internet and/or possibly private networks) end-to-end.
E-commerce versus e-business
Compared with e-commerce, e-business is a more generic term, it refers not only to
information exchanges related to buying and selling but also to servicing customers &
collaborating with business partners, distributors and suppliers. E-business encompasses
sophisticated business-to-business interactions and collaboration activities at a level of
enterprise applications and business processes it implies Business Process Integration!!
E-business processes are integrated end-to-end
across the company, with key partners, suppliers
and customers and can respond with flexibility
and speed to customer demands and market
opportunities. Companies link their internal and
external processes more efficiently & flexibly,
work more closely with suppliers to satisfy the
needs and expectations of their customers.
Internal or back-office processes include
distribution, manufacturing and accounting while external or front-office processes include
these processes that connect an organization to its customers and suppliers.
Internet-based e-business
Reasons for firms to create the ability to exchange transactions over the internet:
• The Internet is a publicly accessible network with few geographical constraints. Its
largest attribute, large-scale connectivity (without the need to have special company
networking architecture) is a seedbed for growth of a vast range of business
applications.
2
, • The internet global inter-network connections offer the potential to reach the widest
possible number of trading partners of any viable alternative currently available.
Importance of the world wide web for e-business the world wide web is the fastest
growing activity on the internet. For instance:
• Companies advertising their presence
• Companies searching for information and products
• Companies buying and selling intellectual property, physical goods, and professional
services
E-business characteristics
E-business is about integrating external company processes with an organization’s internal
business processes:
• Collaborative product development.
• Collaborative planning, forecasting and replenishment.
• Procurement and order management.
• Operations and logistics.
E-business roles and their challenges
E-business applications have two sides:
• Buy side: organizations that use e-Business facilities for their buying needs, e.g., spot
purchasing and/or enterprise-wide procurement.
• Sell side: businesses that sell their products via the transaction mechanisms offered
in e-Business applications.
o Manage multiple selling channels.
o Ability to take multiple types of orders from customers.
o Ability to differentiate and customize products and services from other
suppliers.
o Ability to adapt and grow the e-Business without dramatic technology
changes, organizational restructurings, business processes or radical new
investments.
Empower suppliers and buyers & enable suppliers of all sizes!
E-business requirements
• Identify/measure quantifiable business objectives
• Ensure organizational/operational flexibility
• Re-think entire company supply chains
• Transform the company to a process-centric one
• Define business processes
• Understand security requirements
• Align business organizations with a flexible IT architecture
• Establish ubiquity within standards: efficient process management and efficient
enterprise integration technology
E-business advantages
• Improved operational efficiency and productivity.
3
, • Reduction in operating costs and costs of goods and services.
• Improved competitive position.
• Penetration into new markets through new channels.
• Improved communications, information and knowledge sharing.
• Harmonization and standardization of processes.
• Improved internal information access.
• Improved relationships with suppliers and improved customer service.
Inhibitors of e-business
Management/Strategy Issues:
• Lack of a clearly defined e-Business strategy
• Organizational changes required by e-Business
• Management attitudes and organizational inflexibility
Cost/Financing
• Costs of implementation of e-Business
• Calculating the Return on Investment (ROI)
Insufficient security & trust
Legal issues
Technology Concerns
• Limited interoperability as most existing applications depend on proprietary solutions
which do not interoperate.
E-market
An e-market is an electronic gathering place that brings multiple buyers & sellers together,
provides to its participants a unified view of sets of goods & services & enables them to
transact via automated means.
Types of systems
Customer relationship management systems
Customer Relationship Management (CRM) systems are “front-office” systems that help the
enterprise deal directly with their customers. CRM integrates & automates customer-serving
processes within a company (personal information gathering & processing, and self-service
throughout the supplying company in order to create value for the customer).
Enterprise resource planning systems
Enterprise Resource Planning systems (ERP) are management information systems that
integrate & automate many of the business practices associated with the operations or
production aspects of a company. An ERP system includes:
• Production: manufacturing resource planning and execution process
• Buying a product: procurement process
• Sales of products and services: customer order management process.
• Costing, paying bills and collecting: financial/management accounting and reporting
process.
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Lecture 1: Introduction
Business function
Business function refers to an activity that a company performs, like order management,
marketing, selling, finances, product design, and so on. Business functions may be carried
out by one or more departments and may be organized hierarchically.
What is a business process?
The complete & coordinated set of collaborative activities that respond to a business
requirement for action, that deliver value to customers (e.g., the purchasing of a certain
product) Needs to add value to the consumers.
Business process integration
Business process integration can be described as the techniques and mechanisms for
managing the movement of data, and the invocation of processes in the correct and proper
order to support the management and execution of common processes that exist in and
between applications.
Implementation: this is what happens inside.
Drivers for BPI
• Business drivers: business demands how to use your sources in a better way, so
that you become more competitive.
• Technology drivers: new technologies emerge you can make products in a more
efficient way
The integration waves
• Process redesign: in the beginning people were talking about redesign doing
things in a different in a way that it is cheaper/better organizational effectiveness
and efficiency.
• Then they started talking about integration. BPI goes beyond organizational retooling
of processes aiming at:
o integration of internal with external processes;
1
, o process models are used to specify cross-organizational process
requirements.
Lecture 2: E-business
Electronic commerce
Electronic commerce is the buying and selling of information, products, and services via
computer networks and distributed media, usually the World Wide Web.
Types of e-commerce:
• Business-to-Consumer: E-commerce between organizations and individual
consumers
• Business-to-business (e-Business): E-commerce between businesses accounts for a
much larger portion of e-commerce than business-to-consumer
• Business-to-administration
• Consumer-to-administration
Electronic business
Electronic business is the conduct of transactions by means of electronic communications
networks (e.g., via the Internet and/or possibly private networks) end-to-end.
E-commerce versus e-business
Compared with e-commerce, e-business is a more generic term, it refers not only to
information exchanges related to buying and selling but also to servicing customers &
collaborating with business partners, distributors and suppliers. E-business encompasses
sophisticated business-to-business interactions and collaboration activities at a level of
enterprise applications and business processes it implies Business Process Integration!!
E-business processes are integrated end-to-end
across the company, with key partners, suppliers
and customers and can respond with flexibility
and speed to customer demands and market
opportunities. Companies link their internal and
external processes more efficiently & flexibly,
work more closely with suppliers to satisfy the
needs and expectations of their customers.
Internal or back-office processes include
distribution, manufacturing and accounting while external or front-office processes include
these processes that connect an organization to its customers and suppliers.
Internet-based e-business
Reasons for firms to create the ability to exchange transactions over the internet:
• The Internet is a publicly accessible network with few geographical constraints. Its
largest attribute, large-scale connectivity (without the need to have special company
networking architecture) is a seedbed for growth of a vast range of business
applications.
2
, • The internet global inter-network connections offer the potential to reach the widest
possible number of trading partners of any viable alternative currently available.
Importance of the world wide web for e-business the world wide web is the fastest
growing activity on the internet. For instance:
• Companies advertising their presence
• Companies searching for information and products
• Companies buying and selling intellectual property, physical goods, and professional
services
E-business characteristics
E-business is about integrating external company processes with an organization’s internal
business processes:
• Collaborative product development.
• Collaborative planning, forecasting and replenishment.
• Procurement and order management.
• Operations and logistics.
E-business roles and their challenges
E-business applications have two sides:
• Buy side: organizations that use e-Business facilities for their buying needs, e.g., spot
purchasing and/or enterprise-wide procurement.
• Sell side: businesses that sell their products via the transaction mechanisms offered
in e-Business applications.
o Manage multiple selling channels.
o Ability to take multiple types of orders from customers.
o Ability to differentiate and customize products and services from other
suppliers.
o Ability to adapt and grow the e-Business without dramatic technology
changes, organizational restructurings, business processes or radical new
investments.
Empower suppliers and buyers & enable suppliers of all sizes!
E-business requirements
• Identify/measure quantifiable business objectives
• Ensure organizational/operational flexibility
• Re-think entire company supply chains
• Transform the company to a process-centric one
• Define business processes
• Understand security requirements
• Align business organizations with a flexible IT architecture
• Establish ubiquity within standards: efficient process management and efficient
enterprise integration technology
E-business advantages
• Improved operational efficiency and productivity.
3
, • Reduction in operating costs and costs of goods and services.
• Improved competitive position.
• Penetration into new markets through new channels.
• Improved communications, information and knowledge sharing.
• Harmonization and standardization of processes.
• Improved internal information access.
• Improved relationships with suppliers and improved customer service.
Inhibitors of e-business
Management/Strategy Issues:
• Lack of a clearly defined e-Business strategy
• Organizational changes required by e-Business
• Management attitudes and organizational inflexibility
Cost/Financing
• Costs of implementation of e-Business
• Calculating the Return on Investment (ROI)
Insufficient security & trust
Legal issues
Technology Concerns
• Limited interoperability as most existing applications depend on proprietary solutions
which do not interoperate.
E-market
An e-market is an electronic gathering place that brings multiple buyers & sellers together,
provides to its participants a unified view of sets of goods & services & enables them to
transact via automated means.
Types of systems
Customer relationship management systems
Customer Relationship Management (CRM) systems are “front-office” systems that help the
enterprise deal directly with their customers. CRM integrates & automates customer-serving
processes within a company (personal information gathering & processing, and self-service
throughout the supplying company in order to create value for the customer).
Enterprise resource planning systems
Enterprise Resource Planning systems (ERP) are management information systems that
integrate & automate many of the business practices associated with the operations or
production aspects of a company. An ERP system includes:
• Production: manufacturing resource planning and execution process
• Buying a product: procurement process
• Sales of products and services: customer order management process.
• Costing, paying bills and collecting: financial/management accounting and reporting
process.
4
