A2006-1-876893.F2006 ITO Course01

2-708-04 – A2006
Information Technology in
Organisations
Course Overview
Objectives
▪ Develop the capacity :
▪ To evaluate the relationship between an organizations’ business
processes and the functionality of its information system
▪ To evaluate the relationship between an organizations’ business logic
and the structure and contents of the database belonging to its
information system
▪ To evaluate the relationship between an organizations’ decision logic
and the analyses made by an information system that supports decision-
making
▪ To describe the generic components of an enterprise IT infrastructure
▪ To understand ethical issues related to the use of IT
▪ with the goal of being better able to use information

systems to accomplish the organization's objectives
(e.g.,profit, social well-being, education, R&D, etc.)
InformationTechnologies for organiaations (2-708-04)
Session 1, page 2
Quelques « Buzz words »
▪ Information technology
▪ microcomputers, servers, local area networks, wide area
networks, Internet, databases, electronic data interchange,
intranet, extranet, etc.
▪ Information systems
▪ Business processes, data flow diagrams, data models,
business logic, entity-relationship diagrams, queries,
OLAP cubes, decision logic, decision-support systems,
system implementation, change management, data
integrity and security, privacy issues, etc.

Session 1, page 3
Course content
Theme 1 – Business Process and Information System (IS)
modeling
▪ Objectives
▪ Learn how to identify and understand business processes
▪ Learn how to use standardized symbols to represent business
processes and information systems
▪ Tools and methodologies

▪ Process identification (BIAIT technique)
▪ Business process modeling (ANSI formalism)
▪ Information system modeling with data flow diagrams (DFD)
▪ Case ICE

Session 1, page 4
Course content
Theme 2 - Modeling business logic, modeling and implementation of
a database
▪ Objectives
▪ Understand the relational databases model
▪ Learn how to build a conceptual data model and translate it into a
logical model
▪ Learn how to build a database
▪ Learn how to analyze data
▪ Tools and methodologies
▪ Entity-relationship diagrams
▪ Use of Access software
▪ Use of Excel pivot tables
▪ Case ICE

Session 1, page 5
Course content
Theme 3 - Modeling decision logic, modeling and

implementation of decision-support systems (DSS)
▪ Objectives
▪ Learn how to define, model and solve decision problems
▪ Tools and Methodologies

▪ Influence diagrams
▪ Creation of decision models with Excel
▪ Use and analysis of scenarios
▪ Case ICE

Session 1, page 6
Course content
Theme 4 – Information system deployment

▪ Objective
▪ Describe and understand the required IT infrastructure
material, software and network components
▪ Describe information systems development and acquisition
processes
▪ Describe and understand ethical issues related to the use of
information systems
▪ Tools and Methodologies

▪ Case study

Session 1, page 7
The case IC Electronics (ICE)
▪ Based on a real Montreal company, we have

developed a business case which allows us
to explore the different aspects of managing
information technology within a company.
▪ ICE is a specialized manufacturing company
which produces sound systems for another
large organization.

Session 1, page 8
Resources and pedagogical tools
▪ Course Web Site (http://zonecours.hec.ca/accueil.txp?t=cours&v=270004)
▪ Required documentation (Excel, Access)
▪ Guay, Richard, Paradis, Denis, Technologie de l'information
en gestion. Des outils pour le gestionnaire : Access et Excel.
Les Services JonPar, 2005.
▪ ICE case
▪ Group help sessions on Access and Excel
▪ The configuration of your computer must comply with
HEC Montréal standards
▪ Weekly individual review exercises
▪ T.A’s (Stagiaires)
▪ Professor
▪ Forum (http://forum.hec.ca/ )
Session 1, page 9
Evaluation
▪ Group assignments (up to 4 per team) 30%

▪ TP1 : theme 1 10%
▪ TP2 : theme 2 10%
▪ TP3 : theme 3 10%
▪ Exams 70%
▪ Mid-term : classes 1 to 7 30%
▪ Final : classes 1 to 13 40%
▪ Assignments and Exams are CUMULATIVE

Session 1, page 10
Assignments (TPs)
▪ 3 team assignments (maximum 4 persons per team)
Available on Due (before 4 pm)

on
TP1 September 5th September 18th
TP2 September 18th October 10th
TP3 October 30th November 20th

Session 1, page 11
Help Session on Access and Excel
▪ Strongly suggested
▪ Electronic files for Access and Excel practice are
available in the “Teaching Materials” section of the site
▪ Documents for the help sessions are at
http://tim.hec.ca/babin/2-700-04/TDs.
▪ Help sessions begin on the 20 et 21 September.
▪ To reserve a place visit:
http://tim.hec.ca/babin/2-700-04/reservations .

Session 1, page 12
2-708-04 Information Technology in Organisations
Theme 1 : Business process and information system

modeling
Class 1 : Business process identification
Plan of class 1
1. Describe the role of information systems in

business
2. Define and identify business processes
within the value chain
3. Identify and distinguish between different
types of information systems
4. Identify business processes using the BIAIT
5. Things to do for the next class
Session 1, page 14
Innovations
▪ Today, firms must innovate to remain

competitive
▪ Organisational innovations can take many
forms:
▪ Transforming business processes
▪ Optimizing operations
▪ Improving client relations
▪ Creating new channels of distribution
▪ Improving coordination with suppliers

Session 1, page 15
▪ Organisational innovations are realised through
mastering information technologies
▪ IT needs to support the vision of the business
▪ Operational excellence is realised through the
sharing of information and the integration of
information systems
▪ Formal methods (modeling tools, formalisms,
mathematical modeling ) are needed to manage
complexity ex. Amazon.
Session 1, page 16
Some examples

Session 1, page 17
ZARA : Live the experience !
http://www.zara.com

Session 1, page 18
ZARA : The context
▪ What are the characteristics of this

company?
▪ Compared to the traditional clothing
industry, what innovations have ZARA
made?
▪ Which elements of the value chain were
retained ‘in-house’ at ZARA? And which
were outsourced?

Session 1, page 19
ZARA : Information systems
▪ What is the role of IT at Zara ?

1. Support the organizational structure
▪ Uphold its strategic position
▪ Inventory management
1. Support the value chain and business processes
▪ Information exchange between individual stores and
headquarters
1. Support business logic by the structure of the database and
supply the information necessary to manage the enterprise
2. Support the organization's decision logic by automating
certain decisions and by presenting data to support other
decisions
▪ Real-time understanding of the market

Session 1, page 20
ZARA: lessons learned
▪ Zara succeeded ininnovating by transforming

its business cycle (design, fabrication,
distribution, sales) to taqke less than two
weeks.
▪ Zara makes maximum use of information
coming from its stores to produce according
to customer demands.
▪ Logistics are optimised to reduce costs and
delays while maintaining quality.

Session 1, page 21
The 5 roles of information in the value chain
Source: Rivard and Talbot, 2004, chap. 1, p. 16
▪ Support the production process (i.e. assembly)

▪ Support business processes (i.e. payment, billing)
▪ Coordination of processes (i.e. ordering and delivery)
▪ Permit the flow of information that informs and starts the next activity
in the value chain
▪ Evaluate performance of processes (i.e. time delay,
customer demand)
▪ Measure the extent to which objectives are achieved
▪ Instrument of added value (i.e. product design)

Session 1, page 22
Plan of class 1

business
Session 1, page 23
What is a business process?
▪ A process is a group of activities

▪ These activities can often be broken down into more
detailed activities.
▪ A process receives an input, transforms it, and produces
an output
▪ Raw material -- > the finished product
▪ Information -- > Decision / Approval
▪ Information -- > Service
inputs outputs
Transformation

Session 1, page 24
Hierarchy of processes : an example of decomposition
Macroprocess
« marketing and sales »
Rivard et Talbot (2001), page 15.

Session 1, page 25
Processes and value chain
▪ The value chain : set of all the activities, primary and support, by which an
enterprise produces, delivers and sells its products and services to its
clients
▪ The macro-process of the organisation
Support Activities
1- Human Resources
2- Procurement
3- Finance
4- IT management
Acquisition Production Distribution Marketing

Service
and sales
Primary Activities
Session 1, page 26
Two types of processes
Source: Rivard et Talbot, 2004, chap 1, p. 9
▪ Primary activities:
▪ Come in « physical » contact with the product or service that
will ultimately be delivered (excluding delivery and
distribution)
▪ Support activities :
▪ Set of activities supporting the production processes
▪ Support of the firm’s operations
▪ Framework for process classification proposed by the
American Productivity & Quality Center
▪ See Rivard-Talbot 2004, pp.10-13.
▪ See PDF Version

Session 1, page 27
ZARA: Processes
▪ What are the important processes used by

Zara ?

Session 1, page 28
Plan of class 1

business.
Session 1, page 29
Definition of a an IS
Source: Rivard and Talbot, 2004, chap 1, p. 9
▪ Information System : collection of activities which collect, store,

process and communicate data and information within the
constraints imposed by the system environment. It manages the
data and information relevant to a business process.
Role : ensure timeliness and The information system is a

quality of information subset of a process. At the
extreme it implements the
activities of the process.

Session 1, page 30
The components of an information system
So
ople ftw
Pe ar
e
Performance control
Data processed Exit of

Data
into valuable
entry
e
information information
war
Dat
d
a
Har
Data storage
Network Source : O’Brien (2003), page 11

Session 1, page 31
Taxonomy of information systems
1. Dashboard
2. IDSS (Interactive decision
support system)
Strategic
3. Business intelligence
(v.p. & CEO)
4. Expert systems
Management System
•Production of
Tactical
reports
(director) •Sales statistics
Operations
(supervisor)
•Generation of
Transactional System operations data

Session 1, page 32
Degree of formalism of a an IS
▪ Formal information system (computerized or manual) :

includes rules and working methods that are well
documented or established according to a tradition, i.e.
the final product is independent of the person that
performs the task
▪ Ex : payables system, payroll, inventory, ...
▪ Informal information system (computerized or manual) :

includes data processing activities which do not follow
explicit or implicit rules, i.e. the final product is
dependant on the person that performs the task
▪ Ex : telephone conversation, sending and receiving e-mail,
memos

Session 1, page 33
Examples from ZARA
How did ZARA learn about the needs of its customers

including what does and does not sell?
▪ Informal system
▪ Informal comments by customers
▪ Informal reports from branch directors
▪ Formal system
▪ Tracking of all the sales
▪ Statistical analysis of sales data

Session 1, page 34
Information technology and information systems in the
business context
Business
environm
The organisation
ent Business
process Information
System Information
technology
Source: Alter, Steven, fig. 1.1

Session 1, page 35
Plan of class 1

business
Session 1, page 36
BIAIT
▪ Business Information Analysis and Integration

Technique (BIAIT)
▪ Don Burnstine at IBM
▪ Objective
▪ Identify standard firms based on their business
processes
▪ Understand the types of information systems the
firm has or should have to function effectively.

Session 1, page 37
The logic underlying BIAIT
▪ An enterprise is defined by how it interacts with its

customer.
▪ There are seven (7) dimensions to this interaction
▪ BIAIT is a tool that helps simplify a potentially complex
reality.
▪ It is not an immutable law nor does it necessarily cover all
possibilities.
▪ It is a very concise way to get a quick assessment of a
company and to assess whether it has any gaping holes in its
processes or systems portfolio.

Session 1, page 38
The 7 BIAIT questions
1. Billing
Does the company bill the customer or does the customer pay upon receipt?
1. Delivery
Does the company deliver the product at some time in the future or does the
customer take the product at the time of purchase?
1. Client Profile
Does the company keep a profile of the customer or is the customer a
stranger with every transaction?
1. Price
Is the price negotiated or fixed?
1. Product Ownership
Is the product rented or purchased?
1. Product Tracking
Does the company keep track of the product after it is sold or not?
1. Mode of fabrication
Is the product made to order or prefabricated?

Session 1, page 39
Q1. Does the company bill the customer or does the
BIAIT # 1 : Billing customer pay upon receipt?
Invoice or payment on receipt?

▪ Is immediate payment required?
▪ Does the company send a bill?
Note : immediate payment can be made by check,

credit card, debit card, or cash.
Examples
Immediate payment is generally used for personal goods

Payment on invoice is generally used for commercial purchases

Session 1, page 40
Q2. Does the company deliver the product at
some time in the future or does the customer
BIAIT # 2 : Delivery take the product at the time of purchase?
In the future or immediately?

▪ Does the product need to be delivered ?
▪ Does the client take the product with them at
the time of purchase ?
Examples
Furniture is delivered (most of the time)
Groceries are generally taken with the client at the time of purchase

Session 1, page 41
Q3. Client Profile
Does the company keep a profile of
BIAIT # 3 : Client profile the customer or is the customer a

stranger with every transaction?
Is client information kept?

▪ Does the company need to conserve
information about the client for reasons other
than invoicing?
Examples
Mailing list, statistical analysis …
Purchase history, recommended purchases …

Session 1, page 42
BIAIT # 4 : Price Q4. Is the price negotiated or fixed?
Fixed or negotiated?
▪ Is the price different for each client?
▪ Is the price the same regardless of the client ?
Examples
The price of a house or a car is negotiated …
The price of groceries at the supermarket is fixed

Session 1, page 43
Q5. Is the product or service rented by the
supplier who conserves property rights, or is
BIAIT # 5 : Ownership the product or service purchases by the clien

who acquires these rights?
Rented or purchased?
▪ Is the product rented or purchased ?
▪ Who holds legal title to the product : the buyer
or the seller?
Examples
Lease of a car, rental of an appartment
Purchase of a car, purchase of a home

Session 1, page 44
Q6. Does the supplier keep track of the
product or service in order to call back the
BIAIT # 6 : Product tracking customers and offer upgrades?
Is product follow-up required?

▪ Is after-the-sale follow-up required ?
▪ Does the company offer upgrades, recalls for
product problems, or is it legally bound to
follow the history of the use of the product?
Example
The grocery store does not know that you bought a particular steak
A rancher knows which processor a particular beef cow went to

Session 1, page 45
Q7. Is the product or service customized according
to the clients’ specifications or is it shipped out of
BIAIT # 7 : Product or Service existing inventory?
Custom made or mass produced?

• Is the product created according to the
specifications of the client or delivered from
inventory.
Example
Furniture can be custom made
Furniture can come from inventory

Session 1, page 46
Example: ZARA
▪ The client selects an article on display in a store of his
choice, pays and leaves with the article.
▪ Zara does no advertising, it solely relies on the image (and
location) of its stores to attract customers. However, the two
semi-annual sales are advertised.
▪ Zara has a startegy of quick response-to-market. The issue
is to find out which models to produce according to public
demand while constantly innovating through the use of a
prototyping approach.

Session 1, page 47
Processes at ZARA
Examples of associated processes
Billing Invoice
Cash
Cash
Delivery Future
Immediate
Immediate
Client profile Yes
No
Price Fixed
Fixed
Negotiable
Ownership Rented
Owned
Owned
Followup Yes
No
Custom Product Custom
Mass
Mass
Produced
Produced
Source : Rivard & Talbot (2001)

Session 1, page 48
BIAIT : From questions to processes
▪ Every response corresponds to a particular

process or set of processes.
▪ This provides a quick means of assessing the
company’s processes (Consult the list of
processes provided by Rivard and Talbot
available as a .pdf document on the Web site)

Session 1, page 49
Plan of class 1

business
Session 1, page 50
Things to do for the next class
Documents
▪ Review notes from class 1
▪ Read notes for class 2
▪ Read part 1 of the ICE case
Exercises
▪ Identification of processes using BIAIT

Session 1, page 51

A2006-1-876893.F2006 ITO Course01

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

A2006-1-876893.F2006 ITO Course01

Uploaded by

Copyright:

Available Formats

2-708-04 – A2006

▪ with the goal of being better able to use information

InformationTechnologies for organiaations (2-708-04)

▪ Tools and methodologies

InformationTechnologies for organiaations (2-708-04)

InformationTechnologies for organiaations (2-708-04)

Theme 3 - Modeling decision logic, modeling and

▪ Tools and Methodologies

InformationTechnologies for organiaations (2-708-04)

Theme 4 – Information system deployment

▪ Tools and Methodologies

InformationTechnologies for organiaations (2-708-04)

▪ Based on a real Montreal company, we have

InformationTechnologies for organiaations (2-708-04)

▪ Group assignments (up to 4 per team) 30%

▪ Assignments and Exams are CUMULATIVE

InformationTechnologies for organiaations (2-708-04)

▪ 3 team assignments (maximum 4 persons per team)

Available on Due (before 4 pm)

TP2 September 18th October 10th

TP3 October 30th November 20th

InformationTechnologies for organiaations (2-708-04)

InformationTechnologies for organiaations (2-708-04)

Theme 1 : Business process and information system

1. Describe the role of information systems in

▪ Today, firms must innovate to remain

InformationTechnologies for organiaations (2-708-04)

InformationTechnologies for organiaations (2-708-04)

InformationTechnologies for organiaations (2-708-04)

▪ What are the characteristics of this

InformationTechnologies for organiaations (2-708-04)

▪ What is the role of IT at Zara ?

InformationTechnologies for organiaations (2-708-04)

▪ Zara succeeded ininnovating by transforming

InformationTechnologies for organiaations (2-708-04)

▪ Support the production process (i.e. assembly)

InformationTechnologies for organiaations (2-708-04)

1. Describe the role of information systems in

▪ A process is a group of activities

InformationTechnologies for organiaations (2-708-04)

Rivard et Talbot (2001), page 15.

InformationTechnologies for organiaations (2-708-04)

Acquisition Production Distribution Marketing

InformationTechnologies for organiaations (2-708-04)

▪ What are the important processes used by

InformationTechnologies for organiaations (2-708-04)

1. Describe the role of information systems in

▪ Information System : collection of activities which collect, store,

Role : ensure timeliness and The information system is a

InformationTechnologies for organiaations (2-708-04)

Data processed Exit of

Network Source : O’Brien (2003), page 11

InformationTechnologies for organiaations (2-708-04)

InformationTechnologies for organiaations (2-708-04)

▪ Formal information system (computerized or manual) :

▪ Informal information system (computerized or manual) :

InformationTechnologies for organiaations (2-708-04)

How did ZARA learn about the needs of its customers

InformationTechnologies for organiaations (2-708-04)

Source: Alter, Steven, fig. 1.1

InformationTechnologies for organiaations (2-708-04)

1. Describe the role of information systems in