Question: Suppose management has left you out of the requirements definition process for the development of the system in question 2-2. Explain how you could use the knowledge you developed in answering this question to justify your need to be involved in the requirements definition. Before you start this exercise, read Chapter Extensions 1 and 2, which describe collaboration techniques as well as tools for managing collaboration tasks. In particular, consider using Google Drive, Google+, Windows SkyDrive, Microsoft SharePoint, or some other collaboration tool. Many students, especially those with limited business experience, have difficulty understanding how important business processes are and how complex even simple processes can become.
The following business situation and exercises will help you understand the need for business processes, the importance of process design, and the role that information systems play in support of such processes. Suppose you work for a supplier of electric and plumbing supplies, equipment, and tools. Your customers are home builders and construction companies that are accustomed to buying on credit. When you receive an order, you need to evaluate it and approve any special terms before you start removing items from inventory and packaging them for shipment. Accordingly, you have developed the order-approval process shown in Figure 2-8. (In this figure, the diamond represents a decision. Flow out of the diamond depends on the answer that is labeled on the arrow.)
As you can see, your order-approval process consists of several stages: prepare quotation, adjust quotation for requested terms, check inventory, check credit, and evaluate special terms. You check inventory and credit on every order, but you need to approve special terms only if the customer asks for something special, such as free shipping, an extra discount, or unusually fast service and delivery. As you will see, even a business process this simple has unexpected complexity. For one, are the checks in the proper order? This business process checks inventory before it checks credit. Does it make sense to check inventory before you check credit? Would checking credit first make more sense? And, if it turns out that you are going to reject the special terms of an order, would it make sense to check them first, before evaluating inventory and credit? Notice that if sufficient inventory does exist, the needed inventory is allocated to that order. But, if the customer's credit or special terms are rejected, that inventory is not released. In that case, you or one of your employees will need to remember to free the allocated inventory. We can't tell this from Figure 2-8, but if customer credit is increased if credit checking is approved,then a similar comment
pertains to credit. If special terms are not approved, the allocated credit needs to be returned to the customer somehow. Other problems occur because you are most likely processing many orders at the same time. Suppose two orders include one Kohler Supreme kitchen sink, but you have just one in inventory. You want to sell the sink to the first customer, but that means you must allocate that sink to it. Otherwise, both orders will be processed for the same sink. But suppose that the special terms of the order to which you've allocated the sink are disapproved. You would like to reassign the sink to the second order if it is still around to be processed. How can you accomplish that?
This scenario ignores another possibility. Suppose you have two order requests for the same sink; one is from a retail customer who wants it for her mountain home, and the second is from Big Sky Construction, a customer that buys 500 sinks a year from you. To which customer do you want to allocate that single sink? And how do you know how to do that? Working with your team, answer the following questions:
1. In Figure 2-8, explain why inventory must be allocated.
2. Using Figure 2-8, explain why credit must be allocated to customers. What is the business consequence if these allocations are not adjusted when special terms are not approved?
3. Recommend a process for adjusting credit for orders for which credit or special terms are not approved. Indicate which role makes the adjustment and how they receive the data for doing so.
4. Change the process in Figure 2-8 so that allocated inventory is returned when credit or special terms are not approved. Indicate which role makes the adjustment and how they obtain the data for doing so.
5. There are six different sequences for the three approval tasks in Figure 2-8. Name each and select what your team considers to be the most promising three.
6. Evaluate each of the three sequences that you selected in question 5. Identify which sequence you think is best.
7. State the criteria that you used for making your selections in questions 5 and 6.
8. So far, we haven't considered the impact of this process on the salesperson. What information do salespeople need to maintain good relationships with their customers?
9. Optional extension. Download the Visio diagram version of Figure 2-8 from this book's Web site, www.pearsonhighered .com/kroenke. Modify the diagram to illustrate the sequence of tasks you chose as best in your answer to question 6.