Business processes are an integral part of modern life, as most people interact with them in many aspects of their daily activities, such as work, education, and entertainment. When developing a new information system, it is essential for organizations to analyze and understand how a business process works due to several reasons. First, all information systems are developed with a purpose of improving or completing a business process in some way. For example, they can “automate parts of business processes”, helping organizations to “redesign and streamline them” (Laudon & Laudon, 2019, p. 70). Therefore, it is essential to take into consideration all the strengths and weaknesses of a given business process in order to ensure that the new information system meets the requirements of that process.
The second reason why understanding business processes is important in relation to the development of new information systems is that it helps to increase the company’s profitability by improving the efficiency of its business operations (Laudon & Laudon, 2019). For example, higher availability of data and easier access to it provided to the managers can improve their decision-making and reduce uncertainty. In addition, this understanding can provide an important insight into the customers’ needs and experiences (Aydiner et al., 2019). These will, in turn, increase the leadership’s understanding of what aspects of an information system have to be changed in order to increase customer satisfaction, as well as create and maintain customer loyalty. Finally, it is also crucial to understand business processes present in the market in order to increase the organization’s competitive advantage (Aydiner et al., 2019). For example, if the company’s leadership is aware of the flaws of their competitors’ business activities, they will be able to avoid making those flaws in the information system they design.
References
Aydiner, A. S., Tatoglu, E., Bayraktar, E., & Zaim, S. (2019). Information system capabilities and firm performance: Opening the black box through decision-making performance and business-process performance. International Journal of Information Management, 47, 168-182. Web.
Laudon, K. C., & Laudon, J. P. (2019). Management information systems: Managing the digital firm (16th ed.). Pearson.