Abstract

The day to day functioning of any organization involves many business processes. Each business process is comprised of different activities. The identification of activities and their cost drivers is a critical factor for successful Business Process Reengineering. Since the resources used by the activities form an integral part of the model, the identification of the cost drivers is also simplified. This paper details the following : 1. It proposesthe use of colored Petri nets for process modeling. Brimson(1991) identifies the process modeling approach to activity analysis as useful since it graphically links the inputs and outputs among activities and identifies the information flow in the processes. However, use of process flow charts, which is most commonly used in activity analysis cannot capture some of the aspects of office processes, like supervision, general management, etc. In addition, representing the complex business logic associated with activities would be difficult in such flow models. The use of colored Petri nets overcomes this limitation, as business logic and various office processes can be easily represented. In addition, the complexity of the system is handled by resorting to hierarchical representation of the processes. 2. The paper applies the concept of activity based costing to the management of the IS processes in firms. The cost structure of these processes, to our knowledge, has not been studied from the activity based costing perspective. The article proposes the use of activity based costing for IS processes. Such analysis could help the organization in making operational as well as strategic decisions as related to its IS processes

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