This document discusses how ERP systems integrate business functions and processes across different functional areas like marketing, supply chain, accounting, and human resources. It provides examples of common business functions and processes within each area. For instance, marketing functions include sales and identifying customer needs, while supply chain functions involve purchasing, manufacturing, and inventory management. The document also explains that ERP processes consist of interdependent steps that span multiple functional areas to transform inputs into outputs. A customer order process is provided as an example of a cross-functional business process in ERP.

1. ERP Business Functions
and
Business Processes
A straight forward lesson designed to
simplify thinking related to how a complex
Author Tom Matys ERP System works
DPR105: Mgmt Info Systems

2. Business Functional Areas
• Marketing & Sales (M/S)
• Supply Chain Management (SCM)
• Accounting & Finance (A/F)
• Human Resources (HR)

3. Business Functions
• M/S: Fulfilling and identifying the customer’s
needs, pricing, product research, determine future
needs, pricing.
• SCM: Purchasing, manufacturing, inventory
management, Production Planning, materials requirements
planning (MRP)
• A/F: Financial & Managerial Reporting, Accounts
Payable, Accounts Receivable, Billing,
• HR: Hiring, training, payroll, salary research, employee
benefits, promote business ethics

4. Business Process
• A set of multi-step activities that produce desired outcomes.
• ERP is a collection of processes.
• Processes consist of interdependent steps in an ERP
System.
• The steps in a process are completed in different functional
areas.
• Each process starts with a trigger.
Inputs Process Outputs

5. Four Concepts of a Process
1) Triggers
2) Tasks
3) Data
4) Outcome

6. Question
What is a common trigger in the
ERP system that initiates a
process?

7. Answer
Create document
Creating a document is a trigger that
can start off a process that needs
to be completed in several
different steps, in several different
areas.

8. Business Processes are
Cross-Functional
M/S SCM
A/F

9. Processes are executed in SAP ERP
using the modules that are specific to the process
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10. Cross-Functional Nature of the Order
Management Process
Check
Quote Commit Produce Deliver Bill Collect
Credit
Sales & Distribution
Production
Planning
Financial
Materials
Mgmt
10 Accounting

11. 11
Sales
Function
Accounting
Function
Purchasing
Function
Customer Order Process
Production
Function
Process View of Business
Logistics
Material Order Process
Function

12. Functional Areas of Operation
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13. Functional Area Information Systems
13

14. Marketing and Sales
• Inputs
– Customer data
– Order data
– Sales trend data
– Per-unit cost
• Outputs
– Sales strategies
– Product pricing
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15. Functional Area Information Systems
15

16. Supply Chain Management
• Inputs
– Product sales data
– Production plans
– Inventory levels
• Outputs
– Raw material orders
– Packaging orders
– Resource expenditure data
– Production and inventory reports
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17. Functional Area Information Systems
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18. Accounting and Finance
• Inputs
– Payments from customers
– Accounts receivables data
– Accounts payables data
– Sales data
– Production and inventory data
– Payroll and expense data
• Outputs
– Payments to suppliers
– Financial reports
– Customer credit data
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19. Functional Area Information Systems
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20. Human Resources
• Inputs
– Personnel forecasts
– Skills data
• Outputs
– Regulation compliance
– Employee training and certification
– Skills database
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21. Questions?
• Next up: Lab One
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