Business process

1. Introduction to Business Process
Chapter 1

2. Learning Objectives
1. Describe the functional organizational structure and explain why this structure
creates problems for modern businesses.
2. Describe key business processes in an organization.
3. Identify the main integration points between and among processes.
4. Understand the cross-functional nature of processes and their relationship to
organizational areas.
5. Adopt and apply an integrated perspective to business processes.

3. Functional Organizational Structure
• Most common organizational structure
• Functional structure divided into functions or departments
• Functions perform specialized tasks or activities
• Processes cut across functions
• Why is the functional structure so common?

4. The Functional Structure
• Processes cut across functions

5. Silo Effect
• Focusing on functional
objectives without regard to
process objectives
• Optimizing functional goals vs.
process goals
• Process execution requires
• Communication and
coordination among
functions
• How is this achieved?

6. Business
Processes
• Sequence of tasks or
activities that produce
desired outcomes
• Key processes
• Procurement
• Fulfillment
• Production
• Processes interrelated with
other processes
• Processes may have sub-
processes

8. Enterprise Systems
• Impossible to manage processes that are geographically dispersed without
utilizing modern information systems
• Enterprise systems (ES) support end-to-end processes
• Investments in ES have provided
• Increased profitability
• Increased productivity
• Competitive edge

9. Key Business Processes

10. A Procurement Process (Buy)
• Refers to all of the activities involved in buying or acquiring the materials used by the
organization
• Raw materials

11. A Production Process (make)
• Involves the actual creation of the products within the organization
• Internally
• Externally

12. A Fulfillment Process (sell)
• Consists of all the steps involved in selling and delivering the products to the
organization’s customers

13. Inventory and Warehouse
Management Process (store)
• Store and track the materials

14. An Asset Management Process
(service)
• Maintain internal assets such as machinery

15. A Customer Service Process
(service)
• Deliver after-sales customer service such as repairs

16. A Project Management Process
(projects)
• Plan and execute large projects
• Construction of a new factory
• the production of complex products

17. Financial Accounting-Track for
external reporting
• Concerned with tracking the financial impacts of processes
• external reporting that is mandated by laws and regulations (Generally Accepted
Accounting Principles (GAAP))
• compiling and reporting financial information for distribution among
shareholders and potential investors.
• reports can be accessed by any person outside the organization.

18. Management Accounting-Track for
Internal Reporting
• Aka. Controlling
• Concerned with tracking costs and revenues for internal reporting
• involves compiling and analyzing financial information for use by
management in decision-making.
• are designed to be viewed only by individuals within the
organization

19. • Thanks 
• Quiz 1 is on blackboard.