BUSINESS STRUCTURE: FUNCTIONS AND PROCESSES Spring 2010 Fundamentals of Business Information Systems Objectives Understand functional structure of medium to large companies. Understand data flows between organizational areas. Understand fundamental business functions and processes. 1
Fundamental purpose of a business Sustain ongoing business operations by meeting a need of a targeted customer base in a mutually beneficial manner. Maintaining or enhancing investment of owners. Subject to the regulation of governmental authority. Recognizing responsibility to various stakeholders. Often, having a profit focus. Functional areas of a business Marketing and Sales Supply Chain Management Accounting and Finance Human Resources Administration and IT Support Research and Development 2
Marketing and Sales common functions Place Product Promotion Price Supply Chain Management common functions 3
Accounting and Finance common functions Human Resources common functions 4
Administration and IT Support common functions Research and Development common functions 5
Functional Areas of Operation Functional areas are interdependent. Better integration of functional areas leads to improvements in communication, workflow, and overall efficiency. Information system (IS): Computers, people, procedures, and software that store, organize, and deliver information. Business Process A collection of activities each taking in input and creating output performed by 1 or more functional areas that creates value for a customer. A distinct method of structuring business processes: Business Model. Business Model: Encompasses what a business is doing, how, and why. 6
Business Processes and ERP Business Processes cut across functional departments and require coordination. Enterprise Resource Planning (ERP) is an effort to establish a highly integrated, cross-functional business structure based on information sharing among various business process participants. Focus is on maximizing efficiency and use of resources. In modern organizations likely to be mediated and managed by software integrated information system. Isolated Kingdoms 7
Process Integration Sales Order Entry Determine Needed Materials Check Availability Purchase Requisition Procurement Process Purchase Order Goods Receipt Receipt of Payment Sales Order Process Pick Materials Payment to Vendor Invoice Receipt Invoice Customer Post Goods Issue Based on material in Intro to ERP, SAP University Alliances Curriculum Process Integration Purchase Requisition Convert Production Proposal Schedule and Release Run MPS Goods w/mrp Issue Production Check Process Completion Availability Sales Order Confirmation Entry Quality Sales Order Goods Pick Inspection Process Receipt Materials Receipt of Payment Invoice Customer Post Goods Issue Order Settlement Purchase Order Procurement Process Payment to Vendor Goods Receipt Invoice Receipt Based on material in Intro to ERP, SAP University Alliances Curriculum 8
Process View of Business Customer Order Process Sales Function Accounting Function Purchasing Function Production Function Logistics Function Material Order Process Taken from Concepts in Enterprise Resource Planning by Monk and Wagner Functional Area Information Exchange Taken from Concepts in Enterprise Resource Planning by Monk and Wagner 9
Functional Area Information Exchange Taken from Concepts in Enterprise Resource Planning by Monk and Wagner Functional Area Information Exchange Taken from Concepts in Enterprise Resource Planning by Monk and Wagner 10
Functional Area Information Exchange Copyrights Presentation prepared by and copyright of Dr. Tony Pittarese, East Tennessee State University, Computer and Information Sciences Dept. (pittares@etsu.edu) Podcast lecture related to this presentation available via ETSU itunesu. Microsoft, Windows, Excel, Outlook, and PowerPoint are registered trademarks of Microsoft Corporation. IBM, DB2, DB2 Universal Database, System i, System i5, System p, System p5, System x, System z, System z10, System z9, z10, z9, iseries, pseries, xseries, zseries, eserver, z/vm, z/os, i5/os, S/390, OS/390, OS/400, AS/400, S/390 Parallel Enterprise Server, PowerVM, Power Architecture, POWER6+, POWER6, POWER5+, POWER5, POWER, OpenPower, PowerPC, BatchPipes, BladeCenter, System Storage, GPFS, HACMP, RETAIN, DB2 Connect, RACF, Redbooks, OS/2, Parallel Sysplex, MVS/ESA, AIX, Intelligent Miner, WebSphere, Netfinity, Tivoli and Informix are trademarks or registered trademarks of IBM Corporation. Linux is the registered trademark of Linus Torvalds in the U.S. and other countries. Oracle is a registered trademark of Oracle Corporation. HTML, XML, XHTML and W3C are trademarks or registered trademarks of W3C, World Wide Web Consortium, Massachusetts Institute of Technology. Java is a registered trademark of Sun Microsystems, Inc. JavaScript is a registered trademark of Sun Microsystems, Inc., used under license for technology invented and implemented by Netscape. SAP, R/3, SAP NetWeaver, Duet, PartnerEdge, ByDesign, SAP Business ByDesign, and other SAP products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of SAP AG in Germany and other countries. Business Objects and the Business Objects logo, BusinessObjects, Crystal Reports, Crystal Decisions, Web Intelligence, Xcelsius, and other Business Objects products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of Business Objects S.A. in the United States and in other countries. Business Objects is an SAP company. ERPsim is a registered copyright of ERPsim Labs, HEC Montreal. Other products mentioned in this presentation are trademarks of their respective owners. 11