Business Process Management CH1

Enterprise Resource Planning
core software used by companies to coordinate
information in every area of the business
Business process
Collection of activities that takes some input and creates an output that is of value to the customer
Functional Areas of Operation
*Marketing and Sales (M/S)
*Supply Chain Management (SCM)
*Accounting and Finance (A/F)
*Human Resources (HR)
Business functions
Activities specific to a functional area of operation
Information system
includes the computers, people, procedures, and software that store, organize, and deliver information.
Integrated information systems
Information systems can be designed so that functional areas share data.
Sharing data effectively and efficiently between and within functional areas leads to
more efficient business processes.
Sales forecasts
are analyses that attempt to predict the future sales of a product.
Marketing and Sales
developing products, determining pricing,
promoting products to customers, and taking customers’ orders
Supply Chain Management
making the lemonade
(manufacturing/production) and buying raw materials (purchasing). Production is planned
so that, as much as possible, lemonade is available when needed, without excess production of lemonade that must be liquidated
Accounting and Finance
recording raw data about transactions
(including sales), raw material purchases, payroll, and receipt of cash from customers.
Raw Data
numbers collected from those operations, without any manipulation, calculation, or arrangement for presentation
Human Resources
means that the business must recruit, train, evaluate, and compensate employees
The purchasing function bases its orders of raw
materials on production plans, expected shipments, delivery lead times, and existing inventory levels. With accurate data about required production levels, raw material and packaging can be ordered as needed, and inventory levels can be kept low, saving money. On the
other hand, if data are inaccurate or not current, manufacturing may run out of raw material or packaging
safety stock
management might carry extra raw material and packaging
Accounting/ Finance Data ERP
M/S provides sales data, SCM provides production and inventory data, and HR provides payroll and benefit expense data.
The accuracy and timeliness of A/F data depend on the accuracy and timeliness of the data
from the other functional areas.
Inputs for A/F include
● Payments from customers
● Accounts receivable data
● Accounts payable data
● Sales data
● Production and inventory data
● Payroll and expense data
Outputs for A/F include:
● Payments to suppliers
● Financial reports
● Customer credit data
ERP Lemonade
M/S: Keep Credit Records, Repeat Customers, Product Development.
SCM:Making the lemonade, Buying raw materials, Packaging
A/F: Recording raw data about transactions, raw material purchases, payroll, and receipt of cash from customers
HR: Recruit, train, evaluate, and compensate employees

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