Business Functions and Business Processes

Chapter 1:

Business Functions and Business Processes

Another Look

Integrated Information Systems

Responses will vary. The 2008 financial crisis was an “avoidable” disaster caused by widespread failures in government regulation, corporate mismanagement and heedless risk-taking by Wall Street, according to the conclusions of a federal inquiry. The commission that investigated the crisis casts a wide net of blame, faulting two administrations, the Federal Reserve and other regulators for permitting a calamitous concoction: shoddy mortgage lending, the excessive packaging and sale of loans to investors and risky bets on securities backed by the loans.

Source: http://www.nytimes.com/2011/01/26/business/economy/26inquiry.html?_r=0

Integrated Information Systems

Responses will vary. Boeing’s Top 10 suppliers include:

Suppliers Service HITCO Carbon Composites Inc.Provides quality parts for Boeing Commercial Airplanes and Integrated Defense Systems.M.C. Gill Corporation The oldest privately held, continuously operating manufacturer of fiber reinforced plastics, or advanced composites, in the world. It is one of the largest producers of composite sandwich panels used in aircraft flooring JWD Machine Produces precision machined parts for the aerospace industry.Watson's Profiling Has been providing precision machined parts and assemblies for the aerospace industry since 1958, and has been a supplier to Boeing for 48 years.Valiant Machine & Tool Inc.Provides Boeing with large, complex-design build projects, tooling, and capital equipment for production and spare parts for programs GE Global Research Performs R&D with Boeing for the 787 Dreamliner. The 787 Research Program is credited with saving considerable airplane weight, developing technologies to improve cabin comfort, as well as improving airplane production flow.American Semiconductor Inc. (ASI) Provides pure-play, low-cost semiconductor foundry services for all aspects of wafer fabrication and process development.(Concepts in Enterprise Resource Planning 4e Ellen Monk Bret Wagner) (Solution Manual all Chapter) 1 / 4

Concepts in Enterprise Resource Planning, Fourth Edition 1-2 Omega Precision Manufactures complex, close-tolerance machined parts for the aerospace and defense industries.Woodland Trade Company Provides production parts tooling and assemblies for Boeing Commercial Airplanes programs.Harris Environmental Group Helps Boeing to identify environmental risks and understand rural site regulatory and construction constraints. They also provide flexible staffing deployment to meet emerging requirements.Source: http://www.boeing.com/news/releases/2008/q2/080417b_nr_supplier.html

With a new integrated ERP system, Boeing would be able to react more quickly to demand increases and would also be able to produce more accurate forecasts.

Exercises

• Distinguish between a business function and a business process. Describe how a

business process cuts across functional lines in an organization. How might a manager organize his or her staff in terms of business processes rather than functional departments? What benefits would there be with this type of organization? What challenges would it pose?

A business function is a business "activity,” such as sales order processing, production scheduling, cash-flow management, and recruiting personnel. A business process is a collection of activities that takes one or more kinds of input and creates an output that is of value to the customer.

A business process occurs when a series of activities are performed in more than one functional area. Making and selling a product to a customer is a process that involves sales, production, and accounting activities. The people who work in each activity must work together to make the sale go smoothly - taking the order, scheduling production, shipping the product, recording data about production and sales and the ultimate collection of the customer's payment.

Today, business managers try to think in terms of business processes that integrate the functional areas, thus promoting efficiency and competitiveness. An important aspect of this integration is the need to share information between functional areas, and with business partners. ERP software provides this capability by means of a single common database.

The better a company can integrate the activities of each functional area, the more successful it will be in today’s highly competitive environment. Integration also contributes to improvements in communication and workflow. Each area’s information system depends on data from other functional areas.

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Concepts in Enterprise Resource Planning, Fourth Edition 1-3

• How could a university organize its business education around business

processes rather than business functions? What would be the benefits to students?

Responses will vary. Students could focus on integrating the process involved

designing the following courses: Finance, Marketing, Technology, and

Organizational Behavior.

• Assume your uncle raises bees for honey on his farm. You help him package the

honey and sell it on the Internet. Reproduce Figure 1-1 for this small business example. Add a one-sentence description for each function as it relates to selling this artisan honey online.

Marketing and Sales Supply Chain Management Accounting and Finance Human Resources Marketing the product Purchasing goods and raw materials Financial accounting of payments from customers and suppliers Recruiting and hiring Taking sales orders Receiving goods and raw materials Cost allocation and control Training Customer support Shipping Planning and budgeting Payroll Customer relationship management Scheduling production runs Cash-flow management Free honey Sales forecasting Harvesting the honey Government compliance Advertising Hive maintenance

4. Go to the Amazon Web site (http://www.amazon.com), and step through the

process of buying an item without actually purchasing the item. Based on this experience, describe the flows of information between Marketing and Sales, Accounting and Finance, and Supply Chain Management at Amazon. How easy is it to buy that item?

Amazon’s order process:

• Marketing and Sales: Customers chooses an item and adds it to her shopping cart.

2. Accounting and Finance: Receives information from Marketing and Sales that

customer wants to checkout.

3. Accounting and Finance: Processes payment.

4. Supply Chain Management: Ships order after receiving information from

Accounting and Finance that payment process is complete.

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• Using the Internet, research your state’s regulations for employing teenagers -

such as minimum age of employment. Do the same for a neighboring state. Are the two state regulations the same? Why would it be important for Human Resources to communicate this information to a hiring department?

Responses will vary.

New York

During weeks when school is in session, minors 14- and 15-years-old are limited to

the following hours in most occupations:

▪ More than 3 hours on any school day ▪ More than 8 hours on a Saturday or a non-school day ▪ More than 18 hours in any week ▪ More than 6 days in any week

The law makes exceptions for:

▪ Babysitters ▪ Bridge caddies at bridge tournaments ▪ Farm laborers ▪ Newspaper carriers ▪ Performers ▪ Models

When school is not in session, and during vacations (school must close for the entire

calendar week):

▪ Minors under 18 may not work more than 8 hours a day, 6 days a week ▪ Minors 14 and 15 may not work more than 40 hours a week ▪ 16 and 17 year-olds may not work more than 48 hours a week

Source:

http://www.labor.ny.gov/workerprotection/laborstandards/workprot/hrswork.shtm

New Jersey

34:2-21.2. Minors under 16 not to be employed; exceptions; nonresidents

No minor under 16 years of age shall be employed, permitted, or suffered to work in, about, or in connection with any gainful occupation at any time; provided, that minors between 14 and 16 years of age may be employed, permitted or suffered to work outside school hours and during school vacations but not in or for a factory or in any occupation otherwise prohibited by law or by order or regulation made in pursuance of law; and provided, further, that minors under 16 years of age may engage in professional employment in theatrical productions upon the obtaining of a permit and may engage outside school hours and during school vacations in agricultural pursuits or in street trades and as newspaper boys as defined in this act,

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