BUSINESS PROCESS INTEGRATION

END-TERM QUESTION PAPER (2019-20)

Question #1
What is a business process? Is adopting a process view of organization essential for a
manager? Explain with respect to Global Bike Inc.
(10 marks)

A business process, is a set of tasks or activities that produce desired outcomes. Every
process is triggered by some event, such as receiving a customer order or recognizing the
need to increase inventory.The columns in the fi gure represent different parts, or
functional areas,within an organization, such as sales, warehouse, manufacturing, and
accounting.Thus, the specifi c steps in the process are completed in different functional
areas. For example, when a retailer (customer) places an order for bicycles,the
manufacturer (seller) uses a specifi c process to ensure that the correct products are
shipped to the customer in a timely manner and that payment for the order is received.
These process steps can include validating the order, preparing the shipment, sending the
shipment, issuing an invoice, and recording the receipt of payment. The sales department
receives and validates the customer order and passes it on to the warehouse, which
prepares and ships the order. The accounting department handles the invoice and
payment steps. This is a very simplistic example. However, it highlights the fact that
processes consist of interdependent steps that are completed in different parts of the
organization. Because the various process steps are carried out by different functional
areas or departments, effective communication and collaboration among the departments
is essential to the smooth execution of these processes. Without this interaction, the
process cannot be completed effi ciently and effectively.

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Question #2
What is an enterprise system? Give few examples of enterprise systems. Explain the
role of enterprise systems in supporting business processes.
(10 marks)

Expected Answer:

• “Enterprise system” is a complex and powerful information system that manages

processes that are geographically dispersed and support end-to-end processes.
Hence, organizations invariably rely on the use of enterprise systems to ensure that
business processes are executed efficiently and effectively.

• At least four examples:

1. SAP ERP
2. Oracle ERP
3. Microsoft Dynamics ERP
4. Sage or Infor or any other…ERP Systems

• Illustration of any one of the business processes, for example “sales order process”
or “procurement process”, is expected while explaining the role of enterprise system
in supporting the business processes.

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Question #3
3a. Define the central organizational structures of the Sales & Distribution (SD) Module
with respect to GBI.
(5 marks)

Client

Credit control area Company Code Chart of Accounts

Plant

Sales Org

Distribution Channel

Division

Sales group

Sales person

3b. Summarize the master data which is more important for the Sales & Distribution
(SD) Module.
(5 marks)

Master datas are common data bases which are shared across the modules and
contains different views to store data in an organized way.
Customer Master
Material Master
Condition Master
Student is supposed to explain each of these master data. Customer details are stored
in customer Master and Material details are stored in Master data and Conditions are
calculations about taxes and discount procedures

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3c. Explain the standard sell (or fulfillment) process with the help of flow diagram.
(10 marks)

Student is expected to write flow diagram and Explanation

Create new customer

Create customer Inquiry

Create customer quotation

Create Sales Order

Check stock status

Start delivery process

Pick material on delivery note

Post goods issue

Check stock status

Create invoice for customer

Post receipt customer payment

Question #4
What is a purchase requisition? Explain different ways in which a purchasing department
can process a requisition to determine the appropriate source of supply.(10 marks)

Purchase Requisition
 Internal Document instructing the purchasing department to request a specific
good or service for a specified time. Requisitions can be created two ways:
- Directly - Manually
• person creating determines: what, how much, and when
- Indirectly - Automatically
• MRP

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 • Production Orders
• Maintenance Orders
• Sales Orders

Requisition Sourcing

1. Internal Sourcing Requirements: The requisition for materials could be

satisfied by sources within our company.
• It is possible that a plant within your firm could represent a potential
source of supply for the material needed (centralized warehouse)
• If an internal source is identified the requirement is covered by an
internal procurement transaction (stock transport order)

2. Source List: A source list is a record that specifies the allowed means for
procuring a material for a certain plant within a given time period.
• If the list contains a sole source the system will assign the vendor to the
requisition.

• If several options exist the system will display a list of vendors for you to
choose from.

• If no source has been established the system will revert to search

information records and outline agreements.
3. Outlined Agreement: Requisitions can be satisfied through existing
longer-term purchasing agreement
• These agreements are subdivided into:

• Contracts: Consists of items defining the individual materials, material

groups, or services with prices and in many cases quantities

• Quantity

• Value

• Scheduling Agreements: Total quantity of material is spread over a certain

period in a delivery schedule, consisting of line items indicating quantities
and their planned delivery date
4. RFQ: If nothing exist in the system we may need to submit a request for
quotation to our vendors. An RFQ is an invitation to a vendor by a
Purchasing Organization to submit a bid for the supply of materials or
services
• The accepted quotations will generate Purchasing Information Records

• Perform Quotation Price Comparisons

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 • Finally Select a Quotation
Question #5
Explain the manufacturing execution process with the help of flow diagram.
(10 marks)

Answer: Student is supposed to explain after writing flow chart.

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 Capacit
y
Plannin Schedule
Production g and
Proposal Release
(Planning/Other)

Shop Floor
Documents

Order
Settlement

Goods
Issue

Goods
Recei
pt Completion
Confirmatio
n

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6a. How do you create an “Expense Account” in General Ledger (G/L)? Explain the
steps with respect to Global Bike Inc.(5 marks)
Student is expected to Creating an Expense Account and Explain the process also.

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Create Bank Account in G/L account
Create reconciliation account in G/L
Create Expense account in G/L
Create Cost Element for Expense Account
Create Vendor Master Record for Land Lord (Vendor)
Post Transfer of Funds to Alternate Bank account
Review Transfer of Funds
Create Invoice Receipt for Rent Expense (in case of Rent)
Display and Review GL Account balances and individual line items
Post payment to Land lord (or Vendor)
Run Financial Statement

6b. How do you execute an “Accounts Payable Process” within Financial Accounting (FI)
Module with respect to Global Bike Inc.? Explain the steps with the help of a flow chart.
(5 marks)

Question #7
The screenshot given below displays General Ledger (G/L) Accounts.

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7a. Explain the difference between primary cost elements and secondary cost elements
in FI/CO Modules.
(5 marks)

Expected Answer:

• Primary Cost Element:

- Originate in the G/L within FI
- Transaction is automatically transferred to CO when an FI transaction is recorded
in the G/L

• Secondary Cost Element:

- Used exclusively (or only) in CO for allocations and settlements between and
amongst Cost Centers

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• Flow chart is not required but useful to explain the differences stated above.

7b. Explain the process of posting a primary cost element within FI/CO Modules by
illustrating with the help of a flow diagram using an “Expense Account.”
(5 marks)

Expected Answer:

• Answer should contain the following three main steps in detail with reference to SAP
FI/CO Modules followed by an explanation.

1. Create Expense Account in General Ledger (G/L)

a) Choose the Chart of Accounts (for example, GL00 – GBI Global)
b) Select the G/L Account Type as Primary Costs or Revenues
c) Select the Account Group as Profit and Loss (PL)
d) Enter the Expense Account in the G/L (GL00)
e) Assign the Expense Account to the Company Code (US00 – GBI US)
2. Post Invoice Receipt for Expenses
a) Enter Company Code (GL00)
b) Enter Vendor Number, Date, and Amount

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 c) Enter Expense Account; Choose Debit; Enter Amount and Cost Center
d) Post Invoice Receipt
3. Post Payment to Vendor
a) Enter the Company Code (US00)
b) Enter the Journal Entry Date (i.e. Posting Date) and Journal Entry Type
(for example, Vendor Payment for Office Supplies)
c) Enter Bank Account in the G/L, Amount, and Vendor Account
d) Clear and Post Payment to the Vendor

• Posting a Primary Cost Element:

- It originates in the G/L within FI and automatically transferred to CO when an FI
transaction is recorded in the G/L.
- Postings in FI, that impact cost accounts, lead to a posting in CO to a Cost
Element; in other words, Expense Account = Cost Element.

• Flow diagram is required to explain the above mentioned steps.

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Question #8
8a. The screenshot given below displays a Storage Bin. Identify and define the central
organizational data relevant to Warehouse Management (WM) Module.
(5 marks)

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Expected Answer:

• Answer should contain the following list of organizational data in the same order
given below and its definition with reference to SAP WM Module.

1. Warehouse Number
2. Storage Type
3. Storage Section
4. Picking Area
5. Storage Bin

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8b. The screenshot given below displays a Transfer Order. Identify the type of goods
movement and explain the warehouse management process relevant to the movement
type with the help of a flow diagram.
(5 marks)

Expected Answer:

• The type of goods movement is “Goods Receipt.” This can be identified by looking at
the movement data (From  Destination is Storage Bin).

• Answer should contain the following four steps (in detail) in the standard warehouse
management process (i.e. logistics execution) with reference to SAP WM Module.

1. Goods Receipt Posting (i.e. Receive Goods)

2. Transfer Requirement (TR)

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 3. Put away with Transfer Order (TO)
4. Confirm Transfer Order (TO)

• Flow diagram is necessary. The above mentioned four steps in a flow chart format.

Question #9
The screenshot given below displays a Project. Identify, define and summarize the
master data displayed within Project Management (PS) Module.
(5 marks)

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Expected Answer:

 The screenshot displays the following three master data related to SAP PS
Module.

1. Projects

2. WBS-Element

3. Milestones

 Definition and summary of each master data with reference to SAP PS module.

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Question #10
The screenshot given below displays an Equipment. Identify, define and summarize the
master data displayed within an Enterprise Asset Management (EAM) Module.
(5 marks)

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Expected
Answer:

• The screenshot displays an “Equipment” Master

Data.

• Definition of “Equipment” Master Data with reference to SAP EAM

Module.

• Summary of Equipment Master Data with Location View (The four views are:
General, Location, Organization,
Structure)

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