BUSINESS ANALYTICS

Business Functions & Business Processes

Agenda
 Name the main functional areas of operation used in business
 Differentiate a business process from a business function

Enterprise Resource Planning (ERP) programs

 Core software used by companies to coordinate information in every area of business
 Help manage companywide business processes
 Use common database and shared management reporting tools Business process:
Collection of activities that takes some input and creates an output that is of value to
the customer

Four Functional Areas of Operation

1. Marketing and Sales (M/S)
2. Supply Chain Management for Purchasing
3. Supply Chain Management for Production
4. Supply Chain Management for Sales
5. Accounting and Finance – Financials in SAP B1
6. Human Resources (HR) – Human Resources in SAP B1

BUSINESS FUNCTION: Activities specific to a functional area of operation.

Functional Areas of Operation

 Functional areas are interdependent Each requires data from the others
 Better integration of functional areas leads to improvements in communication,
workflow, and success of company

Information system (IS): Computers, people, procedures, and software that store, organize,
and deliver information

BUSINESS PROCESS: Collection of activities that takes one or more kinds of input and creates
an output that is of value to customer.
 Customer can be traditional external customer or internal customer
 Thinking in terms of business processes helps managers to look at their organization
from the customer’s perspective
  Businesses must always consider customer’s viewpoint in any transaction successful
customer interaction
 Customer (either internal or external) is not required to interact with each business
function involved in the process
 Businesses take inputs (resources) and transform these inputs into goods and
services for customers
Inputs: Material, people, equipment
 Managing inputs and business processes effectively requires accurate and up-to-date
information

“Successful business managers view business operations from the perspective of a

satisfied customer.”

“Sharing data effectively and efficiently between and within functional areas leads to
more efficient business processes.”

Integrated information systems: Systems in which functional areas share data

A. Marketing and Sales

Functions of Marketing and Sales
 Set product prices
 Promotes product through advertising
 Takes customer orders
 Support customers
 Creates sales forecast

O2C – Order to Cash Process

Business Process Process Owner (Function) Document
Sales Order Sales Staff Sales Order
Delivery Warehouse Delivery Receipt
Return Warehouse Return Slip
A/R Invoice Credit and Collection Statement of Account, Sales
Invoice, Daily Sales Report
A/R Credit Memo Credit and Collection Credit Note
Incoming Payments Credit and Collection Collection Report
B. Supply Chain Management for Purchasing
Functions within Supply Chain Management for Purchasing
 Request inventories (raw materials, finished goods)
 Send quotations to different suppliers
 Order inventories from suppliers
 Check inventories received from suppliers

P2P – Purchase to Pay Process

Business Process Process Owner (Function) Document
Purchase Request Requestor (Sales, Production, Purchase Requisition Slip
Accounting, etc.)
Purchase Quotation Purchasing Canvass Sheet
Purchase Order Purchasing Purchase Order
Goods Receipt PO Warehouse/Logistics Receiving Report
Goods Return Warehouse/Logistics Return Slip
A/P Invoice Accounting Request for Payment
A/P Credit Memo Accounting Debit Note
Outgoing Payments Finance Payment Voucher
Landed Cost Accounting Brokerage Fess, Tariffs

C. Supply Chain Management for Production

Functions within Supply Chain Management for Production
 Develops production plans
 Withdrawal of raw materials
 Manufactures product
 Monitor Resource Capacity and Performance

Sales Forecasts: Analyses that attempt to predict the future sales of a product

Business Process Process Owner (Function) Document

Production Order Production Staff Production Order
Issue for Production Warehouse Withdrawal Slip
Receipt from Production Production Staff Finished Goods Report
D. Supply Chain Management for Sales
Functions within Supply Chain Management for Sales
 Ship products to customers

Business Process Process Owner (Function) Document

Sales Order Sales Staff Sales Order
Delivery Warehouse Delivery Receipt
Return Warehouse Return Slip
A/R Invoice Credit and Collection Statement of Account, Sales
Invoice, Daily Sales Report

E. Accounting and Finance

Functions within Accounting and Finance
 Payment to suppliers
 Collection from customers
 Planning and budgeting
 Cash flow management
 Reconciliations
 Execute period end closing

Business Process Business Function/Owner Document

A/P Invoice Accounting Request for Payment
Outgoing Payments Finance Payment Voucher
Landed Cost Accounting Brokerage Fess, Tariffs
A/R Invoice Credit and Collection Statement of Account, Sales
Invoice, Daily Sales Report
Incoming Payments Credit and Collection Collection Report
Inventory Counting and Accounting Counting Sheet
Posting
Inventory Revaluation Accounting Inventory Revaluation

F. Human Resources
Functions of Human Resources
 Recruit, train, evaluate, and compensate employees
 HR uses sales forecasts developed by the individual departments to plan personnel
needs
 Systems integrated using ERP software provide the data sharing necessary between
functional areas