Chapter 1: Introduction to Business Process

Magal and Word: Business Process Integration w/ SAP ERP | © 2020

Learning Objectives

 Describe the functional organizational structure and

explain why this structure creates problems for modern
businesses.
 Describe key business processes in an organization.
 Understand the cross-functional nature of processes
and their relationship to organizational areas.
 Adopt and apply an integrated perspective to business
processes.
 Describe GBI’s organizational structure.

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Functional Organizational Structure

 Most common organizational structure

 Functional structure divided into functions or departments
 Functions perform specialized tasks or activities
 Processes cut across functions
 Why is the functional structure so common?

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Silo Effect

 Focusing on functional objectives without regard to

process objectives
 Optimizing functional goals vs. process goals
 Process execution requires
 Communication and coordination among functions
 How is this achieved?

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Enterprise Systems

 Impossible to manage processes that are geographically

dispersed without utilizing modern information systems
 Enterprise systems (ES) support end-to-end processes
 Investments in ES have provided
 Increased profitability
 Increased productivity
 Competitive edge

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Business Processes

 Sequence of tasks or activities that produce a desired

outcomes
 Key processes
 Procurement
 Fulfillment
 Production
 Inventory and Warehouse management
 Material planning

 Processes are interrelated with other processes

 Processes may have sub-processes

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A Procurement Process

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A Production Process

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A Fulfillment Process

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Inventory and Warehouse Management
Process

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An Asset Management Process

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A Customer Service Process

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A Project Management Process

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Processes are Integrated

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Global Bicycle, Incorporated (GBI)

 Fictional company
 Background on GBI can be found in the overview document at:
 http://epistemypress.com/gbi-overview/

 GBI data is used throughout the book to illustrate key concepts

and processes
 Hands-on exercises and demos use GBI data

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GBI Organizational Structure

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