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Spring 2010 Fundamentals of Business Information Systems
BUSINESS STRUCTURE:
FUNCTIONS AND
PROCESSES
Objectives
Understand functional structure of medium to large
companies.
Understand data flows between organizational
areas.
Understand fundamental business functions and
processes.
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Fundamental purpose of a business
Sustain ongoing business operations by meeting a
need of a targeted customer base in a mutually
beneficial manner.
Maintaining or enhancing investment of owners.




Subject to the regulation of governmental authority.
Recognizing responsibility to various stakeholders.
Often, having a profit focus.
Functional areas of a business
Marketing and Sales
Supply Chain Management
Accounting and Finance
Human Resources
Administration and IT Support
Research and Development
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Marketing and Salescommon functions
Product
Price Promotion
Place
Supply Chain Managementcommon functions
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Accounting and Financecommon functions
Human Resourcescommon functions
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Administration and IT Supportcommon functions
Research and Developmentcommon functions
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Functional Areas of Operation
Functional areas are interdependent.
Better integration of functional areas leads to
improvements in communication, workflow, and
overall efficiency.
Information system (IS): Computers, people,
procedures, and software that store, organize,
and deliver information.
Business Process
A collection of activities
each taking in input and creating output
performed by 1 or more functional areas
that creates value for a customer.
A distinct method of structuring business processes:
Business Model.
Business Model:



Encompasses what a business is doing, how, and why.
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Business Processes and ERP
Business Processes cut across functional
departments and require coordination.
Enterprise Resource Planning (ERP) is an effort to
establish a highly integrated, cross-functional
business structure based on information sharing
among various business process participants.
Focus is on maximizing efficiency and use of
resources.
In modern organizations likely to be mediated and
managed by softwareintegrated information
system.
Isolated Kingdoms
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Process Integration
Sales Order
Process
Sales Order
Entry
Check
Availability
Procurement
Process
Pick
Materials
Purchase
Requisition
Purchase
Order
Goods
Receipt
Invoice
Receipt
Payment
to Vendor
Post Goods
Issue
Invoice
Customer
Receipt of
Payment
Determine
Needed Materials
Based on material in Intro to ERP, SAP University Alliances Curriculum
Process Integration
Goods
Issue
Sales Order
Process
Sales Order
Entry
Check
Availability
Production
Process
Run MPS
w/MRP
Convert Production
Proposal
Schedule
and Release
Procurement
Process
Pick
Materials
Purchase
Requisition
Purchase
Order
Goods
Receipt
Invoice
Receipt
Payment
to Vendor
Completion
Confirmation
Goods
Receipt
Quality
Inspection
Order
Settlement
Post Goods
Issue
Invoice
Customer
Receipt of
Payment
Based on material in Intro to ERP, SAP University Alliances Curriculum
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Process View of Business
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Material Order Process
Customer Order Process
Taken from Concepts in Enterprise Resource Planning by Monk and Wagner
Functional Area Information Exchange
Taken from Concepts in Enterprise Resource Planning by Monk and Wagner
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Functional Area Information Exchange
Taken from Concepts in Enterprise Resource Planning by Monk and Wagner
Functional Area Information Exchange
Taken from Concepts in Enterprise Resource Planning by Monk and Wagner
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Functional Area Information Exchange
Copyrights
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ERPsim is a registered copyright of ERPsim Labs, HEC Montreal.
Other products mentioned in this presentation are trademarks of their respective owners.
Presentation prepared by and copyright of Dr. Tony
Pittarese, East Tennessee State University, Computer and
Information Sciences Dept. (pittares@etsu.edu)
Podcast lecture related to this presentation available via
ETSU iTunesU.