Using Mis 3rd Edition Kroenke Test Bank

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Using MIS, 3e (Kroenke)
Chapter 7 Business Process Management
7.1 True/False Questions
1) BPM is the systematic process of creating, assessing, and altering business processes.
Answer: TRUE
Diff: 1 Page Ref: 236
AACSB: Analytic skills
Study Question: Study Question 1
2) In a business process management scenario, teams make adjustments necessary to solve

process problems before building an as-is model.
Answer: FALSE
3) Based on the as-is model, system components are generated only for the elements of the
information system that are entirely automated.
Answer: FALSE
4) The cycle of business processes repeats as change occurs and companies adjust to those
changes.
Answer: TRUE
5) The BPM cycle consists of six stages.

Answer: FALSE
6) Well-managed organizations create policy, procedures, and committees to continually assess

business process effectiveness.
Answer: TRUE
1
Copyright © 2011 Pearson Education, Inc.
7) Cross-functional processes often lead to islands of automation, sometimes called information
silos.
Answer: TRUE
8) Functional processes involve activities among several business departments.

Answer: FALSE
9) Customer relationship management is an example of a cross-functional process.

Answer: TRUE
10) Supply chain management is an example of a functional process.

Answer: FALSE
11) One of the advantages of cross-functional processes is that authority belongs to a single
manager who has authority to resolve BPM issues.
Answer: FALSE
12) Human resources and sales forecasting are examples of functional processes.
Answer: TRUE
13) The benefit of functional processes is the integration of data across functional processes.
Answer: FALSE
2
14) Independent, isolated processes are the most important factor in producing the productivity
and efficiency necessary for businesses.
Answer: FALSE
15) The problem with information silos is that decisions that are appropriate when considering
only a single function like purchasing may create inefficiencies when the entire process is
considered.
Answer: TRUE
16) Customer support in an organization can justify high levels of support by being able to know
which customers have high value. This is an outcome of the integration possible through
functional processes.
Answer: FALSE
AACSB: Reflective thinking
17) BPM for interorganizational processes is much more difficult than for cross-functional
systems.
Answer: TRUE
18) BPM for cross-functional processes is shared across several departments that most frequently
need to resolve conflict via committee and policy.
Answer: TRUE
19) The problem with interorganizational processes is that problem resolution occurs via
negotiation, contracts, and litigation.
Answer: TRUE
3
20) Business process management applies only to commercial, profit-making organizations.
Answer: FALSE
21) The standard set of terms and graphical notations for documenting business processes was
created by the International Standards Organization.
Answer: FALSE
22) The standard set of terms and graphical notations for documenting business processes is
called Business Process Modeling Notation.
Answer: TRUE
23) In BPMN notation, solid arrows document process flow.

Answer: TRUE
24) In a BPMN process diagram, the swim-lane layout is used to simplify process diagrams and
to draw attention to interactions among components of the diagram.
Answer: TRUE
25) Fire-and-forget activities are those in which, after the activity is completed, they are never
revisited for feedback or assessment.
Answer: TRUE
26) Adding or removing resources to a given process without changing its structure is the only
way process designers can increase the performance of a business process.
Answer: FALSE
4
27) According to Porter's model, one should add cost to a business process if the change
generates value greater than its cost.
Answer: TRUE
28) The resources that are added to change a process may include information systems as well as
human resources.
Answer: TRUE
29) One of the goals of business process change is to enable the organization to reduce resources
required to obtain the same result.
Answer: TRUE
30) The role of information systems in business processes is to implement process activities.
Answer: TRUE
31) Most organizations develop their own functional applications.

Answer: FALSE
32) An operating system is a computer program that supports or possibly automates the major
activities in a functional process.
Answer: FALSE
33) One reason why organizations buy off-the-shelf functional applications is that the off-the-
shelf applications usually provide a perfect fit to an organization's business processes.
Answer: FALSE
Diff: 1 Page Ref: 245-246
5
34) Customer support and training is typically part of the sales and marketing function.
Answer: FALSE
35) The primary purpose of the sales process is to find prospects and transform them into
customers by selling them something.
Answer: TRUE
36) Customer management is a functional application on the customer service function.

Answer: FALSE
37) Manufacturing activities include finished-goods inventory management.

Answer: FALSE
38) Lead tracking is not a customer service application.

Answer: TRUE
39) Operations applications are especially prominent for nonmanufacturers, such as distributors,
wholesalers, and retailers.
Answer: TRUE
40) Typically, an order-management application obtains customer contact and shipping data,
verifies customer credit, validates payment method, and enters the order into a queue for
processing.
Answer: FALSE
6
41) Manufacturing organizations operate finished-goods inventory applications.
Answer: FALSE
42) Inventory-management applications use past data to compute stocking levels, reorder levels,
and reorder quantities in accordance with inventory policy.
Answer: TRUE
43) The ultimate expression of the view that inventories are liabilities is demonstrated in the just-
in-time inventory policy.
Answer: TRUE
44) A stock report is a list of the materials that comprise a product.

Answer: FALSE
45) The BOM is a list of materials, and materials within materials, and materials within materials
within materials, and so forth.
Answer: TRUE
46) In addition to the BOM, if the operations application schedules equipment, people, and
facilities, then a record of those resources for each manufactured product is required as well.
Answer: FALSE
47) MRP is a manufacturing information system used in the planning of materials, personnel,
and machinery that has links to sales and marketing functions.
Answer: FALSE
7
48) MRP does not include the planning of personnel, equipment, or facilities requirements.
Answer: TRUE
49) MRP II is an application that plans the need for materials and inventories of materials used in
the manufacturing process.
Answer: FALSE
50) When a company generates a master production schedule (MPS) using an analysis of past
sales levels and makes estimates of future sales, this is called a push manufacturing process.
Answer: TRUE
51) Planning manufacturing in response to signals from customers or downstream production

processes that products or components are currently needed is called pull manufacturing.
Answer: TRUE
52) Manufacturing processes that have a push process must be more flexible than those that have
a pull process.
Answer: FALSE
53) Compensation refers not only to pay, but also to the processing and tracking of vacation, sick
leave, and health care and other benefits.
Answer: TRUE
54) Cost-accounting applications determine the marginal cost and relative profitability of
products and product families.
Answer: TRUE
8
55) Budgeting applications concern the management and investment of the organization's cash
and payment of cash dividends.
Answer: FALSE
56) The reason why data is duplicated in functional processes is because each functional
application has its own database.
Answer: TRUE
57) Integration of business processes is a result of the isolation of applications.

Answer: FALSE
58) Independent functional systems result in decreased costs for the organization.
Answer: FALSE
59) Disjointed systems lead to a lack of integrated enterprise information which in turn leads to
inefficiencies.
Answer: TRUE
60) CRM applications integrate all of the primary business activities.

Answer: TRUE
61) CRM applications store data in separate databases for each function.
Answer: FALSE
9
62) Supporting direct mail, catalog, other traditional promotion belongs to the lead tracking
component of a CRM application.
Answer: FALSE
63) Prioritizing customers using purchase history and increase sales of existing customers are the
relationship management functions of a CRM application.
Answer: TRUE
64) The primary users of ERP systems are service organizations.

Answer: FALSE
65) ERP integrates the primary value chain activities with human resources and accounting.
Answer: TRUE
66) ERP represents the ultimate in cross-functional systems.

Answer: TRUE
67) True ERP is an informal approach that is based on innovative and unique business models.
Answer: FALSE
68) SAP defines the comprehensive set of inherent processes for all organizational activities as
the process blueprint.
Answer: TRUE
10
69) In building an ERP system, variations from the standard business blueprint are usually very
expensive.
Answer: TRUE
70) Inherent processes are those processes in the business blueprint that have been tried and
tested over hundreds of organizations.
Answer: TRUE
71) One benefit of the inherent processes in ERP is that organizations that convert to ERP do not
need to reinvent business processes.
Answer: TRUE
72) Organizations have found that by implementing ERP, it is not necessary to maintain large
buffer stocks.
Answer: TRUE
73) One advantage of implementing ERP is that it helps organizations increase lead times.
Answer: FALSE
74) Data inconsistency problems are a common issue because all ERP data are stored in an
integrated database.
Answer: FALSE
75) Implementing the ERP system happens after the differences between the as-is processes and
the blueprint have been reconciled.
Answer: TRUE
11
7.2 Multiple Choice Questions
1) ________ is the systematic process of creating, assessing, and altering business processes.
A) Business delivery management
B) Business process management
C) Strategic management
D) Core competency management
Answer: B
2) The BPM process begins with the ________ stage.

A) create components
B) assess work flows
C) create processes
D) model processes
Answer: D
AACSB: Communication
3) In BPM, the teams build a(n) ________ that documents the current situation and then change
it to make adjustments necessary to solve process problems.
A) process map
B) organizational chart
C) as-is model
D) operational flowchart
Answer: C
4) Which of the following represents the correct sequence of the different stages in BPM?
A) create components; model processes; assess results; implement processes
B) create components; model processes; implement processes; assess results
C) implement processes; model processes; create components; assess results
D) create components; assess results; implement processes; model processes
Answer: B
12
5) Accounts payable is an example of the ________ scope of business processes addressed by
business process management.
A) cross-functional
B) industry-wide
C) interorganizational
D) functional
Answer: D
6) The scope of an enterprise resource planning (ERP) project is ________.

A) functional
B) cross-functional
D) industry-wide
Answer: B
7) Which of the following is not a functional process in an organization?

A) customer relationship management
B) accounting
C) human resources
D) sales forecasting
Answer: A
8) Which of the following is a problem with functional processes?

A) It lacks clearly defined authority.
B) It leads to islands of automation.
C) It needs detailed negotiation for problem resolution.
D) It applies only to commercial, profit-making organizations.
Answer: B
13
9) Islands of automation are also referred to as ________.
A) blind spots
B) information silos
C) errors of omission
D) cross-functional dead-ends
Answer: B
10) The scope of a supply chain management (SCM) project is ________.

A) functional
B) cross-functional
D) departmental
Answer: C
11) BPM is easier to accomplish with ________ processes.

A) functional
B) cross-functional
D) industry-wide
Answer: A
12) Information silos are often the result of ________ processes..

A) functional
B) cross-functional
D) virtual
Answer: A
14
13) BPM is most difficult for ________ processes.
A) functional
B) cross-functional
D) departmental
Answer: C
14) Which of the following is the reason why BPM is difficult across cross-functional processes?
A) No manager has authority over all the processes assigned to them.
B) Cross-functional processes lead to problems of isolated systems and data.
C) Integration of data is not possible in cross-functional processes.
D) Problem resolution occurs through a detailed negotiation and contracts between owners.
Answer: A
15) Which of the following systems requires greater interorganizational cooperation?

A) ERP
B) SCM
C) CRM
D) TQM
Answer: B
16) Which of the following is true of business processes in nonprofit and governmental
organizations?
A) Interorganizational processes are not possible owing to policies and regulations.
B) Lack of revenue-generation makes process-mapping difficult.
C) Authority and responsibility for processes are not clearly defined.
D) Business processes are service-oriented.
Answer: D
15
17) Which of the following is false regarding the various aspects of business processes in an
organization?
A) Activities are tasks to be performed.
B) Facilities are collections of resources.
C) Processes are the flow of authority in a functional area.
D) Resources are people or equipment that can be assigned to activities.
Answer: C
18) ________ is a software-industry standards organization that created a standard set of terms
and graphical notations for documenting business processes.
A) International Standards Organization
B) Object Management Group
C) IEEE
D) National Standards Body
Answer: B
19) ________ is the standard set of terms and graphical notations for documenting business
processes.
A) Business Process Modeling Notation
B) ISO 9000
C) Interface standards
D) Business Process Execution Language
Answer: A
20) The ________, in which each role is shown in its own horizontal rectangle, is used to
simplify process diagrams and to draw attention to interactions among components of the
diagram.
A) schematic layout
B) process-flow chart
C) swim-lane layout
D) organizational map
Answer: C
16
21) In a BPMN process diagram, data are represented by ________.
A) rectangles with the right top corner cut off
B) solid arrows
C) thin lined circle
D) rectangle with rounded corners
Answer: A
22) In a BPMN process diagram, a ________ documents process flow.

A) rectangle with the right top corner cut off
B) solid arrow
D) heavy lined circle
Answer: B
23) In a BPMN process diagram, ________ represents the start of a process.

B) rectangle with rounded corners
D) heavy lined circle
Answer: C
24) In a BPMN process diagram, a ________ represents an activity.

B) rectangle with rounded corners
D) solid arrow
Answer: C
17
25) In a BPMN process diagram, you can use ________ to simplify process diagrams and draw
attention to interactions.
A) rectangles with the right top corner cut off
B) rectangles with rounded corners
C) swim lane layout
D) message flows
Answer: C
26) ________ represent the modelers' best representation of the current processes.
A) Current process charts
B) BPMN diagrams
C) Historical process maps
D) As-is diagrams
Answer: D
27) Activities in the process diagram in which the person sends a message and never has to think
about it again are called ________ activities.
A) single-entry
B) fire-and-forget
C) non-recurring
D) isolated
Answer: B
28) While changing a business process by adding a resource, one should add cost to the value
chain if ________.
A) the resources added are non-human
B) the resources added are human
C) the cost is not recurrent and is a one-time investment
D) the change generates value greater than its cost
Answer: D
18
29) Ted, the quality supervisor at McJeeves Engineering Inc., has to get the process feedback
sheet from the mailroom located at the second floor of the administrative building. He suggests
providing the feedback sheets at each floor to simplify the procurement. Which method of
business process change is he suggesting?
A) changing by altering the process structure
B) changing by adding resources
C) changing by removing resources
D) changing by installing new process
Answer: A
30) A(n) ________ is a computer program that supports or possibly automates the major
activities in a functional process.
A) DBMS
B) operating system
C) functional application
D) application program
Answer: C
31) The purposes of the sales process include all of the following except ________.
A) finding prospects and transforming them into customers
B) managing customers by selling them more products
C) forecasting future sales
D) tracking orders
Answer: D
32) Lead tracking is an application that is traditionally run in the functional area of ________.
A) sales and marketing
B) accounting and finance
C) human resources
D) operations
Answer: A
19
33) Order entry is an application that is traditionally run in the functional area of ________.
C) operations
D) manufacturing
Answer: C
34) Inventory management is an application that is traditionally run in the functional area of
________.
C) operations
D) manufacturing
Answer: D
35) ________ applications are especially prominent for nonmanufacturers, such as distributors,
wholesalers, and retailers.
A) Operations
B) Customer service
C) Sales and marketing
D) Human resources
Answer: A
36) In an operations function, ________ applications record customer purchases.

A) sales
B) finished-goods inventory
C) order-entry
D) lead tracking
Answer: C
20
37) Order-management applications fulfill all of the following functions except ________.
A) track the order through the fulfillment process
B) obtain customer contact and shipping data
C) process exceptions
D) arrange for and schedule shipping
Answer: B
38) Which of the following is the functional application that nonmanufacturing organizations
operate?
A) order-entry application
B) order-management application
C) lead tracking application
D) finished-goods application
Answer: D
39) Which of the following is a manufacturing application?

A) inventory application
B) finished-goods inventory management application
C) order-entry application
D) lead tracking application
Answer: A
40) ________ applications help businesses allocate inventory and equipment to manufacturing
processes.
A) Order-management
B) Operations
C) Manufacturing planning
D) Manufacturing operations
Answer: C
21
41) Manufacturing schedule application programs fulfill all of the following functions except
________.
A) integrating manufacturing signals into production schedule
B) producing materials requirements plans and schedules
C) scheduling and controlling machines in accordance with production schedules
D) producing equipment, personnel, and facility plans and schedules
Answer: C
42) Which of the following is an example of a pull manufacturing process?

A) create and maintain master production schedule
B) integrate manufacturing signals into production schedule
C) produce materials requirements plans and schedules
D) produce equipment, personnel, and facility plans and schedules
Answer: B
43) A(n) ________ inventory policy seeks to have raw materials and work-in-process delivered
to the manufacturing site just as they are needed.
A) MPS
B) JIT
C) BOM
D) kaizen
Answer: B
44) In a manufacturing-planning system, the list of the materials that are needed to make any
products is contained in the ________.
A) MPS
B) JIT
C) BOM
D) MRP
Answer: C
22
45) MRP stands for ________ and MRP stands for ________.
A) materials requirements planning; manufacturing resource planning
B) materials resource planning; manufacturing requirements planning
C) manufacturing requirements process; materials requirements process
D) materials resource process; manufacturing requirements process
Answer: A
46) ________ is a follow-up on materials requirements planning that includes new linkages with
sales and personnel.
A) MPS
B) CRM
C) BOM
D) MRP II
Answer: D
47) One of the philosophies companies use with regard to manufacturing scheduling is to
generate a plan for producing products, called the ________.
A) manufacturing resource plan
B) materials requirements plan
C) master production schedule
D) manufacturing process plan
Answer: C
AACSB: Communication
48) In a(n) ________ manufacturing process, production plans are created from signals from
customers that products or components are currently needed.
A) MPS
B) push
C) pull
D) MRP
Answer: C
23
49) In a(n) ________ manufacturing process, production plans are created from an analysis of
past sales levels and estimates of future sales.
A) MPS
B) push
C) pull
D) MRP
Answer: B
50) Customer service applications include all of the following except ________.
A) lead tracking
B) order tracking
C) account tracking
D) customer support and training
Answer: A
51) ________ applications determine the marginal cost and relative profitability of products and
product families.
A) Cost-accounting
B) Budgeting
C) Cash management
D) Treasury
Answer: A
52) The first era of human resource applications was restricted to ________.
A) developing training modules
B) evaluating employee performance
C) computing payroll
D) supporting recruitment
Answer: C
24
53) ________ applications concern the management and investment of the organization's cash
and payment of cash dividends.
A) Budgeting
B) Treasury
C) Cash management
D) Accounts payable
Answer: B
54) ________ applications concern checking account reconciliation, as well as managing

electronic funds transfer throughout the organization.
A) Accounts payable
B) Accounts receivable
C) Cash management
D) Cost-accounting
Answer: C
55) Functional information systems are bound to have all of the following problems except
________.
A) disjointed business processes
B) inefficiencies of isolated systems
C) integrated enterprise information
D) increased cost for the organization
Answer: C
56) The problems presented by functional processes can be resolved by ________.

A) eliminating duplication of data
B) cross-functional processes
C) further disintegration of process data
D) increasing the efficiencies of functional processes
Answer: B
25
57) ________ systems link up all the processes that touch the customer.
A) CASE
B) CRM
C) ERP
D) MRP
Answer: B
58) All of the following are true of CRM applications except that they ________.
A) provide training and development for resources
B) integrate all of the primary business activities
C) track all interactions with the customer
D) make the organization customer-centric
Answer: A
59) ________ systems link up all the direct activities in the organization; including logistics,
operations, manufacturing, sales and marketing, and support.
A) CASE
B) CRM
C) ERP
D) MRP
Answer: C
60) The primary ERP users are ________.

A) manufacturing companies
B) service organizations
C) federal governments
D) nonprofit organizations
Answer: A
26
61) Which of the following is not true regarding the characteristics of an ERP application?
A) provides cross-functional, process view of organization
B) includes a formal approach based on formal business models
C) maintains data in separate functional databases
D) offers large benefits but is difficult and can be slow to implement
Answer: C
62) The comprehensive set of inherent processes for all organizational activities, as defined by
SAP, is the ________.
A) master schedule
B) process blueprint
C) process template
D) operations map
Answer: B
63) The built-in procedures in an ERP application, which are the processes in the business
blueprint that have been tried and tested over hundreds of organizations, are called ________.
A) master processes
B) process templates
C) inherent processes
D) best practices
Answer: C
64) All of the following are benefits of ERP applications except ________.
A) reduced inventories
B) reduced lead times
C) reduced data inconsistency
D) reduced real-time data visibility
Answer: D
27
65) At which stage of the ERP implementation does training start?
A) after modeling current processes "as-is"
B) before modifying the ERP application
C) after preparing the detailed plan of implementation
D) before identifying relevant ERP blueprint processes
Answer: C
66) ________ is a design philosophy in which every activity is modeled as an encapsulated

service, and exchanges among those services are governed by standards.
A) XML
B) ERP
C) SOA
D) CRM
Answer: C
67) In process terms, a ________ is a repeatable task that a business needs to perform.
A) standard
B) service
C) specialization
D) schedule
Answer: B
68) In the service oriented architecture (SOA), ________ places the logic in only one place.
A) abstraction
B) authorization
C) encapsulation
D) standardization
Answer: C
28
7.3 Essay Questions
1) Explain the BPM process.

Answer: Because business processes are critical, complex, and dynamic in structure, well-
managed organizations practice business process management (BPM). BPM is the systematic
process of creating, assessing, and altering business processes. It has four stages. The process
begins by creating a model of the business process. The business users who have expertise and
are involved in the particular process adjust and evaluate that model. Usually teams build an as-is
model that documents the current situation and then change that model to make adjustments
necessary to solve process problems. Given the model, the next step is to create system
components. The components include all five elements of every information system, although
some are entirely automated (no people and procedures) and some are entirely manual (no
hardware or software). The organizations involved then implement the business processes
needed.
2) Explain the benefits and challenges of BPM in functional processes.

Answer: Functional processes involve activities within a single department or function. BPM is
easier to accomplish with functional processes: A single department manager has authority over
all of the activities and the resources assigned to them. The problem with functional processes is
their isolation. Functional processes lead to islands of automation, sometimes called information
silos, because they work in isolation from one another. Independent, isolated processes cannot
produce the productivity and efficiency necessary for many businesses. Decisions that are
appropriate when considering only a single function may create inefficiencies when the entire
process is considered.
3) What are cross-functional and interorganizational processes?

Answer: Cross-functional processes involve activities among several, or even many, business
departments. A classic example is customer relationship management (CRM), a process that
integrates the activities of several departments, including sales, marketing, operations,
accounting, and customer support. Process management is more difficult for cross-functional
systems than functional systems because no manager has authority over all of the activities and
the resources assigned to them. BPM for cross-functional processes is shared across several
departments that most frequently need to resolve conflicts via committee and policy.
Some business processes cross not only departmental boundaries, but organizational boundaries
as well; these processes are called interorganizational processes. Supply chain management
(SCM) is an example of interorganizational integration. BPM for interorganizational processes is
much more difficult than for functional or cross-functional systems. Not only are different
managers involved, but different owners are involved as well. Problem resolution occurs via
negotiation, contracts, and even litigation.
29
4) Explain the requirement for a business process notation standard.
Answer: Business process is a network of activities, resources, facilities, and data that interact to
achieve a function or purpose. This definition of business process is commonly accepted, but
dozens of other definitions are used by other authors, industry analysts, and software products.
Accordingly, a software-industry standards organization called the Object Management Group
(OMG) created a standard set of terms and graphical notations for documenting business
processes. That standard is called Business Process Modeling Notation (BPMN).
5) Which are the methods of changing business processes?

Answer: Process designers can increase the performance of a business process in three
fundamental ways. First, they can add or remove resources to a given process without changing
its structure. According to Porter's model, one should add cost to a value chain (or the business
process) if the change generates value greater than its cost. Second, designers can change the
structure of a process without changing resource allocations. If the change is particularly
effective, it can result in greater performance at no additional cost. It does require people to
change the way they do things, which can be a difficult transition to make. Finally, what
designers can do is a combination of adding (or reducing) resources and changing the process.
Changing both resources and process structure is obviously more complicated and has greater
potential, but will cause the organization more turmoil, and hence will be more difficult to
implement.
6) Describe functional application and functional information system. Why do organizations opt
for adaptation when implementing functional systems?
Answer: A functional application is a computer program that supports or possibly automates the
major activities in a functional process. A functional information system is an information
system that includes a functional application. Few organizations develop their own functional
applications. Instead, to reduce costs and risks, most license functional application software from
a vendor and then adapt. Adaptation is necessary because organizations differ in the way they
structure their functional processes; almost never does an off-the-shelf functional application
provide a perfect fit.
30
7) List and briefly describe the common functional applications.
Answer: The common functional applications are as follows:
Sales and marketing applications: The primary purpose of the sales process is to find prospects
and transform them into customers by selling them something. Sales processes also manage
customers. Other functional sales processes forecast future sales.
Operations applications: These concern the management of finished-goods inventory and the
movement of goods from that inventory to the customer. Operations applications are especially
prominent for nonmanufacturers, such as distributors, wholesalers, and retailers. For
manufacturing companies, many of the operations functions are merged into manufacturing
systems.
Manufacturing applications: These include inventory control, manufacturing planning

applications, materials requirements planning, and manufacturing resource planning.
Customer service applications: These include order tracking, account tracking, and customer
support and training. Customers call customer service to ask questions about order status, to
query and report problems with their accounts, and to receive assistance with product use.
Human resources applications: These support recruitment, compensation, assessment,

development and training, and planning. The first-era human resources (HR) applications were
focused on computing payroll. Modern HR applications concern all dimensions of HR activity.
8) What are the major problems of functional processes? How can they be resolved?
Answer: The major problems with functional processes are as follows:
Data is duplicated because each functional application has its own database. Functional
processes lead to islands of automation and when applications are isolated, business processes
are disjointed. A consequence of such disjointed systems is the lack of integrated enterprise
information. Another consequence of isolated systems is inefficiency. When using isolated
functional applications, decisions are made in isolation. And finally, isolated functional systems
can result in increased cost for the organization. Duplicated data, disjointed systems, limited
information, and inefficiencies all mean higher costs. These problems are solved by cross-
functional processes
31
9) Briefly explain CRM applications.
Answer: A customer relationship management (CRM) is a cross-functional application that
tracks all interactions with the customer from prospect through follow-up service and support.
CRM applications integrate all of the primary business activities. There are four phases of the
customer life cycle: marketing, customer acquisition, relationship management, and loss/churn.
There are CRM components for each stage of the customer life cycle. Some CRM features and
functions support solicitation processes, some support lead-tracking processing, and others
support relationship management or postsale processes. CRM applications store data in a single
database. Because all customer data reside in one location, CRM processes can be linked to one
another.
10) Describe ERP and its characteristics.

Answer: Enterprise resource planning (ERP) applications provide even more integration than
CRM. ERP integrates the primary value chain activities with human resources and accounting.
ERP systems are truly enterprise-wide. They track customers, process orders, manage inventory,
pay employees, and provide general ledger, payable, receivables, and other necessary accounting
functions. Thus far, ERP represents the ultimate in cross-functional systems. The primary ERP
users are manufacturing companies.
One of the major ERP characteristics is that ERP takes a cross-functional, process view of the
entire organization. Second, true ERP is a formal approach that is based on documented, tested
business models. Third, with ERP systems, organizational data are processed in a centralized
database. Fourth, the process of moving from separated, functional applications to an ERP
system is difficult, fraught with challenge, and can be slow. Finally, the switch to an ERP system
is very costly.
32

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7.1 True/False Questions

2) In a business process management scenario, teams make adjustments necessary to solve

5) The BPM cycle consists of six stages.

6) Well-managed organizations create policy, procedures, and committees to continually assess

8) Functional processes involve activities among several business departments.

9) Customer relationship management is an example of a cross-functional process.

10) Supply chain management is an example of a functional process.

23) In BPMN notation, solid arrows document process flow.

31) Most organizations develop their own functional applications.

36) Customer management is a functional application on the customer service function.

37) Manufacturing activities include finished-goods inventory management.

38) Lead tracking is not a customer service application.

44) A stock report is a list of the materials that comprise a product.

51) Planning manufacturing in response to signals from customers or downstream production

57) Integration of business processes is a result of the isolation of applications.

60) CRM applications integrate all of the primary business activities.

64) The primary users of ERP systems are service organizations.

66) ERP represents the ultimate in cross-functional systems.

2) The BPM process begins with the ________ stage.

6) The scope of an enterprise resource planning (ERP) project is ________.

7) Which of the following is not a functional process in an organization?

8) Which of the following is a problem with functional processes?

10) The scope of a supply chain management (SCM) project is ________.

11) BPM is easier to accomplish with ________ processes.

12) Information silos are often the result of ________ processes..

15) Which of the following systems requires greater interorganizational cooperation?

22) In a BPMN process diagram, a ________ documents process flow.

23) In a BPMN process diagram, ________ represents the start of a process.

24) In a BPMN process diagram, a ________ represents an activity.

36) In an operations function, ________ applications record customer purchases.

39) Which of the following is a manufacturing application?

42) Which of the following is an example of a pull manufacturing process?

54) ________ applications concern checking account reconciliation, as well as managing

56) The problems presented by functional processes can be resolved by ________.

60) The primary ERP users are ________.

66) ________ is a design philosophy in which every activity is modeled as an encapsulated

1) Explain the BPM process.

2) Explain the benefits and challenges of BPM in functional processes.

3) What are cross-functional and interorganizational processes?

5) Which are the methods of changing business processes?

Manufacturing applications: These include inventory control, manufacturing planning

Human resources applications: These support recruitment, compensation, assessment,

10) Describe ERP and its characteristics.

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