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24 Cards in this Set

  • Front
  • Back
5 Functions of an Organization
Manufacturing and production
Sales and marketing
Human resources
Finance and accounting
Operations
Business Process Defined
“an interrelated, sequential set of activities and tasks that turns inputs into outputs, and includes the following: (1) a beginning and end; (2) inputs and outputs; (3) a set of tasks (subprocesses) that transform the inputs into outputs; and (4) a set of metrics for measuring effectiveness” (Pearlson and Saunders 2006, p. 112)
Most often involves multiple functional areas
Business Process Perspective

This requires…
This requires…
A manager to consider the whole rather than focusing only on their piece of the process
enabled through…
A defined set of outputs measured through metrics
and often results in…
Employee sense of ownership and accountability for the entire process
Communications
A marketing employee within The Media Company observes a system metric where customers that experience an initial declined payment frequently report dissatisfaction with product delivery time.
Coordination
Spurred by this information, members from the accounts receivable, inventory management, and information technology groups meet to evaluate potential causes of the lag. An investigation of the process reveals a flaw in the on-line payment screen that allows customers to submit their order without requiring the selection of a credit card type. The information technology group is then able to use this information to correct the on-line payment system.
Collaboration
Using their discussions from earlier meetings as a springboard, employees from several departments collaborate to determine other ways in which the lag between payment processing and product retrieval activities can be reduced to improve overall customer satisfaction. Their discussions reveal that all on-line purchases currently require an individual within the accounts receivable group to manually approve the purchase before it can be passed to the inventory management group.
Flexibility
Based on input from these different groups, the business process is modified so that system-approved credit card purchases will automatically route to the inventory management group in order for product retrieval to proceed immediately.
The information process

(Logical Components of a Business Process)
Addresses the flow of information within the organization
The operations process

(Logical Components of a Business Process)
Includes individuals, equipment and procedures that are procedurally involved in the ongoing operations related to the business process
The management process

(Logical Components of a Business Process)
Composed of individuals, policies and procedures that coordinate and oversee the operational aspects of a business process
Determining Information Quality
Understandability
Relevance
Timeliness
Verifiability
Neutrality
Reliability
Marketing & Sales Process
Focused on informing customers of product or service offerings, processing orders, managing inventory, and shipping products to customers
Examples of operational activities include:
Taking customer orders
Evaluating a customer’s credit limit
Checking inventory levels
Preparing an order for shipment
Revenue Collection Process
Focused on billing customers and maintaining accounts receivable
Examples of operational activities include:
Mailing paper invoices
Notification of customers with overdue accounts
Updating customer records when payment has been received
Resolving delinquent accounts
Expenditure Management Process
Focused on the organization’s procurement, or purchase and payment for services rendered and/or goods received
Examples of operational activities include:
Monitoring product inventory
Generating purchase orders
Issuing payment to vendors
Production Process
Focused on the organization’s design and manufacture of products or services
Examples of operational activities include:
Manufacture oriented:
New product design
Documentation of the production schedule
Manufacturing of a product
Service oriented:
New service design
Modification of existing services
Implementation of a new or modified service
Human Resources Process
Focused on employee activities relating to recruitment, hiring, training, job assignment, compensation, performance evaluation, and discharge
Examples of operational activities include:
Advertising job openings
Training employees on corporate policies
Specifying compensation criteria for corporate employees
Conducting exit interviews for terminated employees
G/L & Business Reporting Process
Focused on processing and communicating information to internal and external stakeholders
Examples of operational activities include:
Compiling a financial budget
Generating a financial statement
Enabling ad hoc reports for management
Transaction Processing System (TPS)
Purpose: processes business events and transactions
Characteristics include:
Efficiently processes transaction data
Ensures data accuracy and integrity
Enables flexible reporting
Increases operational efficiencies
Improves customer service and loyalty
Management Information System (MIS)
Purpose: supports the informational needs of management required to steer the activities of an organization, functional area, or subgroup within the organization
Characteristics include:
Ability to forecast
Given a set of criteria, able to generate optimal values
Ability to provide secure, ad hoc reporting capabilities
Executive Information System (EIS)
purpose: supports the activities of senior management, and as such must allow for unstructured and non-routine analysis required in strategic planning activities
Characteristics include:
Learns from past experience and applies learnings to new situations
Analyzes highly complex and unstructured situations
Solves problems with minimal information
Prioritizes issues
Uses heuristics
Continuous Improvement

(Identifying & Enacting Change)
Attempt to continuously search for ways in which existing processes can be improved
Frequently implemented through Total Quality Management (TQM) programs
Advantages
Often more palatable to employees
Disadvantages
Doesn’t fix major process problems
Business Process Reengineering
“a systematic, structured improvement approach by all or part of an organization whereby people critically examine, rethink, and redesign business processes in order to achieve dramatic improvements in one or more performance measures such as quality, cycle time or cost” (Jessup and Valacich 2006, p. 262)
Advantages
Can address major process problems
Disadvantages
Often takes a long time to realize benefits
Radical change can alienate employees
Restructuring (outsourcing)
“the contracting of a specific business task, such as payroll, to a third-party service provider” (Haag, et al. 2006, p. 160)
Often discussed as “off-shoring”
Advantages
Allows organization to focus on their core competencies
Disadvantages
Organization diminishes their control of the business process and becomes reliant on an external party
Restructuring (downsizing)
Often the result of enacting change in an organization
Advantages
Can increase operational efficiencies
Disadvantages
Can produce moral issues for retained employees
Not easily reversible