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Chapter 1 Introduction to Business Process

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Magal and Word | Integrated Business Processes with ERP Systems | © 2011

Learning Objectives  Explain the cross-functional nature of business

processes and the use of enterprise systems to effectively and efficiently complete business processes 1. 2. 3.

Organizational Structure and Silo Effect Business Processes Cross Functions (cross-functional) Enterprise Systems

 Describe what a business process is, including steps

involved in processes related to creating and delivering goods and services - buy, make, and sell 1. 2. 3. 4. 5.

Business Processes Key business processes in an organization. Procurement (buy) Processes Production (make) Processes Fulfillment (sell) Processes

 General understanding of a fictitious company used in

the course 2

Magal Word Bicycle | Integrated 1. and Global Inc.Business (GBI) Processes with ERP Systems | © 2011

Organizational Structure & Silo Effect  Most common organizational structure is the

functional structure where a business is divided into functions or departments (e.g., sales, purchasing, ing etc.)  What are some of the reasons for the use of the functional

structure?

 Downside of the functional structure is the “silo”

effect where departments or functions operate in isolation:  Focusing on functional objectives without regard to process

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objectives (or organizational objectives of overall efficiency and effectiveness)  Individual departments developed systems to serve their Magal and Word | Integrated Business Processes with ERP Systems | © 2011 needs (e.g., sales and marketing system, purchasing

Business Processes Cross Functions (cross-functional)

Think of the cross functional dependencies to make a sale. 4

Magal and Word | Integrated Business Processes with ERP Systems | © 2011

Enterprise Systems  Enterprise systems (ES) such as SAP

end-to-end processes by:  Having capability to meet the needs of the different

functions or departments in a business  Using a single integrated database  Impossible to manage processes that are

geographically dispersed without utilizing enterprise systems  Enterprise systems are costly, but, justified by  Increased profitability  Increased productivity 5

and Word | Integrated Business Processes with ERP Systems | © 2011 Magal Competitive edge

Business Processes  Sequence of tasks or activities that produce

desired outcomes

 Processes interrelated with other processes (see

next slide)  In this Chapter we will focus on three key processes:  Procurement (buy)  Production (make) 6

Magal and Word | Integrated Business Processes with ERP Systems | © 2011

 Fulfillment (sell)

Key Business Processes

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Magal and Word | Integrated Business Processes with ERP Systems | © 2011

A Procurement Process

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Magal and Word | Integrated Business Processes with ERP Systems | © 2011

A Production Process

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Magal and Word | Integrated Business Processes with ERP Systems | © 2011

A Fulfillment Process

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Magal and Word | Integrated Business Processes with ERP Systems | © 2011

Global Bicycle, Incorporated (GBI)  Fictional company that will be used to illustrate

key concepts and processes in:  Magal textbook  SAP hands-on exercises

 Background information on GBI is posted on

Moodle  Review the two GBI documents for general

understanding of the business  In the future use these two documents as references for Magal textbook and SAP exercises

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Magal and Word | Integrated Business Processes with ERP Systems | © 2011