BUSINESS ANALYTICS
Business Functions & Business Processes
Agenda
Name the main functional areas of operation used in business
Differentiate a business process from a business function
Enterprise Resource Planning (ERP) programs
Core software used by companies to coordinate information in every area of business
Help manage companywide business processes
Use common database and shared management reporting tools Business process:
Collection of activities that takes some input and creates an output that is of value to
the customer
Four Functional Areas of Operation
1. Marketing and Sales (M/S)
2. Supply Chain Management for Purchasing
3. Supply Chain Management for Production
4. Supply Chain Management for Sales
5. Accounting and Finance – Financials in SAP B1
6. Human Resources (HR) – Human Resources in SAP B1
BUSINESS FUNCTION: Activities specific to a functional area of operation.
Functional Areas of Operation
Functional areas are interdependent Each requires data from the others
Better integration of functional areas leads to improvements in communication,
workflow, and success of company
Information system (IS): Computers, people, procedures, and software that store, organize,
and deliver information
BUSINESS PROCESS: Collection of activities that takes one or more kinds of input and creates
an output that is of value to customer.
Customer can be traditional external customer or internal customer
Thinking in terms of business processes helps managers to look at their organization
from the customer’s perspective
Businesses must always consider customer’s viewpoint in any transaction successful
customer interaction
Customer (either internal or external) is not required to interact with each business
function involved in the process
Businesses take inputs (resources) and transform these inputs into goods and
services for customers
Inputs: Material, people, equipment
Managing inputs and business processes effectively requires accurate and up-to-date
information
“Successful business managers view business operations from the perspective of a
satisfied customer.”
“Sharing data effectively and efficiently between and within functional areas leads to
more efficient business processes.”
Integrated information systems: Systems in which functional areas share data
A. Marketing and Sales
Functions of Marketing and Sales
Set product prices
Promotes product through advertising
Takes customer orders
Support customers
Creates sales forecast
O2C – Order to Cash Process
Business Process Process Owner (Function) Document
Sales Order Sales Staff Sales Order
Delivery Warehouse Delivery Receipt
Return Warehouse Return Slip
A/R Invoice Credit and Collection Statement of Account, Sales
Invoice, Daily Sales Report
A/R Credit Memo Credit and Collection Credit Note
Incoming Payments Credit and Collection Collection Report
B. Supply Chain Management for Purchasing
Functions within Supply Chain Management for Purchasing
Request inventories (raw materials, finished goods)
Send quotations to different suppliers
Order inventories from suppliers
Check inventories received from suppliers
P2P – Purchase to Pay Process
Business Process Process Owner (Function) Document
Purchase Request Requestor (Sales, Production, Purchase Requisition Slip
Accounting, etc.)
Purchase Quotation Purchasing Canvass Sheet
Purchase Order Purchasing Purchase Order
Goods Receipt PO Warehouse/Logistics Receiving Report
Goods Return Warehouse/Logistics Return Slip
A/P Invoice Accounting Request for Payment
A/P Credit Memo Accounting Debit Note
Outgoing Payments Finance Payment Voucher
Landed Cost Accounting Brokerage Fess, Tariffs
C. Supply Chain Management for Production
Functions within Supply Chain Management for Production
Develops production plans
Withdrawal of raw materials
Manufactures product
Monitor Resource Capacity and Performance
Sales Forecasts: Analyses that attempt to predict the future sales of a product
Business Process Process Owner (Function) Document
Production Order Production Staff Production Order
Issue for Production Warehouse Withdrawal Slip
Receipt from Production Production Staff Finished Goods Report
D. Supply Chain Management for Sales
Functions within Supply Chain Management for Sales
Ship products to customers
Business Process Process Owner (Function) Document
Sales Order Sales Staff Sales Order
Delivery Warehouse Delivery Receipt
Return Warehouse Return Slip
A/R Invoice Credit and Collection Statement of Account, Sales
Invoice, Daily Sales Report
E. Accounting and Finance
Functions within Accounting and Finance
Payment to suppliers
Collection from customers
Planning and budgeting
Cash flow management
Reconciliations
Execute period end closing
Business Process Business Function/Owner Document
A/P Invoice Accounting Request for Payment
Outgoing Payments Finance Payment Voucher
Landed Cost Accounting Brokerage Fess, Tariffs
A/R Invoice Credit and Collection Statement of Account, Sales
Invoice, Daily Sales Report
Incoming Payments Credit and Collection Collection Report
Inventory Counting and Accounting Counting Sheet
Posting
Inventory Revaluation Accounting Inventory Revaluation
F. Human Resources
Functions of Human Resources
Recruit, train, evaluate, and compensate employees
HR uses sales forecasts developed by the individual departments to plan personnel
needs
Systems integrated using ERP software provide the data sharing necessary between
functional areas