ELEMENTARY BUSINESS PROCESS MODELING 954270 : College of Art, Media and Technology

AGENDA Application of business process modeling in enterprise systems. / Concept in Enterprise Resource Functional Area and Business Process Business Processes Functional Area Information Systems Information and material flows in a functional business model Information and material flows in a process business model A Case Study Business Process Management : ERP Software SAP Business Intelligence / Business Analytics

Functional Area and Business Process Functional Areas of Operation : Most companies have four main functional areas of operation : Marketing and Sales (M/S) Supply Chain Management (SCM) Accounting and Finance (A/F) Human Resources (HR) Each area is composed of a variety of narrower business functions, which are activities specific to that functional area of operation.

Functional Area and Business Process

Functional Area and Business Process Recall that a business process is a collection of activities that takes one or more kinds of input and creates an output that is of value to the customer. The customer for a business process may be a traditional external customer (the person who buys the finished product), or it may be an internal customer (such as a colleague in another department). For example, what is sold through Marketing and Sales is linked to what is procured and produced by Supply Chain Management.

Functional Area and Business Process

FUNCTIONAL AREA INFORMATION SYSTEMS

FUNCTIONAL AREA INFORMATION SYSTEMS To summarize, inputs for Marketing and Sales could include the following: • Customer data • Order data • Sales trend data • Per-unit cost • Company travel expense policy Outputs for Marketing and Sales could include the following: • Sales strategies • Product pricing • Employment needs

FUNCTIONAL AREA INFORMATION SYSTEMS

FUNCTIONAL AREA INFORMATION SYSTEMS To summarize, inputs for Supply Chain Management could include the following: • Product sales data • Production plans • Inventory levels • Layoff and recall company policy Outputs for Supply Chain Management could include the following: • Raw material orders • Packaging orders • Resource expenditure data • Production and inventory reports • Hiring information

FUNCTIONAL AREA INFORMATION SYSTEMS

FUNCTIONAL AREA INFORMATION SYSTEMS To summarize, inputs for Accounting and Finance could include the following: • Payments from customers • Accounts receivable data • Accounts payable data • Sales data • Production and inventory data • Payroll and expense data Outputs for Accounting and Finance could include the following: • Payments to suppliers • Financial reports • Customer credit data

FUNCTIONAL AREA INFORMATION SYSTEMS

FUNCTIONAL AREA INFORMATION SYSTEMS To summarize, inputs for Human Resources could include the following: • Personnel forecasts • Skills data Outputs for Human Resources could include the following: • Regulation compliance • Employee training and certification • Skills database • Employee evaluation and compensation

Summary • Marketing and Sales develops products, sets product prices, promotes products through advertising and marketing, takes customer orders, supports customers, and creates sales forecasts. • Supply Chain Management develops production plans, orders raw materials from suppliers, receives the raw material into the facility, manufactures products, maintains facilities, and ships products to customers. • Accounting and Finance performs financial accounting to provide summaries of operational data in managerial reports, and also is responsible for tasks such as controlling accounts, planning and budgeting, and cash-flow management. • Human Resources recruits, hires, trains, and compensates employees, ensures compliance with government regulations, and oversees the evaluation of employees.

Information and material flows in a functional business model

Information and material flows in a process business model

Data Flow within an integrated IS.

A Case Study Business Process Management : ERP Software - SAP In 1988, SAP realized the potential of client-server hardware architecture and began development of its R/3 system to take advantage of client-server technology. The first version of SAP R/3 was released in 1992. Each subsequent release of the SAP R/3 software contained new features and capabilities. The client-server architecture used by SAP allowed R/3 to run on a variety of computer platforms, including UNIX and Windows NT. The SAP R/3 system was also designed using an open architecture approach. In open architecture, third-party software companies are encouraged to develop add-on software products that can be integrated with existing software. The open architecture also makes it easy for companies to integrate their hardware products, such as bar-code scanners, personal digital assistants (PDAs), cell phones, and global information systems with the SAP system.

Modules within the SAP ERP integrated information systems environment

Modules within the SAP ERP integrated information systems environment • The Sales and Distribution (SD) module records sales orders and scheduled deliveries. Information about the customer (pricing, address and shipping instructions, billing details, and so on) is maintained and accessed from this module. • The Materials Management (MM) module manages the acquisition of raw materials from suppliers (purchasing) and the subsequent handling of raw materials inventory, from storage to work-in-progress goods to shipping of finished goods to the customer. • The Production Planning (PP) module maintains production information. Here production is planned and scheduled, and actual production activities are recorded. • The Quality Management (QM) module plans and records quality control activities, such as product inspections and material certifications. • The Plant Maintenance (PM) module manages maintenance resources and planning for preventive maintenance of plant machinery in order to minimize equipment breakdowns. • The Asset Management (AM) module helps the company manage fixed-asset purchases (plant and machinery) and related depreciation. • The Human Resources (HR) module facilitates employee recruiting, hiring, and training. This module also includes payroll and benefits.

Modules within the SAP ERP integrated information systems environment • The Project System (PS) module facilitates the planning for and control over new research and development (R&D), construction, and marketing projects. This module allows for costs to be collected against a project, and it is frequently used to manage the implementation of the SAP ERP system. PS manages build to- order items, which are low-volume, highly complex products such as ships and aircrafts. • The Financial Accounting (FI) module records transactions in the general ledger accounts. This module generates financial statements for external reporting purposes. • The Controlling (CO) module serves internal management purposes, assigning manufacturing costs to products and to cost centers so the profitability of the company’s activities can be analyzed. The CO module supports managerial decision making. • The Workflow (WF) module is not a module that automates a specific business function. Rather, it is a set of tools that can be used to automate any of the activities in SAP ERP. It can perform task-flow analysis and prompt employees (by email) if they need to take action. The Workflow module works well for business processes that are not daily activities but that occur frequently enough to be worth the effort to implement the workflow module—such as preparing customer invoices.

BUSINESS INTELLIGENCE / BUSINESS ANALYTICS Business intelligence (BI), also referred to as business analytics, is a term used to describe a range of different applications and technologies used to extract and analyze large amounts of data to aid in decision making. BI includes data-mining tools and querying tools, which are often interactive and visual. The growth of data-generating technologies such as RFID, combined with improvements in BI tools, has led to significant growth in the BI market. Prior to 2008, almost all of SAP’s ERP business came from traditional ERP suite applications. However, in the period from 2008 to 2011, the percentage of the business that came from BI rose to 50 percent.

BUSINESS INTELLIGENCE / BUSINESS ANALYTICS

Structured BPMN Workshop - LavaCon 2014 10/12/2014 Resources “CONCEPTS IN ENTERPRISE RESOURCE”. Ellen F. Monk University of Delaware Bret J. Wagner Western Michigan University http://www.cengageasia.com/ Copyright (c) 2014. Dr. Jackie Damrau. All rights reserved.