By Hollander, Denna, Cherrington PowerPoint slides by: Bruce W. MacLean, Faculty of Management, Dalhousie University Accounting, Information Technology, and Business Solutions, 2nd Edition Irwin/McGraw-Hill  The McGraw-Hill Companies, Inc., 2000 Modeling Business Processes Chapter 2

 The McGraw-Hill Companies, Inc., 2000 Irwin/McGraw-Hill Objectives Describe a business processes and identify the business processes of an organization Identify the events that comprise a business process Build and validate a REAL business processes model Model operating events using the REAL concepts

 The McGraw-Hill Companies, Inc., 2000 Irwin/McGraw-Hill Introduction n The first step toward enhancing a business professional’s value is enhancing the role he/she plays in helping an organization define and improve its business processes. n So what are business processes and how can they be designed to support an organization’s objectives? n How do we design information systems that collect, maintain, and process the data needed to generate the outputs required by management to effectively manage business processes in the information age? n Our analysis will use semantic models  models of real world actions or phenomenon. We will use REAL Business Process Modeling as a method to help you understand and model business processes.

 The McGraw-Hill Companies, Inc., 2000 Irwin/McGraw-Hill Business Processes Acquisition/payment Business Process Human Resources Financial Resources Supplies Inventories Property, Plant and Equipment New Ideas (R & D) Miscellaneous services Conversion Business Process Operations Varies widely depending upon the industry SAP industry solution maps Sales/Collection Business Process Marketing and Sales Service Promotion Outbound logistics Collection and Credit E-Commerce Activities

 The McGraw-Hill Companies, Inc., 2000 Irwin/McGraw-Hill Are All Processes And Business Activities Created Equally? n Companies often prioritize their business processes based on the value of the process in achieving the organization’s objectives. n Some business activities determine an organization’s competitiveness in the marketplace while other activities might be classified as support activities. n An organization may be internally cost-effective but it might be an unsuccessful organization. Why? n Perhaps the organization has competitors: ä who better meet the needs of customers, ä do a good job of outsourcing some business functions, ä or do a better job of creating effective strategic alliances with trading partners.

 The McGraw-Hill Companies, Inc., 2000 Irwin/McGraw-Hill Primary Value Activities n Inbound logistics - activities associated with receiving, storing, and disseminating inputs to the products or services n Operations- activities associated with transforming inputs into the final products or services n Outbound logistics - activities associated with collecting, storing, and physically distributing the products or services n Marketing and sales - activities associated with providing a means by which customers can buy produce and the means for inducing them to buy n Service - activities associated with providing service to enhance or maintain the value of the products or services

 The McGraw-Hill Companies, Inc., 2000 Irwin/McGraw-Hill Support Activities n Procurement - the function of purchasing inputs to firms value chain n Technology Development - the know-how, procedures, or technology embedded in processes that are intended to improve the product, services, and/or process n Human Resource Management - activities involved in recruiting, hiring, training, developing, and compensating all types of personnel n Firm Infrastructure - activities that support the entire value chain (e.g. general management, planning, finance, accounting, legal, government affairs, quality management, etc.)

 The McGraw-Hill Companies, Inc., 2000 Irwin/McGraw-Hill Porter’s Generic Value Chain Revenue Costs Firm Infrastructure Human resource management Technology development Procurement Inbound Logistics Operations Output Logistics Marketing & Sales Service Support Activities Primary Activities Margin

 The McGraw-Hill Companies, Inc., 2000 Irwin/McGraw-Hill Business Process Events n A business process is “a series of activities intended to accomplish the strategic objectives of an organization.” n Operating Events are the operating activities performed within a business process to provide goods and services to customers. n Information Events include three activities: recording data about operating events, maintaining reference data that are important to the organization, and reporting useful information to management and other decision makers. n Decision/Management Events are activities where management and other people make decisions about planning, controlling, and evaluating business processes.

 The McGraw-Hill Companies, Inc., 2000 Irwin/McGraw-Hill Business Process: Delivering Goods and Collecting Payment Event 1: Marketing Event 2: Take Customer Order Event 3: Ship the Goods Event 4: Collect Payment Business Processes and Business Events

 The McGraw-Hill Companies, Inc., 2000 Irwin/McGraw-Hill Exhibit 2-3 Business Process Activities (Events) Decision / management events Operating events Information events Define and often trigger Trigger

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