1. Other Business Processes
Chapter 8
Other Business Processes

2. Chapter Objectives
Identify the characteristics of other business processes and related IT applications.
Identify the weaknesses of the traditional processes and their IT application architecture.
Develop REAL models of the various business processes.
Identify opportunities to improve the business processes.

3. Traditional, Manual Payroll Process1 3 n 2
Job time
tickets
Cost
Accounting
Post to
job order
cost
sheets
Personnel 1
Authorize Rate
and Deductions
Employee
Records 1 3 n 2
Job time
tickets
Factory
Supervisor
Reviews 2 1 3 n
Job time
tickets
Time
cards
Timekeeping
Reconcile
& approve
time 4 1 3 n 2
Approved
time cards
Payroll
Verify pay
rates &
deductions
Register 4 5
Accounts
Payable
Payroll
Register
Prepare cash disbursement
documents
Payroll register
pay voucher,
check 5 1 3 n 2
Individual
Checks
Cashier/Cash
Disbursement
Sign check &
deposit in
imprest
fund 6
Prepare
employee
pay checks
Bank
Imprest
payroll
account
Deposit check
in imprest
fund
Employees
Paycheck 6

4. Human Resource Business Process
Strategy & Objectives
To provide the human labor and expertise that an organization needs to function efficiently and effectively.
Traditional Manual Payroll Process
Uses an extensive amount of paper to capture, convey, store and report information.
Traditional Computerized Payroll Process
Collection of personal and payroll data entered into an employee payroll master file.

5. Traditional Automated Payroll Process Flowchart
From Timekeeping
Attendance time cards
Performed by a payroll clerk
Prepare batch total
Batch total
Performed in the Data Processing Department
Attendance time cards
Key-to-disk & edit
Exemption and summary report
Personnel Department
Payroll action records
Time data
Performed by personnel clerks as soon as changes are approved
Enter change data
Run 1 - Sort by employee number
Exemption and summary report
Sorted time data
Access employee records & make changes
Run 2 - Update employee file & prepare paychecks
Employee payroll master file A

6. Traditional Automated Payroll Process Flowchart
Employee payroll master file
Run 2 - Update employee file & prepare paychecks
Exemption and summary report
General Ledger transaction file
Payment register
Paychecks
To Payroll Department
To general ledger procedure
To cashier

7. Information Needs in the Human Resource Business Process
Approve headcount
In many organizations approved headcount is a key tool for controlling labor cost.
For example, a supervisor wishing to increase headcount must prepare the necessary paperwork to identify and justify the need for a new position.
There is an extensive review process that requires the division manager, area controller, and executive vice president to approve the request.
Only when all these approvals are obtained can the position be opened for hiring.

8. Information Needs in the Human Resource Business Process
Hire employees
Organizations continue to need professional, support staff, and technical personnel in today’s competitive, advanced business environment.
Individuals agree to work in exchange for wages, benefits, and other rewards.
Hiring is the process of matching the skills and interests of people with the needs of the organization.
Important in the hiring process is an accurate description of the organization’s needs. Not only must accurate projections be made of the number of individuals needed, but also organizations must develop job descriptions and skill requirements associated with each job position. Those responsible for hiring use the job descriptions and skill requirements as a basis for selecting new hires.

9. Information Needs in the Human Resource Business Process
Training
Training requires:
an understanding of the current knowledge and skills of the people to be trained,
identifying the desired skills and knowledge, and a program to provide what is currently lacking.
Maintaining a record of each employee’s training can provide important information in assigning employees to new jobs.

10. Information Needs in the Human Resource Business Process
Assigning
Part of management’s responsibility is to organize and direct the work of employees.
Organizing involves identifying the activities to be performed, structuring the activities into jobs, and positioning the jobs into departments, project teams, or divisions.
Competent individuals who have the skills, abilities, and training necessary to perform them must fill jobs.
To effectively assign people to jobs, management must receive information on the operating events that must be performed, the skills required to perform them, and the skills, abilities, and training of each employee.

11. Information Needs in the Human Resource Business Process
Compensating
Employee compensation may come in the form of a salary, commission, salary plus commission, rate per hour, or rate per piece (based on units of work).
Most managers and top‑level executives are paid a salary and perhaps a bonus depending on the profitability of the company.
Manual-type work is typically paid by the hour with a premium rate for overtime hours.
Overtime pay may be computed on a daily basis (any time over eight hours per day), or on a weekly basis (any time over 40 hours per week).

12. Information Needs in the Human Resource Business Process
Evaluating
Performance evaluations serve several important functions in an organization:
They provide a basis for recognizing and rewarding performance.
They guide personnel actions such as hiring, firing, and promoting.
They provide individuals with information for their own personal development.
They identify training needs for the organization.

13. Information Needs in the Human Resource Business Process
Terminating
Terminating employees is the most undesirable of all operating events.
Unfortunately, this has become an important event as many companies attempt to “downsize” or “rightsize.”
Effectively performing each of the aforementioned events is important in avoiding problems with this event.
Doing a quality job of hiring and training employees can reduce the likelihood of having to subsequently terminate them.

14. REAL Model of the Human Resource Business Process
Propose
Headcount
Supervisor
Headcount
List
Review/
Approve
Headcount
Planning
Committee
Hire
Employees
Hiring
Officers
Train
Employees
Employees
Trainers
Assign
Employees
Pay
Employees
Payroll
Employee
Cash
Terminate/Retire
Employees

15. Sample Process Relationships
Acquisition/Payment
Process
Human Resource
Sales/Collection
Financing
Business
Other
Alternatives
Conversion
Cash
Goods and
Services
Materials
Labor

16. Sample Equity Company Financing REAL Model
Approve
New Loans
(0,*)
(1,1)
(1,1)
(1,1)
Executive
Committee
(0,*)
(1,1)
(1,1)
Debt Financial
Instruments
(1,1)
(1,1)
Borrow
Money
(1,1)
(1,1)
Finance
Employee
(0,*)
(1,1)
(0,*)
(1,1)
(1,1)
Sell
Stock
(0,*)
(1,1)
Financing
Institution
(1,1)
(1,1)
(0,*)
Receive
Cash
(1,1)
(0,*)
(1,1)
Accounting
Clerk
(1,1)
Cash
(0,*)
(1,1)
(0,*)
(1,1)
Invest
Excess Funds
(0,*)
(1,1)
Asset Financial
Instruments
Approve
Principal &
Interest
Payments
(1,1)
(0,*)
(0,*)
(0,*)
(0,*)
(0,*)
Disburse
Cash

17. Sample Conversion Process Data Flows
Inputs
Outputs
Conversion
Process
Raw Materials
Equipment
Labor
Products
Services
Acquire Input through:
Sell Outputs through:
Acquisition/Maintenance/Payment Process
Human Resource Process
Sales/Collection Process

18. Flow of Resources - Manufacturing Process
Raw Materials
Acquired
Used
Labor
Costs
Work In Process
Materials
Labor
Overhead
Units
Completed
Finished Goods
Units
Completed
Sold
Equipment and Other
Allocated
Amount

19. Nichol’s Bottles Conversion Process Model
Raw Material
Inventory
(1,*)
(1,*)
(0,*)
Heat Glass
Compound
(0,*)
(1,1)
Furnace
Operators
(1,*)
(0,*)
Work in
Process
Inventory
(1,1)
(1,1)
(1,1)
(1,1)
(1,*)
Pour Glass
into Molds
(0,*)
Pourers
(1,1)
(1,*)
(0,*)
(1,*)
Equipment
(1,*)
(1,*)
(1,*)
Finish and
Label
(0,*)
(1,1)
(0,*)
Finishers
(0,*)
(1,*)
Package
Bottles
(0,*)
(1,1)
(0,*)
Packagers
Finished
Goods
Inventory
(1,*)
(1,*)

20. Generic Overview of an Entire Business
Acquire
Financing
Financial
Instruments
Investors
& Creditors
Hire & Use
EmployeeServices
Customers
Convert/Build
Products
Employees
Sell Goods/
Services
Goods/Services
Resources
Receive
Cash
Property, Plant,
& Equipment
Purchase
Resources
Vendors
Cash
Disburse
Cash