,Chapter 1: Introduction to Business ff f f ff ff
Process
ff
Learning Objectives ff
After completing this chapter you will be able to:
ff ff ff ff ff ff ff ff
1. Define the functional organizational structure, and explain why this structure creates
ff ff ff ff ff ff ff ff ff ff
problems for modern businesses
ff ff ff ff
2. Describe key business processes in an organizationff ff ff ff ff ff
3. Identify the main integration points between and among processes
ff ff ff ff ff ff ff ff
4. Understand the cross-functional nature of processes and their relationship to
ff ff ff ff ff ff ff ff ff
organizational areas
ff ff
5. Adopt and apply an integrated perspective to business processes
ff ff ff ff ff ff ff ff
6. Describe GBI’s organizational structure ff ff ff
7. Explain how the SAP system promotes an integrated approach to business processes
ff ff ff ff ff ff ff ff ff ff ff
Chapter Outline and Teaching Suggestions
ff ff ff ff
1. The Functional Organizational Structure
ff ff ff
a. The Silo Effect ff ff
b. Enterprise Systems ff
Discuss how companies are organized, and explain that the functional structure is the most
ff ff ff ff ff ff ff ff ff ff ff ff ff
common organizational structure. You can use a university or company or a business
ff ff ff ff ff ff ff ff ff ff ff ff ff
school department that you are familiar with as an example. Point out that processes are
ff ff ff ff ff ff ff ff ff ff ff ff ff ff ff
cross- functional. Ask the question: Why is the functional structure so common? Figure 1-1
ff ff ff ff ff ff ff ff ff ff ff ff ff ff
will assist you in explaining the cross-functional nature of business processes.
ff ff ff ff ff ff ff ff ff ff ff
Explain the silo effect and its negative implications for modern business organizations.
ff ff ff ff ff ff ff ff ff ff ff
You can give an example such as creating a sales order in sales and marketing with no
f f ff ff ff ff ff ff ff ff ff ff ff ff ff ff ff ff
integration or communication with inventory management or production.
ff ff ff ff ff ff ff ff
Point out that the nature of the functional organizational structure and the cross-functional
ff ff ff ff ff ff ff ff ff ff ff ff
nature of processes directly conflict with each other.
ff ff ff ff ff ff ff ff
Explain the benefits of an enterprise system (ES) (i.e., supports end-to-end processes,
ff ff ff ff ff ff ff ff ff ff ff
productivity, competitive edge, monitoring and changing of business processes, etc.).
ff ff ff ff ff ff ff ff ff ff
2. Business Processes ff
, a. Procurement - Buy ff ff
b. Production - Make ff ff
c. Fulfillment - Sell ff ff
d. Material Planning - Plan ff ff ff
e. Inventory and Warehouse Management - Store ff ff ff ff ff
f. Lifecycle Data Management - Design ff ff ff ff
g. Asset Management and Customer Service - Service
ff ff ff ff ff ff
h. Human Capital Management - People ff ff ff ff
i. Project Management - Projects ff ff ff
j. Financial Accounting - Track for Track for External Reporting ff ff ff ff ff ff ff ff
k. Management Accounting - Track for Internal Reporting ff ff ff ff ff ff
Define and explain a business process. Point out that organizations use many processes to
ff ff ff ff ff ff ff ff ff ff ff ff ff
achieve their objectives and they employ specific terms to identify the processes. Processes
ff ff ff ff ff ff ff ff ff ff ff ff ff
can be directly related or closely related to creating and delivering goods and services. Use
ff ff ff ff ff ff ff ff ff ff ff ff ff ff ff
Figure 1-2 to illustrate a process that is executed in response to a need (trigger). The
ff ff ff ff ff ff ff ff ff ff ff ff ff ff ff ff
process is carried out through a sequence of steps and results in an output. You can use
ff ff f f ff ff ff ff ff ff ff ff ff ff ff ff ff ff
an example such as ordering supplies.
ff ff ff ff ff ff
Processes can be supported by other processes and can have numerous sub-processes. Point
ff ff ff ff ff ff ff ff ff ff ff ff
out that communication and coordination of tasks are very important. Figure 1-3 can assist
ff ff ff ff ff ff ff ff ff ff ff ff ff ff
you in explaining this point. Ask students to indentify some other processes that they are
ff ff ff ff ff f f ff ff ff ff ff ff ff ff ff
familiar with.
ff ff
Describe and give examples of the business processes (A - K). Figures 1-4 through 1-10 will
ff ff ff ff ff ff ff ff ff ff ff ff ff ff ff
assist you.
ff ff
3. Global Bicycle, Incorporated (GBI)
ff ff ff
Explain that Global Bicycle, Incorporated (GBI) is a fictional company that is used to
ff ff ff ff ff ff ff ff ff ff ff ff ff
illustrate the important concepts, processes, and techniques discussed in the textbook.
ff ff ff ff ff ff ff ff ff ff ff
Figure 1-11 will assist you in explaining GBI's organizational structure.
f f ff ff ff ff ff ff ff ff ff
Call up the SAP University Alliance Community (UAC) website http://uac.sap.com, and
ff ff ff ff ff ff ff ff ff ff
demonstrate the functionality and services available for students. Also instruct students to
ff ff ff ff ff ff ff ff f f ff ff ff
read the GBI Backround Document on the UAC to understand GBI’s history, products and
ff ff ff ff ff ff ff ff ff ff ff ff ff ff
operations.
ff
4. How To Use This Book
ff ff ff ff
a. Chapter Structure ff
b. SAP Software and Certification ff ff ff
c. WileyPLUS
, Explain the four key sections in most of the process chapters. Provide a brief background
ff ff ff ff ff ff ff ff ff ff f f ff ff ff
on the origins of SAP and the problems it initially solved.
ff ff ff ff ff ff ff ff ff ff ff
Explain that most SAP consultants are not programmers and have mastered the material
ff ff ff ff ff ff ff ff ff ff ff ff
presented in this book.
ff ff ff ff
Explain the three levels of SAP Certification and the value added of becoming a SAP-certified
ff ff ff ff ff ff ff ff ff ff ff ff ff ff
consultant.
ff
Point out that the importance of the WileyPLUS online supplements and the value added to
ff ff ff ff ff ff ff ff ff ff ff ff ff ff
passing the SAP Certification exam. Reinforce the point that using this textbook and the
ff ff ff ff ff ff ff ff ff ff ff ff ff ff
ancillary materials can substitute for taking a formal TERP 10 course.
ff ff ff ff ff ff ff ff ff ff ff
Review questions ff
1. Question:
Describe the functional organizational structure. Why do you think this structure is so common?
ff ff ff ff f f ff ff ff ff ff ff ff ff
.
Answer:
The functional organization structure is divided into functions, or departments, each of which
ff ff ff ff ff ff ff ff ff ff ff ff
is responsible for a set of closely related activities. This type of organizational structure is
ff ff ff ff ff ff ff ff ff ff ff ff ff ff ff
widely used because it spreads the responsibility across an organization instead of locating it
ff ff ff ff ff ff ff ff ff ff ff ff ff ff
in one particular person or group. In addition, it enables people to specialize in terms of
ff ff ff ff ff ff ff ff ff ff ff ff ff ff ff ff
skills and knowledge.
ff ff ff
2. Question:
What is the silo effect? Why does it exist? How can an organization reduce or eliminate the
ff ff ff ff f f ff ff ff f f ff ff ff ff ff ff ff
silo effect?
ff ff
.
Answer:
The silo effect refers to an organizational structure in which workers complete their tasks in
ff ff ff ff ff ff ff ff ff ff ff ff ff ff
their functional “silos” without regard to the consequences for the other functions in the
f f ff ff ff ff ff ff ff ff ff ff ff ff ff
process. This situation exists because each department within a functional organization
ff f f ff ff ff ff ff ff ff ff ff
works independently and focuses on its objectives. This tendency can be reduced by thinking
ff ff ff ff ff ff ff f f ff ff ff ff ff ff
sideways or viewing the business across functional boundaries and focusing on the end-to-
ff ff ff ff ff ff ff ff ff ff ff ff ff
end nature of the process and its intended outcomes.
ff ff ff ff ff ff ff ff
3. Question:
What is a business processes? Why is a process view of organizations essential to becoming a
ff ff ff ff f f ff ff ff ff ff ff ff ff ff ff
successful manager?
ff ff
.
Answer:
A business process is a set of tasks or activities that produce desired outcomes. Every
ff ff ff ff ff ff ff ff ff ff ff ff ff f f
process is triggered by some event, such as receiving a customer order or recognizing the
ff ff ff ff ff ff ff ff ff ff ff ff ff ff ff
need to purchase something. A process view can liberate managers from the silo effect.
ff ff f f ff f f ff ff ff ff ff ff ff ff ff
Managers must
f f ff
Process
ff
Learning Objectives ff
After completing this chapter you will be able to:
ff ff ff ff ff ff ff ff
1. Define the functional organizational structure, and explain why this structure creates
ff ff ff ff ff ff ff ff ff ff
problems for modern businesses
ff ff ff ff
2. Describe key business processes in an organizationff ff ff ff ff ff
3. Identify the main integration points between and among processes
ff ff ff ff ff ff ff ff
4. Understand the cross-functional nature of processes and their relationship to
ff ff ff ff ff ff ff ff ff
organizational areas
ff ff
5. Adopt and apply an integrated perspective to business processes
ff ff ff ff ff ff ff ff
6. Describe GBI’s organizational structure ff ff ff
7. Explain how the SAP system promotes an integrated approach to business processes
ff ff ff ff ff ff ff ff ff ff ff
Chapter Outline and Teaching Suggestions
ff ff ff ff
1. The Functional Organizational Structure
ff ff ff
a. The Silo Effect ff ff
b. Enterprise Systems ff
Discuss how companies are organized, and explain that the functional structure is the most
ff ff ff ff ff ff ff ff ff ff ff ff ff
common organizational structure. You can use a university or company or a business
ff ff ff ff ff ff ff ff ff ff ff ff ff
school department that you are familiar with as an example. Point out that processes are
ff ff ff ff ff ff ff ff ff ff ff ff ff ff ff
cross- functional. Ask the question: Why is the functional structure so common? Figure 1-1
ff ff ff ff ff ff ff ff ff ff ff ff ff ff
will assist you in explaining the cross-functional nature of business processes.
ff ff ff ff ff ff ff ff ff ff ff
Explain the silo effect and its negative implications for modern business organizations.
ff ff ff ff ff ff ff ff ff ff ff
You can give an example such as creating a sales order in sales and marketing with no
f f ff ff ff ff ff ff ff ff ff ff ff ff ff ff ff ff
integration or communication with inventory management or production.
ff ff ff ff ff ff ff ff
Point out that the nature of the functional organizational structure and the cross-functional
ff ff ff ff ff ff ff ff ff ff ff ff
nature of processes directly conflict with each other.
ff ff ff ff ff ff ff ff
Explain the benefits of an enterprise system (ES) (i.e., supports end-to-end processes,
ff ff ff ff ff ff ff ff ff ff ff
productivity, competitive edge, monitoring and changing of business processes, etc.).
ff ff ff ff ff ff ff ff ff ff
2. Business Processes ff
, a. Procurement - Buy ff ff
b. Production - Make ff ff
c. Fulfillment - Sell ff ff
d. Material Planning - Plan ff ff ff
e. Inventory and Warehouse Management - Store ff ff ff ff ff
f. Lifecycle Data Management - Design ff ff ff ff
g. Asset Management and Customer Service - Service
ff ff ff ff ff ff
h. Human Capital Management - People ff ff ff ff
i. Project Management - Projects ff ff ff
j. Financial Accounting - Track for Track for External Reporting ff ff ff ff ff ff ff ff
k. Management Accounting - Track for Internal Reporting ff ff ff ff ff ff
Define and explain a business process. Point out that organizations use many processes to
ff ff ff ff ff ff ff ff ff ff ff ff ff
achieve their objectives and they employ specific terms to identify the processes. Processes
ff ff ff ff ff ff ff ff ff ff ff ff ff
can be directly related or closely related to creating and delivering goods and services. Use
ff ff ff ff ff ff ff ff ff ff ff ff ff ff ff
Figure 1-2 to illustrate a process that is executed in response to a need (trigger). The
ff ff ff ff ff ff ff ff ff ff ff ff ff ff ff ff
process is carried out through a sequence of steps and results in an output. You can use
ff ff f f ff ff ff ff ff ff ff ff ff ff ff ff ff ff
an example such as ordering supplies.
ff ff ff ff ff ff
Processes can be supported by other processes and can have numerous sub-processes. Point
ff ff ff ff ff ff ff ff ff ff ff ff
out that communication and coordination of tasks are very important. Figure 1-3 can assist
ff ff ff ff ff ff ff ff ff ff ff ff ff ff
you in explaining this point. Ask students to indentify some other processes that they are
ff ff ff ff ff f f ff ff ff ff ff ff ff ff ff
familiar with.
ff ff
Describe and give examples of the business processes (A - K). Figures 1-4 through 1-10 will
ff ff ff ff ff ff ff ff ff ff ff ff ff ff ff
assist you.
ff ff
3. Global Bicycle, Incorporated (GBI)
ff ff ff
Explain that Global Bicycle, Incorporated (GBI) is a fictional company that is used to
ff ff ff ff ff ff ff ff ff ff ff ff ff
illustrate the important concepts, processes, and techniques discussed in the textbook.
ff ff ff ff ff ff ff ff ff ff ff
Figure 1-11 will assist you in explaining GBI's organizational structure.
f f ff ff ff ff ff ff ff ff ff
Call up the SAP University Alliance Community (UAC) website http://uac.sap.com, and
ff ff ff ff ff ff ff ff ff ff
demonstrate the functionality and services available for students. Also instruct students to
ff ff ff ff ff ff ff ff f f ff ff ff
read the GBI Backround Document on the UAC to understand GBI’s history, products and
ff ff ff ff ff ff ff ff ff ff ff ff ff ff
operations.
ff
4. How To Use This Book
ff ff ff ff
a. Chapter Structure ff
b. SAP Software and Certification ff ff ff
c. WileyPLUS
, Explain the four key sections in most of the process chapters. Provide a brief background
ff ff ff ff ff ff ff ff ff ff f f ff ff ff
on the origins of SAP and the problems it initially solved.
ff ff ff ff ff ff ff ff ff ff ff
Explain that most SAP consultants are not programmers and have mastered the material
ff ff ff ff ff ff ff ff ff ff ff ff
presented in this book.
ff ff ff ff
Explain the three levels of SAP Certification and the value added of becoming a SAP-certified
ff ff ff ff ff ff ff ff ff ff ff ff ff ff
consultant.
ff
Point out that the importance of the WileyPLUS online supplements and the value added to
ff ff ff ff ff ff ff ff ff ff ff ff ff ff
passing the SAP Certification exam. Reinforce the point that using this textbook and the
ff ff ff ff ff ff ff ff ff ff ff ff ff ff
ancillary materials can substitute for taking a formal TERP 10 course.
ff ff ff ff ff ff ff ff ff ff ff
Review questions ff
1. Question:
Describe the functional organizational structure. Why do you think this structure is so common?
ff ff ff ff f f ff ff ff ff ff ff ff ff
.
Answer:
The functional organization structure is divided into functions, or departments, each of which
ff ff ff ff ff ff ff ff ff ff ff ff
is responsible for a set of closely related activities. This type of organizational structure is
ff ff ff ff ff ff ff ff ff ff ff ff ff ff ff
widely used because it spreads the responsibility across an organization instead of locating it
ff ff ff ff ff ff ff ff ff ff ff ff ff ff
in one particular person or group. In addition, it enables people to specialize in terms of
ff ff ff ff ff ff ff ff ff ff ff ff ff ff ff ff
skills and knowledge.
ff ff ff
2. Question:
What is the silo effect? Why does it exist? How can an organization reduce or eliminate the
ff ff ff ff f f ff ff ff f f ff ff ff ff ff ff ff
silo effect?
ff ff
.
Answer:
The silo effect refers to an organizational structure in which workers complete their tasks in
ff ff ff ff ff ff ff ff ff ff ff ff ff ff
their functional “silos” without regard to the consequences for the other functions in the
f f ff ff ff ff ff ff ff ff ff ff ff ff ff
process. This situation exists because each department within a functional organization
ff f f ff ff ff ff ff ff ff ff ff
works independently and focuses on its objectives. This tendency can be reduced by thinking
ff ff ff ff ff ff ff f f ff ff ff ff ff ff
sideways or viewing the business across functional boundaries and focusing on the end-to-
ff ff ff ff ff ff ff ff ff ff ff ff ff
end nature of the process and its intended outcomes.
ff ff ff ff ff ff ff ff
3. Question:
What is a business processes? Why is a process view of organizations essential to becoming a
ff ff ff ff f f ff ff ff ff ff ff ff ff ff ff
successful manager?
ff ff
.
Answer:
A business process is a set of tasks or activities that produce desired outcomes. Every
ff ff ff ff ff ff ff ff ff ff ff ff ff f f
process is triggered by some event, such as receiving a customer order or recognizing the
ff ff ff ff ff ff ff ff ff ff ff ff ff ff ff
need to purchase something. A process view can liberate managers from the silo effect.
ff ff f f ff f f ff ff ff ff ff ff ff ff ff
Managers must
f f ff
