Business Cycle and Governance Processes

• A business cycle is an interrelated series of activities that follow a logical sequence to accomplish a specific business purpose.
• There are four primary types of business processes: governance, management, operations, and information processes.
• Operations and associated information processes are the focus.

Governance Processes

• Governance processes address the directional aspects of a business.
• They consist of activities to evaluate, direct, monitor, and control organizational performance.
• These processes serve the "ruling" function of an organization.
• They are necessary to ensure an organization's strategic direction and performance align with stakeholder interests/value.
• Governance processes consist primarily of evaluating, directing, controlling, and monitoring.
• Evaluating assesses current/future stakeholder interests and establishes the strategic direction of the organization.
• Directing establishes strategic objectives, plans, policy, structures, and roles/responsibilities to direct the implementation of organizational strategy.
• Controlling establishes processes to ensure strategic objectives are attained.
• Monitoring establishes appropriate monitoring/measurement systems for monitoring organizational performance to ensure compliance with strategic objectives and business requirements.

Management Processes

• Management processes address the administrative aspects of the business.
• They consist of activities necessary to plan, implement, run, control, and monitor business operations.
• These processes serve the "running" function of an organization.
• They are necessary to ensure operations processes meet expectations/requirements.
• Management processes consist primarily of planning, implementing, decision making, controlling, and monitoring.
• Planning defines operational objectives to support organizational strategy/strategic objectives.
• Implementing develops and executes processes to support operational objectives.
• Decision-making identifies and selects courses of action to run the business and support operational objectives.
• Controlling implements controls to ensure operational objectives are met.
• Monitoring monitors operational processes and performance.

Operations Processes

• Operations processes address the operational aspects of a business.
• They consist of activities performed to fulfill the entity's central business function(s).
• Operations processes perform the “work” function of a business entity.
• It is necessary to ensure the organization fulfills its intended purpose.
• Selling goods/services includes order processing, fulfillment, delivery/distribution, and collections.
• Acquiring/procuring resources includes requirements determination, procuring/purchasing, receiving, storing, and payments.
• Producing goods/services includes product/production design, planning/scheduling, requirements planning, production operations, and storing.
• Supporting operations processes are activities that facilitate the achievement of core operations processes.
• Accounting/reporting includes transaction processing, financial reporting, and management reporting.
• Finance includes cash management, financial planning, investments, and financing.
• Human resources includes employee recruiting, hiring, training, development, and compensation.
• Information systems includes acquisition, development, implementation, and operation of information systems/processes.
• Marketing includes market research, identification, strategy, promotion, sales generation, and distribution.
• Service includes installation, parts, repairs, replacements, and customer support.

Information Processes

• This process addresses the informational aspects of a business
• It consists of activities performed to transform data resulting from operations processes into information (i.e., data processing cycle, capture, processing, maintenance/storage, and distribution/reporting).
• Information processes perform the "keeping track” function within a business entity.
• They are necessary to track/support operations processes.
• Data capture involves input activities to get data into the system (i.e., collect, verify, enter).
• Data processing consists of transforming activities to convert captured data into a useful form (i.e., adding/altering, reviewing/verifying, updating/revising, and/or deleting/removing data).
• Data maintenance consists of storage activities to maintain data so that it may be readily identified and accessed, (i.e., organizing, filing, and retrieving).
• Data distribution involves output activities to provide useful information in meaningful form (e.g., documents, reports) to users (i.e., aggregating, preparing, and distributing).
• Data/information processing should be designed to effectively, efficiently, and securely track operations activities in a manner that results in a high level of data/information integrity (accuracy, completeness, and validity).
• Information processes (keeping track activities) are designed to closely follow operations processes (work activities).
• Operations and associated information processes will be closely related and sometimes difficult to distinguish.

Operations and Information Process Objectives

• Business objectives establish a base for both driving and measuring how adequate business performance is.
• A business process objective is a goal or requirement for a particular business process.
• Business process objectives may be used to assess how well a business process functions relative to expectations.
• Operations process objectives ensure the effectiveness, efficiency, and security of operational processes.
• Information processes are designed to track operations processes.
• The effectiveness, efficiency, and security of operations processes will directly/indirectly impact the integrity and security of information processes (and vice versa).
• Operations process objectives include effectiveness, efficiency, and security.
• Effectiveness concerns “what” a process does and whether or not the process fulfills its intended purpose or accomplishes its intended function.
• Efficiency relates to “how” well a process is performed and whether or not resources are employed in a concise, economical, organized/systematic, and timely manner.
• Security concerns the protection of operational resources such as cash, inventory, and data.
• Information security objectives concern the protection of information systems (IS) components (i.e. people, data/information, processes/procedures, IT components, facilities).

Transaction Processing

• Transactions refer to a business event that impacts or is of interest to an organization.
• Transactions are typically classified as financial or non financial.
• Financial transactions are impact financial position, measured in monetary terms.
• Non financial transactions do not impact financial position, not measured in monetary terms.
• Transaction processing is the capture, processing, maintenance, and distribution of business transaction information.
• A TPS (transaction processing system) is an information processing system designed to process business transactions.
• The is to capture, process, maintain/store, and distribute business transaction information to users.
• A transaction cycle is a data/information processing cycle designed to process business transaction data for a particular series of logically related, recurring transaction events.
• Three basic transaction cycles are used to account for most of the operational activity/processes: revenue cycle, expenditure cycle, and production cycle.
• The revenue cycle processes transaction data relating to selling goods/services.
• The expenditure cycle processes transaction data relating to acquiring/procuring resources.
• The production cycle processes transaction data relating to producing goods/services.
• A subcycle is a meaningful component or part of a cycle.
• The revenue cycle consists of order entry/sales, billing/accounts receivable, and cash receipts subcycles.
• The expenditure cycle consists of purchasing/receiving, payables/accounts payable and cash disbursements subcycles.
• The production cycle consists of product/production design, production planning/scheduling, materials requirements planning, production events/operations, management reporting subcycles
• Documents are use to support data processing steps
• Documents are manual/electronic forms/instruments used to support data processing steps and to ensure integrity

e-Transaction Processing

• e-Transaction processing refers to the use of communications, networks, and/or Internet technologies to facilitate transaction processing (i.e., processing transactions online).
• It encompasses online transaction entry (OLTE), online batch processing (OLBP), online real-time processing (OLRT), and online transaction processing (OLTP) systems.
• OLTE uses electronic data entry devices to enter data directly into the information system at the time of the transaction event.
• OLBP updates master records subsequent to the entry of a transaction event into a system using periodic mode/batch processing.
• OLRT updates master records immediately after the entry of a transaction event into a system using immediate mode/real-time processing.
• OLTP enables online transaction oriented applications for numerous users with extremely fast response times.
• OLTP systems are characterized by speed, concurrency, high volume, and continuous availability.
• e-Payment processing refers to the use of online technology to process payments for goods/services.
• Electronic funds transfer (EFT) is the direct, digital transfer of money from one account to another via a network.
• Electronic payment (e-payment) methods are online payment methods (generally enabled by EFT) that allow consumers to pay for goods/services electronically.

Point of Sale (POS) Systems

• Refers to the time/place at which payment is made for goods/services
• POS Systems includes computer/device and associated applications, peripheral devices (input/output devices), and network connectivity.
• POS System can record customer orders, track order fulfillment, process different payment options, update master records in real-time, manage inventory, process returns, and connect to other networked systems.
• Mobile Point of Sale (mPOS) Refers to a wireless mobile device and associated peripherals

Process Analysis & Improvement

• Business process analysis is the process of systematically analyzing internal business processes as a basis for determining appropriate improvement strategies
• Business process analysis is used to better understand a process and improve its effectiveness, increase customer satisfaction, improve effectiveness/efficiency, enhance quality/value, and/or reduce costs
• The goal specification, process identification, data collection, process mapping, process analysis, opportunity identification, plan improvements, and implement/monitor.
• Process mining is an analytics technique that analyzes and tracks processes based on data event logs extracted from a business information system.
• Process mining tools are automated software applications designed to work with a business information system to discover, track, and model processes, and then construct useful analytics to enable process analysis improvement/management.

Understand business cycles with a focus on governance, management, operations, and information processes. Governance processes evaluate stakeholder interests, direct strategic objectives, and monitor organizational performance. These processes ensure alignment with stakeholder value.