Business Processes Fundamentals

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Questions and Answers

What is a business process?

A one-time event that occurs in a business

A functional area of a business, such as marketing or finance

A logically related set of tasks that define how specific business tasks are performed (correct)

A set of unrelated tasks that are performed in a business

What is an example of a functional business process?

Hiring employees and evaluating their job performance

Paying creditors and managing cash accounts

Assembling products and checking for quality

All of the above (correct)

How can information technology improve business processes?

By increasing the number of manual steps

By reducing the flow of information

By eliminating the need for financial statements

By automating steps that were manual (correct)

What is a result of improving business processes with information technology?

Eliminating delays in decision making Signup and view all the answers

What can business processes be seen as?

A collection of business processes Signup and view all the answers

What is the primary purpose of a Transaction Processing System (TPS)?

To record and perform daily routine transactions necessary to conduct business Signup and view all the answers

What is an example of a cross-functional business process?

The order fulfillment process Signup and view all the answers

What would be the consequence of a TPS failure for even a few hours?

It could lead to a firm's demise Signup and view all the answers

What can business processes be?

Either assets or liabilities Signup and view all the answers

What type of system would be used to help managers and users make improved decisions?

System for business intelligence Signup and view all the answers

What can information technology enable?

Entirely new processes Signup and view all the answers

What type of system serves middle management and provides reports on a firm's current performance?

Management Information System Signup and view all the answers

What is a characteristic of a Management Information System (MIS)?

It provides answers to routine questions with predefined procedure Signup and view all the answers

What type of system would be used to support non-routine decision making that are unique and rapidly changing?

Decision Support System Signup and view all the answers

What type of system uses external information as well as TPS/MIS data?

Decision Support System Signup and view all the answers

What is an example of a Decision Support System?

Voyage-estimating system Signup and view all the answers

Study Notes

Business Processes

Business processes are flows of material, information, and knowledge that define how specific business tasks are performed.
These processes may be tied to a functional area or be cross-functional.
A business can be seen as a collection of business processes.
Business processes can be assets or liabilities.

Functional Business Processes

Examples include:
- Manufacturing and production (assembling products, checking for quality, producing bills of materials)
- Sales and marketing (identifying customers, making customers aware of products, selling products)
- Finance and accounting (creating financial statements, paying creditors, managing cash accounts)
- Human resources (hiring employees, evaluating employees' job performance, enrolling employees in benefits plans)

Improving Business Processes with Information Technology

IT increases efficiency of existing processes by:
- Automating manual steps
- Changing the flow of information
- Replacing sequential steps with parallel steps
- Eliminating delays in decision making
- Supporting new business models
IT enables entirely new processes.

Systems for Different Management Groups

Transaction Processing Systems (TPS):
- Serve operational managers and staff
- Perform and record daily routine transactions necessary to conduct business
- Examples: sales order entry, payroll, shipping
- Allow managers to monitor status of operations and relations with external environment
- Serve predefined, structured goals and decision making

Systems for Different Management Groups (continued)

TPS failure can lead to a firm's demise.
A payroll system is an example of a TPS.
Systems for business intelligence:
- Provide data and software tools for organizing and analyzing data
- Used to help managers and users make improved decisions
Other systems include:
- Management Information Systems
- Decision Support Systems
- Executive Support Systems

Management Information Systems

Serve middle management
Provide reports on firm's current performance, based on data from TPS
Provide answers to routine questions with predefined procedures for answering them
Typically have little analytic capability

Decision Support Systems

Serve middle management
Support nonroutine decision making that is unique and rapidly changing
Use internal and external information, including TPS and MIS data
Examples: model-driven DSS (e.g. voyage-estimating systems) and data-driven DSS.

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Description

Learn about business processes, including their definition, types, and importance in organizational effectiveness. Understand how they can be assets or liabilities and how they relate to functional areas.