Chapter Extension 8 Functional Processes, Applications, and Systems

Q1How do functional processes relate to functional applications and systems? Q2What are the functions of sales and marketing applications? Q3What are the functions of operations applications? Q4What are the functions of manufacturing applications? Q5What are the functions of human resources applications? Q6What are the functions of accounting applications? Study Questions CE11-2 Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Functional processes Processes that support a single organizational function Accounts payable, sales lead-tracking, customer support business processes Functional application Computer program that supports or automates major activities in a functional process Q1: How Do Functional Processes Relate to Functional Applications and Systems? CE11-3 Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Determine requirements of function Evaluate functional applications and select closest fit Implement application in context of supported functional process Alter process or software Build remaining components of an information system Acquire and install hardware, populate database, adapt standard procedures, and train staff Creating Functional Information Systems CE11-4 Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Model of “as-is” functional process Create components Evaluate functional applications and select one that provides closest fit Implement processes/application Build remaining components of information system Functional process Organizations acquire functional application software and adapt it to support functional processes by creating functional information systems Functional Applications and Business Process Management (BPM) CE11-5 Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Process: Reserving golf tee times and tennis courts Model process and determine specific requirements Identify potential off- the-shelf applications and select Create default and custom procedures for using software Example of a Functional Application at Fox Lake: Reservation Application CE11-6 Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Acquire hardware, populate database, modify procedures, train users

Q2: What Are the Functions of Sales and Marketing Applications? CE11-7 Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Find and transform prospects into customers and sell more product to existing customers

Prospect generation Send postal mailings and Web sites may be used to send product information, white papers for contact information Maintains customer name, product interests, past purchases, history of contacts with customer Lead-tracking applications Lead- generation applications Lead Generation and Lead Tracking Applications CE11-8 Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Form for Lead Tracking and Customer Management CE11-9 Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Obtain additional sales from existing customers Maintain customer contact and order- history data Track customer credit status Customer- management applications Compare past sales records with projections and sales estimates Assess desirability of product to different market segments Manage product through life-cycles Product and brand management applications Customer-Management and Product and Brand Management Applications CE11-10 Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Manage finished-goods inventory and movement of goods to customer Used by non- manufacturers, distributors, wholesalers, retailers Principle operations applications Finished-goods inventory management Order entry Order management Customer service Q3: What Are the Functions of Operations Applications? CE11-11 Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Functions of Operations Applications CE11-12 Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Inventory applications: Support inventory control, management, and policy Manufacturing-planning applications Manufacturing-scheduling applications Manufacturing operations applications Manufacturing applications Q4: What Are the Functions of Manufacturing Applications? CE11-13 Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Figure CE11-4 Manufacturing Information Systems CE11-14 Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Support inventory control, management, and policy Cover inventory control, track goods and materials into, out of, and between inventories Use UPC bar codes and RFID tagsRFID Inventory applications Use past data to compute stocking levels and reorder levels, and reorder quantities according to inventory policy Computing inventory counts and losses Inventory- management applications Q4: What Are the Functions of Manufacturing Applications? (cont’d) CE11-15 Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Large inventories to minimize operations disruptions and lost sales due to outage Increase sales via greater selection and availability Inventories viewed as assets Keep inventories small, eliminate if possible Just-in-time inventory policy (JIT)JIT Inventories viewed as liabilities Wal-Mart has large inventories in stores, but minimizes inventories in warehouses and distribution centers Hybrid Inventory Policy: Two Schools of Thought CE11-16 Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Implement inventory philosophy Find balance between inventory cost and item availability Compute ROI Report effectiveness of current inventory policy Evaluate alternative policies by performing what-if analyses Inventory applications help to: Inventory Policy: Two Schools of Thought (cont’d) CE11-17 Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

List of materials that comprise subassemblies to be manufactured Bill of materials (BOM) May be augmented to show labor and equipment requirements Schedule equipment, people, and facilities Manufacturing-Planning Applications CE11-18 Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Bill of Materials Example CE11-19 Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Sample Manufacturing Plan CE11-20 Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Demand pull products through manufacturing in response to signals from customers or other production processes. (Demand-side method, JIT)Demand-side method, JIT Pull manufacturing process Analyze past sales levels, estimate future sales, create master production schedule. Produce and push into sales (Supply-side method).Supply-side method) Push manufacturing process Combined push and pull systems Three Philosophies of Manufacturing CE11-21 Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Company creates an MPS and plans manufacturing accordingly, but it uses kanban- like signals to modify schedule.kanban

Application that plans need for materials and inventories used in manufacturing process Materials requirement planning (MRP)MRP MRP plus planning of materials, personnel, machinery Linkages with sales, marketing via MPS “what-if” analyses on variances“what-if” analyses Manufacturing resource planning (MRP II)MRP II Manufacturing-Scheduling Applications CE11-22 Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Computer programs operate lathes, mills, and robots, and even entire production lines Operate production lines Computer-aided manufacturing Computer-aided design Robotics  These run machines rather than support business processes Manufacturing Operations CE11-23 Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Recruitment Compensation, pensions, bonuses, and so on in liaison with Payroll Training and development Assessment HR Functions Support Q5: What Are the Functions of Human Resources Applications? CE11-24 Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Functions of Human Resources Applications CE11-25 Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Cost-accounting─determine marginal costs and profitability Accounts receivable─includes receivables, payments, collections Cash management─scheduling payments; planning use of cash Financial reporting─produce financial statements General ledgers─show assets and liabilities Accounts payable─reconcile payments against purchasers Budgeting─allocate and schedule revenues and expenses Treasury applications─concern management and investment Q6: What Are the Functions of Accounting Applications? CE11-26 Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Functions of Accounting Applications CE11-27 Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Active Review CE11-28 Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Q1How do functional processes relate to functional applications and systems? Q2What are the functions of sales and marketing applications? Q3What are the functions of operations applications? Q4What are the functions of manufacturing applications? Q5What are the functions of human resources applications? Q6What are the functions of accounting applications?

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