Infosystems Final (Wednesday)
Corporate Structure/Business Processes 2. Finance
- Deals with the strategic financial issues associated with increasing the value of the business while observing applicable laws and social responsibilities, ex. How the company should raise and spend its capital/merge?/how invest/etc. - Short term (up to 1 year), medium term (1-7 years), long term (more than 7 years) - Calculate different ratios
Corporate Structure/Business Processes 6. Operations/Production
o The management of systems or processes that convert or transform resources into human goods o Oversees transformation of input resources into output resources o Manages the physical process by which companies take in raw materials, convert them into products, and distribute them to customers Business Process Reengineering 1. Project scope-broad to narrow 2. Project Speed-fast to slow 3. Turnaround, transformation, reengineering, and continuous improvement
Corporate Structure/Business Processes 7. Management Information Systems
- A field concerned with the use of technology in managing and processing information - Use of electronic computers and computer software to convert, store, protect, process, transmit, and retrieve information - The application of people, technologies, and procedures to solve business problems - Implement, control, and monitor plans, strategies, tactics, new products, new business models, or new business ventures
Corporate Structure/Business Processes Business Process Improvement
- Customers are demanding better products and services - If they don't get what they want from one, they get it from another - Continuous process improvement model (aka business process improvement or functional process improvement)—attempts to understand and measure the current process, and make performance improvements accordingly o Steps→document as-is process, establish measures (way to measure the process based on what customers want), follow process, measure performance/results, identify and implement improvements, measure the performance of the new process (REPEAT) 2 types of process models 1. As is=represent the current sate of the operation that has been mapped without any specific improvements or changes to existing processes 2. To be=shows the results of applying change improvement opportunities to the current (as-is) process model; ensures that the process is fully and clearly understood before the details of a process solution are decided; shows how the what is to be realized
Corporate Structure/Business Processes 3. Human resources
- Includes the policies, plans, and procedures for the effective management of employees - Hire, train, evaluate, reward, and terminate employees - Focus on employee recruitment, employee selection, employee training/development, employee appraisals/evaluations/rewards, employee communications - Goal: to instill employee commitment by creating an environment of shared values, innovation, flexibility, and empowerment
Corporate Structure/Business Processes 4. Sales
- The function of selling a good or service and focuses on increasing customer sales, which increases company revenues - Good indication of how well a company is performing - Sell the product/service (sometimes need a license to do this) o Hard sell: only concerned with making the sale now without any regard to the cost of the sale to the business, where the salesperson heavily pushes a product (even when the customer doesn't want the product) and where price cuts are given when if they cause financial losses for the company *The sales process=SEE microsoft doc - Market share: measuring the proportion of the market that a firm captures is one way to measure a firm's performance relative to its competitors - Reasons to increase it: many associate it with profitability, economies of scale, sales growth in a stagnant industry, reputation, increased bargaining power - Ways to increase market share: changing one of the variables like product, price, place, promotion (these 4 variables are called the marketing mix)--there are also reasons not to increase it
Corporate Structure/Business Processes 5. Marketing
- The process associated with promoting the sale of goods and services; supports the sales department by creating promotions that help sell the company's products - Marketing communications: seek to build product or service awareness and to educate potential consumers on the product or service - Marketing mix: the four p's (product, price, place, promotion), includes the variables that marketing managers can control in order to best satisfy customers in the target market - Market segmentation: the division of a market into similar groups (more on page 12 of book), target specific market and better satisfy their need. - Product life cycle: includes the four phase a product progresses through during its life cycle including introduction, growth, maturity, and decline; the marketing of a product depends on its stage in the cycle
Corporate Structure/Business Processes What are the three common business forms ?
1. Sole proprietorship (one person, quickest and easiest way to set up a business, no prerequisites or specific costs, a simple business license for $25) 2. Partnership (more than one owner, partners—each personally responsible for all the profits and losses of the business, simple—no prerequisites or specific costs required, Partnership agreement—need to have lawyer draft this when start up; a legal agreement between two or more business partners that outlines the core business issues. They include: • Amount of capital each partner expects to contribute • Duties and responsibilities expected from each partner • Expectations from sharing profits and losses Limited Partnership--the law protects the limited partner from being responsible for all the partnership's losses, the legal liability of a limited partner is limited to the amount of his or her investment, limited partner can't play a role in operations of business 3. Corporation--most sophisticated form of business entity and the most common for large companies, the business entity is separate from the business owners, shareholder=business owners, limited liability—the shareholders are not personally liable for the losses incurred by the corporation, pay several hundred dollars and have a charter - Financial losses incurred by a corporation are limited to the assets owned by the corporation - Shareholders' personal assets (i.e. homes/investments) cannot be claimed to pay off debt or losses incurred by the corporation - 2 types: • For profit corporations: primarily focus on making money and all profits and losses are shared by the business owners • Not for profit (nonprofit) corporations: exist to accomplish some charitable, humanitarian, or educational purpose; the profits and losses are not shared by the business owners; donations to them can be tax deductible for the donor (ex. Hospitals, colleges, universities, and foundations) Why incorporate? • Limited liability: limited to the assets owned by the corporation • Unlimited life: not dependent on the lifespan of one individual; continues until it accomplishes its objective, merges with another business or goes bankrupt OR indefinitely • Transferability of shares • Ability to raise investment capital: easy to attract new investors
Corporate Structure/Business Processes List and describe the seven departments commonly found in most organizations.
Accounting, finance, human resources, sales, marketing, operations/production, management information systems
Corporate Structure/Business Processes 1. Accounting
Analyzes the transactional information of the business so the owners and investors can make sound economic decisions 2 Types 1. Financial accounting: involves preparing financial reports that provide information about the business's performance to external parties such as investors, creditors, and tax authorities; must follow GAAP (Generally accepted accounting principles, strict accounting rules) 2. Managerial accounting: involves analyzing business operations for internal decision making and does not have to follow rules issued by standard setting bodies such as GAAP Produce financial statements: balance sheet, income statement, statement of owner's equity, statement of cash flows
Corporate Structure/Business Processes Business Process Management
Integrates all of an organization's business process to make individual processes more efficient. BPM can be used to solve a single glitch or to create one unifying system to consolidate a myriad of processes. - Issues in the as-is order process model o Sales representatives take too long to submit orders o There are too many process steps o Sales administration slows down the process by batch-processing orders o Credit checking is performed for both old and new customers o Credit checking holds up the process because it is done before (rather than concurrently with) order picking - Key reasons for BPM o To introduce greater efficiencies/improved productivity o To improve service o To reduce operational costs o To improve organizational agility o To improve process visibility o To meet regulatory compliance o To deal with integration issues - BPM benefits o Update processes in real time o Reduce overhead expenses o Automate key decisions o Reduce process maintenance cost o Reduce operating cost o Improve productivity o Improve process cycle time o Improve forecasting o Improve customer service - BPM risks and rewards - Risks o A new group is involved in implementing a BPM solution across all these areas; span on control is consolidated and all are accountable to the whole process, not just one piece of the puzzle - Benefit o A new business architecture and approach to managing the process and enabling proactive, continuous improvement. The new organizational structure and roles created to support BPM help maximize the continuous benefits to ensure success. Critical Success Factors 1. Understand reengineering 2. Build a business and political case 3. Adopt a process management approach 4. Measure and track performance continuously 5. Practice change management and provide central support 6. Manage reengineering projects for results
Corporate Structure/Business Processes Business Process
o A standardized set of activities that accomplish a specific task, such as a customer's order o Transform a set of inputs into a set out outputs—goods or services—for another person or process by using people and tools - Process steps—the activities done to complete the transaction - Business process—a standardized set of activities that accomplish a specific task, such as processing a customer's order; transform a set of inputs into a set of outputs (goods or services) for another person or process by using people and tools - Examining processes helps an organization determine bottlenecks and identify outdates, duplicate, and smooth running processes - Must optimize and automate to be competitive - Characteristics of business processes o The processes have internal and external users o A process is cross-departmental. Departments are functional towers of expertise, but processes cut across departments. o The processes occur across organizations. o The processes are based on how work is done in the organization. o Every process should be documented and fully understood by everyone participating in the process. o Processes should be modeled to promote complete understanding. - It is a type of high-profile strategic initiative that an organization undertakes to help it gain competitive advantages and business efficiencies 1. Customer Facing Processes 2. Core business processes 3. Business facing processes Understanding the importance of business processes - Organizations are only as effective as their business processes. Logical processes help businesses achieve their goals.
