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CH A P TE R1

BUSINESS FUNCTIONS AND

BUSINESS PROCESSES

L E ARNING O BJ ECTIVE S
After completing this chapter, you will be able to:
• Name the main functional areas of operation used in business
• Differentiate between a business process and a business function
• Identify the kinds of data each main functional area produces
• Identify the kinds of data each main functional area needs
• Define integrated information systems, and explain why they are essential
in today’s globally competitive business environment

I N TRODUCTION

Enterprise Resource Planning (ERP) systems are core software programs used by companies to

integrate and coordinate information in every area of the business. ERP (pronounced “E-R-P”)
programs help organizations manage company-wide business processes, using a common database

and shared management reporting tools. A business process is a collection of activities that takes
one or more kinds of input and creates an output, such as a report or forecast, that is of value to the

customer. ERP software supports the efficient operation of business processes by integrating tasks
related to sales, marketing, manufacturing, logistics, accounting, and staffing—throughout a

business. In addition to this cross-functional integration, which is at the heart of an ERP system,
companies connect their ERP systems, using various methods, to coordinate business processes

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