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Business Functions and Business Processes
productivity increases, and costs decrease. In effect, integrating the information systems
5
can make for a more effective overall organization—hence, more efficient business
processes. Figure 1-3 illustrates the process view of business operations.
Customer order process

Sales function Accounting function Purchasing function Production function Logistics function

Material order process
Source Line: Course Technology/Cengage Learning.

FIGURE 1-3 A process view of business operations
Businesses take inputs (resources) in the form of material, people, and equipment,
and transform these inputs into goods and services for customers. Effectively managing
these inputs and business processes requires accurate and up-to-date information. For
example, the sales staff takes a customer’s order, and production employees schedule the
manufacturing of the product. Logistics employees schedule and carry out the delivery of
the product. If raw materials are needed to make the product, production prompts
purchasing staff to arrange for their purchase and delivery. Logistics will receive the raw
material, verify its receipt to accounting so the vendor can be paid, and deliver the goods
to production. Throughout, accounting keeps appropriate transaction records.

ANOTHER LOOK

Integrated Information Systems
The world today is information driven. Getting the right information to the right person
can make a huge difference in terms of a company’s bottom line. But are some systems
just too complicated to be fully integrated? Although the financial services industry
spends more on information technology than any other industry ($500 billion worldwide
in 2009), many financial institutions do not have fully integrated information systems.
Why is this so? The reasons are many. Banks were the first organizations to adopt
information systems, so many of their systems are legacy (old) systems that would be
difficult and expensive to update. In addition, many banks have gone through multiple
phases of acquisition, which in itself results in duplicate information systems.
Government regulations on financial institutions have also brought about additional
(continued)

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