Page 22 -

4 CHAPTER 1 Introduction to Business Processes

to effectively manage a business process from beginning to end in an inte-
grated, consistent, and highly effi cient manner. Further, once a business pro-
cess is managed by an integrated enterprise system, it can be monitored and
improved very easily. As a result, we cannot discuss contemporary business
processes without considering the role of enterprise systems. We will discuss
enterprise systems in greater depth in Chapter 2.
In this chapter, we begin by identifying the key processes that typically
exist in organizations. We then discuss enterprise systems and SAP, the com-
pany that produces the most popular enterprise systems globally. We also
introduce Global Bike Incorporated, a company that we will use as a case
study throughout this textbook to illustrate important concepts in a practical
format. We conclude with the plan for the remainder of the book.

BUSINESS PROCESSES
Organizations exist either to serve some commercial purpose or to achieve
some social objective. They differ depending on the purpose or goal they are
trying to achieve, their ownership or management structure, and the regula-
tory environment in which they operate. Some organizations create and deliver
products or services to customers to make a profi t. For example, a bicycle
manufacturer produces a variety of bicycles and accessories. It then sells these
products to numerous retailers who, in turn, sell them to the fi nal consumers.
Other companies provide services, such as repairs to the bicycles. Yet others
provide the manufacturer with the parts and materials needed to make the
bicycles. Achieving the organization’s objectives involves many different types
of work. For example, the manufacturer must design the bicycles, identify what
parts it will use to make them, determine where to obtain these parts, produce
the bicycles, identify its customers, and market and sell the bicycles to them. In
addition, it must determine how to manage its money, its various facilities such
as factories and warehouses, and the many people that it must recruit, employ,
train, and retain. This work is completed in numerous processes.
Although organizations exist for many different purposes, vary greatly in
size and complexity, and operate in many different industries, they all exhibit
similarities in the ways that they operate. Regardless of their type or size, suc-
cessful organizations and industries use processes and enterprise systems to
complete the work needed to achieve their goals. Processes may vary slightly
depending on the unique characteristics of the industry or the structure of the
organization, but the basic activities can be recognized by anyone who has
developed a process view of business. Likewise, companies may employ differ-
ent enterprise systems to manage their processes. However, you can apply the
principles, concepts, and techniques explained in this textbook to most of
the enterprise systems you are likely to work with.
A business process, illustrated in Figure 1-2, is a set of tasks or activi-
ties that produce desired outcomes. Every process is triggered by some event,
such as receiving a customer order or recognizing the need to increase inven-
tory. The columns in the fi gure represent different parts, or functional areas,
within an organization, such as sales, warehouse, manufacturing, and account-
ing. Thus, the specifi c steps in the process are completed in different functional
areas. For example, when a retailer (customer) places an order for bicycles,
the manufacturer (seller) uses a specifi c process to ensure that the correct

31/01/11 1:03 PM
CH001.indd 4
CH001.indd 4 31/01/11 1:03 PM