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74 Part One Organizations, Management, and the Networked Enterprise

TABLE 2.1 EXAMPLES OF FUNCTIONAL BUSINESS PROCESSES

FUNCTIONAL AREA BUSINESS PROCESS
Manufacturing and production Assembling the product
Checking for quality
Producing bills of materials
Sales and marketing Identifying customers
Making customers aware of the product
Selling the product
Finance and accounting Paying creditors
Creating financial statements
Managing cash accounts
Human resources Hiring employees
Evaluating employees’ job performance
Enrolling employees in benefits plans

Other business processes cross many different functional areas and require
coordination across departments. For instance, consider the seemingly simple
business process of fulfilling a customer order (see Figure 2.1). Initially, the
sales department receives a sales order. The order passes first to accounting to
ensure the customer can pay for the order either by a credit verification or
request for immediate payment prior to shipping. Once the customer credit is
established, the production department pulls the product from inventory or
produces the product. Then the product is shipped (and this may require work-
ing with a logistics firm, such as UPS or FedEx). A bill or invoice is generated by
the accounting department, and a notice is sent to the customer indicating that
the product has shipped. The sales department is notified of the shipment and
prepares to support the customer by answering calls or fulfilling warranty
claims.

FIGURE 2.1 THE ORDER FULFILLMENT PROCESS

Fulfilling a customer order involves a complex set of steps that requires the close coordination of the
sales, accounting, and manufacturing functions.

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