Differences Between Business Function and Business Process - Essay Example

Running Head: ERP ERP [Institute’s ERP Distinguish between a business function and business process. Describe how a business process cuts across functional lines in an organization. Why do managers organize their teams in terms of business processes instead of functional departments? What benefits do you see from this new method of organizations? In ERP, business process and business function are two imperative terms, and it is very imperative to understand their meanings in order to recognize importance of enterprise resource planning. A major requirement of distinguishing between business function and business process is to differentiate between ‘performing’ and ‘’managed’ (Borysowich, 2007). Everything that one can manage in an organization will be a business function; however, everything that one can perform will be a business process. Moreover, a business function can comprise different business processes; however, a business process will never consist of business functions, and will only comprise more business processes. Furthermore, a business process will always have an input component, as well as an output section that make it a process. In the past, conventional organizations were focusing on functional departments for the management; however, studies indicated that a number of business processes usually cut across functional lines internally that resulted in a paradigm shift, essential for efficient managers, and thus, managers are now putting efforts to manage their teams while focusing on business processes, rather than business functions. One of the crucial reasons of split by business process is involvement of various departments and individuals in a single process that results in cutting across of functional lines. It is an observation that this horizontal focus on business processes has enabled efficient managers to improve their processes while ensuring customer value in the organization, a significant benefit of this paradigm shift. Think of the last time you bought a pair of shoes. How does this process of buying those shoes cut across the store’s various functional lines? What information from your receipt would need to be available to the business functions? Which business functions would need that information? A significant objective of ERP is alignment of business projects/processes with strategic aims of the organization. In other words, major aim of implementing ERP is the enhancement and improvement of key metrics that requires proper flow of information from one functional department to another, and this is foremost job of ERP databases that facilitate employees of different functional lines in acquiring needed information from another department, allowing them to perform their jobs efficiently (Molloy, 2008). From the consumers’ perspective, efficiency or quality of the business process is their only concern that automatically cuts across various functional lines in an organization. For instance, buying of a pair of shoes is business process with input in the form of customer’s order, process involving different functional lines of sales, accounting, logistics, production, etc, and lastly, output in the form of a pair of shoes. In this way, a simple order of a pair of shoes cuts across various functional departments until achievement of its output. In this regard, ERP plays an imperative role in integrating information and providing it to the concerned functional lines that may improve the result. For instance, some of the information such as configuration of delivery, priority of delivery as urgent, payment in installments, etc from customer’s receipt can be efficient for different departments of production, logistics, and accounts department respectively. Much is available about ERP, both in the news media and on the Internet. Using library resources or the Internet, report on (1) on company’s positive experience with implementing ERP, and (2) one company’s disappointing experience. During research on the beneficial and disappointing experiences of organizations, it is an observation that ERP implementation allows an improved flow of information from one functional department to another allowing standardization of business practices, a significant benefit of ERP implementation. In addition, companies have been beneficial after ERP’s implementation, as it results in centralization of every business process, allowing business leaders to monitor and bring positive changes from a centralized platform. Companies have acknowledged reduction in the maintenance costs of information systems after ERP’s implementation that brings positivity in the company. On the other hand, one of the issues confronted by business organizations that turned the whole experience into a disappointment was implementation process of ERP systems. Experts have indicated that company’s future literally depends on the implementation process of ERP systems, as their success or failure decides company’s prospects in the market. In this regard, a few companies have even confronted terrible consequences due to inefficient implementation of ERP (Stein, 1999). Moreover, a few adversaries of the ERP systems have criticized that centralization and standardization process of ERP results in rigidity in the functional departments that discourage competitive advantage, essential for company’s growth. In specific, Navarre Corporation has reported prospects for improvement in their profitability rate according to Reuters (2009), and ERP implementation has been the significant factor of such enhancement. In this regard, ERP has allowed the Navarre Corporation to experience a positive outcome after its implementation in the company. Find a journal article about the development of ERP, its history, or how businesses use its features Since centuries, business has remained a major sector of the human society that has enabled individuals and even nations to develop and progress in their lives. However, in recent years, globalization has resulted in rapid advancement in the field of business sector, and ‘Enterprise Resource Planning’ is one of the significant developments that facilitate business organizations in managing their different processes in an efficient manner with the help of computerized databases. These databases manage and integrate information flow from different departments of marketing, sales, accounts, etc into a single shared report, beneficial for effective management of business processes. Analysis of the material on ERP has indicated that until 70s, organizations were focusing on ‘material requirements planning’, whereas, businesses during 80s shifted their focus to ‘manufacturing resource planning’, and subsequently, in 90s, ‘ERP’ (Jacobs, 2007). Nowadays, business organizations are using ERP systems to integrate their different business processes for improving their business practices, and enhancing their profitability as well. Moreover, recent studies have indicated that companies are now using extended forms of enterprise resource planning, such as ‘business intelligence’ that facilitate executives to take effective decisions. Besides, e-business is the innovative form of ERP that comes with e-logistics, allowing business to carry out their business activities on the internet. Lastly, customer relationship management and supply chain management are some other recent forms of enterprise resource planning. In specific, CRM ensures a deeper and strong relationship with individuals consumers that results in customer loyalty in the organization, indirectly improving profits of the company. References Borysowich, Craig. (2007). Guidelines for Decomposing Business Functions and Processes. Retrieved on October 31, 2009: http://it.toolbox.com/blogs/enterprise-solutions/guidelines-for-decomposing-business-functions-and-processes-14635 Jacobs, F. Robert. (2007). “Enterprise Resource Planning – a brief history.” Journal of Operations Management. Volume 25, Issue 3, pp. 357-363. Molloy, Owen. (2008). Enterprise Resource Planning. National University of Ireland. Retrieved on October 31, 2009: http://www.ics.ie/downloads/protected/psnc/Dr-Owen-Molloy-An-Overview-of-ERP.pdf Reuters. (2009). Navarre Corporation Reports Improved Profitability for Second Quarter of Fiscal Year 2010. Retrieved on October 31, 2009: http://www.reuters.com/article/pressRelease/idUS237552+29-Oct-2009+PRN20091029 Stein, Tom. (1999). “Making ERP Add up.” Information Week. Retrieved on October 31, 2009: http://www.informationweek.com/735/erp.htm;jsessionid=WHIDF4KKW2XUVQE1GHOSKH4ATMY32JVN Read More