Business Process Modelling Report - Key Concepts and Analysis

This report delves into the intricacies of business process modelling, commencing with an examination of functional organizational structures and their evolution, alongside a comparative analysis of functional and enterprise information systems (EIS). It explores the significance of EIS in large organizations and contrasts functional and process views within a business context. The report then examines the procurement process, specifically the three-way matching method, and differentiates between bills of material and product routing. Furthermore, it highlights the disadvantages of manual and paper-based business practices and the benefits of ERP systems. A key focus is the comparison between "Make to Order" and "Make to Stock" strategies, along with the impact of globalization on business. The report concludes with a discussion of master data in the SAP environment, the different types of materials, and their relevance to various business processes. The report is supported by relevant figures and a comprehensive bibliography.

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Business process modeling
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BUSINESS PROCESS MODELLING 1
Question: 1
Functional organizational structure refers to small companies group their workers into the
departments. Companies use the functional organizational structure to divide their departments
into different functions such as marketing, accounting, human resource management or
engineering and business development. The evolution of functional structure states that
traditional functional created between different functions and with the change of time, it
develops decentralizes decision making that promotes flexibility and easy changes (Bert , 2019).
Figure 1: An example of a functional structure
Source:
The benefits while implementing the functional organizational structure is specialization between
departments reduce workload, executive development, the scope of expansion, better control and
more efficiency. The functional structure established effective coordinating of each unit. There
are some drawbacks while implementing the functional structure it creates complicated
communication in the decision-making process (Bert , 2019).
Question: 2
The functional information system stand on much business functions that gives explained
information for a particular type of activity management. Functional information systems
business functions are manufacture, selling, finance, and personnel. The value of financial
information system as it makes the procedure better organized through regular communication

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between the managers. These information systems significantly boost the company’s
performance and productivity and generate innovative ways to generate revenue and engaging
customers that are customers. The drawbacks of functional information systems are that although
the departments work effectively on functional area but they are not compatible to each other due
to low communication between internal systems (Ahmad, 2013).
Question: 3
EIS (Enterprise information systems) gives a technology platform. It is a part of the information
systems, which improve business process operation through integration. These information
systems provide a high worth of service and deal with the abundant data that can handle the
complex organizations (Nath, 2013). The enterprise information systems differ to other
functional systems it delivers a particular system that is centralized in the organization that make
sure information that can be distributed across all management levels and management
hierarchies whereas functional systems are more complex in nature as it supports the business
functions of accounting, finance, human resource management, operation, and marketing
management. The importance of enterprise information system to the business is that in large
organizations there are different information systems like sales, manufacturing, and production
so sharing information in each business function is difficult for the managers in this case
enterprise information systems help to share vital information in all business processes
(Zuyderduyn, 2011).
Question: 4
A functional view in an organization organizes functional outlines like sales and production
whereas process view gives importance to the management processes like order processing and
planned strategy. The functional view of a business is that operations implemented in business in
terms of loosely coupled functions however, process view concentrates on the interrelationships
in functional lines that important to accomplish the work of business. The process views
significant today because burden burdens of international competition are compelling businesses

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to provide an option that diminish the high cost and delay. The lead times also compelled the
small businesses. (Bert , 2019).
Question: 5
In the procurement procedure, three-way matching is a payment verification method to confirm
that the supplier invoice is valid. In the three ways, matching it matches data of supplier invoice
with the copy related to the purchase order. In the procurement process, there is a matching of
three documents that is the invoice, buying order, and received report. To complete the match
quantities, the price per unit and other information showing on the three documents has been
taken. In simple words, vendors invoice information is compared with the organization‘s
purchase order. The three ways matching process is used to detect the incorrect and fraudulent
invoice (Nath, 2013).
Question: 6
The basic variance between the bills of material or product routing is that bills of material are a
base procedure of establishing production module of an ERP (Enterprise resource planning)
whereas product routing is a base of production module, which explains the technique of
manufacturing. In the BOM, (Bill of material) operations are based on material-routing
relationship whereas product routing operations are based on the work center Task relationship.
In the Bill of material the production of similar items don on an aggregate basis and not done
separately whereas, in the product routing, routing code identifies separately on each produced
item. In the bill of material the mistake and data error is detected through the utilities and
management by the Engineering Data Management whereas mistakes and data error detection
through the work centers that carried out the specific task (Bragg, 2019).

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Figure 2: Defining the production of Bills of material
Source: (Alam, 2019)
Figure 3: Product Routing Model
Source: (Ahmad, 2013)

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Question: 7
The main key disadvantage in the manual business practice is that it creates delays and
communication amongst the different units as same is applies to the paper-based business. The
manual business is very time-consuming in nature that creates inefficiency between the
departments. The paper-based business by manually leads to delay in transferring that could send
by electronic means through internally or externally. An ERP system helps to decrease the delays
and errors and most importantly reduces the paper clutter. An ERP system reduces the errors by
putting the master data single time because after the only reference is needed, such as, vendor
figure that delivers by the shipping and handset number (Zuyderduyn, 2011).
Question: 8
The key variance amongst the “Make to order” and “Make to stock” strategy is that MTS
operational supervisors have a production that permits for stock built off on demand forecasting
whereas MTO, orders are made upon order and permits the consumers to have extra
customization with the order. In the make to order, there is a durable link between the sales and
production-planning order module whereas make to stock has a relationship with the sales
forecast on a definite time, a year six or months and quarter. The advantages of made to order it
minimize waste, reduce the risk of efficiency and more customizable products offered to the
customers. Make to order have some disadvantages such as irregular sales demands, material
stock falling behind and customers required to wait before receiving the products. The advantage
of make to stock is to give the option to produce more over a given period and reduce the chaotic
in production. The disadvantage of MTS strategy it is not stable and not free from unreliable
movements (Bragg, 2019).
Question: 9
Globalization affects the business through competition and rapid changes in technology.
Globalization through competition changes the behavior of customers; as they want, acquire
goods and services with high-quality and low prices. It affects in a way that its decrease the

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profit and lose the market share or decrease in the sales of company. The organization should
develop greater flexibility in responding to emerging conditions. Organizations may respond
through the mergers and acquisitions with the major international companies. The organization
must diversify the product portfolio to cop-up with the competition, maintain market share and
into the new markets (Gleeson, 2019).
Question: 10
Product might have numerous views as if when the order placing the transfer of data through the
procurement process and verify the availability of the goods in master data. The same procedure
applies in the production procedure that is verification from the procurement process to examine
with its vendor. In the fulfillment process, verification with the master data is significant so that
history of product can be checked. (Bragg, 2019).
Question: 11
Master Data in the SAP environment refers to a transaction cannot be implemented and
compulsory for every organization. Master data give detailed information about the transaction
when the transaction appears. It remains change over time and needed information that always
needed in the same manner. Transactional data are organizational data prepared by using master
data that is sales orders. It related to day-to-day transactions. For example: As an example from
the HR module, all employees info-types are master data whereas payroll data, common
admission test details, and time evaluation results of an employee are Transactional data (Berson,
2011)
Question: 12
Raw material, semi-finished, finished and trading products are four kind of material. The Raw
material sourced from the external areas and used to make the products. The partly finished
goods used to make the completed goods in the production process. Finished process is the
product that has been finalized through every production process. The trading process is those
products prepared to sell to the customers (Berson, 2011).

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Bibliography
Ahmad, L., 2013. Realizing the Benefits from Enterprise Information Systems: A Sociomaterial
Perspective. Journal of procedia technology, 9(1), pp. 473-479.
Alam, S., 2019. Dow Corning: The structural evolution of the organization. [Online]
Available at: https://www.academia.edu/35372074/Structural_evolution_Dow_Corning
Berson, A., 2011. Master data management and data governance. McGraw-Hill, 2011. Boston:
Mc-Graw-Hill.
Bert , M., 2019. The Difference Between a Functional Vs. a Business Process Orientation.
[Online]
Available at: https://smallbusiness.chron.com/difference-between-functional-vs-business-
process-orientation-25941.html
Bragg, S., 2019. Three-way matching. [Online]
Available at: https://www.accountingtools.com/articles/what-is-three-way-matching.html
Gleeson, P., 2019. How Does Globalization Affect an Organization's Business Approach?.
[Online]
Available at: https://smallbusiness.chron.com/globalization-affect-organizations-business-
approach-20077.html
Nath, A., 2013. Capability hierarchy in electronic procurement and procurement process
performance: An empirical analysis. Journal of Operations Management , 31(6), pp. 376-390.
Zuyderduyn, J., 2011. Make-to-order vs make-to-stock: implications for your ERP system.
[Online]
Available at: http://www.softwareshortlist.com/erp/articles/erp-applications/make-to-order-vs-
make-to-stock-implications-for-your-erp-system/