Business processes
– Competitive advantage: It is an advantage over competitors in some measure such as
cost, quality, or speed; it leads to control of a market and to larger than average profits.
– A business process is an on-going collection of related activities that create a product or
a service of value to the organisation, its business partners and/or its customers.
o A process has inputs and outputs and its activities can be measured. Many processes
cross functional areas in an organisation. (example: product development involves
research, design, engineering, manufacturing, marketing and distribution.)
– Examples of cross-functional business processes: Procurement and fulfilment. (No single
functional area is responsible for their execution. Rather, multiple functional areas
collaborate to perform the process)
o Procurement process includes all of the tasks involved in acquiring needed materials
externally from a vendor. It comprises of 5 steps that are completed in three different
functional areas of the firm: warehouse, purchasing and accounting.
The process begins when the warehouse recognizes the need to procure materials, perhaps
due to low inventory levels. The warehouse documents this need with a purchase
requisition, which it sends to the purchasing department (STEP 1).
In turn, the purchasing department identifies a suitable vendor, creates a purchase order
based on the purchase requisition, and sends the order to the vendor (STEP 2).
When the vendor receives the purchase order, it ships the materials, which are received in
the warehouse (STEP 3).
The vendor then sends an invoice which is received by the accounting department (STEP
4).
Accounting sends payment to the vendor, thereby completing the procurement process
(STEP 5).
Business processes
– Competitive advantage: It is an advantage over competitors in some measure such as
cost, quality, or speed; it leads to control of a market and to larger than average profits.
– A business process is an on-going collection of related activities that create a product or
a service of value to the organisation, its business partners and/or its customers.
o A process has inputs and outputs and its activities can be measured. Many processes
cross functional areas in an organisation. (example: product development involves
research, design, engineering, manufacturing, marketing and distribution.)
– Examples of cross-functional business processes: Procurement and fulfilment. (No single
functional area is responsible for their execution. Rather, multiple functional areas
collaborate to perform the process)
o Procurement process includes all of the tasks involved in acquiring needed materials
externally from a vendor. It comprises of 5 steps that are completed in three different
