What is functional organizational structure?

1. Describe the functional organisational structure. Why do you think this structure is so common? 

2. What is the silo effect? Why does it exist?  How can an organisation reduce or eliminate the silo effect?

3. What is a business processes? Why is a process view of organisations essential to becoming a successful manager? 

4. Briefly describe the key business processes in terms of their key steps.

5. What  are  the  three  data  groups  defined  within  an  ERP  System  (SAP).  Give  examples  of each  group.

6. Describe the client-server and service-oriented architectures. What are their advantages and disadvantages?

7. Briefly explain the three types of data in an enterprise system and how they are related.

8. Explain the relationship between client, company code, and plant in SAP ERP. What are these typically used to represent?

9. Why is the material master one of the most complex types of data in an ERP system? Provide some examples of data in a material master.

10. What are material types? Explain the four common material types in SAP ERP.

11. Explain the key organisational levels relevant to the purchasing process.

12. Briefly describe the steps in the procurement process explained in the lecture. What are some possible variations to this process?

13. Explain how the procurement process is integrated with other processes in an Organisation.

14. Briefly discuss the organisational levels relevant to the fulfilment process. Be sure to explain the relationships among the various levels.

15. Briefly discuss the master data relevant to the fulfilment process. 

1. The functional organizational structure is one of the most common types of organizational structure that is used by the business organizations. The structure plays a significant role in order to divide the organizational structure into functions as well as departments. Moreover, each department divided by the structure is responsible to perform specific tasks, functions, and activities in an effective and a more comprehensive manner (Cant, Strydom, and Jooste, 2009). Along with this, each and every department is also liable to handle one major aspect related to the product/service. As per the functional organizational structure, the top management is responsible to coordinate the efforts of each department and also arrange them together to accomplish the goals of the organization.

According to me, the functional organizational structure is so common. The main reason behind it is that this structure plays a critical role in order to sort out the activities of a business around areas of specialization (Leondes, 2010). Moreover, this structure does not locate responsibilities in one particular person/group; consequently, all the people have rights to show their skills and knowledge in their specialized areas.

What is silo effect?

2. The ‘silo effect’ alludes as a lack of communication among employees within an organization; wherever different management groups work on different goals in place of working together. Silo effect exists because of each and every department works separately and also focuses on personal objectives. Moreover, an organization can reduce/ eliminate the silo effect with the help of numerous strategies.  For case, the organization should oblige the employees to work together for the success and growth of the organization (Abedalla, 2014). Moreover, the organization should motivate the employees to share their innovative ideas, views, and perceptions to accomplish the goals and objectives of the organization in a cohesive way.

3. A business process refers as an activity or a set of tasks/activities that plays a significant role in order to accomplish the desired goals and objectives of the organization. Along with this, in today’s more complex and challenging business era, a process view of organizations is essential to becoming a successful manager. The main reason behind it is that, it plays a major role in order to reduce the silo effect within the organization. Moreover, a process view is helpful for the managers in order to understand all the processes of the organizations to accomplish the desired outcomes in an effective and a more comprehensive manner (Weske, 2007). In addition to this, a process view is helpful for the managers to make use of processes as well as systems to complete the work required to accomplish their goals. In his way, it can be said that a process view is crucial to be a successful manager.

4. The procurement process, production process, and fulfillment process are the key business processes. These business processes in terms of their key steps are described as below:

Procurement Process: The procurement process involves all the activities related to the purchase of the materials like raw materials that are required to produce products (Lacity, and Willcocks, 2015).

Production Process: The production process engages the real manufacture of the products within the organization. The production process is concerned with obtaining required materials in an internal way. Apart from this, the procurement process is related with acquiring desired materials externally (Weske, 2007).

Fulfillment Process: The fulfillment process is related to the selling of the product. The process involves all the major steps that are related to the selling and delivering of the products to the customers of the organization.

What are business processes?

5. Master data group, real-time data group,  and transaction data group are  the  three  data  groups  defined  within  an  ERP  System. Master data group involves all the important data related to the system.  Real-time data group is related to the data that are required by the user for a specific time period (Röthlin, 2010). Transaction data group involve the data related to the transfer of the data and information.

6. Client-Server Architectures: The client-server architectures play a significant role in order to distribute services as required by the clients. Along with this, servers that present services are treated in a different way from clients that make use of services (Christudas, and Barai, 2008). On the other hand, there are numerous advantages and disadvantages of the client-server architecture.

Advantages: The major advantage of client-server architecture is that there is a centralized control. Servers help in order to manage the entire set-up in a proper manner. Moreover, proper management is also the other major advantage of client-server architecture. It is because of all the files are stored at the same place by the server (Zha, 2006). In addition, back-up &recovery, up-gradation & scalability, accessibility, and security are the other major advantages of the client-server architecture.

Disadvantages: The major disadvantage of client-server architecture is the congestion in network. The main reason behind it is that too many requests from the clients may lead to blockage in the servers.

Service-Oriented Architectures: The service-oriented architectures are architectural patterns in computer software design by which application components present services to other components all the way through a communications protocol. For case, a web service is a standard approach in order to make a reusable component available as well as accessible across the web (Christudas, and Barai, 2008).  Along with this, there are numerous advantages and disadvantages of the service-oriented architecture.

Advantages: Service reusability, greater reliability, easy maintainability, improved software quality, and so on are the major advantages of service-oriented architecture.

Disadvantages: Complex service management, increased overhead, and high investment cost are the major disadvantages of service-oriented architecture (Zha, 2006). 

7. Organizational data, master data, and transaction data are the three types of data that are used in an enterprise system and also work together to enhance the performance of the system and business. For case, the organizational plays a significant role in order to represent the structure of an enterprise. Along with this, companies, warehouses, sales regions, subsidiaries, storage areas, and factories, are the major examples of the organizational structure. Moreover, company code, client, and plant are the major instances of organizational data (Röthlin, 2010). On the other hand, master data plays a major role in order to signify entities linked with different processes of the business.  Materials, vendors, and customers are the examples of master data. Apart from this, transaction data plays a vital role in order to reveal the outcomes of executing steps process, or transactions in an accurate way. Prices, quantities, dates, and payment & delivery terms are the examples of transaction data. Moreover, these all the data work together to make a transaction and to execute a specific task in an appropriate manner.

Key business processes and their key steps

8. Client, company code, and plant in SAP ERP are related to each other. For case, a client is considered as the highest organizational level that plays a vital role to signify an enterprise consisting of numerous companies/subsidiaries. Along with this, each and every company within the enterprise is symbolized by a company code. A company code stands for a separate legal entity, and also measured as a central organizational element in financial accounting (Okungbowa, 2015). In addition to this, a plant is an organizational element that plays a significant role in order to perform multiple functions and   multiple processes in an effective and a significant manner.

9. The material master is one of the most complex types of data in an ERP system. The main reason behind it is that material master is used by different processes and each process makes use of the material in a different manner. For that reason, each process may require the data about the material that are not required by the other process. Along with this, the material master groups divided these data into different categories in order to manage these data in an effective and a more comprehensive manner. The material master groups also put together the data that is related to one or more processes to make the task simple or easier (Wagner and Monk, 2008). Moreover, basic data, financial accounting data, and sales data are the examples of data in a material master.

10. Material types refer as the major categories of materials that are based on the use of materials in the operations activities of the business organizations. Along with this, raw materials (ROH), semi-finished goods (HALB), finished goods (FERT), and trading goods (HAWA) are the four common material types in SAP ERP (Sharma and Mutsaddi, 2010). These are explained as below:

Raw Materials (ROH): ROH are acquired from a vendor and utilized in the production process.

Semi-Finished Goods (HALB): HALB are produced in-house from other materials and also utilized in the production of a finished good (Williams, 2008).

Finished Goods (FERT):  FERT are produced by the production process from other materials, for example raw materials and semi-finished goods.

Trading Goods (HAWA): HAWA are procured from a vendor and also resold to customers.  

11. The key organizational levels relevant to the purchasing process are client, company code, and plant. A client represents to an endeavor that is involved numerous organizations or auxiliaries, each of which is spoken to by a company code. A plant is the area where the materials are obtained (Weele, 2009).   

Three data groups within an ERP System

12. The procurement process is begun by a trigger, which is for the most part a need to gain materials or administrations. A buy order is then made. After a seller is chosen, a buy request is created, which references the buy order for the things required. At the point when the things arrive, they are examined and put away in stock. In addition to this, a brief span later a receipt is gotten and confirmed. The bookkeeping division pays the seller the measure of the receipt, accepting there are no disparities (Jonker, and Witte, 2006). On the other hand, variations to this procedure may happen if a thing should be subcontracted or if an organization requires a non-stock thing.

13. The procurement process is integrated with other processes in an organization. It is because of the procurement process is the base of the other process. The procurement process entails all the activities that are related to the procurement of the materials. If an organization completes the procurement process than it will be able to complete all the other processes production and fulfillment process in an effective and an appropriate manner (Bugdol and Jedynak,  2014).  

14. The organizational levels related to the fulfillment process and relationships among the various levels are described as below:

Sale Organization: Sales organization is the highest level of sales reporting. This level is responsible to negotiate terms and conditions and to summarize all the relevant data of sales in an accurate manner (Kowalczuk and Orłowski, 2013).

Distribution Channel: The distribution chalet is responsible to allocate the orders in an appropriate manner. Moreover, this level involves volume purchases and also offers volume discounts to the vendors.

Distribution Chain: The distribution chain is a combination of both level sales organization and distribution channel. This level is helpful in order to maintain material master data and pricing conditions in an appropriate manner (Bugdol and Jedynak,  2014).

Division: Each division is related with a product line and also acquired its own strategies.

Sales Area: Sales area refers as a combination of sales organization.  Along with this, each sales area obtains its own fulfillment documents to complete the fulfillment process.

Plant: In the fulfillment process, plant can be a manufacturing, storage, office, and delivery plant (Jonker, and Witte, 2006).

Shipping Point: Shipping point is to be found in a plant which makes sure that outbound deliveries are shipped.

Credit Control Area: The credit control area is conscientious for customer credit values. Moreover, this level plays a critical role in order to determine customers’ credit limit that may be centralized or decentralized as required.

15. Plant, distribution channel, sales organization, and client are the major organizational elements in fulfillment process for which material master data are described. Along with this, the material master data are categorized into views and each view is related to one or more processes in order to define specific organizational levels (Kowalczuk and OrÅ‚owski, 2013). Moreover, basic data, sales organization data, and sales plant data are the three views related to fulfillment process. 

References

Abedalla, R.W. 2014. The Silo Effect of Information Technology on the Organizational Productivity: A Qualitative Research Study. International Journal of Computer (IJC) 15 (1). PP: 42-50 .

Bugdol, M. and Jedynak, P. 2014. Integrated Management Systems. Springer.

Cant, M.C., Strydom, J.W., and Jooste, C. J. 2009. Marketing Management. Juta and Company Ltd.

Christudas, B.A., and Barai, M. 2008. Service Oriented Architecture with Java. Packt Publishing Ltd.

Jonker, J. and Witte, M. D. 2006. Management Models for Corporate Social Responsibility. Springer Science & Business Media.

Kowalczuk, Z., and Orłowski, C. 2013. Advanced Modeling of Management Processes in Information Technology. Springer.

Lacity, M., and Willcocks, L. 2015. Nine Keys to World-Class Business Process Outsourcing. Bloomsbury Publishing.

Leondes, C.T. 2010. Intelligent Knowledge-Based Systems: Business and Technology in the New Millennium. Springer Science & Business Media.

Okungbowa, A. 2015. SAP ERP Financial Accounting and Controlling: Configuration and Use Management. Apress.

Röthlin, M. 2010. Management of Data Quality in Enterprise Resource Planning Systems. BoD – Books on Demand.

Sharma, K., and Mutsaddi, A. 2010. Configuring SAP ERP Sales and Distribution. John Wiley and Sons.

Wagner, B., and Monk, E. 2008. Enterprise Resource Planning (3^rd ed.). USA: Cengage Learning.

Weele, A.J.V. 2009. Purchasing and Supply Chain Management: Analysis, Strategy, Planning and Practice. Cengage Learning EMEA.

Weske, M. 2007. Business Process Management: Concepts, Languages, Architectures. Springer Science & Business Media.

Williams, 2008. Implementing Sap Erp Sales & Distribution. Tata McGraw-Hill Education.

Zha, H. 2006. Interactive Technologies and Sociotechnical Systems: 12th International Conference, VSMM 2006, Xi’an, China, October 18-20, 2006, Proceedings. Springer Science & Business Media.