Assessment: Business Process Analysis

1. Analyse and articulate business processes and recognise the role of accounting information systems in enhancing business process design.

2. Communicate with IT professionals, stakeholders and user groups of information systems.

Business Process for Supplying Retail Stores

The business process followed by GAAM for supplying retails stores is as follows:

- The retail store will send an order to GAAM, where it will be received by the customer representative. Orders are generated by and originate from the retail stores and can arrive on an ad hoc and irregular basis. Retail stores, while all being long-standing and regular customer, have typically ordered at the last minute, resulting in irregular demand levels across the year. Two copies of the order form are made, with one being sent to the warehouse assistant, who checks that all goods are available for dispatch to the retail store. The second copy goes to the accounts receivable office.

- Once confirmed as available, the goods are packed, manually recorded on the goods release form (two copies are prepared) and sent to the shipping department for dispatch. A courier collects the goods and a goods release form every morning and afternoon and delivers these to the retail store. Once delivery details are confirmed, an invoice is prepared by accounts payable, based on the details in the customer order and the goods release form. Paper invoices are sent out at the end of each week. Retail stores currently have standard payment terms of 2/15, n/30*. Payment is made in the form of cheque, which is sent back to the customer service representative who forwards it on to the accounts receivable office.

GAAM has recently noticed that it is having inventory management problems due to the spasmodic and irregular nature of orders. This has impacted on its own ability to meet customer demands. It is also concerned that incorrect quantities of goods may be packed and shipped, and not detected until the goods reach the retail stores. This introduces extra costs of handling returns and allowances. GAAM has also noticed that its accounts receivable turnover has dropped from 12.5 times per year to 10.5 times per year over the last 12 months.

An independent consultant has suggested that by re-engineering the process and introducing IT, these problems could be addressed.

ASSESSMENT 1: BUSINESS PROCESS ANALYSIS

Instructions:

In groups of 2 or 3, analyse the organisation brief provided. Only one submission is possible on behalf of the group.

For the business process described in the organisation's brief:

1. identify:
a. participants
b. inputs
c. outputs

2. Develop the current business process model.

3. Identify and describe current strengths and inefficiencies that are present in the current system.

4. Suggest ways that the business process inefficiencies could be corrected through business process re-engineering and the use of IT .

5. Identify technologies that can help improve the business process.

6. Show the proposed business process model and explain how the newly re- engineered system would operate.

Suggested document content (you can add more sections if needed):

- Statement of Scope -. Naming your process with a clear name in the [Verb] [Noun] syntax and writing a starts with / ends when statement will help you clearly identify the scope of the process.

- Desired Outcome -. A clear answer to why we work through this process will guide your analysis.

- Process Flow or Activity Descriptions -a list of the steps completed by people in certain roles. This is the primary or most common path through the business process.

- Exceptions - In addition to the primary path, you want to include variations. What happens if information on a form is illegible, a required piece of information is not provided, or a special condition is met?

- Business Rules - Your process flow will presume a certain set of rules are followed or enforce those rules. As processes get more complex, it often makes sense to break the business rules out separately so they can be more easily managed as they change.

- Entry Criteria and Inputs - Entry Criteria identify what needs to be true in order for the process to start. Inputs identify any tangible work items someone executing the business process needs to have present-at-hand.

- Exit Criteria and Outputs - Exit Criteria identify what needs to be true when the process ends. Outputs identify tangible work items generated through the course of the business process.

- Workflow Diagram -visual model showing the primary activity steps and exceptions. When multiple roles are involved, a swimlane diagram is a good choice

- Process strengths - what were the strengths of the current business process

- Process inefficiencies - what were the problems with the current processes

- Business Process Re-engineering - how process can be improved through process re- engineering and through the use of IT. Discuss suggested technologies and how it can be used.

- Proposed Workflow Diagram - visual model of the proposed business process

- References