Recent research (Keller & Teufel, 1998; Klaus, Rosemann, & Gable, 2000; Powell, Schwaninger, & Trimble, 2001) has clearly demonstrated that years of increasing competition combined with the ongoing demand to improve the bottom line significantly reduced the business capacity to achieve greater efficiency (profitability) and effectiveness (market share) solely along organisational functional lines. To complement the functional paradigm of business development, a business process paradigm has evolved allowing a holistic view of the business as an entity focused on specific outcomes achieved through a sequence of tasks (Keller & Teufel; Klaus et al.). Existing common understanding of the concept of business process being “a continuous series of enterprise tasks, undertaken for the purpose of creating output” (Scheer, 1999) laid the foundation for several successful attempts by major business process modeling and ERP (enterprise resource planning) vendors, such as ARIS (Davis, 2001; Scheer, 1999, 2000) and SAP (Keller & Teufel), to link business process modeling and enterprise resource planning.
Key Terms in this Chapter
Business Process Paradigm: This is a holistic view of the business as an entity focused on specific outcomes achieved through a sequence of tasks.
Influence Diagram (ID): ID is a diagrammatic tool used to describe a decision analysis tool focused on structuring complex decision problems by linking decisions, uncertain events, decision objectives, and calculation nodes.
Decision Tree Diagram (DTD): DTD is a diagrammatic tool used to describe a decision and the consequences of choosing a particular action.
Mathematical Programming: It is the study of optimisation problems where we seek to minimize or maximize a real function of real or integer variables, subject to constraints on the variables (defined by Mathematical Programming Society, 2001).
Causal Loop Diagram (CLD): The CLD is a diagrammatic tool used to describe the causal relationship between key quantities and identify feedback mechanisms.
Business Process: It is a set of logically related tasks performed to achieve a defined business outcome (defined by Powell et al., 2001).
Decision: A decision typically involves a choice from possible actions or alternatives to satisfy one or several given objectives.
Supply Chain: It is a “network of facilities and distribution options that performs the functions of procurement of materials, transformation of these materials into intermediate and finished products, and the distribution of these finished products to customers” (Scheer, 1999).