Systems Integration

Customer-Facing Processes

Organizations should consider the impact that processes have on customer-perceived value

Fat client

a client that can handle presentation and processing logic - Responsible for process and storage logic

Client-server computing

a computing model in which tasks and workloads are partitioned between the client, which makes service requests and the more powerful server, which responds to the requests

Process inventory

a list of business processes that a department or area owns, which identifies key processes including their sub-processes and activities

Service Level Agreement (SLA)

must spell out clearly what is being delivered, how it is to be measured and by whom, and what penalties will ensue if the SLA is not met

Internal control

policies and procedures put in place to safeguard the integrity of data and avoid risks

Transaction data

records of day-to-day business events - Highly volatile (unlike master data) - Transaction data accesses master data in order to process the event ------A payroll disbursement is linked to a specific employee in the master data

Master Data

relatively permanent data collected on entities in the business. Remains stable over time but it can be edited Examples: employee master, inventory master

Clean slate reengineering

starting over from scratch and completely redesigning a process

On-premise ERP

the ERP system is installed locally on a company's own servers choose this option when: - business environment involves highly sensitive data - - lots of fast paced app changes - high user base - rapidly changing user demands

Mobility

the ability to access data and information from a computing device wherever and whenever needed.

Business process reengineering (BPR)

the fundamental, dramatic redesign in business processes that an organization undertakes to achieve breakthrough performance in key measures of cost, quality, speed, and service

Production (PRD)

the live system users work with

Business process management (BPM)

the process of continuously monitoring and improving processes

EAI Communication Issues

- Bad communication between business units in drafting /documenting the endto-end Business Processes. - Some departments do not wish to share their information which leads to conflicting redundancy of data.

Advantages of 3-Tier Client Server

- Better security - Maintenance becomes more manageable - Servers and clients can be added more easily as the business grows

Why EAI

- Better that everyone uses the same servers with the same operating system with the same clients - Reality is very diverse. We can expect a mix of mainframes, Windows, UNIX, Linux, as well as many other systems - System development emphasized on core functionality as opposed to integration -Many systems are highly stovepiped and difficult to integrate with other similar systems - Building system with integration in mind reduces the amount of money spent on further system development

Middle ware problems

- Changes are typically required to existing systems to incorporate middle-ware - No centralized management typically exists, so complex systems rapidly grow unmanageable - Technological advances tend to make middle-ware based systems look like an ill-planned highway system composed of small integration projects instead of a single over-reaching standard

Advantages of EAI

- Cost effectiveness - Time to market - Scalability - Ability to deal with complex environments

Optimal Business Process Criteria

- Cost efficiencies - Customer satisfaction and differentiation - - Standardization - Value-added activities - Improved agility and speed

Processes in Need of Change

- Customer-Facing Processes - Process as Part of a Core Competency - High Volume, Low Margin Processes - High Defect, High Reward Processes - High Skill, Time Intensive processes - High Complexity, Specialized Resource Processes - Processes Built around obsolete or changing technology

Advantages of ERP Systems

- Data integration reduces data duplication and reconciliations among systems - Real-time access to information improves communication and operations and reduces risk - Common processes and data model - Based on industry best practices - Modules from same vendor look and act same (standardization) - Can reduce operational costs and increase revenue

How is EAI differrent?

- EAI includes the notion of reuse as well as distribution of business processes and data. - EAI allows users who understand very little about the details of the applications to integrate them.

Who needs knowledge of ERP Systems?

- End User - IT Auditor - Integration partner - Software developers and programmers

EAI Planning issue

- Entitlements not considered in initial implementation of integration project - Change is constant, frequent change requires different components among different companies - Inflexible plan for changing within implantation - Management does not understand that integration is a onetime activity - Lack of appropriate change plan repeatedly leads to rejection of EAI strategies

Traditional Systems

- Generally referred to as 'legacy' systems - May consist of anything from PC's to minicomputers, even large mainframes - While the architecture of these systems may be obsolete, they still contain functionality that must be maintained by the organization in order to do it's job.

Integration Partner

- Help clients select the best ERP system out of the possible choices - Provide project management, training, and testing expertise during implementation

EAI Management Cost Issue

- Implementation is expensive and more complex - nature of EAI is dynamic and requires dynamic project managers to manage these changes - Cost of EAI project could be 5 to 7 times higher than other IS Projects - Top management often does not understand what exactly the cost of integration is - Decisions are made without performing an appropriate analysis -

Packaged Applications

- Off-the-shelf software - Software that is purchased rather than designed - Most are natural stovepipes, since they haven't been designed with integration in mind and are closed systems

Standards or middle ware (example)

- Remote Procedure Calls (RPC) - Sockets - Common Object Reuse Broker Architecture (CORBA) - Distributed Computing Environment (DCE) - Java's Remote Method Invocation (RMI)

ERP Essentials

- Replace legacy systems - Are cross-functional - Considered process-centered - support end-to-end business processes - Sold in modules - Built upon relational database systems

Factors for Reengineering Success

- Scaling up and down - Think outside the functional box - Look at other companies for similar solutions to similar processes - Recognize that a process is just one aspect of success - Deliver sooner rather than later - Consider the competition Remembering the employee

Two-tier Architecture

- Server (back end application) - Client (front end application)

Distributed Systems

- Some number of systems tied together by a network that supports applications run across the network - May comprise the range of computer sizes - A wide range of system types exist: client/server, Internet, intranet, etc.

Why does a company need an ERP System?

- Too many business problems and unanswered questions - Changing business model - Desire for growth - Need for advanced functionality - Too many business systems supporting processes - Lack of compliance

IaaS Benefits

- Use a secure infrastructure for a flat monthly fee - No maintenance cost - Scale up and down the amount of data storage

IT auditor

- Verify the effectiveness of application controls including proper segregation of duties (SoD) and configured controls - Verify there is proper security in the data center - Verify that reports generated by the ERP system are accurate and timely

Disadvantages of ERP Systems

- implementations can be long, tedious, and very expensive - Constant care and feeding of ERP system - People issues ("soft stuff") can make or break the implementation; need change agents skilled in change management techniques - Best practices can level the playing field between a company and its competitors; must still be good at core competency - The standardization of business processes can be problem if runs counter to the firm's culture or expectations

Cloud Computing ERP

- the ERP system and the associated data are managed centrally (in the internet "cloud") by the ERP vendor or third-party service provider and are accessed by the customer on demand

Technology enabled reengineering

- using technology, such as an ERP system, as the means for transformation Also known as constrained reengineering because the technology imposes constraints on the resulting business operations

Stakeholders for Business Process Transformation

-Customers -Employees -Information Technology Staff -Executive Suite -Business Partners -Supply Chain -Auditors, Regulators, and Other Interested Parties

Microcomputer Systems

-Personal computers -A wide range of hardware, operating system and applications make it difficult to integrate these systems with each other or legacy systems

ERP Instances

1. Development (DEV) 2. Quality Assurance (QAS) 3. Production (PRD)

Point-to-point

Applications communicate with one another

Network

Best use for asychronous activity and independent transactions

High Complexity, Specialized Resource Processes

Businesses tend to embrace complexity and the market advantages that complex solutions gain Replace complex activities with simpler ones

ERP Market

ERP vendors can be organized by tier, or vendor groupings based on certain characteristics

ERP Vertical Solutions

ERP vendors can support enormous R&D (research and development) efforts to identify best practices in various industries and incorporate the into their solutions . - Enables ERP vendors to offer industry-specific versions of their software

Define EAI

Enterprise Application Integration: - Provides the means to share data between different applications without writing custom interfaces. Examples. - Consider a company that wants to do build an - eCommerce portal. Has a number of legacy applications (or even an ERP solution in place) - Need build the web-based eCommerce infrastructure and link with systems that do functions like process orders, manage inventory, ship products

ERP

Enterprise resource plannning systems. business systems that integrate and streamline data across the company into one complete system that supports the needs of the entire organization

Pipeline

FIFO , first in first out info flows

True or False : ERP systems can only use one type of database

False. ERP systems can generally use more than one type of database

Hub

From source to central hub

Processes Built around Obsolete or Changing Technology

Keeping legacy systems will trap a company into less than optimal business processes and obsolete business models Older systems suffer from outdated core software code and are not built on current best practices

ERP Evolution

MRP systems and discrete manufacturing industry - > MRPII -> ERP

MRPII

Manufacturing Resource Planning Systems

MRP

Material Requirements planning

Walkthrough

Practicing the new process to build a detailed understanding of the process and see how it will work

Value-added activities

Processes should add value

Improved agility and speed

Processes should be nimble and efficient to help the company anticipate, manage, and respond to changes in the marketplace

Standardization

Processes should be standardized across the organization wherever and whenever possible

Cost efficiencies

Processes should enable employees to get work accomplished faster

Customer satisfaction and differentiation

Processes should help a company better serve its customers and provide differentiation

Processing (or business) logic

manages communication between the GUI and the data storage

How do ERP systems store enterprise data?

RDBMS - Data is only entered once and shared across departments; the potential for errors and data duplication is reduced

Tier 1 ERP Vendors

Sell ERP solutions to multinational corporations with: - > 1000 employees - Revenues > $1 Billion 3 Players: SAP, Oracle, Microsoft - Highest cost and longest implementation time - More industry solutions - - Pushing down-market to compete with Tier 2

Bus

Source puts messages on a bus

High Skill, Time Intensive Processes

The focus should be on transforming the process to empower highly skilled workers to perform the job faster or allow lower paid workers to perform the activity or part of the activity

Development (DEV)

The instance in which consultants/team configure and customize the system per the company's requirements

Scope Creep

The scope for the integration effort is not adequately defined.

How do users interact with the mainframe?

Through character-oriented terminal that captures keystrokes and sends the data to the host computer

EAI focuses on the integration of both business-level processes and data whereas the traditional middleware approach is data oriented. T or F

True

Middle ware

acts as a transport mechanism to perform integration typically on client/server based systems.

Mainframe architecture

all computing intelligence is within a central host computer that processes data and displays it on a "dummy terminal"

Sandbox

area in the DEV environment where configuration and customization options are explored

Quality assurance (QA)

attempts to improve and stabilize processes to avoid, or at least minimize, issues that lead to the defect(s) in the first place Proactive managerial tool focused on defect prevention

Business Process

can be defined as a series of value-added activities or tasks that are linked together to convert inputs into a product or service output -Successful companies spend time analyzing and optimizing their business process

Two types of Business Process Reengineering

clean slate and technology-enabled

Best of Breed

companies "mix and match" modules from different software vendors in order to obtain (what they consider to be) the overall best ERP system

Distributed computing

consists of multiple software components on multiple computers that together run as a single system

In BPR, companies do not change

core competencies but instead optimize their business processes in order to make them more efficient and customer-centric

"As is" process

current process being analyzed

Quality Assurance (QAS)

customizations and configurations will be tested by end users or members of the project team during implementation

Storage logic

data storage and retrieval on the physical storage device

Tier 3 ERP Vendors

design ERP solutions for smaller companies - < 250 employees - Revenue $10 million - $50 million - Few locations and less complexity - Designed with an industry focus - Limited breadth in applications, offer depth needed in a particular industry - Lowest cost of ownership - Collectively, Tier 2 and 3 target small-to-medium sized enterprises (SME)

Tier 2 ERP Vendors

design ERP systems for the mid-market company - 250-1000 employees - $50 million- $1 billion in revenue Compared to Tier 1: - Applications are less complex - Lower cost of ownership - Easier to implement and support - Focus on fewer industries

Presentation Logic

designed for the display screens of a software application and is what makes the application respond to user commands GUI

Quality control (QC)

emphasizes testing of products to uncover defects Reactive tool to product quality

Configuration Data

enables a company to tailor a particular aspect of the system to the way it chooses to do business - Includes setting up enterprise structural details (type of plants, warehouses, sales organization)

"To be" process

future design of the new business process

Business Process Improvement

gradual improvement to business processes over time

Thin client

handles only the presentation logic

Core ERP

includes module suites for financials, human capital management, and operations (logistics)

Extended ERP

includes modules for customer relationship management, supply chain management, and product life cycle management

3-Tier Client Server

introduced one or more application servers between the client and the database tiers - Client tier (Presentation logic) -Application tier (Business logic) - Database Tier (Data Access Logic)

Middleware

is software that facilitates sharing data and business logic across systems; requires a certain degree of IT support to set up and maintain

System Landscape

is the "layout" or "architecture" of the servers. - To complete a landscape, companies will purchase multiple servers and install the ERP system and DB several times.

Customization

the process of fitting the ERP software to the specific needs of the organization by rewriting or adding code to the ERP software - Use for issues that fall outside of bounds (Examples. Missing form, missing field, missing step)

Configuration

the process of selecting parameters that enable a company to tailor a particular aspect of the system to the way it chooses to do business

Benchmarking

to measure and compare processes against strong competitors that have the same core competency, to identify quality gaps, and to specify programs or action plans to meet or exceed the competition