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
