DW and ERP
DW and ERP
Yun Zeng
Department of DSC and MIS, Miami University, Oxford, Ohio, USA
Roger H.L. Chiang
Information Systems Department, College of Business Administration, University
of Cincinnati, Cincinnati, Ohio, USA
David C. Yen
Department of DSC and MIS, Miami University, Oxford, Ohio, USA
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Yun Zeng, Roger H.L. Chiang . Comprehensive. An ERP system is able to can have direct access to the supplier's ERP
and David C. Yen support a variety of organizational system (Waurzyniak, 2000).
Enterprise integration with
advanced information functions and is suitable for a wide range
technologies: ERP and data of business organizations.
warehousing . Modular and open. An ERP system should 3. An overview of data
Information Management & have open system architecture, meaning warehousing
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11/3 [2003] 115-122 that any module can be interfaced or
According to Bill Inmon[4]; Inmon, 1996), who
disconnected whenever required without
is considered to be the originator of the data-
affecting the other modules. It should also
warehousing concept, a data warehouse is
support multiple hardware platforms for
defined as a subject-oriented, integrated,
companies having a diverse collection of
time-variant and non-volatile collection of
systems.
data in support of management's decision-
. Beyond the company. A good ERP system
making process. The characteristics of data
is not confined to the organizational
warehouses are as follows:
boundaries, but can support online . Subject-oriented. Data are organized
connections to other business entities
according to subject instead of
outside the organization.
application. For example, an insurance
. Simulation of reality. An ERP system can
company using a data warehouse would
simulate real business processes on the
computer. organize the data by customer, premium
. Multiple environments required. For ERP, and claim, instead of by different
most businesses must maintain multiple products.
environments in order to achieve uptime
. Data integration. The data within the
requirements: development/test, promote- warehouse are integrated in that the final
to-production, highly available product is a combination of various legacy
production, and disaster recovery[3]. data management systems integrated into
a cohesive set of integrated data. It is
Evolution of ERP critical to use consistent naming
With more and more companies being conventions, variable measurement
equipped with ERP systems, companies are standards, encoding structures and data
looking for new applications of ERP systems, attribution characteristics.
requiring ERP to keep evolving to meet the
. Time-variant. One of the key
new business needs. There are several characteristics distinguishing
current issues around ERP development that warehouses from operational
need to be addressed. First, ERP is moving its environments is the currency of the data.
focus from the largest companies to the Operational systems require real-time
mid-market, which is going to involve more views of the data, while warehouse
than a new marketing campaign. According applications generally deal with longer-
to AMR Research, sales of ERP to companies term, historical data. Warehouses provide
with revenues of $1 billion plus have actually access to a greater volume of more
declined, falling 14 percent in 1998 alone. detailed information over a longer time
Meanwhile, the overall ERP markets are period.
charging ahead at 21 percent annually. AMR . Non-volatile. Data warehouses are static.
Research is so enthusiastic about ERP's The data in the warehouse are read-only;
prospects at smaller companies that it updates or refresh of the data occur on a
projects a rapid and sustainable acceleration periodic, incremental or full refresh basis.
of overall growth to 32 percent annually The warehouse data are non-volatile in
through 2003 (Michel, 1997, 1999). Since that the data that enter the database are
middle and small market companies have rarely, if ever, changed.
different needs, infrastructure, and resources
from the Fortune 1,000, ERP software is being Evolution of data warehousing
made on several more management fronts, Data warehousing has undergone many
from costs to start-up time required. In changes. The first data warehouses were
addition, changes in the supply chain are created to answer the demands of business
forcing ERP suppliers to change how the managers and executives who wanted to be
software operates. The Internet represents able to extract, from the volumes of data
the next major information technology produced by their in-house operational
enabler that allows rapid supply chain applications, the key historical and summary
management between multiple operations data that would allow them better to plan,
and trading partners. Most ERP systems are analyze and control their business
enhancing their products to become enterprises. The initial data warehouses
``Internet-enabled'', so customers world-wide answered this need by providing integrated
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Yun Zeng, Roger H.L. Chiang historical and summary data. The next Case study 1: Congo Accelerator in Shell
and David C. Yen phase in the data warehouse evolution was International Petroleum Company
Enterprise integration with
advanced information the creation of the data mart. To address Shell Oil Products is perhaps the best-known
technologies: ERP and data the challenges raised by the spread of of the five business streams within the giant
warehousing Shell International Petroleum Company.
multiple independent data marts, the concept
Information Management & of the dependent data mart has emerged. In a With a presence in 125 countries, revenue of
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11/3 [2003] 115-122 dependent data mart architecture there is a US$100 billion and employing over 50,000
central data warehouse that contains the people world-wide, the company dominates
``corporate view of the data'' and supplies the its global markets with activities in aviation,
departmental data marts with the specific marine, refining and the retail and
data they require. While there are a lot of commercial sectors. However, Shell Oil
Products faced the following challenges:
things happening in the marketplace, here . current ERP system unable to hold and
are a few of those that reflect the current
quickly change complex models required
development and status of data
by the business;
warehousing[5]: . increasing demand for multidimensional
. SAP data-warehousing strategy gains
management information; and
momentum (SAP). SAP[6] is launching a . diverse data sources and platforms
direct assault on the data-warehousing impeding data management.
programs of Fortune 1,000 firms. It is
likely that SAP and its newly launched Shell Oil Products operates SAP and JD
business information warehouse (SAP Edwards ERP systems in over 100 countries.
BW) will garner a sizable portion of new As the company's main repository of
data warehouse initiatives in large financial information, the ERP systems are
used for order and invoice processing.
corporate accounts over the coming years.
. ERP and data-warehousing integration. However, with increasing requirements for
fast, accurate and up-to-date operational
SAP is only one of many ERP vendors that
information, the system could not provide
are starting to wake up to the possibilities
segmented management information without
and implications of data-warehousing. At
unacceptable impact on response times. ``It
the same time, many data-warehousing
was simply too slow,'' confirms Gerrit-Jan
vendors are trying to tap into the ERP
Smitskamp, VP of financial management
market by forging direct linkages to ERP Information at Shell Oil Products. ``We were
source data. finding that it couldn't handle the
. More and more analytic applications. Data multidimensional data queries that were
warehouses support more end-user being demanded by sales staff. We needed to
analytic activities because they contain get a global and regional view of our
integrated data from a variety of sources operations based on a single, truthful data
to support the end-user. As such, the data source.'' Smitskamp made the decision to
warehouse can be the point of integration develop a data warehouse system and a user-
for many customer-oriented applications, friendly report and analysis tool that would
such as sales, marketing, e-commerce, and make light work of the company's large and
customer service systems. disparate data sources.
. Data warehousing and the Web. The Web
Goals desired
became a twofold advocate of data
For the integration of ERP system and data
warehousing. First, the Web created a
warehousing, Shell Oil Products basically
delivery vehicle that enabled many data wanted to:
warehouses to connect with a much larger . reach the major goals of providing a
community of users. Second, as common data warehouse across oil
companies continue to develop and deploy products;
e-commerce solutions, they find that . deliver harmonized and segmented
understanding their new electronic management information that supports
customers is critical. the business at the national level; and
. enable aggregation of data for regional
and global reporting.
4. Case studies on the integration The objective was to develop a management
of ERP and data warehousing information solution that was cost-efficient,
In this section, two cases regarding the easy to roll out world-wide, able to
integration of ERP systems with data accommodate changes quickly in business
warehouses are discussed to illustrate structures, and capable of providing
its values. information in a simple, accessible format
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Yun Zeng, Roger H.L. Chiang world-wide. Working with Shell Services Benefits appreciated
and David C. Yen International (SSI), the software support By integrating ERP with data warehousing,
Enterprise integration with
advanced information operation for the Shell Group, they developed the company obtained the following business
technologies: ERP and data the oil products management information benefits:
warehousing ability to rapidly change and adopt new
system (OPMIS). OPMIS is a hybrid of three .
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