Enterprise Systems

Architecture and Integration

Philip Apodo Oyier
[email protected]
 ERP Application Areas
Intra-organizational systems:
Enterprise systems:
support all or most of the organization
Managerial Support systems
support a specific manager or group of
managers
Inter-organizational systems:
e-Business applications
B2C – link businesses with end consumers
B2B – link businesses with other businesses
Intermediaries

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 Review of Critical Concepts
Batch processing
A group (or batch) of transactions are
accumulated, then processed all at one
time
Key Disadvantage: Time delay before
the master file updated

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 Review of Critical Concepts
Online processing
Each transaction is entered directly into computer
when it occurs
Interactive System: A fully implemented online system
where user interacts directly with the computer
In-Line System: Provides for online data entry, but
processing of transactions is deferred for batch
processing

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 Batch processing vs. Online
processing
Batch Processing Online Processing
• Significant delay before master • Master file updated within a
file is updated (usually 1 day) fraction of a second

• Much less expensive to • Much more expensive to

operate operate

• Some applications naturally • Some applications need to be

suited for batch processing processed in real time
(e.g., payroll)

Given these tradeoffs, hybrid systems that combine

online data entry, with batch processing, are very
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common
 Review of Critical Concepts
Functional information systems
Information systems that support one primary business
function or process of an organization

Example Business Functions and

Subsystems
Marketin Accounti Engineerin
Personnel Personnel
g ng g
Production Sales
Planning Forecasting

Production
Etc.
Scheduling
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 Review of Critical Concepts
Vertically integrated information systems
Serve more than one vertical level in an
organization or industry

Top Management
Long-term trend
analysis
Sales System Example

Middle Management
Weekly data analysis to
track slow-moving items
and productive salespeople

Produce invoices

7 Capture initial sales data

 Review of Critical Concepts
Distributed systems
Refers to mode of delivery: Processing
power is distributed to multiple sites,
which are linked via telecommunications
Client/server systems
A type of distributed system where
processing power is distributed between
a central server computer and a number
of client computers (usually PCs)

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 Client/server systems and
Middleware

Middlew
Client are Server

• Handles user • Software to support • Runs on bigger machine

interface clients and server • Handles data storage
• Accesses distributed interaction for applications …
• Three categories: – Databases
services through a
– Server operating systems – Web pages
network – Groupware
– Transport stack software
– Service-specific software
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 Client/server systems and
Fat/Thin Models
Fat client/thin server: most processing
done on the client
Ex: Web and groupware servers
Thin client/fat server: most processing
done on the server
Ex: Database servers

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 Review of Critical Concepts:
Virtualization
Server Virtualization:
Physical server split in multiple virtual server
Each virtual server can run its own full fledged operating
system
Physical server acts as a hypervisor program creating virtual
servers
Each virtual server can be employed as a standalone physical
server, reducing the number of physical servers needed
Desktop Virtualization:
Implemented through a client server computing model
Virtualized desktop environment stored on a server then on
local storage of desktop device
All the programs, application and data are kept on the server
and all programs and applications are run on the server

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 Review of Critical Concepts:
 Service-oriented architecture (SOA)
Application architecture based on a collection of functions,
or services, where these services can communicate (or be
connected) with one another
Advantages:
Once a service is created (internally or externally) it can
be used over and over again
 Web services
Collection of technologies built around the XML standard of
communicating
Other protocols used in web services include:
Web Services Description Language (WSDL)
Universal Description, Discovery, and Integration (UDDI)
SOAP (originally Simple Object Access Protocol)

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 2- tier vs. 3- tier Client/server
systems

2-tier system 3-tier system

- Original - Popular
model beginning
Client mid-1990’s
Client

Server Application Server

Database Server
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 The Role of a Systems
Architect
 A Systems Architect is someone who
designs the internal structure of a business
application.
To others, this person designs the
operational platforms (HW, SW,
middleware, networks) that support
applications.

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 The holistic approach
End-to-end (holistic)
Requirements-driven

Requirements Analysis

End-to-End Systems
Architecture

Viability - Non-functional Structured Method

Requirements Global Services Method
Performance (response times, etc.) Enterprise Architecture Method
Availability (# breaks per year, etc.) End-to-End Design Method
Operability / Systems Management SMFD (Systems Management)
Security Availability Method
Etc. Performance Engineering method

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 The T-shaped skills profile

Breadth of understanding & skill across IT

Depth of
technical
expertise

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 Open Source ERP
Reasons of Choosing open source ERP
Cost
Free redistribution
Available source code
Available providers
There are about 20 vendors providing open
source ERP systems. For example:
Open MFG
FISTERRA
ERP 5
Compiere
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 Compiere Open Source ERP
Architecture
Compiere is a 100% pure Java solution
based on Oracle database technology, and
it is working on database independence.
client application component is written
entirely in Java
The application server component is
implemented in Java based on J2EE
technology using the JBoss server
infrastructure.

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 Compiere Open Source ERP

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 Functionality
Business processes
rather than traditional
departments drive
Compiere's design.
Seven Modules
quote-to-cash,
requisition-to-pay,
partner relationship
management,
supply chain
management,
performance analysis,
web store

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 Quote-to-Cash

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 Requisition-to-Pay

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 Customer relations
management

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 Partner Relations
Management

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 Supply Chain Management

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 Performance Analysis

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 Web Store

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 Microsoft Dynamics ERP:
Architecture 2-tier
Microsoft Dynamics ERP is
enterprise resource planning
(ERP) software primarily geared
toward midsize organizations as
well as subsidiaries and
divisions of larger organizations.
Its applications are part of
Microsoft Dynamics, a line of
business management software
owned and developed by
Microsoft.

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 Microsoft Dynamics ERP:
Architecture 3-tier

The second tier is the multithreaded middle tier.

This is the service tier that is based on Web services.
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 Microsoft Dynamics NAV
Windows compatible (menu, command,
mutual relations to MS Office,..)
Security (ID, passwords, roles, protocols)
Menu and basic modules
Shorthand keys and HELP
Multilanguage
Navigate and calculation (flow) fields, finding
the reason why any document was created
Reports
Entries, dimensions

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 Main form (menu, toolbar, forms)

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 Main forms (card, list, form->sub-
form)

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 SAP R/3 Overview

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 About SAP AG from www.sap.com
Founded in W. Germany in 1972
World's largest enterprise software and third-
largest software supplier
SAP R/3 - Collaborative business solutions for all
types of industries
12 million users, 88,700 installations, and over
1,500 partners
$7.5B revenue in 2004, More than 32,000
employees in over 50 countries

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Partial SAP Client List

Spacenet
 What is an R/3 System?

Database
Server

Application
Server

Presentation
Server
R

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 SAP AG
 SD FI
Sales & Financial
Distribution Accounting

MM CO
Materials Controlling
Mgmt.
PP AM

R/
Production Fixed Assets
Planning Mgmt.
SM EC
Service

3 Solution
Enterprise
Manage- Controlling
ment
QM Integrated PS
Quality
Management Logical Architecture Project
System
PM WF
Plant Maintenance Workflow

HR IS
Human Industry
Resources Solutions

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 Client
Highest hierarchical level in an SAP
system
A complete database with all the tables
necessary for an integrated system
Master records per client

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 Organizational
Elements
• Structures that represent the and/or
organizational views of an enterprise
• Company structure based on business
processes
• A framework that supports all business
activities

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 Master Data
 Centrally and available to all
applications and all authorized users

 In the database over an extended

period of time

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 Transactions
• Application programs that execute
business processes
• Whenever a transaction is executed, a
document is created
• The document contains all of the
relevant information from the master
data and organizational elements

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 Financial Accounting (FI) &
Controlling (CO) Modules

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 FI and CO Comparison

FI CO
Internal management
Legal or external reporting reporting
Reports by accounts Reports by cost centers and
Balance Sheet cost elements
Cost Center Reports
Income Statement

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 FI/CO Organizational
Structures
Client
Company
Chart of Accounts
Company Code
Business Area

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 Company
Consolidated financial statements are
created at the company level
A company can include one or more
company codes
All company codes must use the same
chart of accounts and fiscal year

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 Chart of Accounts
 The chart of accounts contains:
− A complete listing of G/L accounts in
FI
− Cost and revenue elements in CO

 Each company code is assigned to one

chart of accounts

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 General Ledger Accounts
• Every account to be posted in FI
must be defined as a G/L account
master record

• Each G/L account master record

contains information that specifies
the function of that account
− e.g., balance sheet vs. P&L account

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 Materials Management (MM)
Module

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 Procurement Process
Purchase
Order

Purchase
Requisition
Demand
Vendor

Accounts
Goods Receipt
Payable
& Inventory Mgmt.
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 Organizational Elements for the
Procurement Process
• Client
• Company Code
• Plant
• Storage Location
• Purchasing Organization
• Purchasing Group

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 Company Code
 A company code represents an
independent accounting unit
 Balance sheets and Profit/Loss
statements, required by law, are created
at the company code level

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 Plant
 A plant is an organizational unit within a
company to produces goods, renders
services, or distributes goods
 A plant can be one of the following types
of locations:
− Manufacturing facility
− Warehouse distribution center
− Regional sales office
− Corporate headquarters

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 Storage Location

An organizational unit for the

differentiation of
material stocks within a plant

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 Purchasing Organization and Groups
• Groups can be a further division of
purchasing responsibility and/or
structure

• Centralized or Decentralized

• Hybrid - multiple organizations buy for

multiple plants

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 Vendor Master
• For processing business transactions and
corresponding with vendors
• Shared between the accounting and
purchasing departments
• Data is grouped into three categories:
− General data
− Accounting data
− Purchasing data

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 Production Planning &
Execution (PP)
Module

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 Material Requirements
Planning (MRP)
A set of techniques utilizing
– Bills of materials (BOM)
– Inventory data
– Master production schedule for material
requirements
A time-phased planning tool for quantity
and capacity by a given
– Day
– Week
– Month

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 Master Data - BOM
BOMs are created as relationships between
one parent material and one or more sub-
component materials. i.e.,

uniform

pants shirt hat emblem - 2 cover box

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 Production Process

Schedule/Release

Goods Issue
Shop Floor

Order Settlement
Goods Receipt

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 Scheduling Techniques
Forward scheduling
− Starts when the order is received
− Results in completion before the due date

Backward scheduling
− The last operation on the routing is scheduled first
− Previous operations are scheduled back from the last one

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 Sales and Distribution (SD)
Module

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 Organizational Unit

3000 1000
4000 Company
Company
MSI MSI
US German
Canada
yy
Sales Area: Sales Area:
Sales 3000 Sales 1000
4000
Organization US Organization Germany
Canada

12 12
Distribution Distribution
Resale Channel Resale
Channel s
02 90 02 90
Division Division Motorcycles Accessories
Motorcycles Accessories

3000 3400 1000

4000 1400
4100
Plant Plant
New York Seattle Hamburg
Montreal Stuttgart
Toronto
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 SD Master Data
• Customer - Sale organization
− Various relationship
− Customer account (i.e, credit, invoice
payment)
• Material - Plant
− Sales status, Material type, etc.
• Pricing
− A technique for prices to be executed
in the order

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 SD Processes

Order Management: Business Processes in

COM Cycle

Sales
Sales Order
Order Processing
Processing
Inventory
Inventory Sourcing
Sourcing
Pre-Sales
Pre-Sales Activities
Activities

Invoice

Payment
Payment Delivery
Delivery

Billing
Billing
R

 SAP AG
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 Human Resources (HR)
Management Module

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 SAP HR Processes

Course
Recruitment Credit
Cost Hiring
Planning
&
Reporting
Training
and
Employee Self-Service Personnel
Development

Travel Planning Managing

Payroll Work Time
Administration Compensation
& Benefits

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 HR Integration
Financial Logistics
Accounting

Controlling

Sales and SAP HR Workflow

Distribution

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 ERP Trends
1. Further integration of suppliers &
customers
2. Focus on ERP system flexibility
3. Mass customization
• Standard interfaces across chain

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 Extended ERP
Upward Integration (i.e., EIS)

Backward Integration Forward Integration

(i.e., SCM) ERP (i.e, CRM)
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ERP Motivations
• Original ERP Design - Internal
• Supply chain relationships
requirements
− Improved interactions &
communications
− Opportunities with suppliers &
customers
• Manufacturers surveyed had supply
chain extensions to ERP
• More planned to have extensions
• Open systems for supply chains
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 ERP Vendor Response
• mySAP.com - open, collaborative
system for SAP & non-SAP software
• SAP APO - forecasting, scheduling,
other logistics activities
• PeopleSoft - enterprise performance
management
• JDEdwards - planning & execution
• Oracle’s 11i - Planning & Scheduling

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79
 Exercise
Discuss the current trends towards
enterprise integration

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