Enterprise Resource Planning (ERP)

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Enterprise Resource Planning (ERP)

The ERP System is usually the central (or lead) IT system and as such it represents the core of the IT landscape of a company. The focus area ERP is concerned with the selection, evaluation, implementation and operation of ERP systems and their integration with other vital business software systems (such as groupware, BPM, BI, office software, etc.). The perspective is mostly internal on the optimization of processes within a company. Related topics are integration of processes and systems and making best use of business and transactional data (Business Intelligence). ERP Systems are also the basis for interorganizational integration which is covered by the expertise area “Electronic Business Collaboration”.

The following figure shows different types of business software and their components.

BusinessSoftware

Figure 1: Types of Business Software

These different types of business software have a few commonalities, for example, their generic technical architecture and the way they are sold and implemented (Ecosystem).

BSA

Figure 2: Business Software Architecture

The Ecosystem comprises the players in the market for business software. Some developers of business software sell directly to their customers (user companies). Others use an indirect sales channel in which two other parties come into play: Independent Software Vendors (ISV) and Value Added Resellers (VAR).

ISVs develop extensions to the basic business software (add-ons), which enhance the core system. Examples are industry solutions (sometimes called “verticals”). Their business model is based on licences for their add-ons. VARs, on the other hand, are implementation partners who specialise in the customization of enterprise systems. Their business model is based on services for the user company (e.g. management of implementation project and adaptation of software).

BSE

Figure 3: Business Software Ecosystem

Apart from these commonalities, ERP Systems and Collaboration Systems also show distinct differences in their characteristics. Some of these are listed in the following table.

Characteristics ERP Systems Collaboration Systems(Suite)
Processes Clearly defined
Functions are frequently invoked in a defined order.
Ad-hoc Functions/features are available at the user’s request.
Modelling Business process modelling
(process chains, BPMN)
Use case scenarios
(actors and interactions)
Support of core business process Critical support of the core production process. Supportive activities. Availability is not usually critical for value generation.
Timeliness of information Only relevant data of current business period is displayed. Predefined process for storing and archiving information. Social content grows in a somewhat unmanaged way. Older (but maybe highly relevant) contributions in Blogs may disappear over time or Wiki entries overwritten.
Data administration Clear separation of master and transactional data. Social content is less well-structured and slightly chaotic.
Module architecture Clear separation of functional areas into modules. Uniform database. No data redundancy. Components/apps: Different types of content. Wikis and Blogs present similar functionality but contain different information in different forms/formats.
Examples of content Data and information (material, BOM, quantities, prices, …) Content (text, images, tasks, …)
Structure Highly structured (in form and content). Data records with fields, clear procedural instructions, templates, … Very little content structure. Exceptions: Templates and workflows (procedural information)
Type of content Tables, data records with fields Rich text, embedded objects, attachments, hyperlinks
Flexibility for the user Fixed procedures Open to multiple and flexible interpretations of use.
Control High level of rules/internal control built into the system (esp. accounting and business controls). e.g. discounts, three-way match, fraud detection etc Tools often selected in an ad-hoc manner; user has multiple ways to achieve same outcome (some are better than others). Control often through usage policies and still evolving.

The interest of our IBD experts in the area of ERP systems is focussed on two main topics:

  • Identification and realisation of benefits from ERP system use
  • Evaluation of ERP systems (finding the right system for a company)

 

If you are interested in joint work in these or related areas contact us at: info@integrated-business-design.com.