Enterprise System Architecture (Session 5-6)
· Once ERP systems are integrated and implemented successfully in a company, they become the cornerstone of the organization because every single transaction will be processed through this system.
· In addition to the Systems Integration, it is also necessary to focus on:
o Business process architecture.
o Business requirements.
o Budget.
o Project management.
o Commitments from top management.
o Continuous communication with employees informing them about future changes.
Why Study Enterprise System Architecture ?
· Help management and the implementation teams understand in detail the features and components of the enterprise system
· Provide a visual representation of the complex system interfaces among the ERP application and databases, operating systems, legacy applications, and networking
· Management can develop a better IT plan if the requirements for system infrastructure, training, change management, and business process reengineering are clarified.
Components of the Enterprise Systems Architecture
• Functional
– Defines the ERP modules that support the various business functions of the organization. Examples include:
• Accounting
• Human Resources
• Procurement
• Fulfillment
• System
– Defines the ERP architecture through the physical components of hardware, software, and networking angle
Enterprise Systems Architecture (ESA) Model
Overview of Modules
• Production
– Helps in the planning and optimizing of the manufacturing capacity, parts, components, and material resources using historical production data and sales forecasting.
• Purchasing
– Streamlines the procurement process of required raw materials and other supplies.
• Inventory Management
– Facilitates the processes of maintaining the appropriate level of stock in a warehouse
• Sales and Marketing
– Implements functions of order placement, order scheduling, shipping, and invoicing.
• Finance
– Can gather financial data from various functional departments and generate valuable financial reports.
• Human Resource
– Streamlines the management of human resources and human capitals.
• Miscellaneous Modules
– Nontraditional modules such as business intelligence, self-service, project management, and e-commerce.
Benefits of Key ERP Modules
• Financials
– Ensure compliance and predictability of business performance.
– Gain deeper financial insight and control across the enterprise.
– Automate accounting and financial SCM.
– Rigorous support for financial reporting—SOX Act.
• HR Management
– Attract the right people, develop and leverage talents, align efforts with corporate objectives, and retain top performers.
– Increase efficiency and help ensure compliance with changing global and local regulations by using standardized and automated workforce processes.
– Enable creation of project teams based on skills and availability, monitor progress on projects, track time, and analyze results.
– Manage human capital investments by analyzing business outcomes, workforce trends and demographics, and workforce planning
• Procurement and Logistics Execution
– Sustain cost savings for all spending categories by automating such routine tasks as converting requisitions into purchase orders and by allowing employees to use electronic catalogs to order products and services.
– Reduce costs through process automation, integration of suppliers, and better collaboration.
– Improve resource utilization with support for cross-docking processes and data collection technologies. (RFID and bar codes).
– Enhance productivity of incoming and outgoing physical goods movements.
– Reduce transportation costs through better consolidation and collaboration
• Product Development and Production
– Shorten time to market.
– Deliver higher quality products and ensure timely delivery.
– Real time visibility and transparency (availability check).
• Sales and Service
– Higher number of sales orders processed and reduction in administrative costs.
– Easy access to accurate, timely customer information.
– Cost-effective mobile access for field employees.
– Reduce travel costs by using online functions.
– Adhere to environmental, health, and safety reporting requirements.
– Improve the management of incentives and commissions.
– Realize more effective real estate management.
Three-Tier Architecture
• Benefits
– Scalability - Easier to add, change, and remove applications.
– Reliability - Implementing multiple levels of redundancy.
– Flexibility - Flexibility in partitioning is very simple.
– Maintainability - Support and maintenance costs are less on one server.
– Reusability - Easier to implement reusable components.
– Security - IT staff has more control system to provide higher security.
A Three-Tier ERP Architecture
Service-Oriented Architectures
• SOA is a software development model based on a contract between a consumer (client) and a provider (server) that specifies the following:
– Functional description of the service.
– Input requirements and output specifications.
– Precondition environment state before service can be invoked.
– Post condition environment state after service has been executed.
Error handling when there is a breakdown.
Benefits of Service-Oriented Architectures
• Business-level software services across heterogeneous platforms.
• Complete location independence of business logic.
• Services can exist anywhere (any system, any network).
• Loose coupling across application services.
• Granular authentication and authorization support.
• Dynamic search and connectivity to other services.
• Enhances reliability of the architecture.
• Reduces hardware acquisition costs.
Drawbacks of Service-Oriented Architectures
• SOA implementations are costly and time-consuming.
• Requires complex security firewalls in place to support communication between services.
• Performance can be inconsistent.
• Requires enterprise-level focus for implementation to be successful.
• Security system needs to be sophisticated.
• Costs can be high because services needs to be junked very often.
Cloud Architecture
• Cloud computing is basically a software service provided over the Internet, securely, by a service provider on a monthly or yearly lease.
• Companies leasing CC services save money by replacing their purchased software that requires a license fee per seat.
• Some cloud computing providers also let you build your own applications using their engines and then they would host those applications for you as part of the service.
• The cloud computing platform provides a great alternative for organizations that do not want to:
• Purchase, install, or maintain software applications.
• Worry about security, privacy and legal issues associated with data storage.
• The cloud computing platform is risky for organizations as it forces them to rely on external vendors for reliability, security, and continuity of enterprise applications
Benefits of Cloud Computing
• Pay for subscription, not for licenses and upgrades.
• Reduced capital and operating expenditures for IT equipment and support personnel.
• Accessed from everywhere, as long as you have an Internet connection.
• No need to install anything on the user’s computer.
• Dynamic scalability available on demand.
• No maintenance fees for software or hardware.
• Promotes green computing environment as servers in cloud run on clean energy.
• Guaranteed reliability.
Drawbacks of Cloud Computing
• Data security.
• Vulnerability.
• Possible conflict of interest, if the company who stores your applications decides to create a similar application to what you created on their servers.
• Not suited for all highly competitive industries like biotech where intellectual property cannot be protected easily.
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