Architecture of Enterprise Systems Discussion Paper
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Architecture of Enterprise Systems Discussion Paper
24 CHAPTER 2 Introduction to Enterprise Systems
The architecture of an enterprise system refers to the technical structure of the software, the ways that users interact with the software, and the ways the soft- ware is physically managed on computer hardware. Most
modern ES have either a three-tier client-server architecture or a service-oriented architecture. There are many different ways to deploy ES in these two architectures. Both models offer distinctive technical and cost benefi
ts, and both models have drawbacks. Nevertheless, the impact of these two models on the management of business processes is largely the same. We examine both types of architecture below.
Client-Server Architecture
Think of a desktop application that you routinely use, such as word process- ing, spreadsheet, or presentation software. These applications consist of three components, or layers: (1) how you interact with the application
(using menus, typing, and selecting); (2) what the application allows you to do (create for- mulas or charts, compose an essay); and (3) where the application stores your work (on your hard drive or fl ash drive). These layers
are the presentation layer, application layer, and data layer, respectively. In the desktop appli- cations mentioned above, all three layers are contained in one system. In con- trast, the three-tier client-server architecture
separates these layers into three separate systems, as illustrated in Figure 2-1.
Figure 2-1: Three layers of the client-server architecture
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Enterprise Systems 25
Much of the work you do on the Internet uses a three-tier architecture. Your browser is the presentation layer. Through your browser, you connect to many systems (websites) that provide a variety of capabilities (e-mail, pur-
chasing goods, information sharing). These websites contain the applications that execute the request you send through the browser (via HTTP), and they retrieve and store data in a connected database.
The shift to the three-tier client-server architecture dramatically reduced the costs of acquiring, implementing, and using an ES while signifi cantly increasing the scalability of the systems. Scalability refers to the ability of
the hardware and software to support a greater number of users easily over time, typically at a decreasing cost per user. These two benefi ts transformed ES from a capability that only a few large companies could afford
into a technology that tens of thousands of companies now utilize.
Service-Oriented Architecture
In the early 2000s, companies began to Web-enable their three-tier applications so that users could access the systems through a Web browser. During these years companies also benefi ted from new technologies that
could help link, or integrate, many different client-server systems together in new and valu- able ways. These new technologies are collectively labeled service-oriented architecture, or SOA. The fundamental concept behind
SOA relates to the technical capabilities that allow systems to connect with one another through standardized interfaces called Web services. By using Web services, companies could now integrate multiple client-server
applications and create enterprise mash-ups, or composite applications. Composite applications and mash-ups rely on Web services to send and receive data between and among ES in a standardized way, which eliminates
a great deal of cost and complexity from integration projects. In addition, they execute newer and more specifi c pro- cesses than are typically found in the standard ES.
Companies such as SAP have invested billions of dollars to service-enable their applications so that these systems can be exposed—that is, their function- ality can be made visible to users—and can be connected to a great
number of composite applications. By using SOA to integrate and expose the business processes and data inside an ES, companies can now create new composite applications quickly and inexpensively. In essence, SOA
enables companies to build composite applications on top of their existing three-tier client-server applications without changing the underlying applications. This capability gives companies an entirely new level of fl exibility
at an extremely low cost.
ENTERPRISE RESOURCE PLANNING (ERP) SYSTEMS
Enterprise resource planning (ERP) systems are the world’s largest and most complex ES. ERP systems focus primarily on intra-company processes— that is, the operations that are performed within an organization—and
they integrate functional and cross-functional business processes. Typical ERP systems support Operations (Production), Human Resources, Finance & Accounting, Sales & Distribution, and Procurement. As we discussed
in Chapter 1, SAP was the fi rst company to create a fully integrated and global ERP system, SAP® R/3, which could manage end-to-end processes for com- panies that operated in many different countries, with multiple
languages and
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26 CHAPTER 2 Introduction to Enterprise Systems
currencies. Figure 2-2 shows the solution map for the current version of the system developed by SAP, known as SAP ERP.
The solution map identifi es the functionality and processes supported by the system. Notice that many of the functional capabilities in the solution map are similar to the business processes that were defi ned in Chapter 1.
In addition, several areas of SAP ERP overlap with functional groups within the company. These overlaps are a result of the tight integration of ERP and the processes that it manages. As companies have adopted more and
more ERP capabilities and begun to view their companies from more of a process per- spective, the ES world and the functional world have begun to merge. Given the scope and size of the SAP ERP system, we will focus on
the core ERP functional modules in this book.
Although companies are moving toward a process view of organizations, and our book takes a process view of business operations, the functional view still persists in many organizations. The capabilities of an ERP system
are often described in terms of modules or specifi c capabilities, and it is still quite com- mon to see or hear SAP ERP referred to in terms of module abbreviations in job advertisements or industry discussions. Figure 2-3
lists the more common
Figure 2-3: SAP ERP modules
Figure 2-2: The SAP ERP solution map. Copyright SAP AG 2011
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Enterprise Systems 27
modules in SAP ERP and the abbreviations that are typically used for them. For example, a person with expertise in the fi nancial accounting and manage- ment accounting modules of SAP ERP is typically called a FICO
expert based on the abbreviations of the two modules.
As more companies acquired ERP systems, the next step in the evolu- tion of ES was to connect these systems so they could support inter-company processes—that is, processes that take place between and among
companies. Examples of inter-company systems are supply chain management (SCM) and supplier relationship management (SRM) systems, which connect a company’s ERP system to those of its suppliers. SCM
connects a company to other companies that supply the materials it needs to make its products. Typical SCM systems help companies plan for their production requirements and optimize complex transportation and
logistics for materials. SRM systems typically manage the overall relationships with the materials suppliers. SRM systems contain functionality to manage the quotation and contracts processes. These systems act as
extensions to the procurement and material planning processes of ERP systems.
On the other side of the manufacturing and sales processes, customer relationship management (CRM) systems connect a company’s ERP sys- tem to those of its customers. CRM systems provide companies with capa-
bilities to manage marketing, sales, and customer service. These systems are an extension of the fulfi llment process of ERP systems. Product lifecycle management (PLM) systems help companies administer the
processes of research, design, and product management. In effect, PLM systems help com- panies take new product ideas from the virtual drawing board all the way to the manufacturing facility.
The collection of these inter-company systems and the underlying intra- company ERP system is called an application suite. Suite vendors, such as SAP and Oracle, provide fairly comprehensive collections of applications
that offer an enormous amount of functionality and cover most of the standard business processes.
Figure 2-4 identifi es the various capabilities that are part of an applica- tion suite and illustrates how they connect to other members of a company’s business network. It is important to note that one of the key benefi ts of
utiliz- ing a complete suite of software is that the data and processes are integrated among the systems in the suite. That is, although they are separate systems, they are designed so that they work together in an integrated
manner.
Figure 2-4: The ES application suite
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28 CHAPTER 2 Introduction to Enterprise Systems
The focus of this textbook is on core intra-company processes and ERP systems. Keep in mind, however, that the emergence of inter-company busi- ness capabilities is one of the most important developments in the modern business environment. A fundamental understanding of the key business pro- cesses and ERP systems is a prerequisite to studying advanced topics such as supply chain management and customer relationship management because those processes are extensions of the core ERP-enabled business processes.
Architecture of Enterprise Systems Discussion Paper
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