Information Architecture of ERP Systems at Globalised Enterprises in a Small EU Member State

Information Architecture of ERP Systems at

Globalised Enterprises in a Small EU Member

StateBálint Molnár 1, Gyula Szabó 2

1 Eötvös University of Budapest, Information Systems2 Dénes Gábor College, Address:1119 Bp, Mérnök u. 39.

E-mail(s): [email protected], [email protected]

The Project is supported by the European Union and co-financed by the European Social Fund (grant agreement no.

TAMOP 4.2.1./B-09/1/KMR-2010-0003).

mailto:[email protected]

Bálint Molnár, Senior Researcher, Information System Department 2

Research issue

Globalization and internationalization motivate

the restructuring the business processes then

consequently IT processes.

Economic and Financial crisis accelerates the

alteration


Reactions of Enterprises

The companies typically react to the changing environment

in cases as follows:

Standardization of ERP and generally information system (IS).

Standardization of business processes, business services.

The information systems existing at various countries of multi-

nationals are rather centralized.(within the continuum

centralization-hybrid-decentralization)

The trends for standardization can be discerned mostly at business

functions where strong coupling to the market can be seen.


Frameworks of Analysis

Enterprise Architecture (based on Zachman) Business (systems) architecture - Defines the structure and content (information

and function) of all business systems in the organization (the ERP of an organization).

Information Systems Architecture (the ERP system of an organization)

Information (or Data) Architecture – represents main data types that support business; furthermore the structure (including interdependencies and relationships) of information required and in use by the organization;

Application Architecture – defines applications needed for data management and business support; the collection of relevant decisions about the organization (structure) of a software system, and the architectural style that guides this organization.

Technical Architecture – represents the main technologies used in application implementation and the infrastructures that provide an environment for information system deployment. Technical architecture describes and maintains the integrity of the hardware, software, and infrastructure environment required to support theBusiness Systems Architecture and Information Systems Architecture.


Based on work by

John A. Zachman

VA Enterprise

Architecture

DATAWhat

FUNCTIONHow

NETWORKWhere

PEOPLEWho

TIMEWhen

MOTIVATIONWhy

DATAWhat

FUNCTIONHow

NETWORKWhere

PEOPLEWho

TIMEWhen

MOTIVATIONWhy

SCOPE

(CONTEXTUAL)

Planner

ENTERPRISE

MODEL

(CONCEPTUAL)

Owner

SYSTEM MODEL

(LOGICAL)

Designer

TECHNOLOGY

MODEL

(PHYSICAL)

Builder

DETAILED

REPRESENTATIONS

(OUT-OF-CONTEXT)

Sub-Contractor

FUNCTIONING

ENTERPRISE

SCOPE

(CONTEXTUAL)

Planner

ENTERPRISE

MODEL

(CONCEPTUAL)

Owner

SYSTEM MODEL

(LOGICAL)

Designer

TECHNOLOGY

MODEL

(PHYSICAL)

Builder

DETAILED

REPRESENTATIONS

(OUT-OF-CONTEXT)

Sub-Contractor

FUNCTIONING

ENTERPRISE

Things Important

to the Business

Entity = Class of

Business Thing

Processes

Performed

Function = Class of

Business Process

Semantic Model

Ent = Business Entity

Rel = Business Relationship

Business Process

Model

Proc = Business Process

I/O = Business Resources

Business Logistics

System

Node = Business Location

Link = Business Linkage

Work Flow Model

People = Organization Unit

Work = Work Product

Master Schedule

Time = Business Event

Cycle = Business Cycle

Business Plan

End = Business Objectiv e

Means = Business Strategy

Important

Organizations

People = Major

Organizations

Business

locations

Node = Major

Business Locations

Ev ents Significant

to the Business

Time = Major

Business Event

Business Goals

and Strategy

Ends/Means =

Major Business Goals

Logical Data

Model

Ent = Data Entity

Rel = Data Relationship

Application

Architecture

Proc = Application Function

I/O = User Views

Distributed System

Architecture

Node = IS Function

Link = Line Characteristics

Human Interface

Architecture

People = Role

Work = Deliv erable

Processing

Structure

Time = System Event

Cycle = Processing Cycle

Business Rule

Model

End = Structural Assertion

Means = Action Assertion

Physical Data

Model

Ent = Segment/Table

Rel = Pointer/Key

System

Design

Proc = Computer Function

I/O = Data Elements/Sets

Technology

Architecture

Node = Hardware/Softw are

Link = Line Specifications

Presentation

Architecture

People = User

Work = Screen Format

Control

Structure

Time = Ex ecute

Cycle = Component Cycle

Rule

Design

End = Condition

Means = Action

Data

Definition

Ent = Field

Rel = Address

Program

Proc = Language Statement

I/O = Control Block

Netw ork

Architecture

Node = Addresses

Link = Protocols

Security

Architecture

People = Identity

Work = Job

Timing

Definition

Time = Interrupt

Cycle = Machine Cycle

Rule

Design

End = Sub-Condition

Means = Step

Data

Ent =

Rel =

Function

Proc =

I/O =

Netw ork

Node =

Link =

Organization

People =

Work =

Schedule

Time =

Cycle =

Strategy

End =

Means =

Based on work by

John A. Zachman

VA Enterprise

Architecture

DATAWhat

FUNCTIONHow

NETWORKWhere

PEOPLEWho

TIMEWhen

MOTIVATIONWhy

DATAWhat

FUNCTIONHow

NETWORKWhere

PEOPLEWho

TIMEWhen

MOTIVATIONWhy

SCOPE

(CONTEXTUAL)

Planner

ENTERPRISE

MODEL

(CONCEPTUAL)

Owner

SYSTEM MODEL

(LOGICAL)

Designer

TECHNOLOGY

MODEL

(PHYSICAL)

Builder

DETAILED

REPRESENTATIONS

(OUT-OF-CONTEXT)

Sub-Contractor

FUNCTIONING

ENTERPRISE

SCOPE

(CONTEXTUAL)

Planner

ENTERPRISE

MODEL

(CONCEPTUAL)

Owner

SYSTEM MODEL

(LOGICAL)

Designer

TECHNOLOGY

MODEL

(PHYSICAL)

Builder

DETAILED

REPRESENTATIONS

(OUT-OF-CONTEXT)

Sub-Contractor

FUNCTIONING

ENTERPRISE

Things Important

to the Business

Entity = Class of

Business Thing

Processes

Performed

Function = Class of

Business Process

Semantic Model

Ent = Business Entity

Rel = Business Relationship

Business Process

Model

Proc = Business Process

I/O = Business Resources

Business Logistics

System

Node = Business Location

Link = Business Linkage

Work Flow Model

People = Organization Unit

Work = Work Product

Master Schedule

Time = Business Event

Cycle = Business Cycle

Business Plan

End = Business Objectiv e

Means = Business Strategy

Important

Organizations

People = Major

Organizations

Business

locations

Node = Major

Business Locations

Ev ents Significant

to the Business

Time = Major

Business Event

Business Goals

and Strategy

Ends/Means =

Major Business Goals

Logical Data

Model

Ent = Data Entity

Rel = Data Relationship

Application

Architecture

Proc = Application Function

I/O = User Views

Distributed System

Architecture

Node = IS Function

Link = Line Characteristics

Human Interface

Architecture

People = Role

Work = Deliv erable

Processing

Structure

Time = System Event

Cycle = Processing Cycle

Business Rule

Model

End = Structural Assertion

Means = Action Assertion

Physical Data

Model

Ent = Segment/Table

Rel = Pointer/Key

System

Design

Proc = Computer Function

I/O = Data Elements/Sets

Technology

Architecture

Node = Hardware/Softw are

Link = Line Specifications

Presentation

Architecture

People = User

Work = Screen Format

Control

Structure

Time = Ex ecute

Cycle = Component Cycle

Rule

Design

End = Condition

Means = Action

Data

Definition

Ent = Field

Rel = Address

Program

Proc = Language Statement

I/O = Control Block

Netw ork

Architecture

Node = Addresses

Link = Protocols

Security

Architecture

People = Identity

Work = Job

Timing

Definition

Time = Interrupt

Cycle = Machine Cycle

Rule

Design

End = Sub-Condition

Means = Step

Data

Ent =

Rel =

Function

Proc =

I/O =

Netw ork

Node =

Link =

Organization

People =

Work =

Schedule

Time =

Cycle =

Strategy

End =

Means =


Frameworks of Analysis

Socio-technological architecture for ERP system Centralized ERP system can be considered as a system with functions that

can be accessed from any places of the world. The disadvantage of such a system is its high complexity as the particular country specific features should be handled centrally or some external solution should have been found.

The decentralized symmetric model contains a centrally used ERP systemand another, different application system that offer services for Production and Logistics locally for “all over the world”, i.e. for subsidiaries of the enterprise. The complexity of the decentralized system is less than the centralized one and the regional specialty could be incorporated easily into the system.

The decentralized organic model makes use of the local selection of IT and application systems allowing the alignment to the local requirements more easily. The data interchange is implemented through a unified and standardized interface.

An orthogonal view on the Zachman architecture tiers (Business, Information Systems, Information, Technical Architecture)


Socio-technological architectures by

Gronau

Centralised ERP system used jointly by subsidiaries

Centralised ERP system communicating with

standardized local application system

Centralised ERP system communicating with locally

different applications systems


Other Assessment Viewpoints

Resilience and stability for future means the

adaptability and flexibility of ERP system to the

future changes.

Higher costs are acceptable only in case the

resilience and stability for future can be ensured.

Satisfying the requirements means the analysis

of compliance to the demand of business,

covering the business tasks and activities.


Investigated issues

What is the standardization level of ERP systems required

by international enterprises?

Which architecture models fits best to ERP systems

reflecting the effect of globalization taking into account

the continuum of Enterprise and IT architecture?

What are the business processes, functions or activities

where the effect of globalization for ERP systems can be

perceived in the form of changing of basic Enterprise and

IT architecture?


Research results

Relatively to the previous status of ERP system

The country specific features or the separate ERP

systems are unified and standardized into the

integrated central information processing system.

Within a region some business processes, services and

information processing are standardized.

The separate, in each country differing data or

information processing units or systems are

centralized (creating server farms at locations

designated as central).


Discerned atypical socio-

technological architecture

There exists such an Enterprise Architecture

After several acquisitions of local companies the centre

has made a decision to keep the existing, country-

specific systems in place that makes up the local, core

business processes;

Their development will have been carried out by

decentralized way in the future;

the long-term plan is to implement a standardized

systems to support the central management decision


Various application systems belonging to core

business communicating through Intranet towards

a standardized central system


Strong technology level

centralization

The significant characteristic of such an approach is to

implement one standard ERP system (e.g. a product of one

of the market leader) ;

To make it compulsory and to enforce the change-over at

all member companies of the enterprise;

A standard, central module through which the centralized

management function will have realized

Within the centralized systems, the localized and country

specific Business Processes supported by disparate,

dedicated Information Systems Services


Centrally operated, standardized ERP system

providing country-specific Services

Country 1

Country 2

Country 3

Country 4

Etc.

Country-specific ERP systems

Standard module for accessing

Subsidiaries (within countries)

Logically and physically centralized IS/ ERP


Conclusions

The main trends can be describes as follows: The existing, separate, country-specific application systems are standardized and

integrated to the centralized standard information processing system.

Certain business processes, business services and as consequence the services of information or application systems are standardized within a region.

The legacy information processing units and systems existing at separate countries are centralized.

The driving force at business services for standardization:– Strong coupling to the market

– Market volatility

The centralization can be perceived at the investigated companies at: Technology level

Information Systems Services level

Business Services and Processes level

Thank you for your attention

…Questions?

Information Architecture of ERP Systems at Globalised Enterprises in a Small EU Member State

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