ENTERPRISE ARCHITECTURE PART 1 OF 3 Panji Wasmana

Agenda  Benefit and Challenges on Business Process  ERP and BRP  Paper Review

“THE PRIMARY ROLE OF AN ENTERPRISE ARCHITECTURE IS TO TIE TOGETHER ALL COMPONENTS INTO ONE AGGREGATE”

Fact on Bussiness  A successful company identifies needed technologies, introduces them quickly, and then commercializes them.  One of the principal roles of an enterprise architecture is to align the implementation of technology to the company’s business strategy

 Companies with experience suggest this means two things:  ability to define and keep on redefining the enterprise architecture in a business environment in full evolution, while  2. providing life cycle management of technology and all other investments which target the ability to stay competitive.

Core Function on EA

Bussiness Objective  Is the company a product manufacturer or on the sales front?  What is the company’s value-added advantage?  How does the company bring its products to the market?  How does the company personalize its products for its customers? Core Issues to Design EA

Value Chain

Decision Level Reference to EA

Need to Changes

Opportunity Cost  guidelines to be established and choices made at top management levels which means that decision making about:  technical issues,  pace-setting,  Upgrade of knowledge on IT Area  people in charge of lines of business and IT implementation

Main Force on Business Growth

Success Key on Opportunity foresight  A continuing ability to innovate  Content and design features that appeal to clients  Fast timetables for deliverables  Lean production and distribution capabilities  High quality compared to that of competitors

IT Audit as Monev to succes key  Evaluating the cost-effectiveness of current solutions  Looking into deliverables and their timetables  Assuring software and hardware are ahead of the curve  Controlling the quality of technology personnel  Proposing intensive training and other remedies

Quality Circle

Reengineering Concept  Senior management decisions are never made in the abstract; they are based on financial and marketing information and their execution is controlled through internal feedback.  At the middle management level, including the professional level, simulation, experimentation, and optimization are the common ground of design objectives.

Reengineering Concept

ERP & BRP “IT fusion into Business Area”

What is an ERP?  Enterprise-wide system which integrates the business functions and processes of an organization  Integration of business functions into one seamless application  Usually runs on a RDBMS  Replaces Countless Departmental and Workgroup Information Systems

What is an ERP?

Evolution of ERP  1960’s: Inventory Control Systems  1970’s: MRP: Material Requirement Planning  1980’s: MRPII: MRP & Distribution  1990’s: MRPII  ERP with introduction of other business functions  Extended ERP, ERP II  Today: Interenterprise ERP, Web Enabled ERP – Connecting ERP Externally

Core and Extended ERP Components

What is an ERP?  Links business processes  Utilizes a common information system  Implementation normally involves BPR: Business Process Reengineering

Cross-Functional Business Processes ERP and Business Processes

ERP and Cross-Functional Business Processes ERP and Business Processes

ERP and Business Process Change ERP and Business Processes

Implementation Issues ERP means:  Single customer, product and supplier data  Information captured only once  Visibility through the business process  Workflow management and event-triggered processes  Empowered users  Informed management decisions  Globalisation of the business  Rapid change capability In short, Dr Jekyl

Implementation Issues  Difficult to build:  Require fundamental changes in the way the business operates  Technology:  Require complex pieces of software and large investments of time, money, and expertise Mr Hyde

Implementation Issues (Costs)

Implementation Issues 35% ERP projects are cancelled 55% overrun their budgets Less than 10% are on time and under budget Implementation averages Cost: 178% over budget Schedule: 230% longer Functionality: only 41% Mr Hyde

Implementation Issues ….. So why do it?  Some firms recognize benefit Standardize and improve processes  Improve level of systems integration – replacement of outdated “legacy” systems  Improve IT responsiveness and information quality  Customer-driven

What is the State of the ERP Market?  Portals  Public Sector Growth  Better Implementations  Midmarket growth  Business Process Management (BPM)  Niche ERP packages

ERP Systems: SAP  SAP (Systems - Applications - Products): One of leading software vendors for ERP systems  SAP R/3: Separate modules  Each module  contains a number of transactions (>5,000 all together)  can be used independently of others  must be configured (customized)  can be supplemented with add-ons

mySAP.com Solutions lmySAP Insurance lmySAP Media lmySAP Mill Products lmySAP Mining lmySAP Oil & Gas lmySAP Pharmaceuticals lmySAP Public Sector lmySAP Retail lmySAP Service Providers lmySAP Telecommunications lmySAP Utilities Industry Solutions lmySAP Aerospace & Defense lmySAP Automotive lmySAP Banking lmySAP Chemicals lmySAP Consumer Products lmySAP Engineering & Construction lmySAP Financial Service Provider lmySAP Healthcare lmySAP High Tech lmySAP Higher Education & Research Cross-Industry Solutions lmySAP Workplace lmySAP CRM lmySAP SCM lmySAP Marketplace* lmySAP E-Procurement lmySAP BI lmySAP PLM lmySAP HR lmySAP Financials lmySAP Mobile Business lmySAP Hosted Solutions l mySAP Services Infrastructure and Services lmySAP Technology *mySAP Marketplace is delivered through MarketSet™, a joint solution from SAPMarkets & Commerce One. ERP Systems: SAP

Summary  A successful company identifies needed technologies, introduces them quickly, and then commercializes them.  Circle of Quality put the rule of continuity on development and evaluation  ERP one of IT fusion of Business area, give tremendous opportunity to optimize information flow on the company.

Source  Vesna Bosilj Vuksic, ERP and Business Processes [Presentation], 2006  Chorafas, Dimitris N, Enterprise architecture and new generation information systems, 2001

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