D-BP-ISP An Electronic B2B Procurement and ERP Integration Model for SC Optimization

ERP 1 Cross-functional Integration and Support Management of Core Business Processes –Accounting/Finance –HR/Payroll –Manufacturing –Sales/Distribution

ERP 2 ERP APS B2B procurement BI CRM

ERP B2B Procurement BI SCM Tier 1 Suppliers N Tier Suppliers Customers

D-BP-ISP Model Step 1 - Definition of SCM Step 2 - Business Process Integration Step 3 - Information Integration Step 4 - Systems Integration Step 5 - People Integration

HOW TO ADD MORE VALUE SC OPTIMIZATION ERP + B2B PROCUREMENT D-BP-ISP

SC Defined A set of integrated business processes throughout the enterprise and/or extended enterprise that optimize the delivery of goods, services, and information from suppliers to customers. The Gartner Group

SCM Dimensional Definition SCM SCP Order Fulfillment Product Development Customer Service SCE

Step 2 -Business Process Integration

Step 3 – Information Integration This step focuses on Information sharing functionality necessary for enabling SCM. This step is mainly reflected in ERP Systems

ERP System Information Sharing Real-time visibility of information flow and effective reporting capability Robust information back- office for most enterprises. Provides Key Performance Indicators(KPIs) Provide advanced planning and scheduling (APS) functionality Limited to historical business, hard to anticipating advantageous emerging business opportunities in the supply chain. Provides little support on extended integration among trading partners in the supply chain. FunctionalityDrawback

Step 3 – Information Integration Continued… The information integration must be extended to external trading partners for optimal management and execution of the supply chain. Solution Interenterprise and Intraenterprise real-time data sharing.

Step 4 – Systems Integrations This step focuses on extending the benefit of ERP to B2B procurement and vice versa.

B2B Procurement Definition – “a set of purchasing processes extended to electronic trading communities with the goal of buying products, services and information.” Electronic trading communities – Internet, Intranet, Extranet. B2B Procurement Applications – Product catalogs and e-marketplaces

B2B Procurement Benefits for SCM Optimization Providing real-time product quoting E-marketplaces create an open sourcing environment Electronic trading communities reduce user training costs and other costs through the Web Applications are usually designed to keep customer profiles

ERP & B2B Procurement Integration Goal - Achieving SCM optimization. ERP provides efficiency on the back-end phases while B2B procurement provides efficiency on the front-end phases of procurement. Online B2B workflow capabilities are extended to ERP B2B can be customized to individual buyer needs and ERP provides the backbone Trading partners can utilize each other’s system resources.

B2B Procurement and ERP Systems Integration ERP Information Backbone Web Clients B2B Product Catalogs Bidding & Auction B2B Product Catalog B2B Product Catalog E-Marketplace Transport –HTTP over TCP/IP Application-ORBs, MOMs, XML Data- ODBC,JDBC,DB Gateways Integration Brokers:E-link, ActiveEnterprise, Inconcert IntranetExtranet Internet Web Clients Web Clients

Security Issues in Systems Integration Authentication should be strictly enforced at the firewall and application levels. Authorization should work in conjunction with authentication and should be based on roles. Confidentiality need to be implemented through S-HTTP, SSL and Public Key Encryption, etc.

Step 5 – People Integration This step focuses on the human capital necessary to realize a successful integration of B2B procurement and ERP.

Three Roles of People Integration Business people IT professional Consultants

Business People Qualifications Provide and continuously communicate the vision on how they will collaboratively achieve their SCM and business objectives. Ensure that resources are committed to accomplishing SCM optimization. Exhibit leadership Program and project competencies Solid understanding of information and network technologies.

IT People Qualifications Possess the most knowledge & experience of ERP with its infrastructures, systems and applications. Have solid experience & knowledge of Internet- based technologies and architectures. Have system integration experience & knowledge. Possess good communication and teaming skills

Consultants Play mediation roles in time of program and project conflicts Bring rare, scare specialty or technical skills that do not have long-term value to an organization Serve as mentors and coaches for the business people as well as the IT Professionals.

Extended Enterprise Internet Domain D-BP-ISP Extranet Domain Manufacturer/Service Organization Intranet Domain Wholesalers 1st Tier Suppliers Distributors N Tier Suppliers

C-Commerce

Major ERP, B2B, SCM Vendors Oracle  PeopleSoft  J.D.Edwards  SAP  Ariba  Harbinger  CommerceOne  Elcom  Manugistics  i2 Technologies  ERPB2BSCM

Conclusion SCM optimization will be used as one of the enterprise strategies. D-BP-ISP is an integration model that enables SCM optimization by integrating B2B procurement and ERP.