Information Architecture of ERP Systems at Globalised Enterprises in a Small EU Member State Bálint Molnár 1, Gyula Szabó 2 1 Eötvös University of Budapest, Information Systems 2 Dénes Gábor College, Address:1119 Bp, Mérnök u (s):

Bálint Molnár, Senior Researcher, Information System Department2 Research issue n Globalization and internationalization motivate the restructuring the business processes then consequently IT processes. n Economic and Financial crisis accelerates the alteration

Bálint Molnár, Senior Researcher, Information System Department3 Reactions of Enterprises n The companies typically react to the changing environment in cases as follows: ä Standardization of ERP and generally information system (IS). ä Standardization of business processes, business services. ä The information systems existing at various countries of multi- nationals are rather centralized.(within the continuum centralization-hybrid-decentralization) ä The trends for standardization can be discerned mostly at business functions where strong coupling to the market can be seen.

Bálint Molnár, Senior Researcher, Information System Department4 Frameworks of Analysis n Enterprise Architecture (based on Zachman) ä Business (systems) architecture - Defines the structure and content (information and function) of all business systems in the organization (the ERP of an organization). ä Information Systems Architecture (the ERP system of an organization) ä 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; ä 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. ä 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 the Business Systems Architecture and Information Systems Architecture.

Bálint Molnár, Senior Researcher, Information System Department5

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7 Frameworks of Analysis n Socio-technological architecture for ERP system ä 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. ä The decentralized symmetric model contains a centrally used ERP system and 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. ä 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. n An orthogonal view on the Zachman architecture tiers (Business, Information Systems, Information, Technical Architecture)

Bálint Molnár, Senior Researcher, Information System Department8 Socio-technological architectures by Gronau

Bálint Molnár, Senior Researcher, Information System Department9 Other Assessment Viewpoints n Resilience and stability for future means the adaptability and flexibility of ERP system to the future changes. n Higher costs are acceptable only in case the resilience and stability for future can be ensured. n Satisfying the requirements means the analysis of compliance to the demand of business, covering the business tasks and activities.

Bálint Molnár, Senior Researcher, Information System Department10 Investigated issues n What is the standardization level of ERP systems required by international enterprises? n Which architecture models fits best to ERP systems reflecting the effect of globalization taking into account the continuum of Enterprise and IT architecture? n 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?

Bálint Molnár, Senior Researcher, Information System Department11 Research results n Relatively to the previous status of ERP system ä The country specific features or the separate ERP systems are unified and standardized into the integrated central information processing system. ä Within a region some business processes, services and information processing are standardized. ä The separate, in each country differing data or information processing units or systems are centralized (creating server farms at locations designated as central).

Bálint Molnár, Senior Researcher, Information System Department12 Discerned atypical socio- technological architecture n There exists such an Enterprise Architecture ä 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; ä Their development will have been carried out by decentralized way in the future; ä the long-term plan is to implement a standardized systems to support the central management decision

Bálint Molnár, Senior Researcher, Information System Department13 Various application systems belonging to core business communicating through Intranet towards a standardized central system

Bálint Molnár, Senior Researcher, Information System Department14 Strong technology level centralization n The significant characteristic of such an approach is to implement one standard ERP system (e.g. a product of one of the market leader) ; n To make it compulsory and to enforce the change-over at all member companies of the enterprise; n A standard, central module through which the centralized management function will have realized n Within the centralized systems, the localized and country specific Business Processes supported by disparate, dedicated Information Systems Services

Bálint Molnár, Senior Researcher, Information System Department15 Centrally operated, standardized ERP system providing country-specific Services

Bálint Molnár, Senior Researcher, Information System Department16 Conclusions n The main trends can be describes as follows: ä The existing, separate, country-specific application systems are standardized and integrated to the centralized standard information processing system. ä Certain business processes, business services and as consequence the services of information or application systems are standardized within a region. ä The legacy information processing units and systems existing at separate countries are centralized. ä The driving force at business services for standardization: –Strong coupling to the market – Market volatility n The centralization can be perceived at the investigated companies at: ä Technology level ä Information Systems Services level ä Business Services and Processes level

Thank you for your attention …Questions?