Course: ISYS6536-Enterprise System

Effective Period : December 2019

Enterprise Systems
Architecture

Session 3
 Acknowledgement

These slides have been adapted from:

Enterprise Systems for Management

second edition (2014)
Luvai F. Motiwalla; Jeff Thompson
Pearson Education Limited, England
ISBN: 978-1-29202-348-9

Chapter 3
 Learning Outcome
Student will able to :
• LO 3: Analyse case study in enterprise systems
 Learning Objectives
After studying this chapter, student will able to
:
• Examine in detail the enterprise systems modules and
architecture.
• Understand the effects of a well-designed architecture on
ERP implementation.
• Know the various types of ERP architectures and the
related benefits and drawbacks of each architecture.
• Learn about the Service Oriented Architecture and its
impact on ERP systems.
• Learn about cloud architecture and its impact on ERP
systems.
 Preview

• Once ERP systems are integrated and implemented

successfully in a company, they become the cornerstone of
the organization because every single transaction will be
processed through this system.

• In addition to the Systems Integration, it is also necessary to

focus on:
– Business process architecture.
– Business requirements.
– Budget.
– Project management.
– Commitments from top management.
– Continuous communication with employees informing
them about future changes.
 Why Study Enterprise
Systems Architecture?
• Help management and the implementation teams
understand in detail the features and components of the
enterprise system.
• Provide a visual representation of the complex system
interfaces among the ERP application and databases,
operating systems, legacy applications, and networking.
• Management can develop a better IT plan if the
requirements for system infrastructure, training, change
management, and business process reengineering are
clarified.

https://standardbusiness.info/enterprise-system/architecture/
 Components of the Enterprise
Systems Architecture

• Functional
– Defines the ERP modules that
support the various business
functions of the organization.
Examples include:
• Accounting
• Human Resources
• Procurement
• Fulfillment
• Etc.
• System Figure 3-1 Enterprise Systems Architecture (ESA) Model

– Defines the ERP architecture

through the physical components
of hardware, software, and
networking angle.
 ERP Modules

• The key role of an ERP system is to provide support for such

business functions as accounting, sales, inventory control,
and production.
• ERP vendors, including SAP, Oracle, and Microsoft, etc.
provide modules that support the major functional areas of
a business.
• The ERP software
embeds best
business practices
that implement the
organization’s policy
and procedure via
business rules.

Figure 3-2 Typical ERP Modules

 ERP Modules

https://erpfm.com/what-is-erp-architecture/
 ERP Modules From
Three Vendors
Function SAP Oracle/ PeopleSoft Microsoft Dynamics
Sales Sales and Distribution, Marketing and Sales, Retail POS, Field
Sales Opportunity Supply Chain Service Management
Management
Procurement Purchasing, Supplier Procurement and Supply Chain
Relationship Supplier Relationship Management
Management Management
Production MRP, Product Life Cycle Manufacturing Manufacturing
Management
Accounting Financial Accounting Financial Management Financial Management
Distribution Warehouse Management Supply Chain Distribution
Management Management
Customer CRM CRM CRM
Service
Corporate Governance, Risk, and Corporate Performance Analytics
Performance & Compliance Management
Governance Management
Human Human Capital Human Capital HR Management
Resources Management Management
Miscellaneous Banking Campus Solutions E-commerce, Portals
 Overview of Modules

• Production (Helps in the planning and optimizing of the

manufacturing capacity, parts, components, and material
resources using historical production data and sales
forecasting).
• Purchasing (Streamlines the procurement process of
required raw materials and other supplies).
• Inventory Management (Facilitates the processes of
maintaining the appropriate level of stock in a warehouse).
• Sales and Marketing (Implements functions of order
placement, order scheduling, shipping, and invoicing).
• Finance (Can gather financial data from various functional
departments and generate valuable financial reports).
• Human Resource (Streamlines the management of human
resources and human capitals).
• Miscellaneous Modules (Nontraditional modules such as
business intelligence, self-service, project management, and e-
Overview of Modules

https://selecthub.com/enterprise-resource-planning/top-erp-features-2018/
 Benefits of Key ERP
Modules
• Self Services
– Flexible support for employees’ business functions.
– Simplified access to relevant information.
• Performance Management
– Delivery of real-time, personalized measurements and metrics.
– Provides executives with access to such information as business statistics
and key performance measurements.
• Financials
– Ensure compliance and predictability of business performance.
– Gain deeper financial insight and control across the enterprise.
– Automate accounting and financial SCM.
– Rigorous support for financial reporting—SOX Act.
• HR Management
– Attract the right people, develop and leverage talents, align efforts with
corporate objectives, and retain top performers.
– Increase efficiency and help ensure compliance with changing global and
local regulations by using standardized and automated workforce
processes.
– Enable creation of project teams based on skills and availability, monitor
progress on projects, track time, and analyze results.
– Manage human capital investments by analyzing business outcomes,
 Benefits of Key ERP
Modules
• Procurement and Logistics Execution
– Sustain cost savings for all spending categories by automating such
routine tasks as converting requisitions into purchase orders and by
allowing employees to use electronic catalogs to order products and
services.
– Reduce costs through process automation, integration of suppliers, and
better collaboration.
– Improve resource utilization with support for cross-docking processes and
data collection technologies. (RFID and bar codes).
– Enhance productivity of incoming and outgoing physical goods
movements.
– Reduce transportation costs through better consolidation and
collaboration.
• Product Development and Production
– Shorten time to market.
– Deliver higher quality products and ensure timely delivery.
– Real time visibility and transparency (availability check).
• Sales and Service
– Higher number of sales orders processed and reduction in administrative
costs.
– Easy access to accurate, timely customer information.
– Cost-effective mobile access for field employees.
– Reduce travel costs by using online functions.
 ERP Architecture

• ERP system architecture is organized in layers or tiers to

manage system complexity in order to provide scalability
and flexibility.

• Three-layer architecture (the most reliable, flexible, and

scalable architecture) is the most prevalent today and includes:
– Web Servers.
– Application Servers.
– Database Servers.

Figure 3-4 A Three-Tier ERP Architecture

 Layered Architecture
Example (Info.Net)
• The Layered ERP architecture generalizes the functional layers to allow it to
change with newer technologies.
• A Web-based user interface is
provided.
– Users can access the application
via the Internet.
– The PC needs to be capable of
running a Java-enabled Web
browser.
– The PC is connected to both
Intranet and Internet to be able
to use one of Info.Net’s servers.
– The user interacts with the Java
Virtual Machine™ Interface layer
to establish a secure connection
via a secure socket layer (SSL)
connection.
– The user is then communicating Figure 3-3 Example of Info.Net Architecture

with the server through the

applications software layer (ASL).
 Three-Tier Architecture

• Most of the current ERP implementations follow a three-tiered

architecture, which consists of a Web tier, an application tier,
and a data tier.
• Benefits
– Scalability - Easier to add, change, and remove applications.
– Reliability - Implementing multiple levels of redundancy.
– Flexibility - Flexibility in partitioning is very simple.
– Maintainability - Support and maintenance costs are less on
one server.
– Reusability - Easier to implement reusable components.
– Security - IT staff has more control system to provide higher
security.
• Limitations
– Can be very expensive and complex.
 Tiers

• The Web Tier

– Web-based portal allows users the ability to access and analyze
information through their Web browser.
• The Application Tier
– Consists of a Web browser and reporting tool where business processes
and end-users interact with the system.
– It shields the business users from the inner workings of an ERP system,
but still provides the information relevant to their job and business
process.
• The Data Tier
– Focus is on structure of all organizational data and its relationships with
both internal and external systems.

Figure 3-4 A Three-Tier ERP Architecture

 Web Services
Architectures
• Web-based architecture often described as a fourth tier where
the Web tier is split into Web Services tier and Web Browser
tier.

• The ERP systems focus on the Internet to provide a powerful

new functionality for Internet-based access and integration.

• This functionality is primarily supported through the following

Internet access technologies:
– Web Server.
– ERP Portal.
– Back-end Server Integration.
– Browse Plug-ins or Applets.
Figure 3-5 Example of PeopleSoft’s
Server-Centric Internet
Architecture
 Benefits and Drawbacks

• Benefits
– Large numbers of end-users have access to ERP
applications over the Web.
– Easily integrate ERP applications with existing systems.
– Server-centric—No complex, expensive client software
installation.
– The server-centric architecture enables secure end-user
access to ERP application.
– Client-centric—Architecture has better response time
because user requests are mostly processed on the client’s
computer.
– Web-based architectures also allow better system-to-
system integration.

• Drawbacks
– Client-centric architectures lack security.
– Server centric is slower.
 Service-Oriented
Architectures
• Also known as object-oriented architectures for Web
platforms.
• Breaks the business tier into smaller, distinct units of services,
collectively supporting an ERP functional module.
• Allows message interaction between any service consumer
and service provider.
• A consumer from a device using any operating system in any
language can use this service.
• SOA is a software development model based on a contract
between a consumer (client) and a provider (server) that
specifies the following:
– Functional description of the service.
– Input requirements and output specifications.
– Precondition environment state before service can be
invoked.
– Post condition environment state after service has been
executed.
 Service-Oriented
Architectures
• Also known as object-oriented architectures for Web platforms.
• Breaks the business tier into smaller, distinct units of services,
collectively supporting an ERP functional module.
• Allows message interaction between any service consumer and
service provider.
• A consumer from a device using any operating system in any
language can use this service.
• SOA is a software development model based on a contract between a
consumer (client) and a provider (server) that specifies the following:
– Functional description of the service.
– Input requirements and output specifications.
– Precondition environment state before service can be invoked.
– Post condition environment state after service has been executed.
– Error handling when there is a breakdown.

Figure 3-6
A SOA Architecture
 Benefits of
Service-Oriented
Architectures
• Business-level software services across heterogeneous platforms.
• Complete location independence of business logic.
• Services can exist anywhere (any system, any network).
• Loose coupling across application services.
• Granular authentication and authorization support.
• Dynamic search and connectivity to other services.
• Enhances reliability of the architecture.
• Reduces hardware acquisition costs.
• Accelerates movement to standards-based server and application
consolidation.
• Provides a data bridge between incompatible technologies.
• Provides the ability to build composite applications.
• Creates a self-healing infrastructure that reduces management costs.
• Provides truly real-time decision-making applications.
• Enables the compilation of a unified taxonomy of information across
an enterprise.
 Service-Oriented
Architectures
Business Value Benefits of Drawbacks of
Service-Oriented Architectures Service-Oriented Architectures
Increases the ability to meet customer SOA implementations are costly and
demands more quickly. time-consuming.
Lower costs associated with the Requires complex security firewalls in
acquisition and maintenance of place to support communication
technology. between services.
Empowers the management of Performance can be inconsistent.
business functionality closer to the
business units. Requires enterprise-level focus for
implementation to be successful.
Leverages existing investments in
technology. Security system needs to be
sophisticated.
Reduces reliance on expensive custom
development. Costs can be high because services
needs to be junked very often.
 SOA and Web Services

• Web services basically are interfaces that allow different

software application and components to be operated together.
• According to IT industry standards, different applications can
interact with without communication problems.
• The only method of interaction by Web services is by receiving
and sending messages.
• Services are developed using open standards such as WSDL
(Web Services Description Language), UDDI (Universal
Description, Discovery, and Integration), and SOAP (Simple
Object Access Protocol).
• The protocols used in Web services are XML-based.
 Enterprise Content
Management and SOA
• Enterprise content management deals with enterprise
software products that usually store, preserve, manage, and
deliver content connected to business processes.

• Enterprise content management also about supporting

business goals, not just managing content.

• Vendors have come to an understanding that content

management takes advantage of technology and information
assets across the business and is no longer application
specific.
 Cloud Architecture

• Cloud computing is basically a software service provided over

the Internet, securely, by a service provider on a monthly or
yearly lease.
• Companies leasing CC services save money by replacing their
purchased software that requires a license fee per seat.
• Some cloud computing providers also let you build your own
applications using their engines and then they would host
those applications for you as part of the service.
 Cloud Architecture

• Cloud computing is basically a software service provided over the

Internet, securely, by a service provider on a monthly or yearly lease.
• Companies leasing CC services save money by replacing their
purchased software that requires a license fee per seat.
• Some cloud computing providers also let you build your own
applications using their engines and then they would host those
applications for you as part of the service.
• The cloud computing platform provides a great alternative for
organizations that do not want to:
– Purchase, install, or maintain software applications.
– Worry about security, privacy and legal issues associated with data
storage.
• The cloud computing platform is risky for organizations as it forces
them to rely on external vendors for reliability, security, and
continuity of enterprise applications.
 Cloud Computing
Benefits of Cloud Computing Drawbacks of Cloud Computing
• Pay for subscription, not for licenses and • Data security.
upgrades. • Vulnerability.
• Reduced capital and operating • Possible conflict of interest, if the
expenditures for IT equipment and company who stores your
support personnel. applications decides to create a
• Accessed from everywhere, as long as similar application to what you
you have an Internet connection. created on their servers.
• No need to install anything on the user’s • Not suited for all highly
computer. competitive industries like
• Dynamic scalability available on biotech where intellectual
demand. property cannot be protected
• No maintenance fees for software or easily.
hardware.
• Promotes green computing environment
as servers in cloud run on clean energy.
• Guaranteed reliability.
 Implications for Management

• Enterprise architecture is an important technology for the

long-term functioning of the organization.

• ERP architecture decisions are complex because their impact

goes beyond systems and technology to people, organizational
policy, and business processes.

• ERP architecture must be flexible to support a diverse set of

hardware and software platforms.

• Management must learn how to filter out the hyped

technologies that do not provide value to their organization.
 Summary

• System architecture provides answers to questions like:

– What will the system look like?
– How will the system work?
– How will it be developed?
– Do we have the required infrastructure to support the system?
– Can the system be used for any business function or just for a specific business
function like human resources?
• System architecture includes ERP modules and ERP architecture.
• Major vendors provide modules to support basic business functions as accounting,
finance, marketing, and HR to such advanced business functions as self-service,
compliance management, business intelligence.
• ERP systems have traditionally been organized in three-tiers or layers providing flexibility
and scalability: data, application, and presentation.
• There are various types of layered architecture.
– Two-tier architecture is the simplest form.
– Three-tier architectures separate application from the presentation layer.
– Web-based architectures facilitate better integration with Internet technologies.
• Service-oriented architecture separates the service provider from the service consumer
similar to object-oriented system architecture which has a higher degree of separation.
• Management must be involved in the design of the architecture from the very beginning
of the ERP implementation project because the system has a wide and long-lasting
implication on the organization.
Continued to session 4

Thank you