Course Code and Title: ADV01 – Enterprise System

Lesson 4-5: Week 4-5

Topic: Enterprise System Architecture

Introduction
Once ERP systems are integrated and implemented successfully in a company, they become the
organization's cornerstone 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
Learning Outcomes
At the end of the lesson, the students should be 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 Service Oriented Architecture and its impact on ERP systems. • Learn about
cloud architecture and its impact on ERP systems.
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.
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 – Defines the ERP architecture through the physical components of hardware, software,
and networking angle.

Figure 4.1 Enterprise System Architecture Model (ESA Model)

(Enterprise System, J. Motiwalla)

Understanding the enterprise system architecture is important for several reasons. First, it helps
management and the implementation teams understand the enterprise system's features and
components in detail. Second, it visualizes the complex system interfaces among the ERP application
and databases, operating systems, legacy applications, and networking. Finally, understanding the
enterprise systems architecture, clarifying the system infrastructure requirements, training requirements,
change management requirements, and business process reengineering requirements, among others,
can help management develop a better IT plan.

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, Microsoft, etc., provide modules
supporting the major functional areas. In addition, the ERP software embeds best business practices that
implement the organization's policy and procedure via business rules.
 Figure 4.2 Typical ERP Modules

Table 4.1 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 Manufacturing Manufacturing
Cycle Management
Accounting Financial Accounting Financial Management Financial Management
Distribution Warehouse Supply Chain Distribution
Management Management Management
Customer Service CRM CRM CRM
Corporate Governance, Risk, and Corporate Performance Analytics
Performance & Compliance Management
Governance Management
Human Resources Human Capital Human Capital HR Management
Management Management
Miscellaneous Banking Campus Solution E-commerce Portal

Overview of Modules
 Production – Helps in the planning and optimizing 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 capital.
 Miscellaneous Modules – Nontraditional modules such as business intelligence, self-service,
project management, and e-commerce.

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, workforce trends and demographics, and workforce planning.
 Procurement and Logistics Execution – Sustain cost savings for all spending categories by
automating such routine tasks as converting requisitions into purchase orders and 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 the 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. Adhere to environmental, health,
and safety reporting requirements. Improve the management of incentives and commissions.
Realize more effective real estate management.

ERP Architecture
ERP system architecture is organized in layers or tiers to manage system complexity to provide
scalability and flexibility. Three-layer architecture is the most prevalent today and includes Web Servers,
Application Servers, and Database Servers.

Layered Architecture Example (Info.Net)

The Layered ERP architecture generalizes the functional layers to allow it to change with newer
technologies. In addition, 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 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 with the server through the applications software layer (ASL).
 Figure 4.3 Example of Info.Net Architecture
(Enterprise System, J. Motiwalla)

Infrastructure Requirements
Traditional networks require upgrading prior to the deployment of ERP systems and must be a
component of the overall budget. A high-availability network is required for a fully functioning ERP system
that grows with the user population and supports continued expansion and integration of a supply chain.
Integration with partner and customer systems allows “a company to manage important parts of the
business such as order tracking, inventory management, etc. Online analytical processing (OLAP) allows
access, present, and analyze data across dimensions.

Three-Tier Architecture
Most of the current ERP implementations follow a three-tiered architecture consisting 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 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 the structure of all organizational data and its relationships with
internal and external systems.

Figure 4.4 Three Tier ERP Architecture

(Enterprise System, J. Motiwalla)

Web Services Architectures - Web-based architecture is 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 powerful new functionality for Internet-based access and integration. Internet access technologies
primarily support this functionality: Web Server, ERP Portal, Back-end Server Integration, Browser Plug-
ins, or Applets.
 Figure 3.5 Example of PeopleSoft's server-centric Internet Architecture
(Enterprise System, J. Motiwalla)

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 applications.
 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, Postcondition environment state after service has
been executed, Error handling when there is a breakdown

Figure 3.6 SOA Architecture

(Enterprise System, J. Motiwalla)

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

Business Value Benefits of SOA

 Increases the ability to meet customer demands more quickly.
  Lower costs are associated with the acquisition and maintenance of technology.
 It empowers the management of business functionality closer to the business units.
 Leverages existing investments in technology.
 Reduces reliance on expensive custom development
 SOA implementations are costly and time-consuming.
 Requires complex security firewalls in place to support communication between services.
 Performance can be inconsistent.
 Requires enterprise-level focus for implementation to be successful.
 The security system needs to be sophisticated.
 Costs can be high because services need to be junked very often.

SOA and Web Services

Web services are interfaces that allow different software applications and components to be operated
together. According to IT industry standards, different applications can interact 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 is also
about supporting business goals, not just managing content. Vendors understand that content
management takes advantage of technology and information assets across the business and is no longer
application-specific.

Cloud Architecture
Cloud computing is a software service provided over the Internet securely by a service provider on a
monthly or yearly lease. Companies leasing Cloud Computing services save money by replacing their
purchased software that requires a license fee per seat. • Some cloud computing providers also let you
build your 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.

Benefits of Cloud Computing

 Pay for subscription, not for licenses and upgrades.
 Reduced capital and operating expenditures for IT equipment and support personnel.
 Accessed from everywhere, as long as you have an Internet connection.
 No need to install anything on the user’s computer.
 Dynamic scalability available on demand.
 No maintenance fees for software or hardware.
 Promotes a green computing environment as servers in the cloud run on clean energy.
 Guaranteed reliability
Drawbacks of Cloud Computing
 Data security.
 Vulnerability.
 Possible conflict of interest if the company that stores your applications decides to create a similar
application to what you created on their servers.
 Not suited for all highly competitive industries like biotech where intellectual property cannot be
protected easily

Summary
The 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 function like human
resources?
The 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. The
two-tier architecture is the simplest form—three-tier architectures separate applications from the
presentation layer. Web-based architectures facilitate better integration with Internet technologies. The
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.
References:
Motiwalla, L.et.al (2012). Enterprise System, Second Edition

Introduction to Microsoft Dynamics

https://www.youtube.com/watch?v=nqM79hlHuOs

SAP HANA
https://www.youtube.com/watch?v=FIpiqs10Fug&t=0s

Oracle PeopleSoft
http://oraclecampus.amaes.com/psp/amacsprd/EMPLOYEE/HRMS/?cmd=logout

Info.net
https://info.net/

Cloud Architecture
https://www.youtube.com/watch?v=sd0qz4HnbpE

Introduction to Web Services

https://www.youtube.com/watch?v=iB3NNW1zl44