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. 39. E-mail(s):
[email protected],
[email protected]
Research issue
Globalization and internationalization motivate the restructuring the business processes then consequently IT processes. Economic and Financial crisis accelerates the alteration
Bálint Molnár, Senior Researcher, Information System Department
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Reactions of Enterprises
The companies typically react to the changing environment in cases as follows:
Standardization of ERP and generally information system (IS). Standardization of business processes, business services. The information systems existing at various countries of multinationals are rather centralized.(within the continuum centralization-hybrid-decentralization) 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 Department
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Frameworks of Analysis
Enterprise Architecture (based on Zachman)
Business (systems) architecture - Defines the structure and content (information and function) of all business systems in the organization (the ERP of an organization). Information Systems Architecture (the ERP system of an organization) 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; 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. 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 Department
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Bálint Molnár, Senior Researcher, Information System Department
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VA Enterprise Architecture
DATA What
FUNCTION How
NETWORK Where
PEOPLE Who
TIME When
MOTIVATION Why
SCOPE (CONTEXTUAL)
Things Im portant to the Business
Processes Performed
Business locations
Important Organiz ations
Ev ents Signific ant to the Business
Business Goals and Strategy
Planner
Entity = Class of Business Thing
Function = Class of Business Process
Node = Major Business Locations
People = Major Organiz ations
Time = Major Business Event
Ends/Means = Major Business Goals
ENTERPRISE MODEL (CONCEPTU AL)
Semantic Model
Business Process Model
Business Logistic s System
Work Flow Model
Master Schedule
Business Plan
Owner
Ent = Business Entity Proc = Business Process Rel = Business Relationship I/O = Business Resources
Node = Business Location People = Organization Unit Time = Business Event Link = Business Linkage Work = Work Product Cycle = Business Cycle
End = Business Objectiv e Means = Business Strategy
SYSTEM MODEL (LOGICAL)
Logical Data Model
Application Architecture
Distributed System Architecture
Processing Structure
Business Rule Model
Designer
Ent = Data Entity Rel = Data Relationship
Proc = Application Function Node = IS Function People = Role I/O = User Views Link = Line Characteristic s Work = Deliv erable
Time = System Event Cycle = Processing Cycle
End = Structural Assertion Means = Action Assertion
TECHNOLOGY MODEL (PHYSICAL)
Physical Data Model
System Design
Control Structure
Rule Design
Builder
Ent = Segment/Table Rel = Pointer/Key
Proc = Computer Function Node = Hardware/Softw are People = User I/O = Data Elements /Sets Link = Line Specifications Work = Screen Format
Time = Ex ecute End = Condition Cycle = Component Cycle Means = Action
Program
Security Architecture
Timing Definition
Rule Design
Data DETAILED REPRESENTATIONS Definition (OUT-OF-CONTEXT)
Technology Architecture
Netw ork Architecture
Human Interface Architecture
Presentation Architecture
Sub-Contractor
Ent = Field Rel = Address
Proc = Language Statement Node = Addresses I/O = Control Block Link = Protocols
People = Identity Work = Job
Time = Interrupt Cycle = Machine Cycle
End = Sub-Condition Means = Step
FUNCTIONING ENTERPRISE
Data
Function
Netw ork
Organiz ation
Schedule
Strategy
Ent = Rel =
Proc = I/O =
Node = Link =
People = Work =
Time = Cycle =
End = Means =
DATA What
FUNCTION How
NETWORK Where
PEOPLE Who
TIME When
Based on work by John A. Zachman SCOPE (CONTEXTUAL)
Planner ENTERPRISE MODEL (CONCEPTU AL) Owner SYSTEM MODEL (LOGICAL)
Designer TECHNOLOGY MODEL (PHYSICAL) Builder DETAILED REPRESENTATIONS (OUT-OF-CONTEXT) Sub-Contractor FUNCTIONING ENTERPRISE
MOTIVATION Why
Bálint Molnár, Senior Researcher, Information System Department
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Frameworks of Analysis
Socio-technological architecture for ERP system
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. 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. 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.
An orthogonal view on the Zachman architecture tiers (Business, Information Systems, Information, Technical Architecture)
Bálint Molnár, Senior Researcher, Information System Department
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Socio-technological architectures by Gronau
Centralised ERP system used jointly by subsidiaries
Centralised ERP system communicating with standardized local application system
Centralised ERP system communicating with locally different applications systems
Bálint Molnár, Senior Researcher, Information System Department
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Other Assessment Viewpoints
Resilience and stability for future means the adaptability and flexibility of ERP system to the future changes. Higher costs are acceptable only in case the resilience and stability for future can be ensured. 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 Department
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Investigated issues
What is the standardization level of ERP systems required by international enterprises? Which architecture models fits best to ERP systems reflecting the effect of globalization taking into account the continuum of Enterprise and IT architecture? 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 Department
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Research results
Relatively to the previous status of ERP system
The country specific features or the separate ERP systems are unified and standardized into the integrated central information processing system. Within a region some business processes, services and information processing are standardized. 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 Department
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Discerned atypical sociotechnological architecture
There exists such an Enterprise Architecture
After several acquisitions of local companies the centre has made a decision to keep the existing, countryspecific systems in place that makes up the local, core business processes; Their development will have been carried out by decentralized way in the future; the long-term plan is to implement a standardized systems to support the central management decision
Bálint Molnár, Senior Researcher, Information System Department
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Various application systems belonging to core business communicating through Intranet towards a standardized central system
Bálint Molnár, Senior Researcher, Information System Department
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Strong technology level centralization
The significant characteristic of such an approach is to implement one standard ERP system (e.g. a product of one of the market leader) ; To make it compulsory and to enforce the change-over at all member companies of the enterprise; A standard, central module through which the centralized management function will have realized Within the centralized systems, the localized and country specific Business Processes supported by disparate, dedicated Information Systems Services
Bálint Molnár, Senior Researcher, Information System Department
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Centrally operated, standardized ERP system providing country-specific Services
Logically and physically centralized IS/ ERP
Countryspecific ERP systems
Subsidiaries (within countries)
Country 1
Country 2
Country 3
Standard module for accessing
Country 4 Etc.
Bálint Molnár, Senior Researcher, Information System Department
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Conclusions
The main trends can be describes as follows:
The existing, separate, country-specific application systems are standardized and integrated to the centralized standard information processing system. Certain business processes, business services and as consequence the services of information or application systems are standardized within a region. The legacy information processing units and systems existing at separate countries are centralized. The driving force at business services for standardization: – Strong coupling to the market – Market volatility
The centralization can be perceived at the investigated companies at:
Technology level Information Systems Services level Business Services and Processes level
Bálint Molnár, Senior Researcher, Information System Department
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Thank you for your attention …Questions?
