SoberITSoftware Business and Engineering Institute
HELSINKI UNIVERSITY OF TECHNOLOGY1
Enterprise Architectures
ERP applications
Timo Itälä, Paavo Kotinurmi
SoberITSoftware Business and Engineering Institute
HELSINKI UNIVERSITY OF TECHNOLOGY
Timo Itälä2
Course Map 2007
12.9: EA (Enterprise Architecture) Overview
19.9: ERP (Enterprise Resource Planning) systemsTimo Itälä, Process and Data Modeling basics
Paavo Kotinurmi, Implementing an ERP System
Terhi Nyyssönen, Ruukki, ERP in practise
26.9: BI (Business Intelligence) and Data Warehousing
3.10: BPM (Business Process Management) and SOA (Service Oriented Architecture)
10.10: Governance
17.10: ECM (Enterprise Content Management) and PDM (Product Data Management)
24.10: Enterprise Architecture Summary
SoberITSoftware Business and Engineering Institute
HELSINKI UNIVERSITY OF TECHNOLOGY
Timo Itälä
In the early days...
Automation of manual tasksPayroll
Bookkeeping
Order entry
Invoicing
Statistics
3
Input Output
Data Program
Computer
SoberITSoftware Business and Engineering Institute
HELSINKI UNIVERSITY OF TECHNOLOGY
Timo Itälä
The next steps...Application packages
Personnell
Economy administration
Production Control
Material Requirements
Inventory-Orders-Shipping-Invoicing
Purchasing
Product development
...
4
User tasks
Databases
Applications
Platforms
SoberITSoftware Business and Engineering Institute
HELSINKI UNIVERSITY OF TECHNOLOGY
Timo Itälä
Enterprise Architecture
Alignment of IT and business
Organization´s strategy, goals and operations
Business Processes
Organizational charts
Conceptual models, data models
Application suites
Software and hardware platforms
5
Business
Information Applications
Technology
Inte
gra
tion
ERP...
SoberITSoftware Business and Engineering Institute
HELSINKI UNIVERSITY OF TECHNOLOGY
Timo Itälä
Business processes...
Integration needed...Enterprise Resource Planning systems (ERPs) integrate (or attempt to integrate) all data and processes of an organization into a unified system.
A key ingredient of most ERP systems is the use of a unified database to store data for the various system modules.
6
SoberITSoftware Business and Engineering Institute
HELSINKI UNIVERSITY OF TECHNOLOGY
Timo Itälä
Key processes within an enterprise
Key business processesOrder entry - delivery - invoicing
Production planning - material purchasing - production -warehousing
Personnel recruting - payroll -education - retention??
Market analysis - product development - product marketing
What is a business process?
7
SoberITSoftware Business and Engineering Institute
HELSINKI UNIVERSITY OF TECHNOLOGY
Timo Itälä
Business ProcessDavenport (1993)”a structured, measured set of activities designed to produce a specific output for a particular customer or market. It implies a strong emphasis on how work is done within an organization, in contrast to a product focus’s emphasis on what. A process is thus a specific ordering of work activities across time and space, with a beginning and an end, and clearly defined inputs and outputs: a structure for action. ... Taking a process approach implies adopting the customer’s point of view. Processes are the structure by which an organization does what is necessary to produce value for its customers.”
8
SoberITSoftware Business and Engineering Institute
HELSINKI UNIVERSITY OF TECHNOLOGY
Timo Itälä
Business Process
Rummler & Brache (1995)”a business process is a series of steps designed to produce a product or service. Most processes (...) are cross-functional, spanning the ‘white space’ between the boxes on the organization chart. Some processes result in a product or service that is received by an organization's external customer. We call these primary processes. Other processes produce products that are invisible to the external customer but essential to the effective management of the business. We call these supportprocesses.”
9
SoberITSoftware Business and Engineering Institute
HELSINKI UNIVERSITY OF TECHNOLOGY
Timo Itälä
Business Process Modeling (How?)Process Maps:High level view of business processes
10
Purchasing Market
Business Processes
Procurement Production SalesSales Market
Functions
Key rolesProcess Customer: A recipient of the process' outcome (External/Internal)
Process Owner: a person being responsible for the performance and continuous improvement of the process
SoberITSoftware Business and Engineering Institute
HELSINKI UNIVERSITY OF TECHNOLOGY
Timo Itälä
High level -> details
11
SoberITSoftware Business and Engineering Institute
HELSINKI UNIVERSITY OF TECHNOLOGY
Timo Itälä
Business Process in details
12
EPC Diagram: Event Process Chain
SoberITSoftware Business and Engineering Institute
HELSINKI UNIVERSITY OF TECHNOLOGY
Timo Itälä
Business Process types
Real Process - Material ProcessThe output is physical
The output is what the enterprise produces and sells
Money ProcessThe moneyprocess has often opposite direction to the material process
The output is what the enterprise earns for living
Information ProcessCreation of information
Usage of information
13
SoberITSoftware Business and Engineering Institute
HELSINKI UNIVERSITY OF TECHNOLOGY
Timo Itälä
The devil lies in the details...
14
SoberITSoftware Business and Engineering Institute
HELSINKI UNIVERSITY OF TECHNOLOGY
Timo Itälä
Concept Models (What?)
15
Customer
BusinessUnit
Product
Supplier
Material
Equipment Employee
Location
Inventory
SoberITSoftware Business and Engineering Institute
HELSINKI UNIVERSITY OF TECHNOLOGY
Timo Itälä
Conceptual Models -> Data ModelsEntity-Relationship Diagram: An ERD is a model that identifies the concepts or entities that exist in a system and the relationships between those entities.
Entity is a thing we need to store information about (A noun)
A relationship captures how two or more entities are related to one another (A verb)
Cardinality: How many?
the ring represents "zero"
the dash represents "one"
the crow's foot represents "more" or "many"
16
SoberITSoftware Business and Engineering Institute
HELSINKI UNIVERSITY OF TECHNOLOGY
Timo Itälä
NormalizationNormalization:
Many-to-many relationships are removed by adding an intersection entity: Order and order line
Business Rules:
Customer: Potential or real? Zero orders or at least one order?
17
SoberITSoftware Business and Engineering Institute
HELSINKI UNIVERSITY OF TECHNOLOGY
Timo Itälä
Entities and attributesAttributes:
Entities can have attributes
Every entity must have an uniquely identifying attribute or set of attributes (Primary Key)
Attributes can be used to represent relationships (Foreign Key)
Business Rules:
Can sales price be different from list price?
18
SoberITSoftware Business and Engineering Institute
HELSINKI UNIVERSITY OF TECHNOLOGY
Timo Itälä
Business processes and data
19
Intersections indicate activities
Bill-Of-Material
Master Data
SoberITSoftware Business and Engineering Institute
HELSINKI UNIVERSITY OF TECHNOLOGY
Timo Itälä
ERP System
Enterprise Resource Planning systems (ERPs) integrate (or attempt to integrate) all data and processes of an organization into a unified system.
20
SoberITSoftware Business and Engineering Institute
HELSINKI UNIVERSITY OF TECHNOLOGY
Timo Itälä
Modules of an ERP system
21
SoberITSoftware Business and Engineering Institute
HELSINKI UNIVERSITY OF TECHNOLOGY
Timo Itälä
Implementation of an ERP system
Discover your Business Processes (As-Is)
Define your Business Processes (To-Be)
Map the Business Processes of your To-Be model into the ERP system´s model
Define your Data Model (To-Be)
Discover your Data Model (As-Is)
Prepare for the migration (Data and processes)
Train
Start
22
SoberITSoftware Business and Engineering Institute
HELSINKI UNIVERSITY OF TECHNOLOGY
Timo Itälä
ERP implementation tasksConsulting for a large ERP project involves three levels: systems architecture, business process consulting (primarily re-engineering) and technical consulting (primarily programming and tool configuration activity).
A systems architect designs the overall dataflow for the enterprise including the future dataflow plan.
A business consultant studies an organization's current business processes and matches them to the corresponding processes in the ERP system, thus 'configuring' the ERP system to the organization's needs.
Technical consulting often involves programming. Most ERP vendors allow modification of their software to suit the business needs of their customer.
23
SoberITSoftware Business and Engineering Institute
HELSINKI UNIVERSITY OF TECHNOLOGY
Timo Itälä
Plan Source Make Deliver Return
New Product Development & Intro. (NPDI)
Quotation Management
Service Management
Procurement of Goods and Services
Supplier Collaboration Inventory Management
Configure to Order Sales Order Processing
Solution Map - mySAP ERP for High Tech
Demand & Supply PlanningMake to Stock Manufacturing
Engineering Change Management (ECM)
Make to Order Manufacturing
Service Parts ManagementEnterprise Management & Support
Analytics
Financials Human Capital Management
Corporate Services
Strategic Enterprise Management Financial Analytics Operations Analytics Workforce AnalyticsOperations Support
Life-Cycle Data Management RoHS / WEEE Compliance Indirect Procurement Global Trade Services (GTS)
Customers& Channels
Suppliers& Partners
Time-to-Market
Procure-to-Pay
Plan-to-Make
Quote-to-Cash
After Sales Support
Distributed Manufacturing
SoberITSoftware Business and Engineering Institute
HELSINKI UNIVERSITY OF TECHNOLOGY
Timo Itälä
H75: PLM - Product Development and Collaboration +H85: PLM - Prototype DevelopmentH91: PLM - Product Data Collaboration w. Subcon.
H11: ECM - for Make-to-Stock (MTS) ProductionH69: ECM - for Configure-to-Order (CTO) Production
H55: CRM - Design Registration
J49: Procurement of Stock Material J50: Procurement - Contract J51: Internal Procurement (with & w/o Delivery) (J52)
H88: Quality Management in Procurement
H83: MTS - Production with External Processing and Serial Numbers +H84: MTS - Production with Batch -, Warehouse - and Handling Unit ManagementH97: MTS - Production with Production Versions and Kanban ProcessingH80: MTO - Production with Repetitive Manufact.,3rd Party Order & SubcontractingH74: MTO - Production with Serial Numbers / RosettaNet (RN) – SAP XI S37: SCM - MTO Production w. Component Availability Check; w. Cap. Check (S38)
H70: CTO - Production with Variant Configuration and Assembly ProcessingH71: CTO - Production w. Credit Limit Check, Legal Control (H72), Mat.Variant (H73)
H50: Sales Order Proc. - B2B/B2C (H51) for HT in CRM e-Comm.; for ERP (H56/H57)
H76: Service Management - On-Site Service +H77: Service Management - Repairs at Plant / Repair Order ProcessingH99: Service Management - Material Exchange ProcessingH86: Service Management - Returns Processing and RefurbishmentH87: Service Parts Management - Spare Parts Sales Order Processing
* new+ enhanced
Time-to-Market
Procure-to-Pay
Plan-to-Make
Quote-to-Cash
After Sales Support
Global Solution Scope - SAP Best Practices for High Tech V1.600
J53: Internal Procurement (Cross Company Transfer)
H65: SAP NP - Sales Assistant H66: SAP NP - Purchasing Agent H67 SAP NP - Plant ManagerH68: SAP NP - Production Supervisor *H94: SAP GTS- Compliance Management H96: SAP GTS - Risk Management +H95: SAP GTS- Customs Management
H44: SAP Business Intelligence - Analytics for High Tech
Enterprise Management & Support
S61 : SRM - Plan Driven Proc. w. Supplier Integration *
S52: SCM - ICH Contract Man. Procurement & Supply Network Inventory *
J62: Sales Order Proc. - Cross-Company Sales Order Processing
J73 : Physical Inventory and Balance Sheet Valuation
H10: SOP, Long Term Planning and Capacity Evaluation
SoberITSoftware Business and Engineering Institute
HELSINKI UNIVERSITY OF TECHNOLOGY
Timo Itälä
New business needs
Make to orderVolvo cars, Dell computers
TraceabilityWhere are the components of an end product coming from?
What is the performance of our suppliers?
What is the maintenance history of a product like an airrcraft?
TransparencySupply Chain Management
26
SoberITSoftware Business and Engineering Institute
HELSINKI UNIVERSITY OF TECHNOLOGY
Timo Itälä
Extended Enterprise
27
SoberITSoftware Business and Engineering Institute
HELSINKI UNIVERSITY OF TECHNOLOGY
Timo Itälä
Questions?
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