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Advanced
Information Technology Application in ERP Systems
Peter
Loos, Wirtschaftsinformatik II, Chemnitz University of Technology,
Germany,
p.loos@wirtschaft.tu-chemnitz.de
Abstract
Current
Enterprise Resource Planning Systems (ERP) are
used to track companies’ finances, human
resources, and
logistics. Upcoming market-driven requirements focus on outside
connectivity and up-to-date information supply,
including business-to-business support,
e-commerce,
and virtual enterprises. How can these requirements be met
by applying emerging information technologies?
This paper focuses on future development of ERP
systems emphasizing on technical aspects of information technology
application as enabler. It briefly discusses
existing research approaches and potential research and
development issues.
Keywords:
ERP, technology application, workflow,
component
ware, agents, multimedia, XML,
Introduction
Enterprise
Resource Planning Systems integrate company's information
concerning supply chains, customers, human
resources, finance, and accounting. Functional capabilities
of ERP systems are based on information technology
and architectural options available during system
implementation (Chan, 1999). Concepts for business solutions
and information technology depend mutually on each
other: Business concepts have to develop further
applying options offered by new technologies. The
upcoming
internet applications for the e-commerce market evinces
an impressing example for IT-driven business. Business
requirements lead on the other hand to the development of new
technologies. The development of database management
systems for instance were driven by an ERP
application, the bill of material processors. XML is an
newer example for application-driven development. So ERP
is both, IT-driven and IT-driving. The following paragraphs
discuss some ERP-related IT developments,
namely
middleware technologies and the technology application for
interorganizational integration, vertical integration and
ERP implementation.
Middleware
The
middleware sections discuss the technology application of component
ware, agents, workflow management, browsers,
multimedia, and virtual reality.
Component
Ware
After
developing large-scale, non-open, proprietary information
systems
in the past, the definition of interfaces like
the Business Application Programming Interface (BAPI)
of the R/3-system is an up to date way to overcome the
border of heterogeneous application systems. Because
of the necessity to combine best in class modules from
different vendors (e.g. BAAN production module and
the SAP R/3 finance module), the concept of predefined reusable
components has been developed. Component
and
framework technology can be applied for combining vendors'
software with individually programmed software
(Braun et al., 1999; Mustafa and Mejabi, 1999; Sprott,
2000). Prototypal implementations have shown that
components also enable a better support of interorganizational
production
planning systems (Braun and Möhle,
1998; Bohrer et al., 1998). The
extensible markup language (XML) is a basic enabler for
ERP systems based on component ware. Object request
broker architectures with interface definition languages are
more powerful technologies to build application
systems
by combining components. The Enterprise JavaBeans
technology supports an efficient intercompany communication
(Fellner and Turowski, 1999).
Agent
Technology
The
technology of mobile agents has been developed for
some years. Agents choose particular destination nodes
dynamically, based on embedded mobility metadata to perform
the required work. So they can provide a way
for executable code, program state information, and other
data to be transferred to the required host to carry out
the necessary actions. An important feature of agents is the
ability to negotiate autonomously to obtain an assigned target.
First research prototypes of agent applications in ERP
environments are implemented, e.g. decentralized capacity
management to control supply and demand of individual
capacity units with agents (Mertens et al.,
1994; Jain et al., 1999; Kirn, 1999; Schnitzer et al., 1999;
Zelewski and Siedentopf, 1999). Java
has several features that directly support the implementation of mobile
agents. For example, agent mobility requires
facilities that convert complex agent structures into
a flat binary stream which is suitable for network transmission.
The remote system on the receiving side
must be able to reconstruct the agent. With Java's object
serialization this conversion and reconstruction can be implemented
transparently (Wong et al., 1999).
User Interface
System
users accustoming to browser interfaces enforces the
transition of existing business information systems, including
ERP applications, into web applications. These
systems present a HTML (Hypertext Markup Language) based
interface for user transactions running the presentation
tier and parts of the application tier within a web
browser with a intuitive handling. A unified interface offers
easy means for users to communicate with ERP applications
and other applications inside and outside the enterprise.
The borders between Intranet, Extranet and Internet,
using all the same technologies, starting to get transparent
for the user. By applying internet technologies in-house,
companies realize a better internal communication and
an easier access to information (Dunn and Varano,
1999). Formatted data stored in ERP databases can
be linked by XML to heterogeneous kinds of information from
various sources to enable an efficient knowledge management,
e.g. material master data can be combined with
documents referring information concerning that
particular material master (Singh 1999). Multimedia
is a more enriched kind of information. Currently
Multimedia technologies are common in the private
consumer field for games. First serious and sophisticated multimedia
applications are used in medical and
engineering domains. In business applications multimedia is already
used in sales domain to illustrate and advertise
products to customers. In e-commerce solutions multimedia
information facilitates the access to virtual marketplaces
for different participants. Only multimedia integration
to ERP databases allows the implementation of efficient
business process: e.g. electronic product catalogues
should be generated from ERP databases and multimedia
information data sources by using internet technologies
(Gaede and Schneeberger, 1998). Due
to high interactive and efficient communication qualities
multimedia can also be gainfully applied within the
industrial production. Photos or design drawings can be stored
as a part of the materials master data and work schedules
master data to enable figurative presentations of materials
and production processes outside the CAD environment. Supervising
the production process is another example
for using multimedia in production. Production data
collection can be enhanced with voice information, pictures,
and videos. The documentation of the production processes
with more than numerical and alphanumerical data
is useful e.g. for quality assurance purposes and error analysis
(Kurbel, 1994). The
concept of virtual reality is the most sophisticated user
interface currently available. Virtual reality technology is scarcely
applied in ERP systems up to now. First implementations
support product development, sales promotion,
and business process modeling (Leinenbach et al.,
1999). By combining the Virtual Reality Modeling Language
(VRML) with Java, 3D scenarios can be modeled and
accessed across enterprise borders via networks. The
well specified, openly available and portable languages can
serve as building blocks of cyberspace (Brutzman,
1998).
Workflow
Management
At present
workflow management systems are mainly used
for administrative tasks in office environments. They are
only sporadically applied for supporting production processes,
i.e. in sales order processing, product development, and
quality inspection. More extensive approaches integrate
workflow technology as a core mechanism to control
process flow in information systems (Rosemann
et al., 1999). Especially in ERP systems the workflow
integration is beneficial: Work schedules are fundamental
ERP data describing the manufacturing activities to produce
the industrial output. Production control is based
on this information. Work schedules are prestructured process
descriptions with specifications of operations and
assigned capacity units. Despite of their purpose of material-oriented
output, work schedules have similar
components as workflow definitions. Therefore it is expedient
to treat both kinds of processes by same means.
Production control on one side and workflow management
of administrative tasks on the other side should
be handled with the same system. Synergies can be obtain
by combining the advantages of both domains. Workflow
technology can benefit for instance from long practical
and theoretical experiences of production management, e.g.
implementing an organization for process descriptions
like the work scheduling department. Integrating workflow
technologies in ERP systems overcomes department
boundaries between production control in the manufacturing
areas and order processes in administrative areas
of an enterprise (Loos, 1998). Applying interorganizational workflow
technologies with mechanisms like capacity
sharing, chained execution, subcontracting, case transfer
and loosely coupled workflow offers means even to overcome
enterprise boundaries, which is essential for supply
chain management and process handling in virtual enterprises
(van der Aalst, 2000).
Interorganizational
Integration
Discussing
interorganizational integration of ERP systems,
technology applications for supply chain management, e-commerce,
business-to-business, and virtual enterprise
systems are focused.
From
Data Interchange to Communication
Traditional
electronic data interchange (EDI) based on protocols
like EDIFACT requires dedicated software to translate
and integrate business data. The view is usually focused
on replacing paper based transfer by electronic data
transfer. The data transfer is mostly made in a bilateral way
or provided by expensive Value Added Network (VAN)
services. Web information systems enable new forms
of business and commerce. Web-based business will
not adapt existing business models and organizations any
longer, but will invent fundamental new ones only realizable
with a almost ubiquitous communication technology like
the internet (Becker et al., 1998; Salam et al., 1999). Compared
with the restrictions of EDIFACT protocols, internet
communication based on XML standards is more
flexible and offers a better way to adjust technology support
to business processes (Pawar and Driva, 2000). The
predominating developing environment Java enables distributed
applications in which two or more components are
cooperatively operating over process boundaries. The simplest
form of Java distributed computing are two Java applications
passing data over a TCP/IP network connection. The
more complex form is the exchange of Java objects (Morgenthal,
1998).
Technology
Driven Business Models
Supply
chain management requires the integration of vendors,
distributors, resellers, and customers. Internet technology
allows the participants in a supply web to publish
information about their products, prices, and availability
on the net. By replacing complex, expensive, and
proprietary EDIFACT based solutions with simple, inexpensive,
and open ones, the internet will be a marketplace for
all participants (Tenenbaum, 1998). New
kinds of web-based services can be offered and the
web is used to conduct business online instead of only selling
products on the web. Extranets link the resources of a
company to its customers, suppliers, and business partners.
Web publishing is an important electronic communication tool
and the web browser has become the universal interface
for accessing business information. Distributed product
development is another example for web technology
deployment (Hameri and Nihtila, 1997). Internet-based
procurement is an attractive area of ecommerce in the
business-to-business (B2B) sector. An example
is the SAP B2B procurement component. It supports the
procurement of indirect goods and services such as office
supplies and travel services. Suppliers list their products
in electronic catalogues. Beside the advantage of a quick
and reliable conducting based on current information, this
component offers additional information, e.g. availability
inspection, and multimedial presentation. Such
applications should facilitate the communication of business
objects based on XML standards (Glushko, 1999;
Klüber, 1999). XML increases flexibility and expandability because
of its separation of syntax and content. As a
result the integration of new business partners is easier
than with a bilateral VAN based EDI solution (Segev
et al., 1998; Senn 1998). Thus information technology has
direct impact on operational business decisions (Weber
1999). There
are several architectures for electronic product catalogues
in the procurement and sales area such as catalogues
for every internet user, supplier catalogues for special
users, mall provider offering market places, and inhouse
catalogues using an intranet (Renner, 1999; Lincke and
Schmid 1998). A new concept in the environment of e-commerce
are virtual communities as a new distribution channel
to contact the customers. Potential business partners
can get information over a central web site using portal
technology. Portals expand the product offer to more
than one single supplier. Thereby integration of product
catalogues and efficient search strategies are required (Glezer
and Yadav, 1999).
Vertical
integration
Vertical
integration of ERP systems needs technologies that
can consolidate data from operational applications and
combines the information with external data sources.
Data warehouse and data mining are applications for
extracting information from databases of current ERP systems.
As an example in the field of supply chain management, data
warehousing allows customers to understand
their
supplier relationships by consolidating and classifying
their purchasing data. To meet the requirements of extracting
remote data like purchasing data from more
than one source, warehousing over the web is a new form
of analyzing this information (Scott, 1998; Weir, 2000).
The term Total Information Solutions (TIS) expresses the
necessity of integration of external data and internal
data. These systems will enable businesses to monitor
and collect data about external business conditions
and
extract business intelligence (Li, 1999). Extracting information
about competitors and their changes in the
suppliers' structure is an example for the importance of integrating
external and internal information sources
(Mertens, 1999).
Implementation
Implementing
an ERP system needs to be prospectively managed
because of the far-reaching changes ERP brings
to companies (Bingi et al., 1999). Software vendors offer
technical consulting services and implementation techniques
to its customers, since installation and support
of ERP systems requires a lot of experience and knowledge.
To share the knowledge acquired from different
consulting
projects, case-based reasoning systems are applied.
These systems use case bases to store problem specifications
and their solutions, and query the case bases
by using a similarity search algorithm (Luttermann and
Pfeifer, 2000). To improve the automation of complex business
processes, co-operative relations between intelligent
agents and end users are implemented. Configuration tools
are developed in research projects to support the
setup of various user centric business scenarios. (Schinzer
et al., 1999).
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