MODULE 3: ENTERPRISE SYSTEMS

ARCHITECTURE

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 CMU Digital Academics

Learning Objectives: At the end of the topic the learner will 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.

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 Why Study Enterprise System Architecture?

ERP system architecture provides a foundation for both the functional and the technical needs of the
organization and adapts to future business challenges. It articulates the relationships among the
complex information technology components, which include hardware, software, and data with such
complex organization components as company structures, business rules, and people.

Hardware can range from multimillion dollar Software similarly requires operating systems,
mainframe computer systems to complex a database, and other software in place for
networking and security equipment them to function properly.
ENTERPRISE SYSTEM ARCHITECTURE

The ESA can be viewed from two different

angles:

1) The functional angle that defines the

ERP modules that support the various
business functions of the organization

2) The system angle that defines the ERP

architecture through the physical
components of hardware, software and
networking.
TYPICAL ERP MODULES

The key role of an ERP system is to provide support for such business functions as accounting,
sales, inventory control, and production for the various stakeholders of the organization.
Organizations often selectively implement the ERP modules that are both economically and
technically feasible. ERP provides the same functionality to the users (e.g., the silo systems
of the past), but the data are integrated or shareable across all the ERP modules.
 TYPICAL ERP MODULES

PRODUCTION MODULE
- this module helps in planning and optimizing the manufacturing capacity, parts, component and
material resources using historical production data and sales forecasting.
TYPICAL
TYPICALERP
ERPMODULES
MODULES

PURCHASING MODULE
- this module streamlines the
procurement process of required raw
materials and other supplies. It
automates the processes of
identifying potential suppliers,
negotiating price, awarding purchase
orders to the supplier and billing
processes. It is also tightly integrated
with the inventory control and
production planning modules.
TYPICAL ERP MODULES

INVENTORY MANAGEMENT MODULE

- this module facilitates the
processes of maintaining the
appropriate level of stock in a
warehouse. Inventory control
identifies inventory requirements,
sets targets, provides
replenishment techniques and
options, monitors item usages.
TYPICAL ERP MODULES

SALES AND MARKETING MODULE

- this module implements functions of

order placement, order scheduling,
shipping and invoicing. It is closely
integrated with an organization e-
commerce Web sites.
TYPICAL ERP MODULES

FINANCE MODULE

- this module benefits for profit

organizations and non profit organizations.
It is the core of many ERP software
systems.

It can gather financial data from various

functional departments and generate
valuable financial reports.
TYPICAL ERP MODULES

HUMAN RESOURCE MODULE

- this module is usually the first model

implemented by many companies. This
module routinely maintain a complete
employee database, including contact
information, salary details, attendance,
performance evaluation and promotion.
 TYPICAL ERP MODULES

MISCELLANEOUS MODULES

Some vendors have started offering such nontraditional modules as business intelligence,
self-service, project management, and e-commerce. For example, the business intelligence
module offers tools and data warehousing capabilities to display real-time information through
reports and to monitor historical trends. Furthermore, these reports can be viewed through the
enterprise portal for decision making with executives who can be located around the globe and
can collaboratively make decisions based on the same live data.
 BENEFITS OF KEY ERP MODULES
SELF - SERVICES
• Enable flexible support for employees’ business functions with views of information
tailored to their needs
• Empower employees and managers through simplified access to relevant information for HR
management, financials, operations, and analytics, while boosting motivation, productivity,
and efficiency.
 BENEFITS OF KEY ERP MODULES
PERFORMANCE MANAGEMENT
• Improve business insight and productivity by delivering real-time, personalized measurements and metrics
• Provide executives, managers, and business workers with access to such information as business statistics
and key performance measurements presented in the context of business tasks

FINANCIALS

• Ensure compliance and predictability of business performance

• Gain deeper financial insight across the enterprise and tighten control of finances
• Automate financial and managerial accounting and financial supply chain management
• Provide rigorous support for financial reporting and such corporate governance mandates as the Sarbanes–
Oxley Act and Basel II
 BENEFITS OF KEY ERP MODULES
HR MANAGEMENT
• Attract the right people, develop and leverage their talents, align their 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
 BENEFITS OF KEY ERP MODULES
PROCUREMENT AND LOGISTICS EXECUTION

• Sustain cost savings for all spending categories by automating such routine tasks as
determining sources and 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 such as radio frequency identification (RFID) and bar codes
• Enhance productivity of all activities related to incoming and outgoing physical goods movements
• Reduce transportation costs through better consolidation and collaboration
 BENEFITS OF KEY ERP MODULES
PRODUCT DEVELOPMENT AND MANUFACTURING
• Shorten time to market through streamlined new-product development and introduction
processes
• Deliver higher-quality products and ensure delivery of promised orders through optimal
planning, scheduling, and sequencing on the factory floor
• Improve visibility and transparency in real time across all shop floor processes, including
availability checking and costing
 BENEFITS OF KEY ERP MODULES
SALES AND SERVICE
• Increase the number of sales orders processed and reduce administrative costs through
automation of sales order management and the use of such profitable Internet-based
solutions as e-commerce
• Deliver greater customer satisfaction by providing easy access to accurate, timely information
• Streamline processes that facilitate cost-effective mobile access for field employees
• Improve the management of incentives and commissions to maximize productivity and
boost sales
• Reduce travel costs by using online functions for planning, booking, and expense accounting
while ensuring that company policies are applied to all processes
• Realize more effective real estate management, supported by tools that streamline and
manage every stage of the real estate life cycle
• Adhere to environmental, health, and safety reporting requirements
 ERP ARCHITECTURE

ERP system architecture is organized in layers or tiers to manage system complexity in order to provide scalability
and flexibility via a plug-n-play systems capability. This is highly essential in an enterprise-level system. Three-

layer architecture is the most prevalent today and includes Web, application, and database servers

THREE- TIER ARCHITECTURES

APPLICATION TIER DATA TIER WEB TIER

 ERP ARCHITECTURE

DATA TIER
- Focus on the structure of all organizational data and its relationships with both internal and
external systems.
APPLICATION TIER
- Where data are entered and shared with other components of the system. It shields the business
users from the inner workings of an ERP system

WEB TIER
- Allows users the ability to access and analyze information through their Web browser. These
portals allow the viewing of many independent system and external third party applications.
BENEFITS AND LIMITATIONS

• Scalability
• Reliability
• Flexibility
• Maintainability
• Reusability
• Security
• Economics
• Complexity
WEB SERVICES ARCHITECTURES

This architecture leverages a number of Internet technologies and concepts to deliver simple, ubiquitous access to ER
modules and enable the open flow of information between systems.

This functionality is primarily supported through the following Internet access technologies:
• Web server
• ERP portal
• Back-end server integration
• Browser plug-ins or applets
BENEFITS AND DRAWBACKS

The main characteristics of an SOA is that of a loosely coupled, document –oriented interaction model.

The key benefits of SOA, are scalability, reusability, and flexibility

Business value benefits of SOA:

• Increases the ability to meet customer demands more
quickly
• Lower costs associated with the acquisition and
maintenance of technology
• Empowers the management of business functionality
closer to the business units
• Leverages existing investments in technology
• Reduces reliance on expensive custom development
BENEFITS AND DRAWBACKS

The key benefits of using the Internet platform as the foundation is that organization are able to provide a wide range of
end users with access to ERP applications over the Web .
THANK YOU! 

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Any Questions

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