erp ii: a conceptual framework for next-generation enterprise systems?

ERP II: A conceptual framework for

next-generation enterprise systems?

Charles M ller Aarhus School of Business, Aarhus, Denmark

Journal of Enterprise Information Managament, 2005

Definition ERP/ ERP II

Structure - Abstract - Introduction - Chapter 1-4 - Conclusions

References

CONTENT

ERP II: A conceptual framework for next-‐generation enterprise systems? Jennifer Keck

ERP: Enterprise-Resource-Planning Integrate external and internal Management information across an entire organisation

efficient application of the resources of a company (capital, assets, equipment, employees) goal: optimization of business processes

Definition ERP/ ERP II

ERP II: A conceptual framework for next-‐generation enterprise systems? Jennifer Keck 1/22

between all business functions inside the boundaries of the organization and manage the connections to outside

1

Abstract


Purpose Next generation ES

Design/Methodo-logy/Approach

Analysis of the evolution of ES, ERP research and emerging business requirements

Findings Proposal of ERP II, present ES concepts comprehensive ERP II generally vaild for corporate- wide enterprise systems

Research limitations/ implications

Paper-conclusion: ERP research needs to broaden its perspective Practical Implications First step towards a tool to analyse and design complex

Originality/

Value First attempt to formalize and record ERP II and the next-generation ES

Keywords Operating Systems, Manufacturing resource planning, Supply Chain Management

Paper Type

Conceptual Paper

The author refers to 4 different journals/ books 4 statements:

(GartnerGroup, Bond et al., 2000) Transformation of ERP

Research needs time to respond to new business practices inertia of IS delayed the emergence of ERP research (until the late 1990s) (Klaus et al., 2000)

Introduction


ERP research interest strategic & managerial perspective on ES management (Shanks et al., 2003) Supply Chain Management as a collaboration and integration instrument importance of ES

trend: ERP II (Christopher, 1998)

1

2

3

4

2 parts: 1) Brief Introduction into the topic 2) Structure/ Topics the paper deals with

Analysis of the ERP II concept Evaluation of business requirements

First chapter evolution of enterprise systems

concepts & ERP research Second Chapter new requirements for ES Third Chapter framework of the ERP II concept Fourth Chapter discussion of the research and business

implications of next-generation ES

Introduction


Existing ERP theory

Current business practices

2 parts: 1) Brief Introduction into the topic 2) Structure/ Topics the paper deals with

Analytical approach to ERP II

Concept of ES: development of 50 years now ERP and ERP II framework conditions: changing business requirements, new

First Chapter Enterprise systems in retrospect


Table 1: Enterprise systems in retrospect

Introduction of computers

Background for IS development (more areas involved)

Often embodied in SAP R/3

ERP: standardized software package designed to integrate the internal value chain of an enterprise (integrated database)

planning & controlling of resources ERP hype in the late 1990s because of preparation for Y2K

Ups and downs

Key drivers for the implementation: - Y2K system concerns - globalization of businesses - increasing nat. & intern. Regulatory environment - Business Process Reengineering, QM -



INFO Y2K or millennium bug:

Problem for digital and non-digital documentation & data-

storage situations Reasons: because of storage

space scarcity in the 60s and 70s reduction of digits (instead of a

four-digit year, 2 digits) Consequences: wrong sorting and calculations (millennium-

change)



Differentiating factors of the complexity of ERP projects: - number & variety of stakeholders in implementation projects - high implementation & consultancy costs - integration of business functions - Management of change & BPR (Business Process Reengineering) ERP implementation has to be understood as a business transformation (multi-dimensional model encompassing people, business, technology and process issues)

Second Chapter New business requirements


SCM: one of the most important new business concepts New concept of the SCM because of globalization and outsourcing In 1990: implementation of major

structural changes in the SC of companies

- - Advanced Planning and Scheduling systems

APS or SCM systems: facilitate the central management of the supply chain activities & processes



Distinction between Downstream & Upstream SCM Just-in-time Managing information became complex emergence of the internet

new opportunities & threats to supply chain managers E-business, E-commerce



Benefits from implementing ERP in combination with SCM systems: - Integration of processes - Optimization of processes - Transformation of the company based on ES data

Third Chapter The conceptual framework of ERP II


ERP hype in 2000 (Y2K), afterwards decline Question of meeting the e-business challenge

- ERP II (GartnerGroup in 2000):

- expansion of the traditional ERP (standard systems today incorporate ERP II)

E-business ERP

Collaboration in the SC



Business Intelligence (BI) analytical Decision support system

emerging pattern of generic application architecture

INFO Business

Intelligence Systematical

analysis of data Goal: extraction of information

to gain competitive advantage



Figure 1: The conceptual framework of the ERP II

Table 2: The four layers in ERP II




Central Components (Process Layer) - ERP: central component of ERP II (modules like financials, sales, distribution, logistics, manufacturing, HR, quality & project - Based on Business Project Management (BPM) Business Activity Monitoring - BPM flexibility of ERP II - Vertical solutions for customization




Corporate Components (Analytical Layer) - Components that enhance and extend central ERP functions decision support - SCM: support planning & production of goods - CRM: Management of functions regarding customer service/ relationships - PLM: Prod. Lifecycle Management (product data management, more efficiency, innovative & profitable products) -

x x

x




Collaborative Components (Portal Layer) - Communication and integration between the ERP system and external actors - B2C: e-commerce commercial sales transactions via the internet need for an extensive infrastructure (catalogue, - B2E: intranet provides the employees with information within a company knowledge management -

x

x

Fourth Chapter The adoption of next generation enterprise systems


Conceptual framework of ERP II: theoretical model based on generalized observations & on an analysis of the past and present of enterprise systems

focused on business requirements & available technology but not on actual business requirements business transformations

SURVEY ON ERP ADOPTION - Based on telephone interviews with ERP managers - Conclusion: ERP had become a contemporary & important

technology, single vendor strategy as the dominant ERP strategy - 14 % of the enterprises had more than 1 ERP system - 67 % of the installations all have incorporated part of the ERP II

components in their recent releases



Hypothesis: workflow of a company The ERP II conceptual framework needs to be extended (integration of the extended enterprise perspective )

Best-practice case Dell: successful example of SCM (arrangement of customers, suppliers and the company itself) purpose-build computers - G2 strategy (based on an open flexible architecture) - EAI middleware (Enterprise Appl. Intergr.) to integrate the SC in adaptive

networks BoB) strong competition with ERP



ERP strategy is widespread and successful, but the network perspective of the ERP transformation is really important - The ERP II conceptual framework needs to be improved combination of corporate and network perspectives on supply chain integration ERP II as an important extension of ERP: - combination of the corporate & the network perspectives on supply chain integration - loosely coupled supply chain perspective - the view on application architecture

Conclusions


Creation of a conceptual framework for ERP II ERP II is a new vision and takes time to develop within our industry Improvement necessary ERP research needs to be extended into the supply chain The complexity of the internal process change has to be observed ERP II has a focus on e-

ERP II is dead long live ERP!

Conclusions


ERP II is dead long live ERP!

ERP is dead long live ERP II !

References


45 references, arranged in alphabetical order

Thanks for your attention!

ERP II: A conceptual framework for next-‐generation enterprise systems? Jennifer Keck