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ERP for IT4
The IT problem domain4
Computer Assisted Software Engineering: the previous generation5
Logical versus physical: the Abstraction problem7
Advantage of ERP8
Disadvantages of ERP9
Of the major enterprise resource areas, only information (i.e., IT) lacks integrated vendor solutions such as those offered by SAP, Oracle, and PeopleSoft. The particular problems of an “ERP for IT” solution are examined and some initial directions are presented, covering enterprise architecture, IT service management, technical element management and discovery, and the software development lifecycle. Particular attention is given to the problems of managing enterprise application integration. A standards-based approach to ERP for IT is favored.Introduction
What is Enterprise resource planning (ERP)?
Enterprise Resource Planning (ERP) is a computer-based system designed to place companies’ major activity areas: planning, production and customer service under an umbrella. ERP system is a software package of different modules such as fixed assets management, controlling, financial accounting, manufacturing, human resources, planning and development and so forth. Each module is business process specific. Generally companies choose one ready-made package available for their industry but it is also common to select the modules that best meet their needs. There are hundreds of ERP vendors available on the market; however, this field is mainly dominated by J.D. Edwards, Baan, PeopleSoft, SAP and Oracle (O’Leary, 2000).
What is the Information Technology (IT)?
Any equipment or interconnected system or subsystem of equipment, that is used in the automatic acquisition, storage, manipulation, management, movement, control, display, switching, interchange, transmission, or reception of data or information. The term information technology includes computers, ancillary equipment, software, firmware and similar procedures, services (including support services), and related resources
Why is managing Information Technology so hard?
The enterprise IT problem – it’s a stack of turtles. A hall of mirrors. We are seeking data about the data and process to manage the processing. This report attempts a brief overview on these problems of IT management, and what it would take to more effectively automate them. A particular goal is demonstrating that the problem is so complex that no one vendor can cover it all. A common framework is required.
ERP for IT
It has been reported recently in a major IT industry periodical (Lundquist 2003) that Ralph Szygenda, Chief Information Officer of General Motors, and his senior staff are challenging their vendors for “Enterprise Resource Planning for Information Technology.” Now that such prominent members of the IT community have raised the call, it’s time to look at some of the issues and make a few recommendations. Enterprise resource planning software comprehensively manages the needs of a major enterprise resource area: money, productive capital, people, stock of goods, or information. Vendors such as Oracle, PeopleSoft and SAP build sophisticated, process-centric solutions, on complex information structures implemented in relational databases, for the business organizations that manage the enterprise resource. Of the major resource areas, only information (i.e., IT) lacks such comprehensively integrated vendor solutions. Reasons for this include:
· The concept of information as a resource is relatively new.
· The process discipline imposed by a true IT ERP solution would generate friction in most IT shops, especially if it involved short-term pain for high visibility, business sponsored projects.
· Finally, there are formidable technical challenges, such as establishing workable information models for the problem domain.
The IT problem domain
One representation of major process and data areas converging into the ERP for IT space is depicted in Figure 1. Rather than take the popular Zachman Framework as a point of departure, this model is much more narrowly focused on the modern IT organization as it is typically structured:
Figure 1 The ERP for IT grand convergence
1. Enterprise Architecture
2. Software and systems development
3. Technical element management
4. IT Audit/Discovery.
5. Operations, support, and maintenance
6. Supporting IT Process
Computer Assisted Software Engineering: the previous generation
There is nothing new under the sun. The history of computer assisted software engineering stands out as a stark lesson for the IT ERP project. We all know CASE failed. Or did it? Many mission-critical, main frame based systems were built and are maintained on first generation CASE tools to this day. Failure? Let’s say rather that CASE was oversold, it didn’t scale down or out to smaller, more heterogeneous distributed architectures very well, its tooling suffered from monolithic proprietary architectures, and in the end it was consolidated and milked for licensing revenue; investment stagnated.
But much of the IT ERP effort will reflect the problems of first generation CASE; the leaders of the IT ERP project should review this history. Some of the industry’s brightest minds put much high quality (and still relevant) thought into this, including various efforts to standardize necessary semantics: CDIF, IRDS, PCTE, and others. These efforts converged in the work of the Object Management Group, with its layered modeling paradigm.
There is no meaningful competition to the OMG’s work, which is capable of absorbing and representing virtually any modeling language imaginable (for example, the Common Warehouse Metamodel supports entity/relationship modeling). The OMG is not just about object modeling any more; they have defined the equivalent of TCP/IP for modeling languages and metadata. Such standards unification will enable the creation of an ecosystem of ERP IT vendors specializing in various areas, assured of their solutions’ interoperability through protocols such as XML Metadata Interchange.
Without such unification, IT ERP will repeat the mistakes of monolithic, single vendor ERP solutions. If the “IT Doesn’t Matter” thesis of Nicholas Carr (Carr 2003) is even partially correct, it supports the position that both vendors and consumers of IT should increase their support of standards bodies, so that fewer resources are spent re-inventing commodity wheels.
The ERP for IT project will live and die by the quality of its normalized data structures, a situation also encountered by first generation CASE. In fact, the most challenging aspect of supporting first generation, repository-based CASE tools arguably understood the information model. If framed as a class or entity/relationship model (more precisely, a met model), the major IT entities might be:
· Feed (or Flow)
· Data store
· Data Element
· Party (individual or team)
And many others.
It’s a tough problem area to model. The sub typing hierarchies are deep, recursion is rampant, and many many relatinships are numerous – on the whole, a nontrivial modeling problem, compounded by the need to support abstractions (e.g. logical/physical).
None of these requirements are well supported by mainstream relational database technology, and leading metadata platforms are therefore based on an object-oriented layer which supports robust inheritance, OO associations, and graph queries.
In fact, a new trend in metadata is the highly graph centric approach, emerging as perhaps an overly extreme response to the difficulties of met modeling the IT problem domain. For example, the ITIL concept of a “configuration management database” uses “configuration item” (CI) as a catchall general type for any item of interest to IT’s internal processes. However, ITIL does not seem to call for a robust relationship model (e.g. sub typing, cardinality and other constraints) with which to describe and enforce the valid relationships between CIs. Research analysts Meta Group have also identified a new industry sector called Technology Relationship Mapping; represented by vendors such as Troux, the emphasis again is primarily on the graph and much less on the valid semantics of the various node connections.
Logical versus physical: the Abstraction problem
The issue of metadata leads to the logical/physical (or “what versus how”) distinction, identified years ago and well detailed in (for example) the Zachman Framework. This is not a discussion of data modeling, although data is a good place to start in understanding the issues of abstraction. Enterprise application integration and business process also require logical/physical mapping. For example, a high level integration diagram might show systems as key abstractions with the interfaces between them as simple lines. A physical decomposition of this would show the actual components, servers, and queues implementing the source and target systems and the data flow in between.
Tracing from the abstraction of what a complex system does, to the reality of how it is physically built, is a problem no other ERP domain faces in quite the same way. Both physical and logical metadata suffer from distinct challenges in and of them selves, and the additional, critical task of mapping between them is expensive and difficult. (The OMG’s Model Driven Architecture attempts to address precisely this challenge.)
Conceptually, physical metadata is relatively straightforward to understand– there is little dispute about what things are. It also is amenable to automated discovery and correlation processes, and the tooling in this area becomes more sophisticated every year.
Advantage of ERP
Ease of use: The ERP System is very user friendly and with the right amount of training, it is easy for the employees to use the system.
Introduces business best practices: It helps companies to do away with the incorrect ways of carrying out the different business functions and introduces business best practices. This helps to provide greater control and introduces standardized ways to perform business processes.
Ready-made solutions for most of the problems: As the vendors who develop ERP software packages, take the best ideas from all their customers and incorporate them into their products, they develop systems that help resolve most of the problems.
Only customization required: ERP Systems are already developed to suit the general businesses. But as every company has a slightly different way of operating, only minor changes may to needed to customize the system to suit the company’s particular business requirements.
Information entered only once into the system: As all the departments and the functions in the organization are integrated and linked to one single database, data needs to be entered only once into the system. It can then, be accessed by different departments according to their needs. For example, before taking an order from a customer, the sales representative can have access to information regarding availability of inventory, credit rating of the customer,
Easy enterprise wide information sharing: Once the information is entered into the single database, everyone in the organization has access to the information and sees the same computer screen.
Reduction in time required to complete tasks: As the different parts of the organization are connected with each other, people have faster access to information and require less time to do their tasks. This helps to improve the time and resources for decision-making.
Customer satisfaction: In the paper-based system, the order moved from basket to basket around the organization, and often caused delays, errors in processing due to repeated entries by the different department or got lost. With the ERP system, the order process moves quickly through the organization. This helps to get the orders to the customers faster and there is no in-basket time waiting time involved,
Disadvantages of ERP
Costs: The costs involved in setting up an ERP System are huge. Hence it is very important for companies to first figure out whether their ways of doing business will fit within a standard ERP package. Software cost is not the only expense for the company. They have to consider costs involved in training, data conversion, integration and testing, post-ERP performance issues that may lead to reduction in revenues, maintenance costs etc.There is also a chance that the implementation process may slow down the routine operating works within organizations. (ERP)
Time: The implementation of an ERP system takes a long time. Since time is a valuable resource for the organization, it is important to make accurate estimates of the time required.
It is important to have flexible training schedules so as to allow everyone to get the training they require. It is also necessary to plan for future training requirements that will carry on even after implementation. (Blain, 1999).Acceptance: Employees are never ready to accept change. They don’t really want to change the way they perform their daily tasks and love to stick with the same old ways to carry out their work. Hence it is important for organizations to involve the users in the project activities from the beginning. This will create a sense of ownership in their minds and make them accept the ERP System more willingly. (Shields, 2001)
Training: Many a time companies underestimate the amount of time employees will require getting familiar with new systems. They tend to budget less time and costs for training, that could lead to improper training of employees or actual costs exceeding the budget by a large number.
Enterprise Resource Planning - Jiraporn Lertkarnchanaporn- Anju Gupta - Jesus Ricardo Morales - Yu “Andy” Wu- Eric Monopoli
Enterprise resource planning for information technology - Charles Betz -Metadata Management Office - Best Buy Corporation - firstname.lastname@example.org
Human resources management aspects of Enterprise Resource
Planning (ERP) Systems Projects - Helena Tadinen
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