The Building Blocks-Enterprise Applications Part 3- Differentiation and Innovation

1.Tailoring the ERP

-Each organisation has a different structure, business rules, processes, etc.

-Because ERP is sold as packaged software, before it can be used it has to be adjusted to fit the organisation's needs.

-Most of these modifications are done during the implementation of the system, through configuration or code modification.

-For more substantial extensions of the base ERP functionality, vendors offer add-on solutions, e.g. SAP's 'Industry Solutions'.

-Further fine-tuning and incremental refinement will continue throughout the lifespan of the system (e.g. SAP's Enhancement Packs)

Configuration

-Achieved through changing parameters in special tables built into the ERP specially for this purpose

-Changes the behavior of the ERP (but does not extend its functionality)

-Allows to define the organisation structure, decision rights, process flows, etc.

Code Modification

-Involves changing the base code of the ERP

-Though ERP vendors provide the necessary tools, extensive code modification is considered to be very risky and generally discouraged.

- One key reason is the difficulty of knowing the impact of a code change on the vast interrelated functions. Hence code modifications may 'void the warranty' and complicate future upgrades.

Industry Solutions

-Provide industry-specific configuration data and additional functionality, which helps to bring the ERP closer in the line with the specialized needs of various industries.

-Based on what is sometimes referred to as 'best practices' (i.e. approaches that work well for many-but not-all- organisations)

- These 'best practice' processes are developed through collaborating with key clients, and then made available to all clients through future versions of the software.

Enhancement Packages

-SAP Enhancement Packages are 'optional packages that enable companies to take advantage of ongoing innovations while keeping their core software stable.'

-Provide new or improved functionality to the ERP

-Modular architecture reduces the need for major, risky upgrade projects

2. Specialised Enterprise Applications

-There are ares where the organisational process requirements are substantially beyond the capabilities of the 'generalist' ERP system.

-These needs can be addressed through more specialised applications that are focused on a particular functional area, but which are often integrated with the ERP

- Some examples of applications that are often implemented to complement an ERP system include:

-Customer Relationship Management(CRM)

-Supply Chain Management (SCM)

-Product LifeCycle Management (PLM)

-Supplier Relationship Management (SRM)

- Business Intelligence (BI)

Example: CRM software is 'packaged software that supports an organisation's customer strategy and customer-focused business processes'

Benefits: improved customer-facing processes;improved management decisions;improved customer service; increased business growth and revenue.

From an EA point-of-view, what are some of the key differences between SAP ERP and Salesforce.com?

Cloud maintain customer in Cloud

Would a company that uses SAP ERP be better off implementing SAP's CRM product or Salesforce.com? Why?

3.Enterprise Application Trends

-Organisations continuously seek new ways of applying IT in support of their business. Many look to emerging techonologies

-Experiments with new techonology are usually done at a small-scale, and may be expanded if the initial pilot project proves successful. The early adpoters may need to do substantial custom developement, as established packages may not yet be available.

-In order to competently advise the organisation about new IT-enabled strategic opportunities, enterprise architects need to have a good grasp on technology trends and how these might support the organisation's business strategy.

Four EA Trends: Analytics, Cloud, Mobile and Social

Analytics 46:17

Cloud

-Cloud computing refers to 'the use of computing resources (hardware and software) that are delivered as a service over a network (typically the internet)'

-Although cloud-based applications have been around for a while, in recent years interest from organisations- as well as push from vendors- to move towards cloud services seems to have substantially increased

-Cloud computing has profound implications from an EA perspective

    -some of the potential benefits include not having to worry about managing the hardware and software environment, high reliability, lower costs, easier to scale up/down

-some of the potential weaknesses include issues around data ownership and security, limited customisability, potential difficulties in integrating with in-house systems

Mobile

- a largely consumer-driven trend, due to the adoption of mobile devices (smartphones, tablets, wearables possibily next)

-Consumer adoption of mobile device has resulted in greater pressure on organisations to make content-as well as business applications-available on mobile platforms.

Social

-Social Media refers to ' the means of interactions among people in which they create, share, and exchange information and ideas in virtual communities and networks'

-Similarly to 'Mobile', this trend largely originated in the individual/consumer space

-As the popularity of these networks continues to grow, organisations have become increasingly interested in leveraging these networks as a data source and as a customer interaction tool.

-Social Media platforms targeted specifically at organisations have also started to gain popularity. eg. Yammer and Get Satisfaction

4. From Differentiation to Commoditisation

System of Record

System of Differentiation

System of Innovation 

The 'system of innovation' of today may become (a part of) the 'systems of record' of tomorrow, i.e. as technologies mature they become increasingly commoditised and embedded in well-established packages.

5. Summary

-A packaged ERP system needs to be tailored before it can be used by the organisation

-Companies use industry-specific add-on modules and specialised applications (e.g. CRM) to extend and/or complement the ERP system in supporting their key business processes

-Organisations are continuously experimenting with new and better ways to leverage IT in order to gain and edge over- or to keep up with- the competitors.

-Currently, much of this experimentation revolves around four trends: analytics, cloud, social and mobile.