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An Analysis of ERP Systems Based on N-tier Architecture

                 Hua-Yang Lin, Ping-Yu Hsu, Jun-Der Leu, Wen-Hsie...
area are evaluated with the functional list             are used to be as the taxonomic characters to
designed with the fr...
into reality by applying software systems to links     management issue rather than IT responsibility
activitie s (functio...
extremely      busy      during     the   intensive
communication period. However no company                       Table 2...
systems and the support of business enabling
Americas Conference on Information               [20] Rao SS. Enterprise resource planning:
    Systems; Milwaukee, Wiscon...
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  1. 1. An Analysis of ERP Systems Based on N-tier Architecture Hua-Yang Lin, Ping-Yu Hsu, Jun-Der Leu, Wen-Hsien Tsai Department of Business Administration, National Central University No.300, Jungda Rd, Jhongli City, Taoyuan, Taiwan 320, R.O.C. s1441002@cc.ncu.edu.tw, pyhsu@mgt.ncu.edu.tw, leujunder@mgt.ncu.edu.tw, whtsai@mgt.ncu.edu.tw Abstract. The proliferation of ERP systems ERP systems, and cost $10 millions for a naturally leads to an intriguing question of moderate size company and over $100 millions products classification. In this paper, a for a large international enterprise [17]. framework for analyzing ERP systems is Since ERP systems are critical to companies proposed. This framework includes various IT and expensive to acquire, many studies have infrastructures that can be incorporated in the n- been devoted to find the recipe for successful tier architecture. By using cluster analysis, implementation. Among other important factors, different groups of ERP systems are classified to product selection has been singled out by many verify the correctness of the framework. The research reports. For example, Jason and results may be useful for ERP vendors to Subramanian points out that in order to improve their products strategy and help implement and use ERP system successfully, companies to evaluate most suitable ERP companies have to select right ERP packages to products to satisfy their requirements. match its requirement [14]. Esteves and Pastor also emphasize that the selection of ERP Keywords . Enterprise Resource Planning products and consultants is an important step in (ERP), Classification Framework, Cluster the proposed ERP Life-Cycle framework [10]. Analysis, N-tier Architecture Al-Mashari et al. also list correct ERP package selection in the critical successful factors of ERP 1. Introduction projects [2]. Currently many ERP systems are available in Information technology has been viewed by the market. In Taiwan along, there are 61 ERP enterprises worldwide as vital tools in improving vendors, and the CIBRES listed approximately efficiency and competitiveness. In the last 1500 different ERP solutions provided by a decade, many companies turning to use variety of vendors in 2000 [3]. These products information systems usually known as enterprise can differ from each other very much. The resource planning (ERP) systems to respond to differences play an important role in competitive pressures and market opportunities software/vendor selection. The vast number of quickly, to make product configuration flexibly vendors and the difference of functionality and and to reduce inventory obviously [4]. architecture have put much pressure on the ERP systems are integrated information system selection processes. Although software systems that support value-added processes of selection is important, to the best of our enterprises. Based on modular software structure knowledge, no academic work has been devoted and centralized database, information flows in to provide formal framework to compare and manufacturing, finance, sales, distribution as contrast the characteristics of ERP systems. Such well as human resources processes can be a framework should provide evaluation items integrated in real time. The ERP systems have come with theoretic supports, be able to become one of the largest IT investments for distinguish products with different functionality, many companies during the 1990s [5]. ERP and it should be applicable to most ERP systems. systems are not only used by large companies but In this paper, a software architecture also penetrated into small and medium evaluation framework for ERP systems based on companies [12]. client server technology, browser based It is expensive and time consuming for computing, system integration capability and companies to implement ERP systems [6]. The support of globalization is proposed. To verify companies can take many years to implement the quality of the framework, several ERP products that are widely used in Greater China
  2. 2. area are evaluated with the functional list are used to be as the taxonomic characters to designed with the framework. The results show classify ERP systems. that the framework can be applied to a wide A simplified framework for analysis of ERP range of software and can reasonably distinguish systems shows the IT infrastructure, major ERP products designed with different complexities. modules, and their relationships with some external systems by interfaces as shown in Fig. 1. 2. Methodology The major modules of ERP systems may include finance, manufacturing, human resources, sales The research involves four major steps to and marketing, and so on [2,7,8]. After ERP establish and verify the ERP analysis framework. having implemented systems successfully , many 1. Identification of the simplified ERP analysis companies are considering and implementing framework. It includes collection of various extensions to the systems. The attributes and functions for developing the extendable external systems could include analysis framework. The research includes supplier chain management (SCM), customer information technology attributes, relationship management (CRM), e -business or production functions and finance functions e-commerce solutions (B2B and B2C), data currently. Then the simplified ERP analysis warehouse (DW), data mining (DM), business framework of ERP systems showing the IT intelligence (BI), knowledge management (KM), infrastructure, ERP modules and interface to and so on [13,17,18,19,25,27]. By integrating external systems will be presented. ERP system with these external systems, 2. Identification of ERP vendors from the company can improve the relationships with Market Intelligence Center (MIC) of suppliers and customers and provide competitive Information Industry Institute (III) in Taiwan advantage for the organization. According to and the Internet search. For it, the ERP Sprott [23] , ERP system can integrate with others software vendors, products, and descriptions applications by integration standards (such as will be identified and only some, but not all XML, RosettaNet) and component interface ERP products will be surveyed in this protocols (such as CORBA, COM+ and EJB). research. The ERP vendors must have branch For others systems to retrieve and store data in offices in Taiwan and the Mainland China at the ERP system, there are three most used the same time. These vendors include methods from the experiences of professional international and local ERP vendors. consultants, of ERP vendors and consulting 3. The function list is sent to the selected ERP companies. The three integration methods vendors. The data filled by vendors are include predefined programs, temporary data verified with independent experts or users in files and read/write tables in database directly. In customer sites. Only the reports that have this paper, the focus will be on IT infrastructure consistent view from both parties are that supported the ERP system operation. reserved for clustering analysis. 4. Identification and analysis of the IT External Systems attributes contained in the ERP products. KM BI DW DM Each key IT attribute has a variety of sub- SCM CRM B2B B2C features or capabilities. These attributes of Interface different ERP products were identified and Intergration Component Intergration analyzed. By evaluating the relationship Standards interface protocols Methods among the aggregations of ERP attributes using cluster analysis, the different groups of ERP Modules ERP products might be identified and Manufacturing Finance Human Resources . . . described. IT Attributes Business- Client Web AP DB System enabling Server Server Server Architecture features 3. A framework for analyzing ERP systems Figure 1. Framework for analyzing ERP systems Because ERP systems are continuously evolving in terms of technology and functionality IT attribute is the technology infrastructure to [16], in this paper both functions and attributes support the execution of ERP systems. The ERP systems transform the value chain methodology
  3. 3. into reality by applying software systems to links management issue rather than IT responsibility activitie s (functional areas) in a client/server and data management feature is categorized to architectural environment [1,11,20,24]. In the database server attribute. Hence, this paper does viewpoint of IT infrastructure, ERP systems have not include these two business-enabling features. three components: client/server system, From above research the IT attributes will be enterprise-wide database as well as the studied under the framework given by the Fig. 2. application modules [28]. User interface is one characteristic of the client/server model [21], ITAttributes which is typically a graphic user interface (GUI). 1.Client 4.DatabaseServer According to Sinha [22], there are following a.OperatingSystem(OS) a. Database support key issues that must be considered for a b.Connectivityconstraint b.Databaseintegration client/server system: Ÿ Client: (1)workstation operating system, cG I . U c.Scalability (2)hardware constrains, (3)connectivity d.Divisionofresponsibility 5.SystemArchitecture constraints, (4)objected-oriented design, 2.WebServer (5)GUI, (6)division of responsibility. a. 2-tiers Ÿ Server: (1)scalability, (2)server interface, a.Webserversupport b. 3-tiers (3)gateway to mainframe, (4)disk space, b.Connection c.4-tiers (5)security and access control, (6)backup, 3.ApplicationServer recovery and logging, (7)fault tolerance and 6.Business-enablingFeatures uninterrupted power supply, (8)performance a. Scability a.Procedures and system management, (9)internetworking. b.Serverinterface Integrationstandards b.Transactionvisibility Because information technologies have made c.Gatewaytoothersystems Componentinterfaceprotocols c.Globalormultilocal progress on hardware and software continuously, d.Securityandaccesscontrol Integrationmethods some key issues have been excluded from this d.Modifications paper, e.g., hardware constraints, disk space and e. Backup, recovery e.Bestpracticesorientation internetworking. Some issues that are not related f.Logging to ERP systems have been neglected also, e.g., g.PerformanceandMgt. OO design, fault tolerance and UPS. The gateway to mainframe issue has been revised to Figure 2. Framework of IT attributes gateway to externa l systems based on above framework. 4. Data collection and verification Information technologies have evolved from client/server computing to the Internet era. The A total of 61 ERP software vendors were system architecture extends to 4-tiers web-based identified from the Market Intelligence Center architecture [9]. The web-based architecture (MIC) of Institute of Information Industry (III) in consists of four layers: client, web server, Taiwan. This vendors list consists of major ERP application server and database server. Owing to vendors in Taiwan and well-known international the development of mobile technology, the ERP vendors which have branch offices or mobile devices can be used to access information agents in Taiwan. Among the 61 companies, 32 systems [15]. Users may connect to ERP systems are taken away from the list since they do not by browsers and mobile devices so that the ERP have branches to operate in Mainland China or systems can be integrated to the supply chain Hong Kong. Phone calls were made to the left 29 management (SCM) system, customer companies to invite them to join the research. 25 relationship management (CRM) system, and so out of the 29 companies agreed to review the on. forms derived from analysis framework. In addition to information infrastructure based After reviewing the framework, 16 companies on n-tiers architecture, Davenport [7] pointed out do not express their interest to attend the research. that ERP systems should include some specific After one month of intensive communication, 9 technical or business-enabling features. These out of the 25 companies return their forms. Such business-enabling features consist of data a low return rate we believe is caused by two ownership, procedures, transaction visibility, problems. One is that the framework may reveal global or multilocal, data management, that their IT attributes have a lot of room to grow. modifications and best practices orientation. The The second one is because the framework data ownership feature is more likely a requires experts to fill out the form and they are
  4. 4. extremely busy during the intensive communication period. However no company Table 2. Features associated with the IT has complained that their products cannot be attributes analyzed by the framework. IT Attributes A B C D E F To assure that the data filled are accurate, Client (14) 7 12 12 6 13 5 Web server (6) 0 1 5 0 6 0 telephone interviews are also performed to make Application server (21) 14 9 21 16 20 6 sure the experts filling the data fully understand Database server (10) 4 1 5 8 6 2 the questionnaire. To verify the data, the same System architecture (3) 1 3 1 2 3 1 form is also used to interviewed customers of the Business-enabling features (10) 7 6 7 6 8 7 Total (64) 33 32 51 38 56 21 companies or experts who do not work for the vendors. Three out of the nine returned questionnaires cannot be confirmed by such a Combined the total IT attributes, the product verification procedure either due to customers E supports most of the features for IT attributes. did not use the latest versions or the experts are For local ERP products, the product D supports out of the country when the survey was most of the features for IT attributes. There is no performed. Hence, the framework verification huge difference between the two international phase successfully obtains the analysis reports of ERP products about IT attributes. But for the six products from six companies. Their four local ERP products, they have bigger characteristics are listed in Table 1. differences among them. The comparisons of six ERP products for all the six IT attributes are Table 1. Characteristics of the ERP shown in Fig. 3. products under analysis Sym Year of Major Company profile bol founded market area 25 Number of IT features A 1982 Taiwan and The largest ERP vendor in 20 China Taiwan 15 B 1994 Taiwan and Aggressively expending ERP China vendor 10 C 1977 Worldwide The largest ERP vendor in 5 U.S. D 1987 Taiwan and The second ERP vendor in 0 Client Web server P server DB server A System architecture Business-enabling China Taiwan IT attributes features E 1972 Worldwide The largest ERP vendor A B C D E F worldwide F 1994 Taiwan and Aggressively expending ERP Figure 3. Comparisons of six ERP products China vendors based on six IT attributes 5. Analysis of ERP systems 5.2 Cluster analysis The IT attributes include client, web server, The different ERP systems can be placed to application server, database server, system dissimilar clusters by using the cluster analysis. architecture and business-enabling functions. The goal of cluster analysis is to classify the ERP These attributes support the infrastructure systems into clusters. In such a way, the ERP requirements for ERP systems from the aspect of systems with similar number of attributes or client-server architecture. functions are placed in the same cluster. The result of the survey is clustered with complete 5.1 The result of the analysis link cluster methodology to examine if products The features associated with the IT attributes under survey can be naturally grouped. The for all the six ERP products are shown in Table 2. result of the cluster is to verify if the analysis The values of each column mean the number of framework can reasonably distinguish products. features for each ERP products supported. The In this research, the agglomerative number contained within parentheses is the total hierarchical clustering is used to analyze the IT number of features surveyed for each IT attribute. attributes of ERP systems. All the surveyed There are in total sixty-four features that results are analyzed by SPSS 10.0 software and categorized as six IT attributes including client, used complete-linkage algorithm. The Fig. 4 web server, application server, database server, shows the results of cluster analysis for six ERP system architecture and business-enabling systems based on IT attributes. features.
  5. 5. systems and the support of business enabling feature. The framework has solid theoretic foundation since it based on client/server architecture [22] and web base computing [9] to develop system attributes and global business requirement to derive business enabling feature [7]. The Figure 4. Cluster analysis of ERP systems clustering analysis in the verification phase based on IT attributes implies the framework can reasonably distinguish products. During the process of From Fig. 4, we can naturally cut the ERP collecting ERP product analysis reports, we have systems into two groups by setting the distance at not found any company complaining that the 15. The two different groups are: framework is not suitable to evaluate their Ÿ Group I: international vendors, the top leaders products. From the friendly response, we have in ERP worldwide market. strong confidence that the framework can be Ÿ Group II: local vendors, the top ERP vendors applied to major ERP systems. and highest market share on small and medium The study tries to establish the IT attributes enterprises in Taiwan. analysis framework of ERP systems. However, Among the local ERP vendors, the four as the discussion in section 1 shows, ERP has companies can be divided into two subgroups by many strong functional aspects in handling setting the distance at 10. The major reason is business processes. In the future work, we that only one ERP system supports web suggest at least manufacturing and financial architecture while the others not. analysis should be added to the analysis The result matches products’ general image framework since financial modules have the and thus implies that the analysis framework can highest installed priority [17] and ERP systems reasonably distinguish products. have the highest penetration rate in manufacturing industries [26]. 6. Conclusions and future works 7. Acknowledgements Product selection has been singled out by many research reports. After checking some The research is partially supported by the local and international renowned ERP software MOE Program for Promoting Academic products, the similarities and dissimilarities of Excellence of Universities of R.O.C. under the ERP systems can be found. The classification Grant Number 91-H-FA07-1-4. framework developed in this paper can help the software vendors to improve their ERP products 8. References strategy. On the other hand, for the ERP user companies, this classification framework will [1] Akkermans HA, Bogerd P, Yücesan E, Van support them in choosing suitable ERP products Wassenhove LN. The impact of ERP on considering their requirements and existing IT supply chain management: exploratory architecture. The NESAF developed in this paper finding from a European Delphi study. can help companies to select most suitable ERP European Journal of Operational Research system according to their requirements and 2003; 146(2): 284-301. existing IT architecture. Considering the future [2] Al-Mashari M, Al-Mudimigh A, Zairi M. growth of system and integration with other Enterprise resource planning: a taxonomy of systems, the framework can also help to critical factors. European Journal of determine which kind of ERP solution is most Operational Research 2003; 146(2): 352-64. flexible. [3] Anderegg T. ERP: A-Z implementer’s guide The framework consists of six major IT for success. Resource Publishing; 2000. attribute categories to classify ERP products. [4] Bingi P, Sharma M, Godla J. Critical issues These attributes include client, web server, affecting an ERP implementation. application server, database server, system Information Systems Management 1999; architecture and business-enabling features. The 16(3): 7-14. framework covers client/server technology, [5] Chung S, Snyder C. ERP initiation - a browser based computing, integration to external historical perspective. Proceedings of
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