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

CONTENT

Definition ERP/ ERP II

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

References

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

Definition ERP/ ERP II
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

between all business functions inside the boundaries of the
organization and manage the connections to outside
1

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Abstract
Next generation ES
Purpose
Analysis of the evolution of ES, ERP
Design/Methodo-
research and emerging business requirements
logy/Approach

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

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

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

Operating Systems, Manufacturing resource planning, Supply Chain
Keywords
Management

Conceptual Paper Paper
Type

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

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

1 (GartnerGroup, Bond et al., 2000)
Transformation of ERP
2 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)
3 ERP research interest strategic & managerial
perspective on ES management (Shanks et al., 2003)
4 Supply Chain Management as a collaboration and
integration instrument importance of ES
trend: ERP II (Christopher, 1998)

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

Analysis of the ERP II concept
Evaluation of business requirements
Existing ERP theory
Current business practices

First chapter evolution of enterprise systems
Analytical
concepts & ERP research approach
Second Chapter new requirements for ES to ERP II

Third Chapter framework of the ERP II concept
Fourth Chapter discussion of the research and business
implications of next-generation ES

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First Chapter Enterprise systems in retrospect

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

Introduction of computers

Background for IS develop-
ment (more areas involved)
Often embodied in SAP R/3

Table 1: Enterprise systems in retrospect

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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 INFO
Y2K or millennium bug:
Problem for digital and non-
Key drivers for the implementation: digital documentation & data-
storage situations
- Y2K system concerns Reasons: because of storage
space scarcity in the 60s and 70s
- globalization of businesses
reduction of digits (instead of a
- increasing nat. & intern. Regulatory environment four-digit year, 2 digits)
Consequences: wrong sorting
- Business Process Reengineering, QM and calculations (millennium-
- change)

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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)

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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 mana-
gement of the supply chain activities & processes

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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

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

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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)

ERP
E-business
Collaboration
in the SC

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of ERP II

INFO
Business
Business Intelligence (BI) analytical Decision support system Intelligence
Systematical
emerging pattern of generic application architecture analysis of data
Goal: extraction
of information
to gain
competitive
advantage

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of ERP II

Table 2: The four layers in ERP II
Figure 1: The conceptual framework of the ERP II

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of 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


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of ERP II

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

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of ERP II

Collaborative Components (Portal Layer)
- Communication and integration between
the ERP system and external actors
x - 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
-

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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

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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

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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

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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!

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Conclusions

ERP is dead long live ERP II !

ERP II is dead long live ERP!

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References

45 references, arranged in alphabetical order

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Thanks for your attention!

Jennifer Keck

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

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