Suggest Track: Enterprise Resource Planning

Suggest Track: Enterprise Resource Planning

Enterprise Resource Planning System Implementation: A Re-engineering Approach

Shi-Ming Huang , Irene Kwan*, Shing-Han Li** , and Maverick Yu

Department of Information Management, National Chung Cheng University, Taiwan

Department of Information systems and Computing, Brunel University, London, England*

Department of Information Management, Tatung University, Taiwan

Phone +886-5-2720411-6403

Fax: +886-5-2721501

e-mail:

ABSTRACT

Enterprise Resource Planning (ERP) system is the solution to synergies the resources of an, usually, manufacturing industry. It seeks to streamline and integrate operation processes and information flow within a company; yet ERP systems implementation involves a much broader scope and depth with an organization as a whole and it remains an issue. The implementation of an ERP system would requires close collaboration between the technical team, almost key staff from each department and the management of the company. The time span and budget for developing an ERP system within a medium scale organization could be relatively lengthy and expensive. The customization of the ERP package for the unique business requirements is thus obvious. As such, Business Process Reengineering (BPR) to transform existing functions of an original information system to the new ERP system is crucial.

Our research investigates a novel approach to integrate ISRT(Information Systems Reengineering Technology) into ERP system implementation. Our unique model includes two parts: (1)the database conversions process to resolve migration problem between the new database and the old database. (2) the process flow integration to solve the functional difference problem between old system and new system. The objective of our research is to ensure a total quality in an ERP system implementation.

Keywords: Database Conversion,Data Process Analysis, Information System Reengineering, Business Process Reengineering, Enterprise Resource Planning.

Proceedings of the Twelfth Annual Conference of the Production and Operaton

Management Society, POM-2001, march 30-Aprial 2, 2001, Orlando FI

1.Introduction

The use of IT (Information Technology) today has already imbedded into every enterprise’s core. However, the dynamic commercial and the aggressive R&D in IT have driven the endless revolution ofstrategy and organization of enterprises, their IS (Information System) that supports the enterprisesthus need to be compatible with these changing. This gave rise to much related research such as ISRT (Information System Reengineering Technology)[Fong and Huang,1997] that we applied in this paper.As legacy system’s available information includes the process and the database, ourresearch paper will discuss these two parts in detail with an aim to minimize the ultimate new system’s implementation time.

The trend of the decreasing product’s lifetime in a dynamic market concluded that theintegratingof information and enterprise resources is the only way for the enterprise to take the lead. As the result, more and more enterprises pay attention to those software packages that enable integration of sale, manufacture, stocking, financing, accounting and human resource into a single new managing system. An ERP (Enterprise Resource Planning) system is such a system that aims at the whole enterprise’s functionality. An ERP system uses software packages in helping enterprise to build up an integrated database. Through this way, the core information in the enterprise could be integrated more efficiently.

As more enterprises are in need of an ERP system to integrate their original resources, the first thing is to introduce an ERP system into the enterprise. In the introducing process, we need to preserve the original data and transform these data into the new system. Concurrently, we have to concern whether the business process needs modification to let the enterprise work properly as a whole. Now enterprises have to deal with several critical problems including how to transform these two totally different databases, what processes could be integrated to reduce processing time and which process needs to be modified during the introducing time[Holland and Light,1999].

In the recent researches, most researchers emphasize only on the database reengineering or the programs reengineer phase. We attempt to take both data and process flow into concern when reengineering a legacy system. Information system supports the enterprise dealing with the ordinary operation and these precious data can not afford to be ignored in the reengineering project. In addition, the business processes of an enterpriseare not integrated for most of the time. These isolated processes are either too complex or too delicate to modify frequently. The one and for all solution is to carry out a BPR (Business Process Reengineering) project. As the business process changes, their information systems also need to be modified to adopt the new designed business process. In result, our research, first consider the database conversion process to make sure the old valuable data could be transferred to the new database system smoothly. Secondly, we also take the process flow into concern concurrently. Our contribution is that we proposed here a sound approach with working prototype that deal with the reengineering process in an enterprise as a whole with unified concern on both enterprise’s data and processes.

2.RelatedStudies

2-1 Enterprise resource Planning

What ERP really do is to investigate allavailable resources in an enterprise and then integrate everything together according to the need of the organization. Through this ERP integrated information system, the operation processes of the enterprise could be linked up together like as an intra-net. Thus,information is transparent and operates in real time. The ultimate aim is the optimized use of the enterprise’s complete resources.

The implementation of an ERP system involves the integration of the data stream and operation processes. Normally, we start from the analysis of the obligation, vision and goal of the enterprise to guide the business running strategy of the enterprise. Then set the core processes according to the company strategy to achieve the goal of the enterprise. Then set up the business functional framework and business model according to the business running strategy and the core processes. At last, design and develop an information system that suits the enterprise well according to the business model build in the pervious step. [Wang,1999]define 3 formal steps when implementing an ERP system.

Step 1:Business diagnose

(1)Entirely strategic planning aiming at the business running aspect to make the most of the resources.

(2)Try to measure how much human and material resources will be needed in the implementation process based on the business scale now.

(3)Conductpropaganda to change staff’s attitude.

(4)Organize a team to take the training course and find their duty deputy.

(5)Definite the core processes of enterprise in the future.

Step 2:Functional-framework design

This step mainly follows up what has done in the pervious step. And then builds up the enterprise functional framework with the main operational processes. The preparation for the ERP implementation involves every department’s operations. Thus for the best effectiveness, enterprise have to make sure their entire processes design is compatible, correct with no conflicts and suit the organization as a whole. This requires performing a BPR initially for the whole enterprise’s constitutionsto operate and communicateas one giant unit.

Step 3:The development and implementation of the information system

Similarly, this step follows up the pervious step 2 and then develops an information system that suits the business model. The main works are:

(1)The special training course before it goes online. Design a special course for every department’s main working contents and provide users with real-time backup services to solve the problems. It can prevent the staffs from fearing the new information system.

(2)Parallel test to make sure that everything goes well.

(3)Data transform. Transform the original data into the new system and run.

2-2 Information System Re-engineering Technology

The evolution of information system technologies started with file systems in the 60’s, database system in the 70’s and expert system in the 80’. The need to continuous refine a company’s information system is vital to its survival. To protect a company’s huge investment in the data and information system, reengineering rather than rewrite seems to be more cost effective[Fong and Huang,1997;Kwan and Qing,1997].

Software engineering is a discipline that integrates processes, methods and tools for the development of computer software. It is the examination and alteration process performing on the existing software system to transform it into a new form.It encompasses the 3-Es (i.e. Restructuring, Reengineering and Reverse engineering)[ Stevens and Pooley,1998].

(1)Restructuring: rearrange program’s logic without changing the original system functions. Thus the complexity will reduce and the readability will upraise of the program.

(2)Reengineering: re-classify data and code then builds up a systematic managing process. Moreover, it tries to control all data definitions and the input and output of the relative programs in the organization in order to set a repository. What the repository does is to be the base line of improving system and establishing standards.

(3)Reverse Engineering: reverse engineering is a process of analyzing a software system to rebuild the description of system components and the relationships between them. Recent Re-engineering software with code reengineering featureenablegenerates a DFD (Data Flow Diagram) out of the old program code. The reverse engineering of data is to find out the data content from the data definition and then put them into the repository, also know as data dictionary. Moreover, it tried to uncover the relationship between the data then draw the data structure diagram or entity-relationship diagram.

2-3 The combination of IT and business process

In the previous research, most of them treat software reengineering and business process reengineering as two independent topics. Thus they developed their own methods and techniques to reengineer but rarely discussed the relationships between these two topics. They are in fact inter-related. Information systems are helping the enterprise dealing with the ordinary operation processes. When enterprise needs to perform a BPR project, IT capability should also be considered in the business process redesign [Davenport and Short,1993]. And the software systems should be reengineering along with the business process.But now most enterprise carrying out a BPR project, managers frequently misunderstand the crucial role that the existing information systems will continue to play after the new business process is implemented[Newcomb,1995]. In fact, these legacy systems always swept away in the project andhowever, this is an unwise action to take. The legacy system itself not just contains the data but the reflection of the business process.

3.System Design and Development

Introduce an ERP system always occurs a huge amount of human resources and time to analyze and generate a suitable process model during the functional architecture building stage. But eventually the ERP engineers will find out that part of the new designed process remained unchanged when comparing to the original process. In other words, we only need to modify and improvethe weak processes that have been identified. By using a data process integration tool, we can retrieve all the processes within subsystems. These processes gathered here are the original processes that the enterprises are running and see it as a based process. Thus we can retrieve some better and more matured parts of these based processes and then reuse them when introducing an ERP system. In this way of reusing and replacing via reengineering, not only the process design and develop time could be reduced, but also the scope that users have to adapt to the new processes is minimized.

Many enterprises always confronted with a problem on how to deal with the legacy system after implementing an ERP system. Legacy system still holds all the history data and it is almost impossible to re-input all the data into the new ERP system. Thus many enterprises keep two systems running online at the same time. Though we could implement an ERP system successfully, it often results in increasing the loading of the staff. Besides, the data cannot exchange with effectiveness. To solve this problem, we build up a data transform system to help enterprise transforming old data into a new ERP system. Thus legacy system could be abolished and phase in the new system completely instead. As such, the enterprise could save a lot of maintaining and running cost.

Figure 1 depicts our unique and complete ERP system design and develop methodology that unifies data process integrate sub-system and data transform sub-system together.

See figure 1

(1)Process Integration: To reflect the modification situation of the operation process in an information system, we applied the code reengineering technique in the information system reengineering. First, by analyzing the original system by capturing all the relative information like DFD. After integration and modification with the current situation, we can get a complete descriptionthat is suitable for refined business running. According to this information, we can perform the code reengineering on the real ground.

(2)Data Transform: After pervious phase, we can then build up an information system. But the old data and information within the legacy system is still a huge resource to an enterprise. It would be infeasible to abandon these old data. Thus we build up a data transform system to transform all these data into the new system with completeness and accuracy.

See figure 2

3-1 Design of Data Transform System

The database structure of the ERP system is fixed including table name, column size and data type. But the database structure of the legacy system is unknown, including the amount of the tables, data and column type, and column size and column name. In some cases, we even need to join multiple columns. As a result, it is necessary to analyze the original database structure and the ERP system database structure. According to the analyzed result, we can set the relative property of the data by the different DBMS definition and then design the rules for the database schema integration. At the last phase, we can transform the old database into our new ERP system by the database schema integration technique. Here is the complete procedure with 5 steps.

(1)Analyze the ERP system database structure (the object system).

(2)Analyze different database structure (the system we wish to transform).

(3)Locate the relative property between two database systems.

(4)Set the rules for database schema integration by the relative property.

(5)Use the database schema integration technique to integrate.

Thus we can use the software reengineering technique to transform data from different database systems to our ERP system. Figure 3 shows our system architecture.

See figure 3

3-2 Design of Process Integration system

Within an enterprise, data are exchangingamong different departments, thus, problem of data redundancy often raised. To resolve this issue, many enterprises take the process reengineering method. Thus we try to express every process in the DFD format and integrate them to generate a DFD that suits the new required situation. Then compare it with the DFD of the ERP system that we wish to introduce to identify the difference.

This system emphasized on the integration of the data process. There are needs to analyze the process of the original information system and express them in the DFD format. At last, store these DFDs into the data process integration system. This completed enterprise DFD process could then be used to develop a new ERP system or be a reference when designing process in introducing an ERP system. Through this way, an enterprise is introducing an ERP system in the least time.

See figure 4

4.Prototype System

To evaluate the feasibility of our study, a prototype has been implemented by using Microsoft Visual Basic 6.0. Figure shows the snapshots of our prototype.

See figure 5

5.Conclusion

The changing of IS and IT technologies has never been faster in the last decade. In today digital era, every enterprise wished to achieve their goal in the most efficient operating mode could not do without the application of IT. Performing BPR and introducing ERP systems to raise their competition ability become a desperate need. The process of introducing an ERP system often confronts with the incompatible problem has arouse this study. We addressed two IS reengineering techniques in our unify approach: data transforming technique and process analyzing technique. Our contribution is to concurrently applied these two techniques to assist the introduction of ERP system within an enterprise. With the study of the case ran on our prototype, it demonstrate that our approach has not only shorten the ERP introducing time but also incorporate with the analyzing of original business function, as a reference when introducing the ERP. To evaluate its validity, we have already built up two prototype systems for these assisting develop tools of information system reengineering based on our unify approach. As for the future research direction, we take an ongoing system for clothing business as a subject to implement reengineering process to evaluate its feasibility.