2. Information Systems Integration ERP EAI Source R. Meissonier How to rationalise the IS and business processes How to harmonize the several IT applications spread out the firm? How to get consistent and up-to-date data and indicators about the overall activity of the corporation?

3. The necessity of an integrated IS: why? impossibility to automate certain inter-department processes Lack of homogenous data Low level of harmonisation of development languages and databases Problems for managers in making reliable management verifications CRM E-sourcing Accounting & Finance purchasingSCM Datawarehouse Datamining

4. Solutions Enterprise Resource Planning Enterprise Resource Planning (ERP) Enterprise Resource Planning Enterprise Resource Planning (ERP) Enterprise Application Integration Enterprise Application Integration (EAI) Enterprise Application Integration Enterprise Application Integration (EAI) Since the years 1990' sSince 2000 Specific systems developed (Dell, Amazon, Wallmart, etc.)

5. What is an ERP? “Huge software” composed of modules managing a large part of the activity: Accounting & finances, manufactory management, supply chain, Human Resources, CRM, Etc.modules 1970’s : MRP (Material Resource Planning) Integration manufacturing processes 1970’s : MRP (Material Resource Planning) Integration manufacturing processes 1980’s : ERP (Enterprise Resource Planning) Integration of the overall corporate activity 1980’s : ERP (Enterprise Resource Planning) Integration of the overall corporate activity 1990’s : CRP ( Customer-centric Resouce Planning ) Integration of customer relationship management 1990’s : CRP ( Customer-centric Resouce Planning ) Integration of customer relationship management 2000’s : XRP ( eXtended Resource Planning) Integration of inter-firm processes 2000’s : XRP ( eXtended Resource Planning) Integration of inter-firm processes Steps

6. ERP: the market Average cost: Software: 150 to 300 K€ + costs of equipment + 15% for maintenance + cost for services (setting up) = initial budget X 2 to X 10! Budget repartition: Market share SAP30% PeopleSoft11% Oracle11% Sage8% Cegid7,5% Intentia consulting 7%

7. Potential effects of an ERP Ericsson case: Microsoft case: Cost of the investment in SAP R/3: 25 Billion $ Objective: to replace the 30 disseminated IS over subsidiaries Project delay: 5 months Estimation of cost saving: 18 Billion$ / year (according to Bill Gates) TaskProcessing time Before the implantation of an ERP After the implantation of an ERP Registering of a customer order 1 hour10 minutes Placing a purchase order 1 to 4 hoursLess than 5 minutes Production planning18 hours30 minutes

8. Risks and limits of ERP Complexity of its implementation (ERP project duration = several months) Standardisation principle Beyond the harmonization of applications: harmonization of the processes, of the procedures of codifications Dependence effect of the firm toward the ERP editor Often perceived by employees as: A vector of workforce reduction ERP “spy effect” Risks of oversizing: Users tend to express more need than required 80/20 Paretto law (Murrell G. Shields)

9. Implementation stages of an ERP solution Audits (financial, organisational, marketing, etc.) Audit report specifying organisational and technological changes required Implantation and setup of ERP solution Interfacing with retained preexisting applications Data recovery from eliminated applications User training Definition of modules to be installed Functional analysis of new information system to be implemented Maintenance

10. Project management of an ERP « Godfather of the project » IS Director + directors Approve the choices, affect resources Carry out the coordination Source : CIGREF, 1999

11. ERP Modules principle (SAP R/3 example) R/3 Client / Serveur FIFinance COAccountancy AM Asset Management PS Project Management WFWorkflow ISSolutionsmétiers MM Material Management HR Human Resources SDSales PPProduction QM Quality Management PMMaintenance

12. EAI principles 1: Message Broker = Physical component that handles communication between applications AccountsSalesCRME-sourcingSCM With point to point systems: 2 connectors per link = 20 connectors AccountsSalesCRME-sourcingSCM EAI + Message broker 1 With EAI: 5 connectors (+ EAI system) are required

13. EAI functions EAI has 4 technical functions: providing connections to interface applications; transforming the data exchanged into the appropriate format; performing data routing from one application to another one; transporting data, over the network. For this reason, an EAI requires the implementation of: an integration server for routing and transformation functions; connectors (to dialogue with applications); a “MOM” (Middleware Oriented Messages) to transport messages between applications.

14. 2 EAI frameworks ComptaVentesCRME-sourcing.SCM HUB central Serveur. Hub and spoke ComptaVentesCRME-sourcingSCM HUB Serveur. HUB Network Centric

15. EAI providers Axway Sun Sybase Neon Webmethods Tibco : Active Enterprise Mercator Vitria IBM : EAI MQSeries Integrator et WebSphere B-to-B Integrator Etc.