ERP Systems for the Intelligent Enterprise

ERP systems stay at the core of the enterprise's business functions; therefore, its understanding is crucial for the intelligent enterprise. If we adopt the generic intelligent enterprise architecture by Delic and Dayal (2002), ERP addresses issues of supply chain efficiency and back-office optimization and provides the basis for Enterprise Knowledge Management (EKM). In order to achieve supply chain efficiency and to allow enterprise application integration, one of the main tendencies in this aspect is the introduction of the Internet by most ERP software vendors. The adoption of the Internet can be seen from two viewpoints:

1. user interface, i.e., communication of the ERP system with the user

2. internal communications of ERP modules/communications of ERP modules with other software

With respect to the user interface as data processing systems, ERP systems are transaction-oriented. That means that most business functions involve the creation, deletion, or updating of several data at a time. These operations should be performed at once or not performed. For instance, it does not make sense to partially store an invoice: either it is registered as a whole, or it is not registered.

Unfortunately, the connectionless nature of the Internet protocols makes it not well suited for transactions. Therefore, it is intrinsically difficult to adapt the ERP internal structure to the Internet. As a consequence, most of the ERP vendors' effort is on creating reliable gateways between the ERP system and an Internet server. These are efforts and challenges intrinsically related to the Internet protocols and, therefore, are not discussed in this ERP-specific chapter. For a detailed review of Internet security issues, the reader is referred to another chapter of the book.

Regarding the internal or external communication of the ERP system, the emphasis is done in the adoption of the Internet standards for data exchange. This is done with respect to both the exchange of data among the different ERP modules and to the exchange of data among the ERP system and external applications. Hopefully, this effort will result in the adoption of a common communication standard that will allow the integration of the information systems of customers and/or providers in a supply chain. Additionally, it will make feasible the so-called 'component ERP' which is the acquisition of the 'best-of-breed' modules from every ERP vendor (Fan et al., 2000). Because communications among ERP modules has been driven by proprietary protocols, the ERP market has been forcing the enterprises to purchase all modules of the ERP system from the same vendor or face huge costs in developing interfaces for modules from different ERP systems. This may be greatly simplified by the adoption of a public, common, protocol standard such as those on the Internet. Even in the most likely case that interfaces between modules from different vendors are still required, the decrease in the cost of their development may render them affordable for the enterprises.