Toward an Integrated Framework for Modeling Enterprise Processes
Abstract:
Enterprise process modeling is the most important element in the design of next-generation ERP systems.
Imagine that a large company has spent hundreds of millions of dollars and 3 years implementing an enterprisewide information system.
But when the system goes live, the company discovers the system is incapable of supporting the volume and price structure of its distribution business.
The project fails, and the company suffers monumental losses and is ultimately driven into bankruptcy.
The company sues the vendor of the software package, blaming it for its losses.
A hypothetical situation? Hardly. This disaster story is as true as it is regrettable and avoidable [4].
Introduction:
Since the mid-1990s, many large- and mid-size enterprises have implemented off-the-shelf enterprise software packages (also called enterprise resource planning, or ERP, systems) to integrate their business activities, including human resource management, sales, marketing, distribution/ logistics, manufacturing, and accounting.
Enterprise systems promise not only information integration but the benefits of reengineered and radically improved business processes as well.
“The business world’s embrace of enterprise systems,” according to [4], “may in fact be the most important development in the corporate use of information technology in the 1990s,” an assessment that’s just as valid today.
However, despite a few dramatic successes, many companies still reportedly fail to realize these benefits while incurring huge cost and schedule overruns.
Given these mixed results, what should companies do? Rejecting enterprise software as an enterprise-integration solution altogether would be foolhardy, given the multimillion-dollar investments many companies have made in the software and the partial success many of them have realized.
Moreover, next-generation enterprise software from such vendors as SAP, Oracle, and PeopleSoft is evolving rapidly, promising to improve flexibility, implementation, and support for the extended enterprise through modules for customer relationship management, advanced planning systems, supply chain management, and collaborative commerce in a Web-based environment.
Consulting firm Gartner Group estimates that by 2005, this next generation of ERP it calls ERP II [11] will replace current ERP systems, thus requiring companies to upgrade. Enterprise process modeling is crucial to the design of ERP II systems.
A common source of difficulty implementing enterprise software involves management’s understanding of its own business processes [6].
A business process, which is different from a traditional business function, is typically cross-functional and involves the reciprocal or simultaneous flow of information between two or more functional areas, as well as among the functions within these areas.
For example, the order-fulfillment process involves inputs from sales, logistics, manufacturing, and finance, as it progresses from sales order entry, to delivery of the product, to the final step of collecting cash payment from customers. Business processes, including order-fulfillment, procurement, and product development, hold the key to the financial success of an enterprise.
In theory, an enterprise system is ready to support business processes because it encapsulates best business practices, or the tried and successful approaches to implementing business processes, and is hence the ideal vehicle for delivering the benefits of an integrated cross-functional approach.
However, “As many companies get ready to implement standard software, they encounter the problem of how to simplify and model the enormous complexity of their business processes” [6].
The result is that companies often face the dilemma of whether to adapt to the software and radically change their business practices or modify the software to suit their specific needs.
Even if they decide to modify the software, they still face maintenance and integration issues. Many enterprise systems today are notably inflexible with respect to process specification and implementation [4].
Moreover, the packages are difficult to change and extend due to their complex proprietary application program interfaces and database schemata—a far cry from proposed open standards of e-commerce [8].
Even if a company were to overcome this barrier, modify its software, and painstakingly build complex interfaces with other information systems, its maintenance and integration issues would still not be completely resolved.
The modification trauma is reexperienced every time the enterprise software vendor issues a new release of its software.
To be sure, leading ERP vendors are working to resolve these issues, though much remains to be done to realize the ERP II vision.
A holistic solution approach garnering considerable researcher attention calls for renewed focus on enterprise process models instead of on technologies alone. It envisions enterprises having the flexibility to redesign enterprise processes—regardless of whether the new processes are derived from clean-sheet process reengineering unhindered by technological considerations or whether industry-standard best practices are incorporated into the software.
From this perspective, process models that are easily created, modified, and analyzed greatly aid process-reengineering efforts to realize the promised benefits of enterprise systems.
Hence, researchers and managers are increasingly interested in techniques, existing and new, for business-process modeling, specification, implementation, maintenance, and performance improvement [9].
We’ve developed an enterprise process-modeling framework that can serve as the foundation for nextgeneration enterprise systems.
Here, we outline some limitations of existing enterprise modeling techniques and architectures, describe a prototype implementation of the framework, and conclude with the significance of this work.
Enterprise Process Modeling Techniques:
Conclusion:
Enterprise integration remains a challenging problem for many organizations.
Enterprise systems, once viewed as a technological panacea for dealing with information fragmentation, have produced mixed results.
Building better enterprise systems requires putting the enterprise back into enterprise systems [4], along with enterprise process modeling.
The framework we developed addresses several modeling concerns relating to theory, distributed computing, process semantics, and links between business and engineering processes.
With Petri net theory underlying the framework’s graphical process models, managers and designers get both ease-of-use of graphical process modeling and the ability to perform rigorous quantitative and qualitative performance analysis.
An XML-based markup language for mapping from the front end to the back end (and vice-versa) enables a standard layer for communicating with the existing systems of customers, partners, and suppliers.
Still needed is a comprehensive theoretical foundation to drive the design and construction of next-generation enterprise systems.
Practitioners and researchers from computing, business management, engineering, and related areas must collaborate to develop effective tools, techniques, and methods for ERP II.
Architectural issues underscored by this work include:
Building holistic process models that link business and technical parameters;
Integrating—semantically, logically, and physically— process submodels created by distributed users;
Linking descriptive models to underlying formal analytic models;
Linking process models with the overall logic of enterprise systems.