03/10/2006

Implementation of the Adaptive ERP System

Gediminas VedrickasPrincipal Consultant / Research & Innovation

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Agenda

● Overview of ERP Systemso What is ERP?o Disadvantages of current ERP systemso Requirements for ERP Systems

● Framework for the Adaptive Enterprise Engineering ● Business Process Definition

o Semantics of Business Processo Semantics of Business Ruleo Weaving Business Rules to Business Processes

● Business Process Automationo Mapping Business Processes to Application Componentso Application Component Framework (ACF)

● Case Study from Customs Domaino Import Declaration Assessment Business Process automationo ACF implementation based on SAP Workflow

● Conclusions

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What is ERP?

● Enterprise Resource Planning (ERP) is an industry term for integrated, multi-module application software packages that are designed to serve and support multiple business functions

● ERP system can include software for manufacturing, order entry, accounts receivable and payable, general ledger, purchasing, warehousing, transportation and human resources

● Market leaders: SAP, Oracle Corporation, Microsoft

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Disadvantages of Current ERP Systems

● Main disadvantages of current ERP systems from our experience:

o Customizing process is very complex and time consuming activity that requires extensive system level knowledge

o Rules that govern system behaviour are encoded in system vendor-specific way (program code, configuration tables, etc.)

o Interfaces of different application components, especially if these components own modular implementations, have very poor (or not at all) documentation

o Application components of ERP system form integrated platform with code based embedded business processes

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Disadvantages of Current ERP Systems (continued)

● Survey of 100 global or pan-European companies by PMP Research about ERP system deployments

o 5% of those polled said they were using their ERP software to its full extent, 32% of respondents said large portions of their enterprise software was not used at all, and 41% said that a small portion of the software's functionality was left unexplored

o Most users customize the software, with only 12% installing ERP packages "out of the box“o More than 50% of companies said that once installed it was hard to make changes to ERP

software in order to meet any changes in business processes or requirements

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● Business requirements (business analyst team perspective):o Highly adaptive ERP systems that allow to make changes reflecting up-to-date business

processes with less effort and in as possible shorter timeo Ability to influence systems behaviour by business workers themselves without codingo Ability to restore the behavioural system state at the specified point of time (i.e. ability to

restore business rules that were effective at that time)o Ability to manage, track, verify and validate the business knowledge

Requirements for ERP Systems

● Implementation requirements (functional team perspective)o Ability to customize systems behaviour without codingo Ability to maximize the reuse of artefacts delivered during requirement analysis phase as

much as possible in the systems customizing phaseo Unified customizing environment across different application components

● Implementation requirements (technical team perspective)o Integrated development environment with full support of Open Standardso Unified methodology and program APIs for development of new highly configurable

Application Components or changing existing oneso Support for RAD tools that speed up development process

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Framework for the Adaptive Enterprise Engineering

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Semantics of Business Process

● A Business Process is a repeatable set of activities taken to produce a result that achieves a specific business purpose for one or more stakeholders*

● Business Process Definition Metamodel**

0..1

-sub-process

0..*

-generates OR receives

11..*

Compensation

TaskProcess

Event Entity

-produces OR concumes-identifies

0..1

Constrainable Rule

0..*0..*

Role Party

-performed by

0..*0..*

-performed by

0..10..*

Transaction

-compensating task0..1Worker Organization

Automated

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Semantics of Business Rule

● Business Rule is …o “… a statement that defines or constrains some aspect of the business. It is intended to

assert business structure or to control or influence the behaviour of the business”(“Business Rules ~ What Are They Really?”, Business Rules Group)

o “… an element of guidance that introduces an obligation or necessity” (“Semantics of Business Vocabulary and Rules”, OMG)

o “… a directive intended to influence or guide business behaviour” (Ron Ross, Business Rule Solutions)

● There are two types of Business Ruleso Structural (something true by definition)

It is necessary that currency amount of each tax liability is calculated in local currency

o Operative (obligation or prohibition)

It is obligatory that each tax payer who submits an import declaration holds an account

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Weaving Business Rules into Business Process

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Business Rules Integration Points

Notification eventState transition eventDecision pointAssertion point

em ei

ej ek

en

dpu apv

Transaction

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Mapping Business Process to Application Components

BusinessProcess

ProcessTask

BusinessActivity

Operation

BusinessFunction

1 1..*

«implements»

0..1

0..*

0..*0..*

0..1

*

1 1..*0..*

1

Business Model

System Model

«interface»Application

Service

«interface»Enterprise

Service

«implements»

0..*

0..*

1 1..*

«interface»Service

«component»ApplicationComponent

0..1

0..*

{OR}

{Operation is part ofEnterprise Service}

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Application Component Framework

-

xAP1

xDP1

xAP2

yAP1

yDP1

yDP2

HRS1 v.1

RS1 v.1

HRS2 v.1

RS3 v.1

HRS1 v.2

RS1 v.1

HRS2 v.2

RS3 v.1

HRS2 v.1

RS4 v.1

RS5 v.1

RS6 v.1

HRS2 v.2

RS4 v.1

RS5 v.2

RS6 v.2

Decision/Assertion points (place holders for

business rule sets)

Hierarchical Business Rule Set Instances

Appl. Comp1

Appl. Comp2

HRS1 v.2 + context

HRS2 v.2 + contextRule Service Component

JSR 94

Business Rules Repository

Business Rules Engine

Actual Business Rule Set+ context

Application Component Framework

Business Rules Technology

Business Rules

Framework

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Business Process of Import Declaration Assessment

[assessment]

[reassessment]

Assessdeclaration

Determine declarationprocessing scenario Peform tax control

Perform tax control(reassessment case)

[failure]

[success] Create

tax liabilities

Notify CustomsOfficer

Assess declarationPost tax liabilities

Post createdtax liabilities

[success]

[failure]

Notify CustomsOfficer

[first version]

Assess newversion of declaration

[new version]

Notify CustomsOfficer

[incorrect version]

Send successmessage to

Customs Officer

Register declaration

[there are created tax liabilities]

Clear tax liabilities[payed in advanced]

[deferred payment ]

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ACF Implementation based on SAP Workflow

● ACF prototype was developed on a basis of one of the main business processes of Customs and has the following features

o Developed framework enables to build Application Components based on Component Based Development (CBD) paradigm using SAP ABAP technology

o ACF implements component behaviour as well as business process customization mechanism based on Business Rules Technology

o ACF utilizes SAP Webflow Engine enabling graphical design of business process implementation

o ACF implements concept of process wide fact base which itself consists of● Persistent fact base● Transient fact base

● Business Rules implementation is done using BRFo Developed BRF prototype utilizes our self implemented ABAP version of Business Rules

Engineo Business Rules specified using SBVR style during requirements phase are expressed as

corresponding rule records in SAP database at implementation levelo Integration of JSR-94 capable and rule service oriented Business Rules Management

System is under development

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Process Definition using SAP Workflow

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Process Task Implementation

● Each Process Task is implemented as Application Component Service

● All Process Tasks have access to process wide Fact Base

● Hierarchical Rule Set is derived using specified rule set and available facts in the process wide Fact Base

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Process ExecutionProcess wide Fact Base is realized by

SAP Workflow Container

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Conclusions

● ERP systems implementation as well as maintenance process is enhanced greatly by application of Business Rules Approach

● Developed Business Rules Based Application Component Framework facilitates the integration of Business Rules Technology into mySAP ERP implementation process making implemented system more transparent and more adaptive

● Only highly adaptive ERP systems will be acceptable as a business enablers that are capable to manage required changes to system behaviour with the same speed as the business change

● The new approach of enhancing and further evolving ERP systems results in benefit of high added value for customers

● The new approach brings new opportunities for delivering out-of-the-box solutions empowered by Business Rules Technology

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Related Information

● Introduction to Business Rules Approachhttp://www.erp.eu/en/research_insights/infocus/bra

● The Principles of Rule Independencehttp://www.businessrulesgroup.org/brmanifesto.htm

● The Business Motivation Modelhttp://www.businessrulesgroup.org/bmm.shtml

● Semantics of Business Vocabulary and Business Rules (SBVR)http://www.omg.org/docs/dtc/06-03-02.pdf

● Object Management Grouphttp://www.omg.org/

● Business Rules Grouphttp://www.businessrulesgroup.org

● Business Rules Communityhttp://www.brcommunity.com/

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Thank you for your attention!

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Questions?

Gediminas Vedrickasg.vedrickas@erp.euhttp://www.erp.eu