ERP Systems Chapter 2: ERP - Technology PDF

ERP Systems Chapter 2: ERP – Technology Prof. Dr. Juergen Weiner  ERP – Technology Learning Objectives By the end of the chapter, students learn to get an entry in the world of ERP technology by...

ERP Systems Chapter 2: ERP – Technology Prof. Dr. Juergen Weiner  ERP – Technology Learning Objectives By the end of the chapter, students learn to get an entry in the world of ERP technology by Knowing how ERP technology architecture has evolved Becoming familiar with relational databases Differentiating among types of data in an ERP database Distinguishing between ERP configuration and ERP customizing Knowing the purpose for each of the three systems in an ERP landscape Identifying criteria for choosing between on-premise, cloud and hybrid ERP deployment SS2024: Standard Software based Logistics - Part 1 / Chapter 2: ERP - Technology 2  ERP – Technology Table of Contents 1. Evolution of ERP Architecture 2. Relational Database 3. System Landscape 4. Deployment Options – On-premise, Cloud, Hybrid 5. Summary SS2024: Standard Software based Logistics - Part 1 / Chapter 2: ERP - Technology 3  ERP – Technology Table of Contents 1. Evolution of ERP Architecture 2. Relational Database 3. System Landscape 4. Deployment Options – On-premise, Cloud, Hybrid 5. Summary SS2024: Standard Software based Logistics - Part 1 / Chapter 2: ERP - Technology 4  Evolution of ERP Architecture Time Horizon 1960s 1970s 1980s 1990s 2000s 2010s Mainframe Architecture Client-Server Architecture Three-Tier Client-Architecture Web-based Architecture Source: Bradford, Marianne | Modern ERP | p. 18 SS2024: Standard Software based Logistics - Part 1 / Chapter 2: ERP - Technology 5  Evolution of ERP Architecture Mainframe Architecture Legacy systems are usually built upon mainframe architecture Terminals All computing intelligence resides within a powerful central computer that processes the data and displays the output on workstations that have little or no processing power These monolith systems have been around since the mid- 1960s, and until the 1990s Mainframe They provided the only means of handling the vast data processing requirements of large organizations at that time Source: Bradford, Marianne | Modern ERP | p. 18 SS2024: Standard Software based Logistics - Part 1 / Chapter 2: ERP - Technology 6  Evolution of ERP Architecture Client-Server Architecture – 1/2 In the early 1990s, with the broad adoption of PCs, client server computing emerged as an alternative to mainframe Client Tier computing Client-server architecture is a network architecture in which each computer on the network is either a client or a server Network A client is a piece of hardware or software that makes requests of a more powerful server in order to utilize a sharable resource such as application or data. A server takes the request from clients from clients and Server Tier shares its resources. The server is sometimes referred to the back-end The server is sometimes referred to the back-end Source: Bradford, Marianne | Modern ERP | p. 19 SS2024: Standard Software based Logistics - Part 1 / Chapter 2: ERP - Technology 7  Evolution of ERP Architecture Client-Server Architecture – 2/2 Option 1 Many ERP Vendors still this terminology for their client software (e.g. SAP’s client is called “SAP Front End”) Fat Client (Presentation and Together the client and server from a two-tier Business Logic) architecture This type of computing model is known as distributed Thin Server computing because it consists of multiple software (Data Access Logic) components on multiple computers that together form a single system Option 2 Two options for client server architecture: − Option 1: Fat client handles the presentation and the business logic, while the thin server contains Thin Client (Presentation Logic) just enough hardware and software to support data storage Fat Server − Option 2: This thin client handles only the (Business and Data Access Logic) presentation logic and the fat server is responsible for the both business logic and data access logic. Source: Bradford, Marianne | Modern ERP | p. 20 SS2024: Standard Software based Logistics - Part 1 / Chapter 2: ERP - Technology 8  Evolution of ERP Architecture Three-Tier Client-Server Architecture Two-tier architecture could still not meet the increasing Client Tier (Presentation Logic) demands for access to information – the overhead of maintaining the connection between the clients and the server limited the number of clients that could access the server Three-tier architecture places one or more application Application Tier tiers between the client tier and the database tier. (Business Logic) Three-tier architecture provides advantages over two- … tier: − Better security – each tier has different security requirements − Maintenance is more manageable, since the tiers Database Tier separate responsibility into loosely coupled layers (Data Access Logic) − Can scale easily – for example additional servers can be added to handle more processing requirements in the application tier Source: Bradford, Marianne | Modern ERP | p. 21 SS2024: Standard Software based Logistics - Part 1 / Chapter 2: ERP - Technology 9  Evolution of ERP Architecture Web-based Architecture Web Browser The introduction of the web browser in 1990 and the Internet boom in the early 2000s led to the web-based architecture. Web-based architecture has the same application and database layers as the three-tier architecture. Firewall The presentation layer is now split in two parts: − The web server is a system that delivers content or Internet services to end users over the Internet. This web server (HTTP server) generates HTML pages to respond to client instructions. − The web browser is a thin client that “talks” to a server and Web Server asks it for the pages the users want to see. With the addition of another layer, web-based architecture is generally referred to as having four tiers. Source: Bradford, Marianne | Modern ERP | p. 22 SS2024: Standard Software based Logistics - Part 1 / Chapter 2: ERP - Technology 10  ERP – Technology Table of Contents 1. Evolution of ERP Architecture 2. Relational Database 3. System Landscape 4. Deployment Options – On-premise, Cloud, Hybrid 5. Summary SS2024: Standard Software based Logistics - Part 1 / Chapter 2: ERP - Technology 11  Relational Database Introduction RDBMS Most ERP systems access a type of database called a relational database management system (RDBMS). The main advantage of RDBMS is that data is entered once and shared across departments and business units, minimizing maintenance costs, errors, and data duplication. Modern RDBMS provide many features, including transactions mechanisms to enable concurrent access to the database, procedures to enforce business logic, and security to limit access to parts and/or features of the database. A commercial off-the-shelf ERP system from a Tier 1 ERP vendor could easily require 100.000 database tables. Each ERP system is capable of working with a number of databases; however, some companies might find that certain database systems are too large or expensive to be considered. For instance, a new state-of-the-art type of database, an in-memory database, is very expensive because all data is stored in random access memory instead of on the hard drive. Source: Bradford, Marianne | Modern ERP | p. 22 SS2024: Standard Software based Logistics - Part 1 / Chapter 2: ERP - Technology 12  Relational Database Database Terminology A RDBMS stores data on entities, or something that can be uniquely identified An entity is described using a two-dimensional table, or a collection of related data attributes consisting of rows and columns Tables are also now as relations – the name “relational” database The rows in the table represents records, which are groupings of related fields, which forms the columns of the table Supplier_# PK Name Street City State Phone Pay_Terms 101023 Higher Tower Inc. 444 West St. Raleigh NC (919) 338-8783 2/10 Net 30 103486 Paper Are Us 2865 Highway 70 Durham NC (919) 937-2124 2/10 Net 30 106555 Downton Smith 1 Peachtree St. Atlanta GA (404) 768-4442 Net 30 10944 Office Stuff Co. 47 Lee St. Auston TX (512) 473-9900 1/10 Net 30 Source: Bradford, Marianne | Modern ERP | p. 23 SS2024: Standard Software based Logistics - Part 1 / Chapter 2: ERP - Technology 13  Relational Database Entity Integrity The primary key (PK) is the unique attribute that defines each record in a table Primary keys are usually a type of code, either numeric or alphanumeric Supplier_# PK Name In the SUPPLIER table, the Supplier_Number is the PK, so each record has a 101023 Higher Tower Inc. unique number The mechanism the database use to enforce unique PKs in each table is called the 103486 Paper Are Us entity integrity rule. 106555 Downton Smith A common practice is for the ERP system to assign the next sequential value for a 10944 Office Stuff Co. primary key when a new record is inserted into a table – an easy way to ensure the PK will be unique. However, depending on the type of table, organizations may want to use their own numbering scheme. For instance, some organizations want to use a combination of numbers and letters to identify their suppliers. In this case, the PK may have to be entered manually SS2024: Standard Software based Logistics - Part 1 / Chapter 2: ERP - Technology 14  Relational Database Table Relations Where a relationship between two tables exits, the tables are connected with fields in common For example, a SUPPLIER table and a PURCHSE_ORDER table are related in that each purchase order must be associated with a supplier Therefore, the Supplier Number field will also be contained in the PURCHASE_ORDER table, so the tables are connected When one table, such as the PURCHASE_ORDER table, includes a field that points back to the PK in another table, such as the Supplier_Number, in the SUPPLIER table, that field is known as a foreign key (FK) It is called “foreign” because it points to a PK in a different table, or foreign table and established and enforces a link between then the two tables. Supplier_# PK Name Example: Purchase Order Database Table 101023 Higher Tower Inc. Purchase_Order_# PK Order_Date Delivery_Date Total_Costs Supplier_# FK 103486 Paper Are Us 100 10-02-2021 20-02-2021 $644.31 101023 106555 Downton Smith 101 28-02-2021 02-03-2021 $76.80 101023 10944 Office Stuff Co. 102 05-03-2021 16-03-2021 $398.00 106555 Source: Bradford, Marianne | Modern ERP | p. 24 SS2024: Standard Software based Logistics - Part 1 / Chapter 2: ERP - Technology 15  Relational Database Entity-Relationship-Model An Entity-Relation model presents a business data schema in graphical form. It is usually drawn in a graphical form as boxes (entities) that are connected by lines (relationships) which express the associations and dependencies between entities. There many notations out, which describes the cardinality of the relationships between entities Crow's foot notation the ring represents "zero“ One-to-One the dash represents "one“ the crow's foot represents "many" or "infinite“ One-to-Many These symbols are used in pairs to represent the four types of cardinality that an entity may have in a relationship. The inner component of the notation represents the minimum, and the outer component represents the maximum. ring and dash → minimum zero, maximum one (optional) Many-to-Many dash and dash → minimum one, maximum one (mandatory) ring and crow's foot → minimum zero, maximum many (optional) dash and crow's foot → minimum one, maximum many Entity (mandatory) SS2024: Standard Software based Logistics - Part 1 / Chapter 2: ERP - Technology 16  Relational Database Example: One-to-Many Relationships SUPPLIER Supplier_# PK Name Street City State Phone Pay_Terms In this type of relationship, one occurrence of an entity can be linked to more than one occurrence of another 101023 Higher Tower Inc. 444 West St. Raleigh NC (919) 338-8783 2/10 Net 30 entity 103486 Paper Are Us 2865 Highway 7 Durham NC (919) 937-2124 2/10 Net 30 These relationships are very common one in databases 106555 Downton Smith 1 Peachtree St. Atlanta GA (404) 768-4442 Net 30 In the example one supplier could be associated with 10944 Office Stuff Co. 47 Lee St. Auston TX (512) 473-9900 1/10 Net 30 more than on (many) purchase orders from a company in the course of the business relationship In order words, multiple suppliers do not “share” a purchase order Purchase Order Hence, the relationship is a one-to-many the “one” side Purchase_Order_# P Order_Date Delivery_Date Total_Cost Supplier_# FK of the relationship being the supplier and the “many” being the purchase order. 100 10-02-2021 20-02-2021 $644.31 101023 101 28-02-2021 02-03-2021 $76.80 101023 102 05-03-2021 16-03-2021 $398.00 106555 Source: Bradford, Marianne | Modern ERP | p. 24 SS2024: Standard Software based Logistics - Part 1 / Chapter 2: ERP - Technology 17  Relational Database Example: One-to-One Relationships PARKING_PERMIT In this type of relationship, each record in the first table is associated with only one occurrence in the second Permit_# PK Parking_Lot Employee_# FK table (and vice versa) 133459 John 000976533 Thus, one-to-one relationships are single valued in 133460 Tyrion 000676371 both directions as the maximum relationship These relationships are the least common one in a database. In the example the maximum relationship shows that an employee can only have one parking permit and a EMPLOYEE parking permit is assigned to only one employee Employee_# PK First_Name Last_Name Hire_Date The minimum relationships shows a circle, or zero, 000976533 John Snow 08-06-2020 next to the PARKING_PERMIT table meaning that a employee does not have to have a parking permit – the 000764736 Tyrion Lannister 22-05-2019 might rid their bikes or walk to work 000676371 Sansa Stark 10-11-2015 On the opposite side, the “one” means that a parking permit goes with a minimum of one employee Source: Bradford, Marianne | Modern ERP | p. 26 SS2024: Standard Software based Logistics - Part 1 / Chapter 2: ERP - Technology 18  Relational Database Example: Many-to-Many Relationships Student-ID PK First Name Surname ZIP-Code City Street Course of Studies Birthday 17908 Hans Müller 76227 Karlsruhe Karlsstraße 17 Business Information Systems 01-01-1995 Table: STUDENT 19304 Ulrike Schmid 77770 Durbach Tal 80 Business Consulting 30-03-1998 Student 20415 Thomas Maier 69117 Heidelberg Hauptstrasse 38 Business Information Systems 10-08-1999 In relational databases many-to-many relationships are not allowed Student-ID PK Lecture-ID PK Grade Semester Year To handle many-to-many relationships, 17908 1 1,3 SS 2019 a separate table, called junction table Table: STU_LEC (or join table), splits the many-to-many 17908 2 2,0 WS 2019 relation into two one-to-many relations 19394 1 2,0 SS 2019 Each record in the junction table contains FKs from the two tables it joins Together, these FKs become the PK in the junction table in order to make each record Lecture unique Lecture-ID PK Lecture Description Credit Points 1 Programming 1 15 Table: LECTURE 2 Programming 2 15 3 ERP Systems 30 SS2024: Standard Software based Logistics - Part 1 / Chapter 2: ERP - Technology 19  Relational Database Referential Integrity The referential integrity rule is a database constraint that ensures that relationships between tables remain valid and consistent When one table is linked to another table through the PK/FK combination, referential integrity dictates that you may not add a record to the table that contains a FK unless there is a corresponding PK in the linked table Also, if you edit the PK, the change must propagate to FKs in other tables Finally, you my not delete a P’K in a table if it is a FK in another table. This is because if you delete the PK, the FK in another table will not reference anything Source: Bradford, Marianne | Modern ERP | p. 27 SS2024: Standard Software based Logistics - Part 1 / Chapter 2: ERP - Technology 20  Relational Database Referential Integrity The referential integrity rule is a database constraint that ensures that relationships between tables remain valid and consistent When one table is linked to another table through the PK/FK combination, referential integrity dictates that you may not add a record to the table that contains a FK unless there is a corresponding PK in the linked table Also, if you edit the PK, the change must propagate to FKs in other tables Finally, you my not delete a P’K in a table if it is a FK in another table. This is because if you delete the PK, the FK in another table will not reference anything Source: Bradford, Marianne | Modern ERP | p. 27 SS2024: Standard Software based Logistics - Part 1 / Chapter 2: ERP - Technology 21  Relational Database Types of Data in ERP Databases This type of data enables a company to tailor a particular aspect of the ERP system to the way it chooses to conduct its business operations. Configuration For example, an organization can select its fiscal year end, default currency and language, and rules for checking Data customer credit from the various option allowed by the ERP system Configuration data also include enterprise structure detail such as the various plants, sales organization, warehouse, and distributions channels Relatively permanent data collected on entities in the business Although master data remains fairly stable over time, it does get edited Master Examples: customer data, vendor data, product/material data Data For example the “ship to” or “bill to” address could change for a customer, or an employee’s last name or marital status could change Supports the ongoing operations of the business by describing business events This type of data reflects the consequences of executing process steps. Transaction Whereas master data are the objects of a transaction, transaction data is the describing data, such as numeric values or Data time periods. Since transactions are constantly taking place in a business, this data represents the largest volume of the data in the ERP system (e.g. transaction data include dates, quantities and unit prices on purchase order) Source: Bradford, Marianne | Modern ERP | p. 31 SS2024: Standard Software based Logistics - Part 1 / Chapter 2: ERP - Technology 22  Relational Database Configuration An advantage of ERP Software is that it is inherently flexible, customers have choices as to how they want the software to work for them Because of this flexibility, ERP vendors can sell the same package to many different companies, and it can work for each of them Configuration is the process of selecting parameters that enable a company to tailor a particular aspect of the system to the way it chooses to do business This seems like an easy task, but there are lots of options in ERP systems! Typically, companies will hire system integrators with the required knowledge to help them complete the task, which takes place during ERP implementation Examples of configuration include: − Allowing different currencies to be used in the company’s transactions − Setting dollar limits for how much an employee or role can post − Determine which fields will be optional or required on various screens All companies must configure their ERP system during implementation, otherwise the software does not know how to work for that specific company. Also configuration options stay intact when the system is updated or a major upgrade takes place Source: Bradford, Marianne | Modern ERP | p. 32 SS2024: Standard Software based Logistics - Part 1 / Chapter 2: ERP - Technology 23  Relational Database Customization It’s rare that an ERP system will fit all of a company’s requirements –especially if the company is Tier I with complex global operations Issues often arise that fall outside the bounds of what the ERP software will allow the customer to do through configuration Examples of these issues are: − Developing extra functionality not inherent in the ERP system − Creating interfaces between the ERP system and any third-party systems − Adding additional fields to the ERP system database These issues typically involve development and programming to augment the ERP system This is referred to as customization, which is adding custom coding that enhances the features and functionality of the ERP system Customization is typically done when all attempts to find a solution through configuration have been exhausted Since customization takes time and costs money, companies should try to limit the amount they do For instance, SAP is written in a program language called ABAP (Advanced Business Application Programming). Companies that need to customize their SAP solution will need to hire consultants with technical software development skills and ABAP programmers to program theSource: code. Bradford, Marianne | Modern ERP | p. 33 SS2024: Standard Software based Logistics - Part 1 / Chapter 2: ERP - Technology 24  ERP – Technology Table of Contents 1. Evolution of ERP Architecture 2. Relational Database 3. System Landscape 4. Deployment Options – On-premise, Cloud, Hybrid 5. Summary SS2024: Standard Software based Logistics - Part 1 / Chapter 2: ERP - Technology 25  System Landscape Basic ERP Landscape – 1/2 An on-premise deployment ERP system installation requires that a system landscape be put in place A system landscape (or instance) is an installation of ERP software and related components on a server or servers The system landscape is the “layout” or “architecture” of the services To set-up a system landscape, companies will purchase (or rent in the cloud) multiple servers and install the ERP system on database on each. Quality Development Productive Assurance (DEV) (PROD) (QA) Developers, End Users (testers) Programmers & IT Quality Assurance & IT End Users Support Staff Support Staff Source: Bradford, Marianne | Modern ERP | p. 34 SS2024: Standard Software based Logistics - Part 1 / Chapter 2: ERP - Technology 26  System Landscape Basic ERP Landscape – 2/2 Productive (Region A) While organizations benefit from the simplicity of having just one PRD system, the reality Productive is often quite different (Region B) Sometimes, when a company is geographically dispersed or operates as a number of distinctly autonomous business unit, separate productive environments are required Productive (Region …) − E.g. a global company may determine that one PRD system may not work for both its U.S. and China operation. That means that employees in the U.S. and China will each access a different PRD system configured and customized specifically for their needs Productive − E.g. data localization laws in Russia –the laws necessitate that data relating to (Business A) Russia customers resides on servers within the country If PRD systems are different, this means that an entire system landscape also has to be Productive set up for each location (Business B) Productive (Business …) Source: Bradford, Marianne | Modern ERP | p. 34 SS2024: Standard Software based Logistics - Part 1 / Chapter 2: ERP - Technology 27  System Landscape ERP Scalability Scalability refers to a system’s ability to keep pace with a company’s trajectory. In other words, the ERP system should not only meet current requirements, but future requirements as well. ERP systems should allow the company … − to take on new markets, − to handle exponential increases of data volume, − to add more users without slowing down the transaction speed, − to work with different platforms An ERP system should last a company at least ten years with upgrades and other maintenance. Source: Bradford, Marianne | Modern ERP | p. 35 SS2024: Standard Software based Logistics - Part 1 / Chapter 2: ERP - Technology 28  System Landscape Dimensions of ERP Scalability Dimension Description This dimension has to do with how the system responds with an increase amount of data and transactions. Reliable performance involves not only hardware, but also the quality of the software code. Many ERP systems will have traffic prioritization features Utilization that can help keep certain mission-critical data flowing, even under heavy usage. Also, using an open (versus closed) database structure allows companies to add server space to support storage needs. This dimension refers to the ability to use the system in multiple computing environments, such as mobile devices, third-party Platform access into the system, different operating systems, and databases (including open source databases). This dimension involves adding users and the associated cost. For example, can additional licenses be purchased individually, or do you have to by 50 at a time? User Count Other additional user-related issues include the need to install client software on every workstation and device and the ease at which user security privileges can be granted. This dimension relates to the software’s ability to handle new reporting needs, additional workflow, more refined security, and Functionality additional functionality. Source: Bradford, Marianne | Modern ERP | p. 36 SS2024: Standard Software based Logistics - Part 1 / Chapter 2: ERP - Technology 29  ERP – Technology Table of Contents 1. Evolution of ERP Architecture 2. Relational Database 3. System Landscape 4. Deployment Options – On-premise, Cloud, Hybrid 5. Summary SS2024: Standard Software based Logistics - Part 1 / Chapter 2: ERP - Technology 30  Deployment Options – On-premise, Cloud, Hybrid On-Premise Cloud Conventual approach to ERP deployment is on-premise Cloud ERP has become a very popular type of deployment option. ERP. This is where the ERP system is hosted by an ERP vendor or third party In this scenario, a company runs its ERP system on its own (such as Amazon AWS or Microsoft AZURE) on shared computer servers and computers located at its own site and often resources accessed over the Internet supported by the own IT staff. Customers access the ERP system on demand and pay for the On-premise software are typically priced using a one-time software on a monthly or yearly basis. perceptual license fee based on number of users, with This method of paying for ERP software on a subscription basis is reoccurring for maintenance and support called software-as-a-service, an attractive option for business looking to The large upfront investments, including hardware and reduce upfront investments (translates into an operational expense software, usually translates into on-premise ERP being (OPEX)) treated as a capital investment (CAPEX) One key advantage is that ERP cloud providers maintain the Companies using on-premise option are usually larger infrastructure for the ERP system and also handle maintenance and companies with bigger budgets and an existing IT- upgrades. infrastructure in place, and knowledge IT personal to support the software and infrastructure (including the landscape) SS2024: Standard Software based Logistics - Part 1 / Chapter 2: ERP - Technology 31  Deployment Options – On-premise, Cloud, Hybrid Disadvantages Cloud Many vendors offering cloud solutions are primarily focused on just one particular area, such as HCM –Human Capital Management or CRM – Customer Relationship management Very view cloud providers are offering a suite of products to meet the needs of medium-to-large organizations Many cloud ERP solutions also are limited in functionality and what the customer can do in terms of customization Finally, although cloud ERP is generally thought to be less expensive than on-premise, research has shown that over a 10-year window, the total costs converges. Hybrid A third option is hybrid ERP, which is a scenario in which companies combine on-premise ERP modules with cloud software. This approach give companies the best of both worlds by tapping into world-class cloud based solutions to supplement a company’s core on-premise System. The on-premise system might support certain workhorse functionality like manufacturing and financials, whereas the cloud-based system might focus on customer or employee-facing processes Source: Bradford, Marianne | Modern ERP | p. 37 SS2024: Standard Software based Logistics - Part 1 / Chapter 2: ERP - Technology 32  Deployment Options – On-premise, Cloud, Hybrid Hosting vs. Soft-as-a-Service More than three-quarters of organizations that selected cloud ERP used a SaaS model as opposed to a hosted model Each of these models has benefits and drawback that may or may not align with an organization’s digital strategy One benefit that attracts organizations to the SaaS model is the relative ease of use SaaS software is fully managed by the vendor, meaning updates are automatic However, one of the drawbacks of SaaS is that updates can change process flow, which means organizations need to invest in continual training and process documentation Another disadvantage is that organizations have limited ability to enhance the software themselves Source: PANORAMA CONSULTING GROUP | 2021 ERP Report | p. 13 SS2024: Standard Software based Logistics - Part 1 / Chapter 2: ERP - Technology 33  Deployment Options – On-premise, Cloud, Hybrid Cloud vs. On-premise Usage Comparison More than half of organizations selected cloud software instead of on- premise software While on-premise ERP systems require manual upgrades, many cloud ERP software receive automated updates from the vendor, and the organization usually has litter choice in the matter Among those organizations that did not choose cloud ERP, the most common reasons were “risk of data loss” and “risk of security breach” –This is different than last year where the most common reasons was “lack of information/ knowledge about the offerings” The least common reason for not choosing cloud ERP deployment or external hosting was cost –it seems as organizations become more informed about cloud ERP, they are realizing the long-term cost of the cloud can exceed cost of on-premise software Source: PANORAMA CONSULTING GROUP | 2021 ERP Report | p. 13 SS2024: Standard Software based Logistics - Part 1 / Chapter 2: ERP - Technology 34  Deployment Options – On-premise, Cloud, Hybrid Hosting Options Less than a quarter of organizations that selected on-premise ERP hosted their software externally, Many organizations that selected on-premise software were concerned about the risk of data loss or a potential security breach This explains why so many decided against external hosting of their on-premise software Source: PANORAMA CONSULTING GROUP | 2021 ERP Report | p. 13 SS2024: Standard Software based Logistics - Part 1 / Chapter 2: ERP - Technology 35  ERP – Technology Table of Contents 1. Evolution of ERP Architecture 2. Relational Database 3. System Landscape 4. Deployment Options – On-premise, Cloud, Hybrid 5. Summary SS2024: Standard Software based Logistics - Part 1 / Chapter 2: ERP - Technology 36  ERP – Technology Summary Throughout the years, the technical environment has evolved from mainframe-based systems to client- server, to web-based ERP. At the heart of modern ERP systems are relational databases where data is stored in two-dimensional tables with row and columns connected together through keys in common. The types of data stored in the tables include master, transaction and configuration data. Configuration data enables a ERP system to look and act in certain ways. Customizing requires development and programming and is used to enhance the ERP system to create a competitive advantage, but doing so is costly and time consuming and carries certain risks. Prior to implementation of the ERP system, a company should set up its system landscape, which consists of the ERP application and database and multiple server, each providing a different function. Servers are generally set-up to support development, quality assurance, and production. However, if a company chooses to use cloud computing, the cloud vendor provides the infrastructure, which results in lower up-front costs and shorter implementation times than on-premise ERP. SS2024: Standard Software based Logistics - Part 1 / Chapter 2: ERP - Technology 37  Questions ?? SS2024: Standard Software based Logistics - Part 1 / Chapter 2: ERP - Technology 38