Benefits and Challenges of Using SOA to Build a Flexible ERP System Application - Research Paper Example

Benefits and challenges of using SOA to build a flexible ERP system application Table of Contents Table of Contents 1 1.Abstract 2 2.Enterprise Resource Planning 3 3.Service Oriented Architecture (SOA) 3 4.Link between SOA and ERP 5 5.Benefits of using SOA to build an ERP system application 7 5.1.Offers Value Proposition 7 5.2.Offers Web Servers and Remote Accessibility 9 5.3.Less Redundancy and more Data Sharing 9 5.4.More Security 10 5.5.Higher availability at minimum costs 11 5.6.Other Benefits 12 6.SOA implementation challenges 12 7.Concussion 14 8.Bibliography 15 1. Abstract At the present, the businesses are transforming more rapidly than ever. Everyday modern and up-to-date business models are developed, changed, and improved. In these models, there are a lot of prospects in terms of business performance, innovation, effective utilization of resources and results. In addition, all these prospects are placing extensive stress on the businesses to discover modern and efficient methods to modernize their business activities as well as share business information efficiently and seamlessly. As stating others’ point of view organizations nowadays require being more flexible as well as quick in responding to the suppliers, vendors, customers, partners and most significantly transforming business models. The enterprise resource planning (ERP) systems are taken as the center of corporate business model. These ERP systems are intended to provide an approach for the business procedures to collaborate and participate by means of outer partners, applications and information. In addition, enterprise applications are changing from being self-contained and monolithic to the being additional and highly collaborative and flexible (Tugnawat, 2008). Furthermore, at the present, enterprise resource planning system solutions facilitate businesses in a broad spectrum of business planning, handling, collaborating, subsectors automation, as well as business execution of business activities according to unique corporate requirements. These systems are developed on a flexible and open service-oriented architecture (SOA) by means of modern technologies. This paper presents the detailed analysis of the benefits and challenges of employing SOA to build a flexible ERP system application. This paper will outline different aspects and areas regarding effective development of the ERP system using SOA. 2. Enterprise Resource Planning “Enterprise resource planning (ERP) is a software application that is a completely incorporated information system that encompasses most fundamental business functions required by a major organization” (Whitten, Bentley, & Dittman, 2000). In addition, the enterprise resource planning (ERP) systems can be viewed as one of the modern and effective developments in 1990s business information systems and information technology (IT). Furthermore, enterprise resource planning systems have turned out to be one of today’s most extensive business information system solutions. The main quality of enterprise resource planning business solutions has motivated businesses to put into practice enterprise resource planning systems. The main reason behind the implementation of ERP are the qualities of standardization and integration capabilities, besides this flexible in the both server and client architecture and their capacity to take effectual organizational reengineering as well as management of foundational and support processes (Al-Mashari, 2002; Stair & Reynolds, 2003; Elbertsen, Benders, & Nijssen, 2006). 3. Service Oriented Architecture (SOA) Hao He (2003) defines Service-Oriented Architectures as an architectural approach whose objective is to attain loose coupling between cooperating software agents. In this scenario a service is a component of work performed by a service provider to attain preferred outcomes intended for a service user. However, service consumer and provider both roles are played by software agents on behalf of their holders (He, 2003). The below given figure demonstrates a fundamental SOA architecture. The image demonstrates a service consumer at the right transmitting a service demand message to the left (to a provider of service). The service provider moves back a reply message to interacting service consumer. The subsequent and request reply relations are explained in a number of ways that is explicable mutually to the provider and consumer of the service (Barry, 2009). Figure 1SOA Arcitecture Image source: http://www.service-architecture.com/web-services/articles/service-oriented_architecture_soa_definition.html Tugnawat (2008) states that by means of Service-Oriented Architecture standards, the designing of any business or corporate application integrations outcomes in Service-Oriented Architecture based application. In addition, ease is preferred for the customary and complex applications world of integrations (Tugnawat, 2008). Why Service-Oriented Architecture? The answer to this question can be assessed from below given factors: (Motiwalla & Thompson, 2008; Vaman, 2008; Tugnawat, 2008): Service-Oriented Architecture offers flawless agility to the corporation Service-Oriented Architecture improves business procedures visibility Service-Oriented Architecture simplifies the present rigid as well as complex state of IT Service-Oriented Architecture improves effectiveness as well as offers cost-effectiveness Service-Oriented Architecture facilitates re-usability factor in application development Service-Oriented Architecture offers enhanced excellence of service 4. Link between SOA and ERP According to Tugnawat (2008), the service-oriented architecture (SOA) with enterprise resource planning system offers an extensiveness of functionality that facilitates organizations to automate fundamental business operations as well as financial procedures. In addition, it also helps in convening the fluctuating client requirements and demand and fulfillment of needs, as well as improves collaboration within business divisions. Furthermore, it also effectively helps in business supply chain (Tugnawat, 2008; Martins, Carrilho, Silva, & Alves, 2007). According to Barry (2009), service oriented architecture is fundamentally a group of services. These set of services corresponds to each other. This communication entails either plain business data passing or else it could engage two or more services linking a number of activities (Barry, 2009). However, Service-Oriented Architecture is a modern software design technique that involves a client application that needs one or additional services from some other application that offers comparable or corresponding functionality. This design permits external and internal business procedures to be united as well as reprocessed, that simplifies access to main business functions as well as reduced development expenses. The beginning of the Service-Oriented Architectures model promises an additional flexible application structural design that can hold new as well as developing business procedures (Army, 2009). Service-Oriented Architecture straightly chains the business vision of services and enterprise-level processes that optimize business investment as well as create improved potential portfolios. In addition, the Service-Oriented Architecture does not put back ERP system however offers the capability to additional effortless coordination based cross-functional business procedures by augmenting the incorporation of non-ERP and ERP systems all through a network. This is attained by means of loose coupling of business services and functions as different from the tightly coupled ERP operating approach (Army, 2009; Barry, 2009). Figure 2before and after SOA implementation http://www.army.mil/ArmyBTKC/focus/sa/soa_i1.htm#img (Army, 2009) 5. Benefits of using SOA to build an ERP system application This section discusses the benefits of building ERP applications using SOA. 5.1. Offers Value Proposition A Commercial off the Shelf (COTS) software application handles customer orders using an ERP application. This ERP application does not possess the facility to manage some kind of business transactions however a trust has been created through a third party service that does this pretty well. This is an instance of Service-Oriented Architecture that offers the facility to stick together various services in cooperation to carry out business activities (Army, 2009). The utilization of Service-Oriented Architecture for the development of the ERP systems offers lot of valuable services and propositions. The Service-Oriented Architecture design pattern permits reusability. In other words, SOA offers the facility of re-use of accessible functionality in numerous business applications. For example, we are going to implement a new ERP system for the business that is a completely new COTS application. As this novel business application would have no need of updating the old business legacy system database, it would necessitate some new business process management functions. In this scenario the utilization of the appropriately applied and implemented SOA offers the following advantages (Mahmoud, 2005), (Steele, 2007) & (Galvan & Mullins, 2008): Facilitates business transformation by offering visibility of corporate level business procedures Promotes the culture in the business leadership regarding the assessment of the business procedures as well as supports services in the course of a diverse lens Encourages reliable, business specific data, and business operations Facilitates in recognizing a better ROI Augments agility in taking action to transformation in business needs Minimizes costs linked with ERP software development by leveraging obtainable assets (idea of the reusability) Minimizes the risk during the re-use of established services Diminishes redundancy of business functionalities systems Simplicity features of future interoperability inside as well as outside to third parties supporting ERP systems 5.2. Offers Web Servers and Remote Accessibility According to Galvan & Mullins (2008), enterprise resource planning solutions developed by means of better tooling are intended for web enabled services. These tools are implemented via a set of standards that have been applied extensively to build the business legacy applications on different technological platforms with a fewer intimidating task. By using the application of the Service-Oriented Architecture, web based services and remote business systems connectivity are offered by ERP vendors. This also enthusiastically facilitates the incorporation of legacy applications for the fundamental business services offered by an enterprise’s ERP solution (Galvan & Mullins, 2008). 5.3. Less Redundancy and more Data Sharing Accoding to Campbell (2009), Service-Oriented Architecture depends on the idea of modularity as well as the layering of services that would enthusiastically be packaged or nested in groups of co-dependent structures. These offer extra robust services, because they are contacted to facilitate business functionality. In addition, the Service-Oriented Architecture is different from the customary notions of architecture by highlighting the division of business information and data. It is linked with business logic by offering split layers of “programs” that can be linked and shared by numerous applications (Campbell, 2009). In this scenario Galvan & Mullins (2008) outline that in case of the development of the similar ERP business applications when we apply the Service-Oriented Architecture there is no such redundancy of the code into each business application department that needs to depend on it (Galvan & Mullins, 2008). By using the SOA the development of the ERP application offers less redundant business functions. The image given below offers a detailed overview of the implementation of the SOA in the development of the corporate ERP. That offers more data sharing and redundancy of the business data and information. Figure 3before and after SOA Implementation http://www.sun.com/products/soa/benefits.jsp 5.4. More Security According to Stevens (2002), application of the Service-Oriented Architecture in the ERP system offers the better security implementation to the corporate data. This offers formation of a service layer by definition, in other words the developers have formed an extra network interface that could be employed by numerous business applications. In the past, business systems were structured using client-server and monolithic procedures. Therefore, the security was usually managed on the front-end. In addition, corporations frequently did not even apply database safety since it was hard to uphold numerous security aspects for the business ERP. In the development of the ERP services using the SOA employed by numerous applications, consequently they have their own safety systems. Therefore, an ERP application will consequently have number of level for the verification of SOA based security at client levels as well as better management service level (Stevens, The Benefits of a Service-Oriented Architecture, 2002). 5.5. Higher availability at minimum costs The development of ERP using SOA is easy to transform, sustain, and manage. This type of system can cut down the costs of a business that requires rapid transformations in the system. In case of the new development of the ERP system an organization would be able to pay less cost for the higher availability of business services. Stevens (2002) outlines that ERP development using the SOA offers numerous services that can have many examples of a services executing on them. These are arranged in a way that offers less cost for huge number of better business management services. In this type of development an ERP segment or a system goes down, a sender is able to redirect corporate ERP system requests to another service without the customer’s knowledge. This facilitates in a way that organization has number of systems running in a parallel way and offering less cost regarding overall management and business data recovery (Stevens, The Benefits of a Service-Oriented Architecture, 2002). 5.6. Other Benefits Some benefits are given below: (Stevens, The Benefits of a Service-Oriented Architecture, 2002) Better Return on Investment Code Mobility Focused Developer Roles Better Testing/Fewer Defects Support for Multiple Client Types Service Assembly Better Maintainability More Reuse Better Parallelism in Development Better Scalability 6. SOA implementation challenges It is extensively forecasted that 80 percent of the new mission-critical applications intended in 2010 will integrate Service-Oriented Architecture concepts. However, this extensive acceptance approximation is supported by promoters of Service-Oriented Architecture; the accomplishment of these novel applications is not assured. As Service-Oriented Architecture has turned out to be a well-recognized technique in the majority business circles however it is yet not an extremely well implicit idea from an execution point of view (Army, 2009). According to Nadhan (2004), the organizations face some challenges regarding the Service-Oriented Architecture implementation for the ERP system development and implementation. These challenges include: (Nadhan, 2004) 1. Inadequate governance of the new SOA implementation for the ERP development 2. Lack of apparent value metrics for the handling of new ERP systems development using the SOA based paradigm. 3. Inadequately identified requirements as well as scope for the new SOA based ERP 4. Inadequate business participation in service identification and project prioritization in enhanced ERP implementation using the SOA. Accoding to Kothandaraman (2004), the ERP system development using the Service-Oriented Architecture presents a primary change in the view of “data ownership.” An efficient Service-Oriented Architecture execution and ERP implementation team have to hold the initiative that data is owned by the business and enterprise, not by individual application owners (Kothandaraman, 2004). In case of implementation of the enterprise resource planning system using the Service-Oriented Architecture Jackson (2007) has stated some considerations (Jackson, 2007): 1. To adopt the new ERP system developed using the SOA organization requires huge volumes of transactions those will require major resources, these resources could be functional as well as technical. It will be difficult to manage these transactions. 2. For better management of the implementation of the new ERP structure using SOA 3. Security is hard as well as complex to apply when ERP business software components dynamically switch over information worldwide 4. For the ERP system the primary development of Service-Oriented Architecture components would be expanded and lead to a high up-front cost 5. Performance cannot be of high-quality because of more strongly coupled interfaces 7. Concussion In the current business world the ERP and service-oriented architecture are functioning mutually. In this current business application world the major software vendors of enterprise resource planning software are moving their own enterprise resource planning platforms to ones that support service-oriented architecture and web services. Service oriented architecture presents comprehensive impact on business systems, how they are designed, analyzed, integrated, built and managed. In addition, the overall business arrangement has completely transformed by this technology. This paper has analyzed the ERP system development using the SOA systems. This paper has outlined some main ERP technology areas those are offering better support to the business. Furthermore, this paper has also outlined the main considerations and challenges organizations are facing nowadays regarding the better ERP system implementation. 8. Bibliography Al-Mashari, M. (2002). Enterprise resource planning (ERP) systems: a research agenda. Industrial Management & Data Systems Volume 102, Issue 3, pp. 165-170. Army. (2009, August 25). Service Oriented Architecture (SOA) Overview. Retrieved January 06, 2010, from Army.mil: http://www.army.mil/ArmyBTKC/focus/sa/soa.htm Bakry, A. H., & Bakry, S. H. (2005). Enterprise resource planning: a review and a STOPE view . International Journal of Network Management , Volume 15 Issue 5, pp. 363-370. Barry, D. K. (2009). Service-oriented architecture (SOA) definition. Retrieved January 06, 2010, from Service-Architecture.com: http://www.service-architecture.com/web-services/articles/service-oriented_architecture_soa_definition.html Campbell, D. (2009). Delivering the Business Benefits of Service-oriented Architecture (SOA). Retrieved January 06, 2010, from CSC Australia White Paper: http://docs.google.com/viewer?a=v&q=cache:rcNow3w25BUJ:assets1.csc.com/au/downloads/10559_1.pdf+benefits+of+Service-Oriented+Architecture&hl=en&gl=pk&sig=AHIEtbSZXlCG5NMIS2TZAbDkoq7f4Fx8pg Elbertsen, L., Benders, J., & Nijssen, E. (2006). ERP use: exclusive or complemented? Industrial Management & Data Systems: Emerald Group Publishing Limited, pp. 811-824. Galvan, G., & Mullins, K. (2008). Adapting ERP Solutions, via SOA, to the Business Needs of Government . Retrieved January 06, 2010, from http://www.soainstitute.org/articles/article/article/adapting-erp-solutions-via-soa-to-the-business-needs-of-government/news-browse/2.html He, H. (2003, September 30). What Is Service-Oriented Architecture. Retrieved January 06, 2010, from XML.com: http://www.xml.com/lpt/a/1292 Jackson, J. (2007, March 01). ERP meets SOA. Retrieved January 06, 2010, from GCN.com: http://www.gcn.com/Articles/2007/03/01/ERP-meets-SOA.aspx Kothandaraman, R. (2004, May). SOA Challenges: Entity Aggregation. Retrieved January 06, 2010, from Microsoft.com: http://msdn.microsoft.com/en-us/library/ms954596.aspx Mahmoud, Q. H. (2005). Service-Oriented Architecture (SOA) and Web Services: The Road to Enterprise Application Integration (EAI). Retrieved January 06, 2010, from http://java.sun.com/developer/technicalArticles/WebServices/soa/ Martins, A., Carrilho, P., Silva, M. M., & Alves, C. (2007). Using a SOA Paradigm to Integrate with ERP Systems . Advances in Information Systems Development:Springer US, pp. 179-190. Motiwalla, L., & Thompson, J. (2008). Enterprise Systems for Management, 1 edition. London: Prentice Hall. Nadhan, E. G. (2004). Service-Oriented Architecture: Implementation Challenges. January 06, 2010, from http://msdn.microsoft.com/en-us/library/aa480029.aspx Stair, R. M., & Reynolds, G. W. (2003). Principles of Information Systems, Sixth Edition. Toronto : Thomson Learning, Inc. Steele, C. (2007). SOA implementations must show benefits to business, not just IT. Retrieved January 06, 2010, from http://searchitchannel.techtarget.com/news/article/0,289142,sid96_gci1281666,00.html Stevens, M. (2002, May 07). The Benefits of a Service-Oriented Architecture. Retrieved January 06, 2010, from Developer.com: http://www.developer.com/design/article.php/1041191/The-Benefits-of-a-Service-Oriented-Architecture.htm Tugnawat, P. (2008, March 19). Service Oriented approach for ERP Integration. Retrieved January 06, 2010, from Oracle.com: http://blogs.oracle.com/pt/2008/03/service_oriented_approach_for.html Vaman, J. N. (2008). ERP in Practice: ERP strategies for steering organizational competence and competitive advantage . New-Delhi: McGraw-Hill Education. Whitten, J. L., Bentley, L. D., & Dittman, K. C. (2000). Systems Analysis and Design Methods 5th Edition. New York: Irwin/McGraw-Hill. Read More