D-BP-ISP

An Electronic B2B Procurement and ERP Integration Model for SC

Optimization

ERP 1

• Cross-functional Integration and Support

• Management of Core Business Processes– Accounting/Finance– HR/Payroll– Manufacturing– Sales/Distribution

ERP 2

• ERP

• APS

• B2B procurement

• BI

• CRM

CRM

ERP

B2B Procurement

BISCM

Tier 1 Suppliers

N Tier Suppliers

Customers

D-BP-ISP Model

• Step 1 - Definition of SCM

• Step 2 - Business Process Integration

• Step 3 - Information Integration

• Step 4 - Systems Integration

• Step 5 - People Integration

HOW TO ADD MORE VALUE

SC OPTIMIZATION

ERP + B2B PROCUREMENT

D-BP-ISP

SC Defined

A set of integrated business processes throughout the enterprise and/or extended enterprise that optimize the delivery of goods, services, and information from suppliers to customers.

The Gartner Group

SCM Dimensional Definition

SCM

SCP

OrderFulfillment

ProductDevelopment

CustomerService

SCE

Step 2 -Business Process Integration

http://www.peoplesoft.com

Step 3 – Information Integration

This step focuses on Information sharing

functionality necessary for enabling SCM.

This step is mainly reflected in ERP Systems

ERP System Information Sharing

• Real-time visibility of information flow and effective reporting capability

• Robust information back-office for most enterprises.

• Provides Key Performance Indicators(KPIs)

• Provide advanced planning and scheduling (APS) functionality

• Limited to historical business, hard to anticipating advantageous emerging business opportunities in the supply chain.

• Provides little support on extended integration among trading partners in the supply chain.

FunctionalityFunctionality DrawbackDrawback

Step 3 – Information Integration Continued…

The information integration must be extended

to external trading partners for optimal

management and execution of the supply

chain.

Solution

Interenterprise and Intraenterprise real-time

data sharing.

Step 4 – Systems Integrations

This step focuses on extending the benefit of

ERP to B2B procurement and vice versa.

B2B Procurement

• Definition – “a set of purchasing processes extended to electronic trading communities with the goal of buying products, services and information.”

• Electronic trading communities – Internet, Intranet, Extranet.

• B2B Procurement Applications – Product catalogs and e-marketplaces

B2B Procurement Benefits for SCM Optimization

• Providing real-time product quoting • E-marketplaces create an open sourcing

environment • Electronic trading communities reduce

user training costs and other costs through the Web

• Applications are usually designed to keep customer profiles

ERP & B2B Procurement Integration• Goal - Achieving SCM optimization.• ERP provides efficiency on the back-end

phases while B2B procurement provides efficiency on the front-end phases of procurement.

• Online B2B workflow capabilities are extended to ERP

• B2B can be customized to individual buyer needs and ERP provides the backbone

• Trading partners can utilize each other’s system resources.

B2B Procurement and ERP Systems Integration

ERPInformationBackbone

Web Clients

B2B ProductCatalogs

Bidding &Auction

B2BProductCatalog

B2BProductCatalog

E-Marketplace

Transport –HTTP over TCP/IPApplication-ORBs, MOMs, XMLData- ODBC,JDBC,DB Gateways

Integration Brokers:E-link, ActiveEnterprise, Inconcert

Intranet Extranet Internet

Web Clients

Web Clients

Security Issues in Systems Integration

• Authentication should be strictly enforced at the firewall and application levels.

• Authorization should work in conjunction with authentication and should be based on roles.

• Confidentiality need to be implemented through S-HTTP, SSL and Public Key Encryption, etc.

Step 5 – People Integration

This step focuses on the human capital

necessary to realize a successful integration of

B2B procurement and ERP.

Three Roles of People Integration

• Business people

• IT professional

• Consultants

Business People Qualifications

• Provide and continuously communicate the vision on how they will collaboratively achieve their SCM and business objectives.

• Ensure that resources are committed to accomplishing SCM optimization.

• Exhibit leadership • Program and project competencies• Solid understanding of information and network

technologies.

IT People Qualifications

• Possess the most knowledge & experience of ERP with its infrastructures, systems and applications.

• Have solid experience & knowledge of Internet-based technologies and architectures.

• Have system integration experience & knowledge. • Possess good communication and teaming skills

Consultants

• Play mediation roles in time of program and project conflicts

• Bring rare, scare specialty or technical skills that do not have long-term value to an organization

• Serve as mentors and coaches for the business people as well as the IT Professionals.

Extended EnterpriseInternet Domain

D-BP-ISP

Extranet Domain

Manufacturer/ServiceOrganization

Intranet Domain

Wholesalers1st Tier Suppliers

DistributorsN Tier

Suppliers

C-Commerce

www.mySap.com/ides

Major ERP, B2B, SCM Vendors

Oracle PeopleSoft

J.D.Edwards SAP Ariba

Harbinger CommerceOne

Elcom Manugistics

i2 Technologies

ERP B2B SCM

Conclusion

• SCM optimization will be used as one of the enterprise strategies.

• D-BP-ISP is an integration model that enables SCM optimization by integrating B2B procurement and ERP.