Enterprise Resource Planning (ERP)

Session-5
By Kushal Anjaria

In the last session, we started discussion on ERP
architecture. The architecture is shown in the figure
below:
In the last class, we have already covered the concepts
of Intelligent dashboards and database. Next, we will
start discission on OLTP and OLAP. Online transaction
processing (OLTP) captures, stores, and processes data
from transactions in real time. Online analytical
processing (OLAP) uses complex queries to analyze
aggregated historical data from OLTP systems.
OLTP applications typically possess the following
characteristics:
together to create accurate, reliable, fast information
about the business. A company that can take advantage
and turn it into shared knowledge, accurately and
quickly, will surely be better positioned to make
successful business decisions and rise above the
competition.
OLAP technology has been defined as the ability to
achieve “fast access to shared multidimensional
information.” Given OLAP technology’s ability to
create very fast aggregations and calculations of
underlying data sets, one can understand its usefulness
in helping business leaders make better, quicker
“informed” decisions.
Using OLAP, following operations can be performed
Pivot: It is the technique of changing from one
dimensional orientation to another. It is also known as
rotation.
Before pivoting, the original data cube is shown in the
figure below:

• Transactions that involve small amounts of data

• Indexed access to data
• A large number of users
• Frequent queries and updates
• Fast response times
OLAP:
OLAP (Online Analytical Processing) is the technology
behind many Business Intelligence (BI) applications.
OLAP is a powerful technology for data discovery,
including capabilities for limitless report viewing, After pivoting the block would be change. The status of
complex analytical calculations, and predictive “what the data block after pivoting is visible in the figure
if” scenario (budget, forecast) planning. below:
Advantages of OLAP:
Knowledge is the foundation of all successful decisions.
Successful businesses continuously plan, analyze and
report on sales and operational activities in order to
maximize efficiency, reduce expenditures and gain
greater market share. Statisticians will tell you that the
more sample data you have, the more likely the resulting
statistic will be true. Naturally, the more data a company
can access about a specific activity, the more likely that
the plan to improve that activity will be effective. All
businesses collect data using many different systems,
and the challenge remains: how to get all the data
Slice and Dice: In slicing and dicing, cross tabulation is
done for specific value other than for all other
dimensions
The data cube before slice and dice is shown in the
figure below:

Roll-up and Drill-down: Rollup is the operation that

converts data with finer granularity to the corser
granularity with the help of aggregation.
Drill-down is the conversion of coarser to finer
granularity. First, normal data-cube is demonstrated in
the figure below:

Dice operation selects a sub-cube from the OLAP cube

by selecting two or more dimensions. In the cube given
in the overview section, a sub-cube is selected by
selecting following dimensions with criteria:

• Location = “Delhi” or “Kolkata”

• Time = “Q1” or “Q2”
• Item = “Car” or “Bus”
After dice operation, the block would change and the
changed block is shown in the figure below:

After that, operation drill-down is applied. After the

drill-down operation, the data cube will be as follows:

Slice operation selects a single dimension from the

OLAP cube which results in a new sub-cube creation.
In the cube given in the overview section, Slice is
performed on the dimension Time = “Q1”.
After slice operation, data would be as follows:
After applying roll-up operation, the data cube is
shown in the figure below:
Next, we will study the data warehousing concepts. In
organizational computing, a data warehouse, also
known as an enterprise data warehouse, is a system used
for reporting and data analysis and is considered a core
component of business intelligence. Data warehouses
are central repositories of integrated data from one or
more disparate sources.
• Data warehouse is a subject-oriented,
integrated, time-variant, and non-volatile
collection of data. This data helps analysts to
take informed decisions in an organization.
• Using data warehousing, it is efficient to keep
data summarized at the different level using
granularity.
• The geographical and structural arrangements
need to be reflected while establishing data
warehousing principles with appropriate
technological adoption.
• It requires a fitness exercise between
organization, systems and technology layer.
• A typical data warehouse has four main
components: a central database, ETL (extract,
transform, load) tools, metadata, and access
tools. All of these components are engineered
for speed so that you can get results quickly and
analyse data on the fly.
Benefits of data warehousing:
Organizations that use a data warehouse to assist their
analytics and business intelligence see a number of
substantial benefits:
Better data — Adding data sources to a data warehouse
enables organizations to ensure that they are collecting
consistent and relevant data from that source. They
don’t need to wonder whether the data will be accessible
or inconsistent as it comes in to the system. This ensures
higher data quality and data integrity for sound decision
making.
Faster decisions — Data in a warehouse is in such
consistent formats that it is ready to be analyzed. It also
provides the analytical power and a more complete
dataset to base decisions on hard facts. Therefore,
decision makers no longer need to reply on hunches,
incomplete data, or poor-quality data and risk delivering
slow and inaccurate results.
Data Warehouse schemas
The Data Warehouse Schema is a structure that
rationally defines the contents of the Data Warehouse,
by facilitating the operations performed on the Data
Warehouse and the maintenance activities of the Data
Warehouse system, which usually includes the detailed
description of the databases, tables, views, and indexes.
Schema is a logical description of the entire database. It
includes the name and description of records of all
record types including all associated data-items and
aggregates. Much like a database, a data warehouse also
requires to maintain a schema. A database uses
relational model, while a data warehouse uses Star,
Snowflake, and Fact Constellation schema. In this
chapter, we will discuss the schemas used in a data
warehouse.
Star Schema
• Each dimension in a star schema is represented
with only one-dimension table.
• This dimension table contains the set of
attributes.
• The following diagram shows the sales data of
a company with respect to the four dimensions,
namely time, item, branch, and location.
• There is a fact table at the center. It contains the
keys to each of four dimensions.
• The fact table also contains the attributes,
namely dollars sold and units sold.
 • Each dimension has only one dimension table
and each table hold a set of attributes. For
example, the location dimension table contains
the attribute set {location_key, street, city,
province_or_state,country}. This constraint
may cause data redundancy. For example,
"Vancouver" and "Victoria" both the cities are
in the Canadian province of British Columbia.
The entries for such cities may cause data
redundancy along the attributes
province_or_state and country.
Snowflake Schema
• The sales fact table is same as that in the star
• Some dimension tables in the Snowflake
schema.
schema are normalized.
• The shipping fact table has the five dimensions,
• The normalization splits up the data into
namely item_key, time_key, shipper_key,
additional tables.
from_location, to_location.
• Unlike Star schema, the dimensions table in a
• The shipping fact table also contains two
snowflake schema are normalized. For
measures, namely dollars sold and units sold.
example, the item dimension table in star
schema is normalized and split into two- • It is also possible to share dimension tables
dimension tables, namely item and supplier between fact tables. For example, time, item,
table. and location dimension tables are shared
between the sales and shipping fact table.

Holistic Performance Management

• This component deals with standardization.

• Each organization will have standards for
business process, workflows, transaction and
related activities
• This layer helps strategic managers to invest
more time on unstructured decision.
• The layer maintains standardization with the
consideration of laws, rules and regulation.
Dialogue for belief, boundary, diagnostic, interactive
• Now the item dimension table contains the
system
attributes item_key, item_name, type, brand,
and supplier-key. • Belief and boundary systems are about keeping
• The supplier key is linked to the supplier employees well informed about organizational
dimension table. The supplier dimension table values and performance
contains the attributes supplier_key and • Belief and boundary systems include business
supplier_type. functions and business rules.
• Note − Due to normalization in the Snowflake • Diagnostic dialogue supports expert system in
schema, the redundancy is reduced and the organization.
therefore, it becomes easy to maintain and the • Interactive dialogue supports decision support
save storage space. system
Fact Constellation Schema/Galaxy schema/Hybrid
Explain ERP lifecycle with phases and
Schema
dimensions
• A fact constellation has multiple fact tables. It • The ERP lifecycle framework has been
is also known as galaxy schema. structured in stages and aspects. The complete
• The following diagram shows two fact tables, lifecycle framework, meaning, and research
challenges have been discussed in [2] in detail.
namely sales and shipping.
• The lifecycle framework has been described in
the figure-2 below:

Figure-2 ERP lifecycle with phases and dimensions
In the diagram above, Phases are the different stages of
an ERP system life-cycle within an organization, and
dimensions are the different viewpoints by which the
phases could be analyzed.
First, phases of ERP lifecycle will be discussed:
1. Adoption decision phase: This phase is the
one during which managers must question the
need for a new ERP system. During this phase,
requirements are defined by the organizations.
2. Acquisition phase: This phase consists of the
product selection that best fits the requirements
of the organization. There are four elements of
the Acquisition phase: 1. Product Selection 2.
Consultant Selection 3. Contractual Agreement
4. Calculate Return on Investment
3. Implementation Phase: This phase consists of
the customization and adaptation of the ERP
package acquired according to the needs of the
organization. During the implementation phase,
the following six aspects are considered by the
organization: 1. Methodologies 2. Time period
implementation 3. Project team 4. Training 5.
Adaption and data conversion 6. Risk
Management.
4. Use and maintenance phase: This phase
consists of the use of the product in a way that
returns expected benefits and minimizes
disruption. During this phase, the following
entities are observed and analyzed: 1.
Functionality 2. Usability 3. Maintenance
5. Evolution Phase: This phase corresponds to
the integration of more capabilities into the
ERP system, providing new benefits, such as
advanced planning and scheduling, supply-
chain management, customer relationship
management, workflow, and expanding the
frontiers to external collaboration with other
partners.
6. Retirement Phase: This phase corresponds to
the stage when with the appearance of new
technologies or the inadequacy of the ERP
system or approach to the business needs,
managers decide if they will substitute the ERP
software with other software solutions. This
phase includes cost analysis, factors related to
‘why’ and ‘when’ retirement will take place,
and recent technology trends.
Next, dimensions are discussed by which the different
phases of the life-cycle should be analyzed: product,
process, people, and change management. The
dimensions of ERP are as follows:
1. Product: This dimension focuses on aspects
related to the particular ERP product in
consideration, such as functionality, and on
related technical aspects, such as hardware and
base software needs.
2. Process: Each organization has its own core
capabilities and functionality that must be
supported by an ERP system. Also, an ERP
system must help the decision-making required
to manage the resources and functions of the
organization.
3. People: This dimension refers to the human
resources and their skills and roles in an ERP
system life-cycle.
4. Change management: This dimension refers
to the body of knowledge that is used to ensure
that a complex change, like that associated with
an extensive system, gets the right results, in the
right timeframe, at the correct costs.
Relationship between business model and ERP
• A business model is a conceptual structure that
supports the visibility of the product or
company and explains how the company
operates, makes money, and how it intends to
achieve its goals.
• All the business processes and policies that a
company adopts and follows are part of the
business model.
• The introduction of new technologies like
mobile computing and internet have formed
strong bonding among business model,
business process and ERP.