ERP WORKFLOW AS NEW PRODUCT IN CASE OF FEDERATED ERP SYSTEM

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1 29 th October 205. Vol.42 No JITBM & ARF. All rights reserved ERP WORKFLOW AS NEW PRODUCT IN CASE OF FEDERATED ERP SYSTEM Evan Asfoura, Mohammad abd Al haq 2 Dar Al Uloom university, Department of management information system Riyadh, Saudi Arabia evan@dau.edu Abstract FERP Mall is a proposed intermediary business model for marketing of distributed ERP componentbased Web services. This FERP Mall aims to cover the needs of small and medium enterprises (SMEs) to FERP functionality because the conventional ERP systems are expensive and only large companies can afford these systems. Beside the intermediation of FERP Web Services these mediators describes the appropriate FERP Workflow (Wf) for the end-user companies, which integrate the required FERP Web services. The relevant question in this case is: how to find the appropriate price of each FERP workflow description as marketable product? Therefore, this work describes a logical analysis of this product (Wf-definition) and find out a suitable model, which can be considered for the determination of logical prices of these products. Keywords: ERP system, Federated ERP system, ERP web services, FERP business model, ERP workflow. Introduction At first, we will introduce two terms FERP systems and business model. An FERP system A federated ERP system (FERP system) is an ERP system which consists of system components that are distributed within a computer network. The overall functionality is provided by an ensemble of allied network nodes that all together appear as a single ERP system to the user. Different ERP system components can be developed by different vendors. As shown in Figure [, 2, 3]: Figure 2 presents the idea of this FERP system through four layers and their actors. These layers are [0]: - Standardization-layer represents initiative for Standardization of FERP Web Services (WS). - Development-layer represents the Web services developers that encapsulate business functionality in Web services and workflow Designer, which is responsible for the specifications of the business logic. - Marketing-layer represents the marketplace for the offerings of FERP workflow definitions and Web services. - Utilization-layer is represented by standard software system for utilizing enterprises. This system consists of graphical user interface, database and workflow management system. Figure. Architecture of Conventional ERP system 3

2 29 th October 205. Vol.42 No JITBM & ARF. All rights reserved Figure 2. Marketing model for best-practice processes based on Web Services [0] This work focus on the marketing of FERP workflow definitions. The first and most important step in this direction is the description of a suitable business model for marketing of FERP systems. A business model includes [6]: - Architecture for the flow of products, services and information. - A description of the various actors and their roles. - A description of the potential benefits for the individual actors. - A description of the revenues. In other words, business model characterizes the actors, their roles and the goods and cash flow between them. There are more than one customer and provider of the ERP components in this business model. Therefore, this business model services as a commercial intermediary between the providers and customers. This intermediary presents the ERP components of different providers and organizes a cross vendor to satisfy the functionality demanded by the customers []. An intermediary is an entity that stands among suppliers and customers and can act actively or passively. Besides the add value of the intermediary experience, the mediation between customers and providers is relevant because the search process by such intermediary is cheaper than a direct single search process. That includes e-mall as well as e-auction [5]. In ERP auction, customer (user or company) should sign several contracts, if his/its requirements are covered by different ERP WS providers. That means that each provider is partially responsible to the user and there is no single one responsible party which customer could deal with in case of failure or any accident. As a result of this problem, beside the high prices of ERPs software, we consider this possibility practically inapplicable [4]. As a result, we say that an FERP E-mall as a intermediary business model between the providers and the end-customer is the reasonable and appropriate business model type, which can fulfill the needs of (SMEs) through an appropriate adaptation [4,, ]. This e-mall contains several professional ERP shops and offer support services in addition to the supplying role of FERP WS as other shops, which are necessary for this mall as integrator. The integrator provides the FERP- Reference workflow model which represents all possible business scenarios of an enterprise (see Figure 3): provider ERP Web service A Provider ERP Web service B Provider ERP Web service n Otter providers FERP Mall ERP Shop A ERP Shop B ERP Shop n Otter Shops Andere Shops Integrator FERP Reference WfM SME SME 2 SME m Figure 3. FERP Mall for marketing of FERP components as Web Services This intermediary integrates the business functions required by the user in appropriate business process? This paper describes a logical analysis of this product (Wf-definitions) and find out a suitable pricing-model, which can be considered for the determination of logical prices of these products. Therefore we show, in Section 2, the construction of this model for finding the FERP workflow prices and explain that in Section 3 through suitable examples. This work is summarized in Section Pricing model of FERP workflow definitions As shown in the previous section, FERP mall integrates FERP Web service in appropriate Workflows. In Figure 4 we present an example manufacturing business process includes three functions (Material requirements planning, Purchase order and Production scheduling) every one of this function will be provided from deferent provider. 32

3 29 th October 205. Vol.42 No JITBM & ARF. All rights reserved Enough material in Customer order acquire Material requirements planning XO R XO Production scheduling Production scheduling Purchase order All materials Not enough material in Provider x Provider y Provider z Figure 4. Example manufacturing business process and Outsourcing of ERP-functions In our case FERP mall works as FERP Workflow Designer. A workflow (Wf) is a plan of sequentially or in parallel chained functions as working Steps in the meaning of activities which lead to the creation or utilization of Business benefits [2]. Then the building block of a workflow is the activity (A), which is executed by operation of a FERP WS. From the designer said are taken into account the activities as black boxes, because the providers themselves execute these activities by FERP WS. Here comes the question: how can the designers to find out logical prices of the workflow descriptions (as a product) based on Wf-activity as mean element in this product? The price of each product is dependent on the total cost of this product and the total cost of a workflow design is dependent on the designer's efforts. These efforts are dependent on the sizes of workflow and workflow complexity. - Workflow-size = Number of Activities (AN). - Workflow complexity is dependent on the Number of Arrows and the Number of Activities (A), joins (J) and Splits (S). That is not so far from the definition of the complexity of a system which depends on the number of system elements and their relationships []. The logical representation of this complexity is done through the well-known coefficient of network complexity (Coefficient of Network Complexity, Short CNC) from the graph theory [9] and this is calculated as follows: Number of Arrows CNC = Number of Activities, Joins and Splits 33 Or (3.49 cm) from the top edge ArN of the page, centered, CNC = (A, J, S)N Joins and splits are control flow elements. Then we have here: - The price per Activity (Ap) as a static value, which the designers can determine through the practical experience. - And two variable: Workflow-size = Number of Activity = (AN) and Coefficient of Network Complexity (CNC). According to this logic representation and explanation of the involved elements, we can formulate a function which can be considered for the identification of Workflow prices (Wfp): Wfp = Ap*AN*CNC Or ArN Wfp =Ap*AN* (A, J, S)N - Wfp: Workflow- Price - Ap: Price per Activity - AN: Number of Activities - ArN: Number of Arrows - (A, J, S)N: Number of Activities, Joins und Splits For more explanation, we will present in the next section various examples 3. Workflows pricing examples We give here three different examples of workflow from different sizes and complexity, which are designed by Petrie net. The price per activity is identified through the experience Ap = 50 entity of money. The goal of these examples is the evidence of the practicability of our model by logical comparison method. The practical evidence is not possible now, because FERP mall as enterprise for marketing of FERP Web services and FERP workflows is not available yet: )

4 29 th October 205. Vol.42 No JITBM & ARF. All rights reserved Figure 5. Workflow Figure 5 represents simple sequential workflow with () Activities and without splits and joins: - AN = - ArN = - (A, J, S)N = Wfp = 50** Activities, relationships, joins and splits. Therefore, this workflow is the most expensive will between our examples: - AN = 3 - ArN = - (A, J, S)N = 6 Wfp = 50*3* Wfp = 3,25 entity of money 2) Wfp = 350 entity of money 3 2 S J We will compare the workflow size, complexity and prices in the following table. Table. Comparing the workflow sizes, complexities and prices Figure 6. Workflow 2 AN CNC Wfp Workflow 2 has the same number of activities (same size) like Workflow, but in workflow 2, there are more relationships (arrows) with split and join points. This means: Workflow 2 more complex and expensive than Workflow : - AN = - ArN= 0 - (A, J, S)N = 0 0 Wfp = 50** Wf / = 0,5 Wf2 0/0 = Wf3 3 /6 =, ,25 3) Wfp = entity of money The relationship between the variables and results in Table are explained in two-dimensional graphics, which will be shown in Figures and uthor names and affiliations are to be centered 2 S 6 S J 500 Reihe Figure. Workflow 3 Workflow 3 is larger and more complex than workflow and 2, because he includes more Figure. The relationship between Wf-Price and Wf-size 34

5 29 th October 205. Vol.42 No JITBM & ARF. All rights reserved Figure explains the relationship between the Wf-prices and Wf-sizes through our three examples: The bigger the workflow the higher the price of the Wf-definition ,2 0,4 0,6 0,,2 Figure 9. The relationship between Wf-Price and Wf-complexity Similarly, figure shows the dependence between the Wf-prices and Wf-complexity: The more complex the workflow the higher the price of the Wf-definition 4. Conclusion In this paper we have presented the FERP workflow as a new product. This product differs from user organization to another. Therefore, we have found a logical function which takes the Wf size and the Wf complexities into account. This function can be a logical basic for the pricedetermination of the different workflow definitions. The result of this function has been explained through three examples of different Workflow sizes and complexities. The Wf activity in this work has been considered as a black box, because this activity is executed by the FERP WSs providers themselves separately, and the price per activity in this case is fixable. 5. References. S. Abels, N. Brehm, A. Hahn, and J. Marx GÓmez, Change management issues in federated ERP-systems An approach for identifying requirements and possible solutions. International Journal of Information Systems and Change Management (IJISCM),, 2006, p 3-335, N. Brehm, and J. Marx Gomez, Federated ERP- Reihe Systeme. In: (Pietsch, T.; Lang, C.V. Hrsg.): Ressourcenmanagement. Erich Schmidt Verlag, Berlin, 200; p E. Asfoura, N. Jamous, and C. Rautenstrauch, Identifying the Roles of the Business Actors in the Federated ERP Systems on the Basis of Web Services. In: Proceedings of the rd International Engineering Sciences Conference (IESC'0), Aleppo, Syria, November 2-4, A. Bartelt, and W. Lamersdorf, Geschäftsmodelle des Electronic Commerce in: Informatik Wirtschaft und Wissenschaft in der Network Economy, 200, p P. Timmers, Business Models for Electronic Markets in: Electronic Markets (2), 99.. E. Asfoura, N. Jamous, and G. Kassam, E-Mall as solution for marketing the federated ERP components on basis of web services. In: Proceedings of the tenth International Business Research Conference. - World Business Inst., insges. 0 S.; E. Asfoura, G. Kassem, and R. Dumke, Kombination von Service, Process Level Agreement und Zahlungsverhalten für sichere FERP Malls. In: Workshop Bewertungsaspekte serviceorientierter Architekturen. BSOA 2009; (Darmstadt-Germany..2009). 9. J. Cardoso, J. Mindling, G. Neumann, H.A. Reijers, A Discourse on Complexity of process Models. In: EDER, Johann (Hrsg); DUSTDAR, Shahram (Hrsg): Proc. Business process management workshops- workshop on business process Intelligence Bd Vienna, Austria: Spriger-Verlag Berlin Heidelberg, September 2006,p N. Brehm, and J. Marx Gómez, Serviceoriented Development of Federated ERP Systems. Workshop on Software Engineering Methods for Service-oriented Architecture (SEMSOA 200), Hannover, 200. [] C. Rautenstrauch, and T. Schulze, Informatik für Wirtschaftswissenschaftler und Wirtschaftsinformatiker. Berlin et al, Systems on the basis of Web Services and P2P networks. International Journal of Information Technology and Management (IJITM), N. Brehm, and J. Marx Gómez, Web Servicebasierte Referenzarchitektur für Föderierte ERP- 35