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Understanding Lean ERP
Part 4 of 6

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Lean Manufacturing, Basics, Principles, Techniques

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The Business Logic Layer

Ultimately your ERP system must do its number crunching. Programs must be written that will accept data supplied by input from the key­board or through interface with other intelligent devices and add, sub­tract, multiply, divide, collate, sort, slice, and dice your data and then update the appropriate files. This set of internal application programs comprises your business logic layer.

By and large, this layer, like the RDBMS layer upon which it rests, is invisible to the end user. It goes about its work quietly and generally very reliably. Of course, it depends upon the successful entry or trans­mission of data and is subject to the old information systems maxim, "garbage in, garbage out."

The ERP business logic layer might include the programs that will perform such varied tasks as exploding your bill of materials to depre­ciating your fixed assets. It also goes about the business of relieving and replenishing inventory and checking credit limits for your custom­ers as a sales order entry clerk provides the raw data. As the ERP defi­nition indicates, the business logic layer drives the functionality to "iden­tify and plan for the enterprise-wide resources necessary to take, make, ship, and account for customer orders or services."

We believe that the strategic qualifiers for the business logic layer are suitability and flexibility.

For your ERP application to be viable, it must be suitable for your business processing needs. While this sounds very basic, you would be surprised at the number of software selections that are made without a rigorous business case analysis. A complete discussion of how to de­termine the suitability of ERP application is far beyond the scope of this paper. However, we do offer the following basic tenets:

• Create an empowered group of cross-functional users to formulate the key business requirements (business logic).
• Focus on those activities that add value to the company, and en­courage creative thinking to reengineer old procedures and assump­tions that are no longer valid.
• Create a list of detailed functional requirements and allow potential ERP vendors ample time to respond.
• For select vendors, create key business scenarios, and ask for prod­uct demonstrations to focus on these areas (again with ample prepa­ration time).
• Validate your ERP selection with a comprehensive conference room
pilot early on in the implementation process.

The last step is critical to ensuring the success of your ERP imple­mentation. The purpose of the conference room pilot is not only to validate the software selection, but also to identify the inevitable gaps between the requirements and the software that must be filled by workarounds, process reengineering, or software modifications. In some instances, your preferred ERP provider may be willing to participate in the conference room pilot before the final funding has been executed.

For your ERP application to be durable, it must be flexible enough to accommodate changes to incorporate current and future business process requirements. It is important that you gain an understanding of your ERP vendor's approach to modifications, particularly to the busi­ness logic layer. We encourage modifications only when they are nec­essary to capture a business process that is key to your company's unique source of competitive advantage (for example, to capture a pricing al­gorithm that is critical to gaining and retaining customers).

We offer the following key considerations when making modifica­tions to the business logic layer:

Can the required business logic be attained by altering parameter

• Can the required business logic be captured in modifications out­side of the core code and implemented by triggers within the code? (Many ERP systems are adopting this approach.)
• Are there other, best-of-breed solutions that could be integrated with the ERP package to provide the business logic? If so, does the ERP package provide a stable and secure integration path?
• If core code modifications are required, what steps will ensure that
the application will not become "rev-locked"?

The last point is very important to the durability of your system. "Rev-locked" (or revision locked) refers to a condition in which your software has been modified to such a degree that upgrades to a new version are impossible or cost prohibitive. While the software may perform ad­equately for you using the existing version in current conditions, chang­ing business conditions may mandate the need for additional functional­ity, Y2K fixes, etc., that are only available in later versions.
As always, there are costs associated with changes to the business logic layer, and in some cases these may exceed the initial investment in the software itself! It is important that these costs are identified early on and are included in the business case analysis.

To Be Continued


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