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Chapter 3 • Enterprise Systems Architecture 59

redistribution expenses. In 2003, Nestlé signed a $500 million, five-year deal with IBM for
server hardware, software, and IT services, and integration of its mySAP.com e-Business
software system, giving its workers access to mySAP.com via an internal portal customized
for their individual jobs. Nestlé is attempting to solve the information management and
systems challenge by standardizing on a common ERP system globally. As part of this initia-
tive, they are rolling out a common e-procurement solution across its major regions and
markets. Adoption of the solution, which is being licensed from SAP, has been accelerated by
Nestlé’s e-procurement rollout that does not conflict with its global ERP and data center
consolidation efforts. (Nestlé will begin transitioning e-procurement system management to
its own data centers in 2007–2008.) This approach also allows Nestlé to handle implementa-
tion and change management issues during the initial rollout, enabling simplified system
setup and configuration when e-procurement system management moves in-house.

PREVIEW
Once ERP systems are integrated and implemented in a company, they become the cornerstone of
the organization. With a successful implementation, every single transaction will now be
processed through this system. The SAP-ERP implementation experience at Nestlé USA provides
some very important lessons. In addition to systems integration, it is also necessary to focus on
business process architecture, business requirements, budget, project management, commitments
from top management, and continuous communication with employees informing them about
future changes. If the ERP software is installed with a focus only on the system architecture, you
may have a successful installation of software, but an unsuccessful implementation. An ERP
implementation isn’t just about the software. It’s easy to install a new system. The hard part is
changing the business processes of the people who will use the system. Nobody likes process
change, particularly when they don’t know what is coming. It is important to include the people in
planning whose processes you are changing. Keep the communication lines open while the project
is in the works and measure the level of acceptance before, during, and after the rollout.
Remember the integration points. It isn’t enough to simply install new systems; you need to make
sure that both the system and people communicate efficiently and effectively with each other.
Update your budget projection at regular intervals to stay on target for the project.

Why Study Enterprise System Architecture?
ERP system architecture provides a foundation for both the functional and the technical needs of the
organization and adapts to future business challenges. It articulates the relationships among the
complex information technology components, which include hardware, software, and data with such
complex organization components as company structures, business rules, and people. For example,
ERP hardware can range from multimillion dollar mainframe computer systems to complex
networking and security equipment. ERP software similarly requires operating systems, a database,
and other software in place for them to function properly. As mentioned in the Nestlé case, ERP
systems require current and historical data and business rules from all parts of the organization to be
embedded into the system during the implementation phase for a successful solution to business
problems. This is a complex undertaking for any organization because it requires a good under-
standing of the enterprise systems structures, characteristics, behavior, and business operations.