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46 CHAPTER 2 Introduction to Enterprise Systems

SAP ERP system is used to execute process steps, the SAP BW system is
designed and optimized for processing large quantities of data to provide pow-
erful analytics. Unlike the OLAP environment in SAP ERP, SAP BW is not a
real-time or an online system. That is, the data used in BW reporting are not
tied to transactions and therefore are not the most current data available.

CHAPTER SUMMARY

This chapter explains the evolution of enterprise systems in terms of the pro-
cesses they manage and the technical capabilities they possess. In addition, it
examines the different types of data that ES collect and utilize to execute pro-
cesses and enable managerial decision making.
Enterprise systems evolved from the custom-built mainframe applications
of the 1960s and 1970s into the three-tier client/server systems of the 1990s.
They were then rebuilt to take advantage of the new technical capabilities of
service-oriented architectures to expand their reach and value as business
platforms. The largest and most complex ES are integrated ERP systems. ERP
systems initially managed only intra-company processes. However, their capa-
bilities were later extended to incorporate external or inter-company processes,
such as customer relationship management and supply chain management.
The combined collection of inter-company process-based applications and
intra-company process-based systems forms an ES “application suite.”
Enterprise systems generate and consume vast quantities of different
types of data in their operations. Data in enterprise systems can be classifi ed
into three major categories: organizational data, master data, and transaction
data. Organizational data represent the structure of the enterprise. Examples are
company code, plant, and storage location. Master data represent the various
entities or materials that are associated with processes. Materials master data
contain information needed to procure, store, manufacture, ship, and invoice
physical goods and services. Transaction data are collected during the execu-
tion of a process and contain information such as dates, quantities, prices, and
payment and delivery terms.
Reports include organizational data, master data, and transaction data
and are used to support process execution and for managerial decision mak-
ing. ERP systems provide multiple options for extracting and analyzing the dif-
ferent types of data for different purposes. Information systems (IS) combine
the various types of data for specifi c functions in the enterprise. IS also enable
employees to easily access relevant data in ways that facilitate effi cient decision
making and operational oversight.

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