Coping

Classifying applications helps to understand the contribution expected from current and future information systems in the enterprise. Application classification models provide instruments for balancing the application portfolio and the life cycle of applications.

Table 4.12 AIMES Application Classification Criteria

Model Classification criteria Categories in the model

Proposed model (AIMES Application Model)

- Purpose of the use of the application

- Business processes

- Back end applications - Front end applications - Engineering applications - Management tools - Communication

applications

Based on the analysis of existing application classifications, we enhanced the models, integrating categories to design our own business application model. The model will be used when analyzing the development of information system view from the application driven point of view for enterprises.

4.4.1. Classification Principles in Proposed Classification model

In the proposed model, classification is based on the purpose of the application itself, the business processes of the enterprise and it is independent of organizational levels.

Applications are classified as Back end applications, Front end applications, Management tools, Engineering applications and Communication applications. This classification is illustrated in Figure 4.21a.

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Figure 4.21a Proposed AIMES Application Classification Model

Brief Definition of Model Elements a. Back end applications

Back end applications are transactional applications that perform transactions and operations, which are not directly in the customer interface. Such transactions are for instance order processing, inventory management and accounting. Back end applications for instance form the backbone of an organization‘s business applications. Back end applications include for instance ERP, finance, human resources management and payroll. If the enterprise does not have a comprehensive ERP system, these functions can be covered by several independent applications. Although ERP systems have clear advantages and an ERP package is the dominant strategy in enterprise to gain business process integration, it is not always obvious that a company should implement a comprehensive ERP package. An alternative strategy would be to use best of breed packages for specific purposes (Light et al., 2011). The main reason for this alternative is to achieve flexibility in the information system view. In several cases, this may be a better option, because case studies in literature highlight the unresolved inflexibility of ERP applications (Davenport, 1998; Kumar & Hillegersberg, 2000; Hagel & Brown, 2001).

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Front end applications are used in customer interface. Front end applications are classified applications, which are used in customer interface or are utilized to create or distribute value-added services for customers. Front end applications include for example Customer Relationship Management (CRM), e-business and extranet applications. Value-added services created and distributed with front end applications are for instance electronic user manuals, customer drawings and product service history information databases. In companies dealing directly with consumers or end-users frond end applications may include Point-of-Sale or shop management applications. As ERP applications get more and more comprehensive in some case they have features of front end applications, although ERP applications are classified as Back End applications in this classification model.

c. Engineering applications

Engineering applications are used for engineering and R & D. These include for example Product Data Management (PDM) and CAD. Traditionally PDM and CAD applications are linked tightly together and currently also PDM and ERP are often linked (Soliman et al., 2001), but this creates problems relating to data overlap (Miller, 1999). Engineering applications are characteristics for manufacturing companies. Especially these are used in manufacturing companies with engineering function, although engineering applications can also be used for design. Engineering applications are often used in companies that deal with complex product data. This does not mean that the product itself would need to be complex, but it may include a lot of product related information. Another type of use is companies producing drawings. These drawings may concern for example products, product assemblies, product design, lay-outs, system planning etc.

d. Management Tools

Management tools are applications used to support management activities in all levels of the organisation. Management tools are typically applications that do not make transactions, but collect, refine and distribute information to support management

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activities. Management tools include applications such as supply chain management, data warehouse, business intelligence applications, budgeting and reporting. These applications are often integrated with backend, front end and engineering applications and they collect data from these applications and refine it as useful information. A typical management tool is a data warehouse application which collects data from various ERP applications in the enterprise, refines it and then distributes information throughout the enterprise. This information can be for example financial figures from various business units. Another useful way to exploit data warehouse is to use it to distribute information in the supply chain. This means quotations, orders, stock count and work in progress.

With data warehouse it is possible to achieve visibility through the supply chain without heavy ERP implementation. However, the difference is that data warehouse is not a transaction system, so it only distributes information but does not automate transactions in order fulfillment process as an ERP system would do. This is why data warehouse is classified as a management tool, not as a Back end application. As Inmon (1999) stated

―Data warehouse solves the problem of integration, except it solves the problem only for informational processing. As appealing and as powerful as data warehousing technology is, it is not a solution for operational transaction integration.

e. Communication application

Communication applications are used for collaboration and communication within the company and with external parties. Communication applications include applications such as e-mail and groupware.

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4.4.2 Mapping TIPS Module to Application Classification Model

Figure 4.21b Mapping Extracted Modules to AIMES Application Model

4.5. Aligning the SME Using AIMES: Extracting the IT-Business Alignment Model