REA Analysis of SAP HCM; Some Initial Findings

This paper explores further the claim that the Transaction-Oriented Architecture (TOA) based on the principles of Resources, Events, Agents (REA) can enhance Enterprise Resource Planning (ERP) systems by providing a principled theoretical basis that can underpin ERP business process implementations. We provide details of some of our initial findings of the REA/TOA analysis which we carried out on the SAP Human Capital Management (HCM) module. Given that SAP is recognized as the dominant ERP system with over 50% of the market share, this technology is viewed as the representative case study technology for exploring the theory of REA in actual ERP systems. In particular O’Leary’s and Dunn et al.’s works are expanded upon, substantiating O’Leary’s findings that SAP was found to be consistent with REA in its database, semantic and structure orientations. Using SAP’s HCM module as the exemplar, two notable discoveries are made. These are namely (i) identifying that several anomalies exist in the underlying data model, and (ii) that there are many more REA entities than previously discovered by Dunn et al. Through the SAP HCM exemplar it is shown that REA adds value to modelling business processes in ERP systems.