S.Hanumanth Sastry et al.

/ International Journal of Computer Science Engineering (IJCSE)

Implementation of CRISP Methodology for

ERP Systems
S.Hanumanth Sastry
Department of CS & SE
Andhra University
Visakhapatnam – 530003, India
E-Mail: hanusistla@gmail.com
Prof.M.S.Prasada Babu
Department of CS & SE
Andhra University
Visakhapatnam – 530003, India
E-Mail: msprasadbabu@yahoo.co.in
Abstract— ERP systems contain huge amounts of data related to the actual execution of business processes.
These systems have a particular way of recording activities which results in an unclear display of business
processes in event logs. Several works have been conducted on ERP systems, most of them focusing on the
development of new algorithms for the automatic discovery of business processes. We focused on addressing
issues like, how can organizations with ERP systems apply process mining for analyzing their business
processes in order to improve them. The data handling aspect of ERP systems contrasts with those of BPMS or
workflow based systems, whose systematical storage of events facilitates the application of process mining
techniques. CRISP-DM has emerged as the de facto standard for developing data mining and knowledge
discovery projects. Successful data mining requires three families of analytical capabilities namely reporting,
classification and forecasting. A data miner uses more than one analytical method to get the best results. The
objective of this paper is to improve the usability and understandability of process mining techniques, by
implementing CRISP-DM methodology for their application in ERP contexts, detailed in terms of specific
implementation tools and step by step coordination. Our study confirms that data discovery from ERP system
improves strategic and operational decision making.
Keywords- ERP; CRISP-DM; BPMS; SAP; Clustering; Classification; Regression; Association Analysis;
APD
I. INTRODUCTION
Data mining can be used to automatically determine significant patterns and hidden associations from large
amounts of data. Data mining provides insights and correlations that had formerly gone unrecognized or been
ignored because it had not been considered possible to analyze them [1]. Generally speaking, Functional
requirements and Business rules cannot be ported from one ERP implementation to another because local
operations have highly specific [2] and customized procedures for operating that equipment [3] [4]. ERP systems
implement highly customized solutions to meet specific business requirements of enterprises. Since each
enterprise has different data mining requirements, it is not possible to deliver fixed models for producing
prediction results. Data mining professionals are challenged with developing different models to meet such
business requirements which help in decision making. Data extracted from ERP system can be mined to answer
business questions like – differential product pricing to match customer profile, customer churn, cross selling
potential of new products, cash flow analysis etc. ERP can play an essential role in Driving accurate and fast
decisions (product profitability, procurement spend) with consistently defined data [3]. The benefits from ERP
implementation can be measured both in qualitative & quantitative terms like- efficient business processes,
enhanced customer service, reduced costs, improved productivity, accelerated transaction time, workflow
management and reduction in the number of credit management errors. [4]. In this paper we have discussed how
CRSIP-Data Mining methodology can be implemented on ERP system data of a large manufacturing enterprise,
where SAP is the ERP solution provider [5]. The rest of paper is organized as follows – Part II discusses Data in
ERP Systems, Part III outlines CRISP-DM methodology, Part IV discusses Implementation of CRISP-DM, Part
V specifies Implementation steps, Part VI discusses Results and finally Part VII provides Conclusions on paper.
II. DATA IN ERP SYSTEMS
ERP systems provide an increased level of integration to support core business processes and is an
amalgamation of three most important components - Business Management Practices, Information Technology
and Specific Business Objectives. Till recent past operational and transactional needs and not information were
the focus of most ERP implementations. At the core of ERP is a well managed centralized data repository which

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acquires information from and supply information into the fragmented applications operating on a universal
computing platform. Information in large business organizations is accumulated on various servers across many
functional units and sometimes separated by geographical boundaries [4]. Such information islands can possibly
service individual organizational units but fail to enhance enterprise wide performance, speed and competence.
In these cases, it is sometimes necessary to gather the scattered data into a single database called a Data
Warehouse (DW), before submitting it to data mining activity. The key objective of an ERP system is to
integrate information and processes from all functional divisions of an organization and merge it for effortless
access and structured workflow [5]. The integration is typically accomplished by constructing a single database
repository that communicates with multiple software applications providing different divisions of an
organization with various business statistics and information.

Figure 1. Integration of different modules in ERP systems

The Principal aim of Data Mining working in ERP Systems is to process data in Business Information
Warehouse for automation of decision-making and forecast processing. SAP offers a complete data warehousing
environment that simplifies the most challenging task in building a data warehouse – the data capture from ERP
applications and building closed-loop feedback mechanisms with business critical applications [7] [8]. For our
study, Cash Flow process data of Finance Module is used for implementing CRSIP methodology and extract
useful information. The Cash flow statement consists of ERP Data from Operations, Investments, Loans,
Payments & Receipts from branches and Special projects domains.
III. CRISP-DM METHODOLOGY

CRISP (Cross Industry Standard Process for Data Mining), is a data mining process model that describes
commonly used approaches that expert data miners use to tackle business problems [5]. It borrowed ideas from
the most important pre-2000 models and is the groundwork for many later proposals. The CRISP-DM 2.0 Special
Interest Group (SIG) was set up with the aim of upgrading the CRISP-DM model to a new version better suited to
the changes that have taken place in the business arena since the current version was formulated [6]. The CRISP-
DM methodology is described in terms of a hierarchical process model, consisting of sets of tasks described at
four levels of abstraction (from general to specific): phase, generic task, specialized task, and process instance.
CRISP-DM is divided into six phases to be carried out in a DM project as shown in figure 2. Implementation
details in each phase are also given in table I & CRISP-DM objectives are in table II.
IV. IMPLEMENTATION OF CRISP-DM METHODOLOGY

Creation of the model is generally not the end of the project. Even if the purpose of the model is to increase
knowledge of the data, the knowledge gained will need to be organized and presented in a way that the customer
can use it. The methodology we have followed for Cash Flow data mining is shown in figure 3 [5] [6] [7].

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Figure 2. Phases in CRSIP-DM Methodology

Cash Flow Data Extraction from SAP ERP System

ETL  Operation  &  InfoCube Updation 

Selection of suitable  Data Mining Technique 

Data Mining Model  Development  in APD

Evaluation  of DM  Model Results

Deployement of DM Model 

Figure 3. CRISP-DM Methodology for Cash Flow Data Mining

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TABLE I. IMPLEMENTATION DETAILS IN EACH PHASE

Phase in CRISP-DM Implementation Details

Business Understanding Understanding the project objectives and requirements from a business perspective,
and then converting this knowledge into a data mining problem definition. A
preliminary plan is designed to achieve the objectives.

Data Understanding It starts with an initial data collection and proceeds with activities in order to get
familiar with the data, to identify data quality problems, to discover first insights into
the data, or to detect interesting subsets to form hypotheses for hidden information.

Data Preparation It covers all activities to construct the final dataset (data that will be fed into the
modeling tool(s)) from the initial raw data. Data preparation tasks are likely to be
performed multiple times, and not in any prescribed order. Tasks include table,
record, and attribute selection as well as transformation and cleaning of data for
modeling tools.

Modeling In this phase, various modeling techniques are selected and applied, and their
parameters are calibrated to optimal values. Typically, there are several techniques
for the same data mining problem type. Some techniques have specific requirements
on the form of data. Therefore, stepping back to the data preparation phase is often
needed.

Evaluation At this stage in the project we would have built a model (or models) that appear to
have high quality, from a data analysis perspective. Before proceeding to final
deployment of the model, it is important to thoroughly evaluate the model, and
review the steps executed to construct the model, to be certain it properly achieves
the business objectives. A key objective is to determine if there is some important
business issue that has not been sufficiently considered. At the end of this phase, a
decision on the use of the data mining results should be reached.

Deployment Depending on the requirements, the deployment phase can be as simple as

generating a report or as complex as implementing a repeatable data mining process.
In many cases it will be the customer, not the data analyst, who will carry out the
deployment steps. However, even if the data analyst will not carry out the
deployment, it is important for the customer to understand up front the actions which
will need to be carried out in order to actually make use of the created models.

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TABLE II. OBJECTIVES & BENEFITS OF CRISP-DM

Sl. Objective
No

1 To ensure high quality of knowledge discovery from

project results

2 To reduce skills required for knowledge discovery

3 To Reduce Costs and Time

4 Stable Model development across varying applications

& generic in purpose

5 Should be robust and withstand changes in Environment

6 DM Modeling need to be Tool & Technique

Independent

7 DM Methodology should be Tool Supportable

8 DM Methodology need to support documentation of

projects

9 CRISP is designed to capture experience for reuse

10 CRSIP methodology supports knowledge transfer and

training

We have used tools available in SAP Business Information Warehouse (BIW) to handle outliers, missing,
inconsistent and duplicate values in the source data [8]. The commonly sought supplementary value from this
DM Model includes preventing fraud, giving marketing advice, seeking profitable customers, predicting sales
and inventory and correcting data during bulk loading of the database, also known as the Extract-Transform-
Load operation (ETL) [9]. Motivation for using DM comes from the value it gives over the competitors and it
almost every time reduces costs, i.e. saves money, if the process is successful (Lukawiecki, 2008) [10].
Two high-level DM goals are prediction and description. The first one tries to find patterns to predict the value
or behavior of some entity in the future and the second one tries to find patterns describing the values or
behavior in a form understandable to humans. These high-level goals are pursued through several DM methods,
for example classification, regression, clustering, summarization, dependency modeling and change, as well as
deviation detection [11]. Each method has many algorithms that can be used to reach the goal, but some
algorithms suit some problem areas better than others. (Fayyad et al., 1996c). The ETL map developed in SAP
BIW workbench for InfoCube Updation is displayed below. This InfoCube is the data source for DM Model, to
be developed later in APD (Analysis Process Designer) workbench of SAP.

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Figure 4. ETL Map for InfoCube Loading in SAP BIW

APD is a workbench that is used to visualize, transform and deploy data from Business warehouse [12] [13].
APD tool supports KDD process where we can merge and manipulate data sources for complex data mining
requirements

Figure 5. SAP APD Workbench for DM Modeling & Visualization

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V. DATA MINING MODELING & IMPLEMENTATION

The specific steps with respect to CRISP-DM are outlined below.
A. Business Understanding
After discussions with Finance function module leads , it is decided to mine data pertaining to vendors, Receipt
& Payment functions, G/L Accounts for each posting date and corresponding amounts posted thereof. It is also
decided to develop a Mining model to predict likely G/L accounts for certain vendors which exhibit similar
attributes. From this information we can estimate amounts likely to be debited or credited on each posting date
against each vendor. This information can be further utilized in Operations & Investment sub functions.
B. Data Understanding
Transactional data generated in SAP ECC data sources is pulled into SAP Business warehouse by means of
custom defined data extractors [13]. The extractor contains Meta information about source data and is capable of
supporting delta mechanism, to update BIW with changed attribute values. Data quality issues are handled in
BIW workbench by assigning relevant values for attributes and the considered attributes on DM Model are
shown in table III below
C. Data Preparation
Extracted source data enters PSA (Persistent Staging Area) layer of SAP BIW. Here we can edit any record and
fix errors, if any. The granularity level at PSA layer is same as what we extracted from source systems. After
cleansing data we loaded it into a DSO (Data Store Object) [13] [16]. The data in DSO is stored in a flat file
which can be further used to load SAP InfoCube or InfoProvider. The Dimensions, Characteristics and Key
Figure associated with our target InfoCube are shown in Table IV below
D. Modeling
Choosing the right Data Mining Model is a complex task and should take into account the precise objectives for
designing the analysis process. With SAP APD tool we can develop Mining Models using DM Algorithms like
– Clustering, Classification, Association Analysis and Regression Analysis. A brief gist on these DM algorithms
[16] and reasons for choosing a particular algorithm are given below.
1) Association Rule Mining (ARM) or Association Analysis is a Data Mining model designed to determine
associations between different events. The purpose of association analysis is to find patterns, in particular
in business processes, and to formulate suitable rules, such as “If a customer buys product A, that customer
also buys products B and C”. Association Analysis Models are used to identify cross-selling opportunities
for different products. Most of the research focuses on the frequent itemset mining subproblem, i.e.,
finding all frequent itemsets each occurring at more than a minimum frequency (min. support) among all
transactions [6]. Well-known sequential algorithms include Apriori [7], Eclat [8], FP-growth [9], and D-
CLUB [10] [16]. For Cash Flow data analysis, ARM model is not found suitable and hence the analysis
results are not discussed.
2) Classification Algorithms: These methods try to categorize items to predefined target classes with the help
of some algorithm. The building of classification model includes training data set with known, discrete
target classes, which means that the classification results are always discrete [14]. Classification targets
vary from binary to multiclass attributes and the models try to predict which target class is correct with the
help of descriptive relationships from the input attributes. Data classification is a two phase process in
which first step is the training phase where the classifier algorithm builds classifier with the training set of
tuples and the second phase is classification phase where the model is used for classification and its
performance is analyzed with the testing set of tuples [15]. Decision Tree is a Classification scheme which
generates a tree and a set of rules, representing the model of different classes, from a given data set [16].
The set of records available for developing classification methods is generally divided into two disjoint
subsets – Training set & Test set. The former is used for deriving the classifier, while the later is used to
measure the accuracy of classifier. Also, the accuracy of the classifier is determined by the percentage of
test examples that are correctly classified. Decision Tree Results from our study are presented in next
section.
3) Regression  Algorithms:  A Regression model predicts the value of a numerical data field, this is the target
field, in a given data record from the known values of other data fields of the same record. The known
values of other data fields are called input data fields or explanatory data fields. They can be numerical or
categorical. The predicted value might not be identical to any value contained in the data used to build the
model [17]. A regression model is created and trained based on known data sets of data records whose
target field values are known. You can apply the trained model to known or to unknown data. In unknown
data, the values of the input fields are known; however, the value of the target field is not known [11]. A
simple case of linear regression, where the sum of squared errors is minimized when –
∑
∑

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The maximum likelihood model is , which is used for prediction

4) Clustering  Algorithms:  Clustering in data mining is a discovery process that groups a set of data such that
the intracluster similarity is maximized and the intercluster similarity is minimized. When there is no
specified class, clustering is used to group items that seem to fall naturally together [16]. For our study
clustering algorithms are found most suitable to identify valuable clusters for analysis. Clustering
algorithms are mainly of 3 types namely – Hierarchical, Partition based and Density based Methods [18].
The important algorithms under each of these methods are discussed here.
a) Hierarchical Methods: This method groups data objects into a tree of clusters. This method can be further
classified as either agglomerative or divisive, depending on whether the hierarchical decomposition is
formed in a bottom-up (merging) or top-down (splitting) fashion [19]. This method examines all the
clusters present so far at each stage of merging; the clustering methods we examined work incrementally,
instance by instance [20]. At any stage the clustering forms a tree with instances at the leaves and a root
node that represents the entire dataset. In the beginning the tree consists of the root alone. Instances are
added one by one, and the tree is updated appropriately at each stage. The important algorithms in
hierarchical clustering are -
i. Agglomerative Clustering (Bottom-up): It measures distance between any 2 clusters and treats any
instance as a cluster in its own right, then finds the two closest clusters, merges them, and keep on
doing this until only one cluster is left. The record of merging forms a hierarchical clustering
structure—a binary dendrogram [21]
ii. Cobweb Algorithm: It always compares the best host, adding a new leaf, merging the two best hosts,
and splitting the best host when considering where to place a new instance
b) Partition based Method: The clusters are formed to optimize an objective partitioning criterion, such as a
dissimilarity function based on distance, so that the objects within a cluster are “similar,” whereas the
objects of different clusters are “dissimilar” in terms of the data set attributes. Given D, a data set of n
objects, and k, the number of clusters to form, a partitioning algorithm organizes the objects into k
partitions (k ≤ n), where each partition represents a cluster [22]. Important partition clustering algorithms
are K-Means & EM (Expectation-Maximization)
c) Density based Methods: This discovers clusters with arbitrary shapes & typically regard clusters as dense
regions of objects in the data space that are separated by regions of low density (representing noise) [23]
[24]. DBSCAN grows clusters according to a density-based connectivity analysis. OPTICS extends
DBSCAN to produce a cluster ordering obtained from a wide range of parameter settings. DENCLUE
clusters objects based on a set of density distribution functions [7] [8].
E. Evaluation
For evaluating Cluster, Classification and Regression models we have split input data for training and testing
purposes. The splitting criterion is, 66% of data is used for training and the rest for testing the model results.
Cluster model has formed 10clusters and used binning intervals to group values together on output visualization
[21]. Many What-If scenarios were run on these models and accuracy is found to be within desired range. The
predicted attribute values are validated against known results and accordingly decision model input parameters
like number of leaf nodes, stooping criteria are adjusted, to achieve desired model accuracy [24]. Care is taken
to avoid overfitting of data so that the model can accommodate variations in input data [25].
F. Deployment
The results of SAP Data Mining models can be accessed by all the concerned in following ways [13] [16]–
i. Model results can be written on to a flat file and published on enterprise portals of SAP i.e. at people
integration layer
ii. Model results are graphically visualized and desired result charts are broadcasted to all stakeholders
iii. Model results in text form are fed back into Enterprise Reports for decision making at all levels
VI. RESULTS & DISCUSSION
Decision Tree is a classification approach that uses the value of input variables to predict the value of a
categorical variable. In SAP Decision Tree Model we have defined G/L Account as predicted variable [20].
Field DT_Pred_Val002 in table V represents value predicted by DM Model for G/L Account. Field
DT_Pred_Node002 denotes node value in Decision tree & Field DT_Pred_Prob002 represents probability of
prediction accuracy. Obviously probability value of 1.0 gives absolute accuracy of predicted result but results
are also fairly accurate with probability values like 0.2, 0.48,0.78 etc as shown table V below.
Parameters used for Cluster model are – Binning Interval – 10; Default weight on variable – 1.0. In Table VI
below, Field CL_Pred_Cluster002 represents predicted cluster for input data attributes. From Overall Influence
Chart in Figure 7 below, Cluster No 6 has most number of records and could be used for prediction of unknown
data values [16].

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For Regression Model, field SC_Score002 represents predicted score for attribute amount
TABLE III. SOURCE FIELD ATTRIBUTES IN SAP SYSTEM FOR CASH FLOW STATEMENT
Field Description SAP Data Length Default Value
Type

BUKRS Company Code Char 4 1000

SAKNR G/L Account Char 10 No Default Value

BUDAT Posting Date Dats 8 No Default Value

BIZ_HEAD Business Head Char 10 OPER

WRBTR Amount in LC Curr 13 No Default Value

BELNR Document Char 10 No Default Value

Number

GJAHR Fiscal Year Numc 4 2012

LIFNR Vendor Char 10 No Default Value

KUNNR Customer Char 10 No Default Value

WAERS Currency Cuky 5 INR

TABLE IV. DIMENSIONS, CHARACTERISTICS AND KEY FIGURES OF INFOCUBE

Dimension Characteristics Technical Name Data Length

Type

Business Head Business Head ZBUSNHEAD Char 10

(ZFI_CASH1)
Accounting 0AC_DOC_NO Char 10
Document No

Company Code 0COMP_CODE Char 04

GL Account G/L Account 0GL_ACCOUNT Char 10

(ZFI_CASH2)
Chart of 0CHRT_ACCTS Char 04
Accounts

Posting date in 0PSTNG_DATE Dats 08

the Document

Customer Customer 0DEBITOR Char 10

Number
(ZFI_CASH3)

Account Number 0CREDITOR Char 10

of Vendor

Key Figure Amount Without ZAMOUNT1 Curr 09

Unit

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Figure 6. Clustering Model: Relative Dominance of each attribute in Overall Influence Chart

Figure 7. Clustering Model Overall Influence Chart

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Figure 8. Regression Model: GL Account Scoring Output

TABLE V. DECISION TREE DM MODEL SAMPLE RESULTS FOR PREDICTED VARIABLE

0CREDITOR 0GL_ACCOUNT 0PSTNG_DATE ZAMOUNT1 DT_PRED_NODE002 DT_PRED_PROB002 DT_PRED_VAL002

100888 272610 20120810 1000 0 0.2 181030

114033 259010 20120822 100000 11 1 259010

118203 259010 20120831 4000 11 0.2 181030

118203 259010 20120906 3000 11 0.2 181030

200710 181030 20120811 1853 4 0.78571 181030

201297 120012 20120817 10530 19 0.47826 120012

600010 181030 20120810 200 24 0.75 161011

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TABLE VI. CLUSTERING DATA MINING MODEL SAMPLE RESULTS

0AC_DOC_NO 0CREDITOR 0GL_ACCOUNT 0PSTNG_DATE ZAMOUNT1 CL_PRED_CLUSTER002

1226000224 200031 250602 20120804 121212 2

1226000227 200031 250602 20120804 3000000 2

1226000228 200031 250602 20120804 3000000 2

1226000229 200031 250602 20120804 300000 2

1226000237 201402 181030 20120806 2000 5

1226000239 201196 250022 20120807 3191271 6

TABLE VII. REGRESSION DATA MIMING MODEL SAMPLE RESULTS

0AC_DOC_NO 0CREDITOR 0GL_ACCOUNT 0PSTNG_DATE ZAMOUNT1 SC_SCORE002

1226000224 200031 250602 20120804 121212 5.31E+04
1226000227 200031 250602 20120804 3000000 5.31E+04
1226000228 200031 250602 20120804 3000000 5.31E+04
1226000229 200031 250602 20120804 300000 5.31E+04
1226000230 200031 250602 20120804 3000000 5.31E+04

Figure 9. Clustering Model for GL Account No Attribute Value Distribution Chart

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Figure 10. Clustering Model for Venodr No Attribute Value Distribution Chart

Figure 11. Attribute Value Chart for G/L Account No in each Cluster

Figure 12. Attribute Value Chart for Vendor No in each Cluster

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Figure 13. Inter Cluster Distance Graph

Figure 14. Intra Cluster Distance Graph

VII. CONCLUSIONS
ERP systems has limited capabilities with regard to, analytics that can answer key business questions, Collective
Intelligence and Actionable insight to quickly respond to market demands with appropriate decisions at each
level. Business analysts rely heavily on query and reporting to provide them with the information they need to
connect the dots between revenues and losses, products and profit ability, financial performance and market
trends and so on. They need a comprehensive query and reporting capability that can tap knowledge from huge
volumes of ERP systems and here CRISP-DM provides a methodology which can be adopted to support these
requirements. With Data Mining Analytics, ERP Systems can facilitate exploration of all types of information
from all angles to assess the current business situation, analyze facts and anticipate tactical and strategic
implications with more advanced, predictive or what-if analysis. The result of a Data Mining project under
CRSIP-DM pedagogy is not just Models but also findings that are important in meeting the objectives of the
business or important in leading to new questions, lines of approach, or side effects. There are diverse subjects
for future work and research, like mapping out more problem regions in ERP systems and descriptive attributes
with CRSIP-DM by exploring more data sets.
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AUTHORS PROFILE 
S.Hanumanth Sastry (Corresponding Author) Senior Manager (ERP) has implemented SAP-BI Solutions for
Steel Industry. He holds M.Tech (Computer Science) from NIELIT, New Delhi and MBA (Operations
Management) from IGNOU, New Delhi. His research interests include ERP systems, Data Mining, Business
Intelligence and Corporate Performance Management. He is pursuing PhD (Computer Science) from Andhra
University, Visakhapatnam (INDIA).
Prof. M.S. Prasad Babu obtained his Ph.D. degree from Andhra University in 1986. He was the Head of the
Department of the Department of Computer Science & Systems Engineering, Andhra University from 2006-09.
Presently he is the Chairman, Board of Studies of Computer Science & Systems Engineering. He received the
ISCA Young Scientist Award at the73rd Indian Science Congress in 1986.

ISSN : 2319-7323 Vol. 2 No.05 Sep 2013 217