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WELCOME TO THE WORLD OF

SAP

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What is an ERP ?

Enterprise Resource Planning

Single software that runs Company-wide– may need complementary software in a few areas which are

too specific or which it does not address

Addresses all major functional areas / processes of the company– Continuously evolving to address newer areas and processes

Ready-to-use package from day one

Leading vendors – SAP, Oracle (Applications), Peoplesoft, BaaN

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What is ERP?

- multi-module application software that helps organization manage its core business

- product planning, inventory maintenance, supplier interaction, order tracking, financial and HR management

- relational database system, client/server distributed architecture

- business process analysis and retraining - rich functionality across all areas

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Evolution of ERP

- 1960s: Inventory Management Control (IMC)- 1970s: Material Requirement Planning (MRP) - 1980s: Manufacturing Resources Planning (MRP-II) - 1990s: Enterprise Resource Planning (ERP)

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ERP Definition

A Future proof software solution that addresses the enterprise needs taking the process view of an organization to meet the organizational goals tightly integrating all functions of an enterprise

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Characteristics of ERP

Real time decision support Fully integrated Open system Distributed yet integrated applications Ease of use - personalization, browser based Flexible / best business processes comprehensive - all functionalities Adaptability to latest technologies Internet / web applications

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Why ERP? - A Typical IT Story

Financial AccountingFinancial Accounting

Procurement/StoresProcurement/Stores

Sales & Sales & DistributionDistribution

HR/PayrollHR/PayrollManufacManufacturingturing

Customer Customer CareCare

1,000 island solution1,000 island solution

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A Typical IT Story

Financial AccountingFinancial Accounting

Procurement/StoresProcurement/Stores

BillingBilling & & Customer Customer CareCare

HR/PayrollHR/Payroll ProjectsProjects

Maintenance Maintenance and Servicesand Services

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Need for ERP

Integration of Business Processes Online information at the corporate office Standardization of systems across Locations Reduce cash to cash cycle times Faster Consolidation at Head office for statutory reporting

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ERP Position in Process chain

SUPPLIER

Purchasing Production

MGMT.

Accounts Costing

Maintenance Quality

Sales

CUSTOMER

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Information and Goods Flow

Capacity resourcesCapacity resources

Capital resourcesCapital resourceslong-termlong-term short-termshort-term

Material resourcesMaterial resources

Logistic processLogistic process

vendorvendor

productionproduction sales sales purchase orderspurchase orders

procurementprocurement

materialsmaterials servicesservices

processesprocesses productsproducts servicesservices

sales orderssales ordersware-ware-househouse

ware-ware-househouse

clientclient

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Centralized Purchasing, Sales, Accounting for Multi-country, Multi-divisional, Multi-product

Better Production Resources planning

Better Services Resources planning

Integration with all functionalities

Optimize the business processes

Have Real-time processing

Get up-to-date information on business

Why ERP?

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Incorporation of best business practices and process orientation

Legacy systems are typically built around a fixed business scenario.

ERP VS Custom Built Applications

05/03/2314

ERP Vendors

Baan J.D. Edwards Lawson Software Oracle Applications PeopleSoft SAP

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SAP - The Company and its Product R/3

Founded in 1972 by ex-IBM employees

HQ in Walldorf

64000 + installations– 10 users to 10000 users

$ 3mn per day R&D expenditure

Indian operations from 1996

200+ Indian companies have implemented it

Market Share and Revenues are bigger than the next three competitors combined!

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SAP R/ 3 ?S-A-P (not SAP!): Systems Applications and

Products in Data Processing

R/3 : 3 tier architectureReady to Run SoftwareMost complex package

– 70,000+ tables, 120,000+ programs (Cryptic German), 400+ authorization objects

Robust Design: wide compatibility for h/w, o/s, d/bDesigned using inputs from best of class companiesExtremely strong integration

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What SAP is not

A temporary solution– It will be the main back bone around which all

future systems will be built

A planning and optimizing tool– SAP’s strengths are in execution– It does not choose the best / most optimized solution

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What SAP is not

A ‘do-it-your way’ software– Large no. of options in configuration tables– Limitations to going beyond these options– Source Code cannot be touched - contractual implications– ABAP Development possible in a few cases - technical restrictions in

trying ABAP in other cases– System Performance issues– Upgrades to newer versions may not support developments

Overall it is the best but not – the best for ‘every’ feature– better than existing systems for ‘every’ feature

A single burst effort – sets the foundation for other Technology initiatives

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SAP R/3 Architecture SAP R/3 works on Three Tier Architecture

User Terminal Application Server Database Server

Data CreationModification

Retrieval

Managing User

RequestsData Storage

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The Presentation Layercollects user input andcreates process requests.

The Application Layeruses the application logic ofSAP programs to collect andprocess the process requests.

The Database Layerstores and retrieves all data.

Communication

3-Tier Client/Server Architecture

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The SAP World

R/3R/3Client / ServerClient / Server

FIFIFinancialFinancial

AccountingAccounting

COCOControllingControlling

AMAMFixed AssetsFixed Assets

Mgmt.Mgmt.

PSPSProjectProjectSystemSystem

WFWFWorkflowWorkflow

ISISIndustryIndustry

SolutionsSolutions

MMMMMaterialsMaterials

Mgmt.Mgmt.

HRHRHumanHuman

ResourcesResources

SDSDSales &Sales &

DistributionDistribution

PPPPProductionProductionPlanningPlanning

QMQMQualityQuality

Manage-Manage-mentment PMPM

Plant Main-Plant Main-tenancetenance

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SAP - characteristics

Highly Integrated solution covering entire business processes Technically capable of utilizing the network infrastructure Open system to ensure freedom to choose Provides multiple ways of configuring business processes Solutions in areas where currently no systems Workflow enabled business processes Enables to exploit the power of Intranet and Internet

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Common SAP objectives

Cost Control & increased profitability Increased productivity of all resources – man, material & money Process Standardization Transparency in operations, resulting in better communication Shift from post-mortem scenario to predictive scenario

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Results of Integration

Focus on Business Processes Elimination of Redundant Data (Common Constant Data) Easier Corporate Consolidation Better Managerial Control Elimination of Interfaces Faster reaction to changing structures

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Success factors for SAP implementation

Top Management Commitment & communication down-the-line

Empowerment Change management Training Compliance to methodology

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How It works

Multiple Users

Multiple Sessions

Multiple Locations&

Live

Modules

SAP are categorized into 3 core functional areas: – Logistics – Financial – Human Resources

Technical– Programming (ABAP)– Basis

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Logistics

Sales and Distribution (SD) Material Management (MM) Production Planning (PP) General Logistics (LO) Quality Management (QM) Plant Maintenance (PM)

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Financial

Financial Accounting (FI) Controlling (CO) Enterprise Controlling (EC) Investment Management (IM) Treasury (TR)

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Human Resource

Personnel Administration (PA) Personnel Development (PD)

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Plant Maintenance (PM)

The PM application module supports planning, processing and completion The PM application module supports planning, processing and completion of the plant maintenance tasks.of the plant maintenance tasks.

– Helps keep track of maintenance cost and resourcesHelps keep track of maintenance cost and resources– Provides information to facilitate decision-making about plant maintenance Provides information to facilitate decision-making about plant maintenance

concernsconcerns Key elements of the PM application include :Key elements of the PM application include :

– Processing of unplanned tasksProcessing of unplanned tasks– Service managementService management– Maintenance notification by date or countersMaintenance notification by date or counters– Maintenance planningMaintenance planning– Maintenance Bill of materialsMaintenance Bill of materials– Plant maintenance Information systemPlant maintenance Information system

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Quality Management (QM)

The QM application module is a quality control and information The QM application module is a quality control and information system supporting quality planning, inspection, and control for system supporting quality planning, inspection, and control for manufacturing, costing, and procurementmanufacturing, costing, and procurement

Key elements of the QM application module are :Key elements of the QM application module are :

– Quality inspectionQuality inspection– Quality planningQuality planning– Quality Management Information System (QMIS)Quality Management Information System (QMIS)

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Production Planning (PP)

The PP application module is used to plan and control the The PP application module is used to plan and control the manufacturing activities of a companymanufacturing activities of a company

PP application module include :PP application module include :– Bill of Material (BOM)Bill of Material (BOM)– RoutingsRoutings– Work CentersWork Centers– Materials Requirement Planning (MRP)Materials Requirement Planning (MRP)– Shop Floor Control (SFC)Shop Floor Control (SFC)– Product costing, activity-based costingProduct costing, activity-based costing– Discrete and Repetitive manufacturing / Process Discrete and Repetitive manufacturing / Process

ManufacturingManufacturing

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Materials Management (MM)

The MM application module supports the procurement and inventory functions occurring in The MM application module supports the procurement and inventory functions occurring in day-to-day business operations.day-to-day business operations.

Key elements of the MM application include :Key elements of the MM application include : Materials procurement (purchasing)Materials procurement (purchasing) Inventory managementInventory management Reorder point processingReorder point processing Invoice verificationInvoice verification Material valuationMaterial valuation Vendor evaluationVendor evaluation External Services managementExternal Services management Purchasing Information System (PurchIS) and Inventory Controlling Information Purchasing Information System (PurchIS) and Inventory Controlling Information

systemsystem

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Financial Accounting (FI)

The Financial accounting module is designed for automated management and The Financial accounting module is designed for automated management and external reporting of general ledger, accounts receivable, accounts payable, and external reporting of general ledger, accounts receivable, accounts payable, and other sub-ledger accounts with a user-defined Chart of Accountsother sub-ledger accounts with a user-defined Chart of Accounts

FI application module include :FI application module include :– General ledgerGeneral ledger– Accounts payableAccounts payable– Accounts receivableAccounts receivable– Special Purpose Ledger (FI-SL)Special Purpose Ledger (FI-SL)– Legal consolidationLegal consolidation– Accounting Information SystemAccounting Information System

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Controlling (CO)

The CO application module represents the company’s flow of cost and revenueThe CO application module represents the company’s flow of cost and revenue CO is a management instrument for organizational decisionsCO is a management instrument for organizational decisions CO application module include :CO application module include :

– Cost center accountingCost center accounting– Product cost analysisProduct cost analysis– Profit center accountingProfit center accounting– Activity based costingActivity based costing– Enterprise controllingEnterprise controlling

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Sales & Distribution (SD)

The SD application module helps to optimize all the tasks and activities The SD application module helps to optimize all the tasks and activities carried out in sales, delivery and billingcarried out in sales, delivery and billing

SD application module include :SD application module include :

–ContractsContracts

–Sales order processingSales order processing

–Delivery processingDelivery processing

–BillingBilling

–Sales Information systemSales Information system

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Information Analysis

Standard Reports Flexible Analysis Standard Analysis

– Logistics Information System ( LIS )– Sales Information System ( SIS )– Project Information System ( PIS )

ABAP/4 Query Report Writer Report Painter ABAP/4 Development Workbench for programming requirements

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SAP IMPLEMENTATION - PHASES Project Planning Business Process Study & Analysis Installation Training Business Requirement mapping Configuration Modifications / Interfaces Data Conversion Documentation Testing Go-Live Post production support

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Implementation Methodology

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The SAP business process uses the following organizational elements:

– Client– Company Code– Group Company– Controlling Area– Purchase Organization– Plants– Sales Organization– Distribution Channel– Division– Sales Area

Organizational Elements

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Client - Characteristics

A Highest Hierarchical Level in SAP(e.g. a corporation)

Used to Differentiate between a Development, Quality Assurance, and Production System within R/3

Common Set of Rules

Common Tables

Common Master Files

Common Data Bases

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Standardized data across the client

A vendor number and name is common across the client

A customer is common across the client

A general ledger number and description is common across the client

A material number and description is common across the client

Client - Characteristics

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Company Code

A company code represents an independent balancing/legal accounting entity, for example, a company within a corporate group.

Balance sheets and profit & loss statements, required by law, can be created at the company code level.

BALANCING / (LEGAL)BALANCING / (LEGAL)ENTITYENTITY

==Company Code ****

Assets Liabilities Revenues

- Expenses

Profit/Loss

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Controlling AreaThe controlling area identifies a self-contained, organizational element for which the management of costs and profits can be performed.

Controlling Area****

*********Cost Centers

Company ****

Assets Liabilities Revenues

- Expenses

Profit/Loss

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Purchase Organization

•Responsible for procurement for one or more plants

•Responsible for negotiating pricing and delivery terms with vendors

•Purchasing organization is assigned to A company where inventory is legally tracked or costs are legally incurred.

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Plant

•Usually a manufacturing facility, warehouse, or a location that stocks , manages, and valuates inventory

•May be a physical site with multiple manufacturing/production lines

•May be multiple manufacturing/production lines at one physical site

•Can be a physical location(cost centers may or may not be associated to a plant i.e. Administrative vs. Manufacturing cost centers)

•Links to production (PP), materials management (MM), and sales and distribution (SD)

•A plant is assigned to a company

•Purchasing organization are assigned to plants.

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Organization Structure

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Logon to SAP System

SAPlogon.lnk

•Click on the SAP icon on the desk top

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Using SAP GUI

Title Bar

Tool Bar

Menu Bar

Screen Body

Input Field

s

Application Bar

Status Bar

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Getting into SAP System

• Enter the Client number

• Enter your user name

• Enter Your password

• And Press Enter Button

• Initial Screen will pop up

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Client :

User ID :

Password :

Language : EN

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Getting Around The Screen

Navigation Area

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Creating Your Own Favorites

Select Your Favourite Transaction

Add it to your Favourite List

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Your OwnFavouritesare Here

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