ERP / SAP Overview ERP / SAP Overview | Dec-2008

Objectives The participants will be able to: Recognize the evolution of ERP solutions. Appraise the concept, benefit and use of ERP solution. Define the SAP R/3 Overview. Identify the different SAP R/3 Functional modules/areas. Distinguish the components of SAP R/3. Evolution of SAP Architecture to ERP6 Judge the use of ABAP programming language. ERP / SAP Overview | Dec-2008

Enterprise Resource Planning ERP Overview Enterprise Resource Planning The evolution of ERP solutions Materials Requirement Planning (MRP-I) began as a technique for developing enterprise-wide business solutions by providing automated tools for forecasting demands and planning according to the forecast ERP / SAP Overview | Dec-2008

Enterprise Resource Planning ... synchronization of Company functions... Purchase Manufacturing Finance An integrated suite of business applications, which.. Closely links, monitors, and controls primary enterprise resources like manpower, machine, material, methods, market and money Enables corporate firms to readily change their processes to adapt to the ever changing business scenario Provides expertise in industry specific business processes Sales ERP / SAP Overview | Dec-2008

Enterprise Resource Planning … and extended to the complete value chain... Tier I Component Manufacturer Vehicle OEM Tier II Component Supplier ERP / SAP Overview | Dec-2008

Enterprise Resource Planning ... delivering administrative and decision support with... Decision support and analysis Processes monitoring & feedback Administrative registration So, ERP is …. An integrated suite of Applications to meet corporate needs Entails Parameterization Designing & Customization Implementation Training Expertise in industry specific business processes ERP / SAP Overview | Dec-2008

Planning and Execution What is an ERP solution...? …Integrated across the primary and support processes Distribution Manufacturing Marketing Planning and Execution Materials Finance Engineering ERP - What It Is ERP is not just a software…but a complete business solution integrated across the entire value chain which creates an information infrastructure for efficient planning and effective execution. Sales Human Resources ERP / SAP Overview | Dec-2008

The ERP application An integrated suite of business applications, which.. Closely links, monitors, and controls primary enterprise resources like manpower, machine, material, methods, market and money. Enables corporates to readily change their processes to adapt to the ever changing business scenario. Provides expertise in industry specific business processes. Entails Parameterization / Configuration Designing & Customization Testing and Implementation Training ERP - What It’s Not …… ERP facilitates the decision making but does not decide. ERP provides comprehensive information to optimize but does not optimize dynamically. It automates and integrates transactions but does not target the cycle time. ERP / SAP Overview | Dec-2008

Why clients buy ERP? Corporate Initiatives Technology Strategic initiatives A requisite capability in a competitive global business Operational initiative A foundation for performance and cost improvement via integration Organizational initiative To initiate a major organizational change within the company Technology IT is making the transition from a supporting operational entity to becoming a strategic competitive tool. Because others are buying it !!! ERP will impact Communication and information domain Leadership and authority Company policies Jobs and rewards Company structure and culture Skills and knowledge of employees Information is available online generally to a much broader audience ERP can alter how work gets done and thus how people work together ERP alters the level of decision-making authority ERP can alter organizational structure ERP / SAP Overview | Dec-2008

Recent business trends favoring ERP growth Business Process Reengineering ( BPR ) Most large companies are attempting to cut in-house development costs, improve customer service, and speed products to market by reorganizing their existing business processes. Software Pricing Licensing and pricing of mainframe based packaged applications are tied to the size of mainframe system on which the applications run, but now customers are now demanding user-based licensing options and major corporate applications like SAP provide this instead of the conventional platform-based pricing technique. ERP / SAP Overview | Dec-2008

Recent business trends favoring ERP growth Globalization As businesses are becoming more global in scope, people are demanding packaged corporate applications that are available in a variety of languages with support for multiple currencies. Integration As more and more companies are going for BPR, there is increase in demand for integrated solution e.g.. different applications sharing a common database and thus enabling data definitions and business rules to be applied across an entire organization with the facility of doing modifications at one location only. ERP / SAP Overview | Dec-2008

Business process benefits clients expect from an ERP project Global process/ Product management Integrated Supply Chain Management Leverage purchasing and vendor management Order cycle time/ customer service improvement Inventory reductions Reduced information systems costs on an ongoing basis Improved business management through worldwide integration and information Logistics and Distribution Sales & Customer Service Vendors Inbound Manufacturing Transportation Distribution Delivery Customer Consumer Logistics ERP / SAP Overview | Dec-2008

Major ERP vendors SAP R/3 Oracle ( Peoplesoft and JD Edwards were independent ERP venders earlier, but are subsets of Oracle now ) Peoplesoft JD Edwards Baan Recipe for a successful ERP application Comprehensive functionality Integration among modules and functions Best Business Practices Global support ERP / SAP Overview | Dec-2008

What results can be expected from an “ERP culture”? Reduced working capital requirements Improved customer service Improved direct labor productivity Reduced purchase costs Reduced obsolescence Reduced overtime Having the figures to make decisions Having accountability throughout the organization Improved quality of life ERP ERP / SAP Overview | Dec-2008

Systems Applications and Products in Data Processing SAP R/3 Overview Systems Applications and Products in Data Processing ERP / SAP Overview | Dec-2008

SAP AG – At a Glance Founded in Germany in 1972 Market Leader in Industrial Enterprise Application (IEA) About 56% market share in the ERP market. Employs more than 38,400 people in more than 50 countries. As the world's third-largest independent software provider, SAP delivers business solutions to more than 36,200 customers in more than 120 countries around the world. Strength lies in its high degree of integration, mainly for large, global corporate enterprises Significant presence in Global Fortune 500 companies In 1972, five former IBM employees -- Dietmar Hopp, Hans-Werner Hector, Hasso Plattner, Klaus Tschira, and Claus Wellenreuther -- launch a company called Systems, Applications, and Products in Data Processing in Mannheim, Germany. Their vision: to develop standard application software for real-time business processing. SAP is now the recognized leader in providing collaborative business solutions for all types of industries and for every major market. Serving more than 36,200 customers worldwide, SAP is the world's largest business software company and the world's third-largest independent software provider overall. Today, SAP employs more than 38,400 people in more than 50 countries. ERP / SAP Overview | Dec-2008

SAP R/1 , R/2 The R/1 system The R/2 system Developed for ICI Chemical Released 1972 Focused on Sales & Distribution and Materials Management Discontinued after release of R/2 R/2 Basis System The R/2 system Reorganized as leading mainframe software for large multinational corporations No sales effort planned – reactive only 4,300 copies worldwide in 1993 Mainframe-based to replace user legacy software; co-existence and migration strategy underway for R/2 and R/3 Keeping in mind its multinational customers, SAP designs SAP R/2 to handle different languages and currencies. Note: "R" stands for real-time data processing. ERP / SAP Overview | Dec-2008

SAP R/3 : 3 Tier Architecture Those SAP R/3 software components that specialize in the management , storage and retrieval of data form the Database Layer The Database Layer specialize in processing business applications form the Application Layer. The Application Layer specialize in interacting with end-users form the Presentation Layer. The Presentation Layer In 1990s SAP R/3 was released. With SAP R/3, SAP ushers in a new generation of enterprise software -- from mainframe computing (client-server architecture) to the three-tier architecture of database, application, and user interface. ERP / SAP Overview | Dec-2008

SAP R/3 : 3 Tier Architecture Presentation Layer components Application Layer components Database Layer components reside in: reside in: reside in: Presentation servers: Systems capable of providing a graphical interface. Application servers: Specialized systems multiple CPUs and vast amounts of RAM. Database servers: Specialized systems with fast and large hard drives. Heterogeneous Platforms ERP / SAP Overview | Dec-2008

SAP R/3 : 3 Tier Architecture Presentation Layer components are installed across many PCs The Application Layer components are installed across one or more high- end servers. The Database Layer components are installed on high-end database server. ERP / SAP Overview | Dec-2008

SAP R/3 Overview R/3 Client/Server ABAP/4 SD FI Sales & Distribution Financial Accounting MM CO Materials Mgmt. Controlling PP R/3 TR Product Planning Treasury Client/Server ABAP/4 QM PS Quality Mgmt. Project System PM WF Plant Mainte- nance Workflow HR IS Human Resources Industry Solutions SAP was earlier divided into different Functional modules like Materials Management (MM), Sales & Distribution (SD), FI (Financial Accounting), CO (Controlling), HR (Human Resources), PP (Product Planning), PM (Plant Maintenance), PS (Project Systems) etc. But, with the introduction of mySAP Business Suite, SAP is now organized into a service-based architecture, which has the following: mySAP Customer Relationship Management mySAP ERP mySAP Product Lifecycle Management mySAP Supply Chain Management mySAP Supplier Relationship Management ERP / SAP Overview | Dec-2008

Integration PP SD MM FI CO FI Planned Requirement Customer MRP Order Requirement on component level Planned Shipping Order Purchase Production Order Invoicing Order Goods Account Receipt Receivable Production completed Invoice FI Verification CO FI Order Settlement Accounts Which modules are involved? Payable ERP / SAP Overview | Dec-2008

Finance and Accounting Integration S U P P L I E R C U S T O M E R S A P R / 3 Procurement Production Distribution Finance and Accounting MM PP SD FI CO All business processes throughout the supply chain are executed in one system sharing all information Workflow All business processes throughout the supply chain are INTEGRATED & executed on a common system sharing all information Scalability Modular Model innumerable business processes Industry best practices Can be customized IS- Plug-in ERP / SAP Overview | Dec-2008

mySAP Technology With the Internet, the user becomes the focus of software applications. SAP develops mySAP Workplace and paves the way for the idea of an enterprise portal and role-specific access to information. As mentioned earlier, with the introduction of mySAP Business Suite, SAP is now organized into a service-based architecture, which has the following: mySAP Customer Relationship Management (CRM) mySAP ERP mySAP Product Lifecycle Management (PLM) mySAP Supply Chain Management (SCM) mySAP Supplier Relationship Management (SRM) mySAP ERP addresses the core business software requirements of the most demanding midsize and large organizations -- in all industries and sectors. mySAP ERP includes four individual solutions that support key areas of Enterprise Resource Planning: mySAP ERP Human Capital Management (HCM) -- Maximize workforce potential. mySAP ERP Financials -- Turn finance into a strategic business partner. mySAP ERP Operations -- Free up resources; budget for innovation. mySAP ERP Corporate Services -- Streamline business processes and costs. ERP / SAP Overview | Dec-2008

SAP NetWeaver Existing Systems SAP has since broadened the integration vision of mySAP Technology into a blueprint they call the Enterprise Services Architecture (ESA). SAP NetWeaver is a comprehensive integration and application platform”, mySAP Technology is now renamed SAP NetWeaver™; NetWeaver delivers the ESA blueprint. SAP NetWeaver is a vision, or paradigm, of total integration of : People Information Business Processes Applications SAP has a team of over 2000 developers in a single organization, working on NetWeaver. Existing Systems ERP / SAP Overview | Dec-2008

Evolution of SAP Architecture SAP ERP 6.0 SAP NetWeaver™ 7.0 Composite Application Framework APPLICATION PLATFORM (7.00) Life Cycle Mgmt Composite Applications PEOPLE INTEGRATION Multi Channel Access Portal Collaboration INFORMATION INTEGRATION Master Data Mgmt Bus. Intelligence Knowledge Mgmt PROCESS INTEGRATION Business Process Mgmt ABAP DB and OS Abstraction Strategic Enterprise Management Self-Services Internet Sales Switch Framework Supplier Relationship Management Enterprise Extensions Industry Extensions SAP ECC Core (6.0) EhP 1 EhP 2 ITS Integration Broker J2EE and more … Quick Facts about SAP ERP6.0: Launched in June 2006 Built on SAP NetWeaver 7.0 Approximately 7000 systems (12/2007) Platform upon which SAP will deliver future software innovations Software innovation delivered via “SAP enhancement packages” ERP / SAP Overview | Dec-2008

Enhancement Packages Enhancement Packages SAP ERP 6.0 SAP NetWeaver What Are Enhancement Packages? Optionally installed and activated software innovations for SAP ERP 6.0 Software innovations include; UI simplifications, functional enhancements, industry specific capabilities and enterprise services Cumulative in nature; current enhancement packages contain all contents of earlier packages Enhancement packages are not support packages ERP / SAP Overview | Dec-2008

Improved Software Lifecycle Installation of new functionality separated from activation via Switch Framework Content of enhancement packages From a functional view each SAP enhancement package contains several “Business Functions”. From a technical view each SAP enhancement package contains new versions of existing software components, grouped by a “technical usage”. Selective Installation Install the parts that are required for the selected Business Function. If installed: No UI or process change until a business function is activated via Switch Framework Less Adjustment effort due to selective update of software components No implications on the underlying NetWeaver platform, in addition enhancement packages contain most current Support Package Stack Selective Activation Activate the business functions you need. If activated: End-user training is limited to the activated business function(s) Testing is simplified with templates, provided for every business function Enhancement Packages Support Packages ERP / SAP Overview | Dec-2008

SAP R/3 : Components Master Data Application Transaction Data ABAP Programs Organization Structure Configuration Key Data Elements Functionality Configurations ERP / SAP Overview | Dec-2008

What is Customization ? Customization Coding Configuration The adaptation of application software to customer-specific needs is accomplished in two ways : Coding Programming customer-specific code that replaces or complements components of the application Configuration Rendering the application appropriate to a specific customer by specifying data on which the application operates Because configuration is captured in data, as opposed to code, it survives software upgrades and other changes. ERP / SAP Overview | Dec-2008

ABAP Programming SAP R/3 applications are written in the ABAP (Advanced Business Application Programming) programming language, and run within the application layer of the R/3 System. ABAP programs communicate with the database management system of the central relational database (RDBMS), and with the graphical user interface (SAP GUI) at presentation level. R/3 applications are written in the ABAP programming language, and run within the application layer of the R/3 System. ABAP programs communicate with the database management system of the central relational database (RDBMS), and with the graphical user interface (SAPGUI) at presentation level. ERP / SAP Overview | Dec-2008

Why do we need ABAP Development ? SAP R/3 scope ABAP programs are objects of the R/3 Repository. Like all other Repository objects, you maintain them using an ABAP Workbench Tool. To open ABAP programs directly from the tool ABAP Editor, select the menu path Tools -> ABAP Workbench ->Development -> User Interface -> ABAP Editor from the SAP menu of SAP Easy Access (or start Transaction SE38). If you want to change a program using this method, you must already know its name and environment. This procedure is only suited for maintaining or creating relatively simple or short programs, which have few or no additional components. It is better to access ABAP programs through Tools -> ABAP Workbench -> Overview -> Object Navigator from the SAP menu of SAP Easy Access (or start Transaction SE80). ERP / SAP Overview | Dec-2008

SAP Solution Specific company requirements SAP R/3 scope ERP / SAP Overview | Dec-2008

SAP Solution Specific company requirements SAP R/3 scope New Functionality Development Non SAP applications ERP / SAP Overview | Dec-2008

Summary Materials Requirement Planning (MRP-I) began as a technique for developing enterprise-wide business solutions by providing automated tools for forecasting demands and planning according to the forecast. ERP is an integrated suite of Applications to meet corporate needs. Some major ERP vendors are : SAP R/3, Oracle, Baan SAP AG was founded in Germany in 1972 and it is a Market Leader in Industrial Enterprise Application (IEA). SAP NetWeaver is a vision, or paradigm, of total integration of : People Information Business Processes Applications SAP has a 3 tier architecture comprising of the Presentation layer, Application layer and the Database layer. The SAP solution is divided in different areas or Functional Modules like SD, MM, PP, QM, PM, FI, CO etc. which are reorganized under services in mySAP Business Suite. R/3 applications are written in the ABAP programming language, and run within the application layer of the R/3 System. ERP / SAP Overview | Dec-2008

Questions What is MRP ? What is ERP ? When was SAP AG founded ? What are the 3 layers of the SAP R/3 ? What is SAP Netweaver ? What are the different functional modules of SAP ? What programming language is used for SAP applications ? Why do we need ABAP developments ? ERP / SAP Overview | Dec-2008