History and Evolution of ERP & SAP


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History and Evolution of ERP & SAP

  1. 1. iKX - BGS History and Evolution of ERP & SAP By Arun Dixit July 16th, 2011
  2. 2. Why ERP? <ul><li>The three letter acronym ‘ERP’ means ‘Enterprise Resource Planning’ </li></ul><ul><ul><ul><li>Integration (Functional and Geographical Islands) </li></ul></ul></ul><ul><ul><ul><li>Best business practices (Whole suite of BPR may not be required) </li></ul></ul></ul><ul><ul><ul><li>Standardization (Do it right first time and every time) </li></ul></ul></ul><ul><li>Enables the integration of business processes and </li></ul><ul><li>systems to achieve enterprise-wide operational </li></ul><ul><li>efficiency. </li></ul>
  3. 3. Why ERP? <ul><li>Improves the performance of a business by consolidating the operations of an entire multi-site enterprise into one database, one application, and one user interface. </li></ul>
  4. 4. Why not ERP? <ul><li>Complexity </li></ul><ul><li>(Not Easy to implement and maintain) </li></ul><ul><li>Cost </li></ul><ul><li>(Cost of Implementation and support is high) </li></ul><ul><li>Inflexible </li></ul><ul><li>(Good ERP is tightly integrated with functions) </li></ul>
  5. 5. Important TLAs <ul><ul><ul><li>ERP </li></ul></ul></ul><ul><ul><ul><li>IMS/IMCS/ICS </li></ul></ul></ul><ul><ul><ul><li>MRP </li></ul></ul></ul><ul><ul><ul><li>MRP-I or mrp </li></ul></ul></ul><ul><ul><ul><li>MRP-II or MRP </li></ul></ul></ul><ul><ul><ul><li>SAP </li></ul></ul></ul><ul><ul><ul><li>R/3 and ABAP </li></ul></ul></ul><ul><ul><ul><li>ECC </li></ul></ul></ul><ul><ul><ul><li>SCM </li></ul></ul></ul><ul><ul><ul><li>CRM </li></ul></ul></ul><ul><ul><ul><li>SRM </li></ul></ul></ul><ul><ul><ul><li>APO </li></ul></ul></ul><ul><ul><ul><li>BPR </li></ul></ul></ul>
  6. 6. Important TLAs <ul><ul><ul><li>ERP – Enterprise Resource Planning </li></ul></ul></ul><ul><ul><ul><li>IMS/IMCS/ICS – Inventory Management System/ Inventory Management & Control Systems/ Inventory Control System </li></ul></ul></ul><ul><ul><ul><li>MRP – Material Requirements Planning </li></ul></ul></ul><ul><ul><ul><li>MRP-I or mrp - Material Requirements Planning </li></ul></ul></ul><ul><ul><ul><li>MRP-II or MRP – Manufacturing Resource Planning </li></ul></ul></ul><ul><ul><ul><li>SAP – Systems Applications and Products in Data Processing </li></ul></ul></ul><ul><ul><ul><li>R/3 and ABAP – Real Time/ 3 Trier, Advance Business Application Programming </li></ul></ul></ul>
  7. 7. Important TLAs <ul><ul><ul><li>ECC – Enterprise Central Component </li></ul></ul></ul><ul><ul><ul><li>SCM – Supply Chain Management </li></ul></ul></ul><ul><ul><ul><li>CRM – Customer Relationship Management </li></ul></ul></ul><ul><ul><ul><li>SRM – Supplier Relationship Management </li></ul></ul></ul><ul><ul><ul><li>APO – Advance Planner and Optimizer </li></ul></ul></ul><ul><ul><ul><li>BPR – Business Process Reengineering </li></ul></ul></ul>
  8. 8. Evolution of ERP <ul><li>ERP (Enterprise Resource Planning) is the evolution of Manufacturing Requirements Planning (MRP) II. From business perspective, ERP has expanded from coordination of manufacturing processes to the integration of enterprise-wide backend processes. From technological aspect, ERP has evolved from legacy implementation to more flexible tiered client-server architecture. </li></ul>
  9. 9. Evolution of ERP <ul><li>1960 – IMC (Inventory Management & Control) </li></ul><ul><li>1970 – MRP (Material Requirements Planning) - mrp </li></ul><ul><li>1980 – MRP II (Manufacturing Resource Planning) MRP = mrp + crp </li></ul><ul><li>1990 – ERP (Enterprise Resource Planning) </li></ul><ul><li>2000 – Extended ERP (Integration and collaboration outside the window) </li></ul>
  10. 10. Famous ERP Vendors <ul><li>- SAP </li></ul><ul><li>- PeopleSoft </li></ul><ul><li>- Oracle </li></ul><ul><li>- JD Edwards </li></ul><ul><li>- Baan </li></ul><ul><li>- MFG/PRO </li></ul><ul><li>- Navision (Microsoft Dynamics NAV) </li></ul>
  11. 11. History of SAP <ul><li>Q: What is SAP? </li></ul><ul><li>A: SAP R/3 is an ERP (Enterprise Resource Planning) software Package. </li></ul><ul><li>In the acronym SAP: </li></ul><ul><ul><ul><ul><li>S Systems </li></ul></ul></ul></ul><ul><ul><ul><ul><li>A Applications </li></ul></ul></ul></ul><ul><ul><ul><ul><li>P Products in Data Processing </li></ul></ul></ul></ul>
  12. 12. History of SAP <ul><li>SAP was founded in 1972 as Systemanalyse und Programmentwicklung in Mannheim, Baden-Württemberg by following five former IBM engineers: </li></ul><ul><li>1. Dietmar Hopp </li></ul><ul><li>2. Hans-Werner Hector </li></ul><ul><li>3. Hasso Plattner </li></ul><ul><li>4. Klaus Tschira </li></ul><ul><li>5. Claus Wellenreuther </li></ul>
  13. 13. History of SAP <ul><li>The acronym was later changed to stand for Systeme, Anwendungen und Produkte in der Datenverarbeitung (&quot;Systems, Applications and Products in Data Processing&quot;). </li></ul>
  14. 14. History of SAP <ul><li>Timeline: </li></ul><ul><li>1972: SAP AG founded in Germany. </li></ul><ul><li>1979: SAP R/2 introduced for mainframe computers. </li></ul><ul><li>1992: SAP R/3 released as client-server application. </li></ul><ul><li>1996: SAP R/3 became partially Internet enabled. </li></ul><ul><li>1997: Developed and launched the new dimension product line including CRM, SCM, and Data Warehousing solutions. </li></ul><ul><li>1999: SAP announced mySAP.com, the next generation of its Enterprise Application System, based on the Internet architecture. </li></ul><ul><li>2000-2005: Introduced mySAP business Suite, NetWeaver, and XApplications. </li></ul>
  15. 15. SAP Benefits <ul><li>The benefits of SAP are: </li></ul><ul><li> - Integration </li></ul><ul><li> - Flexibility </li></ul><ul><li> - Real-Time data processing and reporting </li></ul><ul><li> - Designed for all types of business </li></ul><ul><li> - Worldwide Usage </li></ul><ul><li> - Multiple languages support </li></ul><ul><li> - Multiple currency support </li></ul>
  16. 16. Application Areas/ Modules/ Sub-Modules in SAP <ul><li>Three Application Areas: </li></ul><ul><li> - Financials </li></ul><ul><li> - Logistics </li></ul><ul><li> - Human Resources </li></ul><ul><li>Application areas have modules: FI and CO in Financials, SD and PP in Logistics, OM and PM in Human Resources </li></ul><ul><li>Modules have sub-module: MM-PU and MM-IM in Materials Management, PM-PD in Personnel Management, FI-AP and FI-AR in Finance. </li></ul>
  17. 17. Client/Server Architecture <ul><li>3 Tier Client/Server Architecture </li></ul>
  18. 18. SAP Internet Initiatives <ul><ul><li>mySAP.com </li></ul></ul><ul><ul><ul><li>Marketplace Portal </li></ul></ul></ul><ul><ul><ul><li>Portal </li></ul></ul></ul><ul><ul><li>SAP Employee-Self-Service </li></ul></ul><ul><ul><ul><li>Internal Corporate Users </li></ul></ul></ul><ul><ul><li>SAP Online Store (sell side) </li></ul></ul><ul><ul><ul><li>B2B: Business-to-Business </li></ul></ul></ul><ul><ul><ul><li>B2C: Business-to-Consumers </li></ul></ul></ul><ul><ul><li>SAP B2B Procurement (buy side) </li></ul></ul><ul><ul><ul><li>Business Purchasing Processes </li></ul></ul></ul>
  19. 19. SAP Modules
  20. 20. Definition of Modules <ul><li>Sales and Distribution (SD) supports the tasks and activities carried out in sales, delivery, and billing. Key elements are: </li></ul><ul><ul><li>Pre-sales support </li></ul></ul><ul><ul><li>Inquiry processing </li></ul></ul><ul><ul><li>Quotation processing </li></ul></ul><ul><ul><li>Sales order processing </li></ul></ul><ul><ul><li>Delivery processing </li></ul></ul><ul><ul><li>Billing and sales information system </li></ul></ul><ul><li>Materials Management (MM) supports the procurement and inventory functions, such as purchasing, inventory management, reorder point processing. </li></ul>
  21. 21. Definition of Modules <ul><li>Production Planning (PP) is used to plan and control the manufacturing activities of a company. This module includes; bills of material, routings, work centers, sales and operations planning, master production scheduling, material requirements planning, shop floor control, production orders, product costing, etc. </li></ul>
  22. 22. Definition of Modules <ul><li>Quality Management (QM) is a quality control and information system supporting inspection, and control for manufacturing and procurement. </li></ul><ul><li>Plant Maintenance (PM) is a complex manufacturing process where equipment can be rebuilt and service maintenance provided. Plant Maintenance is tightly integrated with PP. </li></ul><ul><li>Human Resources (HR) is a complete integrated system for supporting the planning and control of personnel activities. </li></ul>
  23. 23. Definition of Modules <ul><li>Financial Accounting (FI) designed for automated management and external reporting of general ledger, accounts receivable, accounts payable and other sub-ledger accounts </li></ul><ul><li>Controlling (CO) represents the company's flow of cost and revenue and used for internal or managerial reporting. </li></ul>
  24. 24. Definition of Modules <ul><li>Asset Management (AM) designed to manage and supervise individual aspects of fixed assets including purchase and sale of assets, depreciation and investment management. </li></ul><ul><li>Project System (PS) is designed to support the planning, control and monitoring of long-term, highly complex projects with defined goals. </li></ul><ul><li>Workflow (WF) links the integrated SAP application modules with cross-application technologies. </li></ul>
  25. 25. SAP Industry Solutions <ul><li>Industry Solutions (IS) combines the SAP application modules and additional industry-specific functionality, e. g: Banking, Oil & Gas, Pharmaceuticals, Aerospace & Defense, Automotive, Mill, Retail, Healthcare, Utilities, Chemical, Media, Insurance, Wholesale Distribution, etc. </li></ul>
  26. 26. Organizational Structure
  27. 27. Organizational Structure  SAP AG 1999 Chart of accounts 1 Chart of accounts 1 Company code 1 Company code 1 Chart of accounts 2 Chart of accounts 2 Company code 2 Company code 2 Business area A Business area A Business area B Business area B Business area C Business area C Business area D Business area D Division Division Sales area Sales area Plant Plant Combination Combination Client Company code 3 Company code 3 Organizational Structure - Financial Accounting
  28. 28. SAP Data
  29. 29. Questions