SAP overview

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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/Payroll
ManufacManufac
turingturing
CustomerCustomer
CareCare
1,000 island solution1,000 island solution

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A Typical IT Story
Financial AccountingFinancial Accounting
Procurement/StoresProcurement/Stores
BillingBilling &&
CustomerCustomer
CareCare
HR/PayrollHR/Payroll ProjectsProjects
MaintenanceMaintenance
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
S
U
P
P
L
I
E
R
Purchasing Production
MGMT.
Accounts Costing
Maintenance Quality
Sales
C
U
S
T
O
M
E
R

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Information and Goods Flow
Capacity resourcesCapacity resources
Capital resourcesCapital resources
long-termlong-term short-termshort-term
Material resourcesMaterial resources
Logistic processLogistic process
vendorvendor
productionproduction salessales
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

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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 architecture
Ready to Run Software
Most complex package
– 70,000+ tables, 120,000+ programs (Cryptic
German), 400+ authorization objects
Robust Design: wide compatibility for h/w, o/s, d/b
Designed using inputs from best of class companies
Extremely 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 Creation
Modification
Retrieval
Managing
User
Requests
Data Storage

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The Presentation Layer
collects user input and
creates process requests.
The Application Layer
uses the application logic of
SAP programs to collect and
process the process requests.
The Database Layer
stores and retrieves all data.
Communication
3-Tier Client/Server Architecture

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The SAP World
R/3R/3
Client / ServerClient / Server
FIFI
FinancialFinancial
AccountingAccounting
COCO
ControllingControlling
AMAM
Fixed AssetsFixed Assets
Mgmt.Mgmt.
PSPS
ProjectProject
SystemSystem
WFWF
WorkflowWorkflow
ISIS
IndustryIndustry
SolutionsSolutions
MMMM
MaterialsMaterials
Mgmt.Mgmt.
HRHR
HumanHuman
ResourcesResources
SDSD
Sales &Sales &
DistributionDistribution
PPPP
ProductionProduction
PlanningPlanning
QMQM
QualityQuality
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

26. Modules
 SAP are categorized into 3 core functional
areas:
– Logistics
– Financial
– Human Resources
 Technical
– Programming (ABAP)
– Basis
26

27. Logistics
 Sales and Distribution (SD)
 Material Management (MM)
 Production Planning (PP)
 General Logistics (LO)
 Quality Management (QM)
 Plant Maintenance (PM)
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28. Financial
 Financial Accounting (FI)
 Controlling (CO)
 Enterprise Controlling (EC)
 Investment Management (IM)
 Treasury (TR)
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29. Human Resource
 Personnel Administration (PA)
 Personnel Development (PD)
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Plant Maintenance (PM)
 The PM application module supports planning, processing and completionThe 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 maintenanceProvides 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 informationThe QM application module is a quality control and information
system supporting quality planning, inspection, and control forsystem 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 theThe 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 / ProcessDiscrete and Repetitive manufacturing / Process
ManufacturingManufacturing

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Materials Management (MM)
 The MM application module supports the procurement and inventoryThe MM application module supports the procurement and inventory
functions occurring in day-to-day business operations.functions occurring in 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 InventoryPurchasing Information System (PurchIS) and Inventory
Controlling Information systemControlling Information system

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Financial Accounting (FI)
 The Financial accounting module is designed for automated management andThe Financial accounting module is designed for automated management and
external reporting of general ledger, accounts receivable, accounts payable, andexternal 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 activitiesThe 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 Area
The 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
Fields
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
1
2

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Your Own
Favourites
are Here

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