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  2. 2. What is ERP? ERP is a high-end sophisticated software solution that reduces the pressure and workload off the managers and provides accurate, timely information for taking appropriate business decisions. Managers with knowledge of ERP will be able to achieve their targets and goals by proper implementation of ERP system in their organization. In fact managers are expected to translate the business rules and requirements for mapping them into ERP software. Implementation of ERP solutions is one of the largest drivers of growth in the consultancy business.
  3. 3. ERP SOFTWARES SAP BANN JD Edwards Karen Microsoft Great Plains (GP) Sage Engineer Link People Soft Oracle Client Serve Three ezijobz MRP(II) Lease Soft
  4. 4. ERP Helps in       Decision support system (DSS). Smooth flow of routine process. Automatic record keeping. Common inter-department resource pool. Better planning at all levels. Data warehousing & various self-service interface for customers, suppliers & employees.
  5. 5. Overall Business Benefits  Information. Maximizes information throughput. Provides timely information. Integrates information throughout supply chain.  Minimizes response time.  Pushes decision making down to lowest levels.  Reduces costs.  Cuts inventory.  Improves operating performance.
  6. 6. Department Benefits o Sales Increased efficiency. o Lower quotes, responsiveness. reduced lead time, improved o Manufacturing. Concurrent engineering. o Faster design and production. o Data Service. Accurate customer service history and warranty information. o Accounts Payable. Suppliers paid accurately.
  7. 7. o Supply Chain Management Supply Chain Planning, Claim Processing, Commission calculations, Supplier scheduling, Inspection of goods, order entry, Inventory. o Project Manufacturing Costing, billing, time & expense, activity management. o Financials Cash Management, Fixed assets, General ledger, Accounts Payables, Accounts Receivables. o Data Warehouse Self-service interface among Suppliers, Customers, Employees.
  8. 8. Enterprise Architecture - Benefits Eliminates the duplication, discontinuity and redundancy in data. Increases the return on investment made on IT implementations. Delivers quality information designed for the Enterprise as a whole. Faster and cheaper. Delivers quality information to produce a quality enterprise. Reducing required manpower. Eliminating legacy systems. Can cause fragmentation. Foundation of e-Business. Back-office functions. Standardization . Helps obtain and maintain competitive advantage. Improved interactions with customers and suppliers.
  9. 9. Disadvantages  Limited training budget.  Lack of Skills and Experience.  Cost estimate is $ 30,000 to 500,000,000.  Limited technical staff.  Systems difficult to use.  Too rigid system .  Compatibly problem with legacy systems
  10. 10. Evolution of ERP 1960’s: Inventory Control Systems 1970’s: MRP: Material Requirement Planning 1980’s: MRPII: MRP & Distribution 1990’s: MRPII  ERP with introduction of other business functions  CRM’s Today: Web Enabled ERP – Connecting ERP Externally
  11. 11. What is SAP ??? What is the full form of SAP? Systems Applications and Products in Data Processing. SAP is both the name of the Company as well as their ERP Product SAP system comprises of a number of fully integrated modules, which covers virtually every aspect of the business Three systems developed : R/1, R/2, R/3
  12. 12. History of SAP Founded in 1972 by Wellenreuther, Hopp, Hector, Plattner and Tschira Renamed in 1977 Before 1977 : Systems Analysis and Program Development (German : Systemanalyse und Programmentwicklung) SAP is both the name of the Company as well as their ERP Product SAP system comprises of a number of fully integrated modules, which covers virtually every aspect of the business Three systems developed : R/1, R/2, R/3
  13. 13. Introduction to SAP SAP Supports all Kinds of Industries and all Functions of the Industry SAP is an Integrated System This means that all SAP modules are designed to share information and automatically create transactions based on various business process. SAP R/2 is the SAP Mainframe Based Software Package SAP R/3 is the SAP Client/ Server – 3 Tier Architecture Based Software Package
  14. 14.  SAP is the leader of ERP software vendor.  Enterprise Resource Planning is a back office application for Enterprise . 21 Industry Vertical Solutions. 80% Fortune 500 Companies Use SAP. 66% Market share in India. Over 18,500 Customers 76000 installations in 120+ Countries, +2500 installations in India. Over 12 million users.
  15. 15. Evolution of SAP products mySAP ERP R/3 R/3 Enterprise Solutions mySAP CRM mySAP SCM mySAP HR mySAP PLM ……….. mySAP Business Suite SAP NetWeaver Web AS •Easing Upgrade Plans & Providing Transition Options •Bringing benefits of SAP Netweaver into installed base •New Customers have more entry options & receive world –class ERP
  16. 16. Language SAP supports multi-national character sets and languages on the same system, at the same time. Default languages are English and German. User Every SAP user has a user name. Users of SAP system are client-specific, which means that having a user identification on one client will only allow access to that particular client.
  17. 17. Password Rules Letters Numbers Easy to remember 3-8 Characters long No 3 Characters can be the same Do not start with a ? or an ! Do not use previous 5 passwords
  18. 18. Why - SAP R/3 has been successful •Multi-Lingual •Secure Information •Integrated SAP •Multi-Currency •Best Business Practices •Enterprise-Wide
  19. 19. Why - SAP R/3 has been successful Real time processing with an integrated suite of client/server applications.   Comprehensive  Open  Business Process orientation  Fully Integrated business process  Modular Structure  International – yet consistent  Providing maximum flexibility & Scalability  Strong backbone for future technologies. OSS 24 hr support available.
  20. 20. SAP Industry Solution Aerospace/Defense Automotive Banking Chemicals Consumer Products Engineering/Construction Financial Svc Provider Healthcare High Tech Higher Education/Research Insurance  Media  Mill Products  Mining  Oil & Gas  Pharmaceuticals  Public Sector  Retail  Service Providers  Telecommunications  Utilities
  21. 21. Organizational Structure in SAP Production Planning Financial Accounting Company Code Plant Controlling Client Human Resources Controlling Area Personnel Area Sales and Distribution Sales Area Materials Management Purchasing Organization
  22. 22. SAP AG Founded in Germany (1972). World’s fourth largest software provider. World’s largest provider of Integrated Business Solutions software. Company stock trades on the Frankfurt and New York exchanges.
  23. 23. R/2 System Components RA - Assets Accounting RF - Financial Accounting RK - Cost Accounting RK-P - Projects RM-INST - Plant Maintenance RM-MAT - Materials Management RM-PPS - Production Planning and Control RM-QSS - Quality Assurance RP - Human Resources
  24. 24. Two Tier Client/Server System Database and Application Server User PCs
  25. 25. SAP R/3 Basis System Integrated solutions SD FI Sales & Distribution Financial Accounting MM Open systems CO Materials Mgmt. Controlling PP AA R/3 Production Planning Client / serverQM architecture Quality Mgmt. Asset Accounting Client / Server PS Designed for all types of business Project System PM WF Plant Maintenance HR Enterprise data model Comprehensive functionality Human Resources Workflow IS Industry Solutions Multinational Euro Y2K
  26. 26. Three-tier Client/Server Architecture Application Server Application Server USER PCs USER PCs Database Server Application Server Application Server
  27. 27. Client/Server Environment Client Software/hardware combination that can make a request for services from a central repository of resources. Server Software/hardware combination that can provide services to a group of clients in a controlled environment.
  28. 28. W h a t is a C lie n t? “ A c lie n t is a n a u to n o m o u s u n it in t h e R /3 S y s t e m w it h r e g a r d to c o m m e r c ia l la w , o r g a n iz a tio n , a n d d a t a .” us er te r u s e re c o rd s as r aut er M h o r iz Us a tio n C lie n t C lie n t to Cus Ap m iz in g t io n p lic a c lie n t-d e p ende c u s to nt m iz in g dat a tra n s a c tio n dat m ast a er da ta R SAP AG
  29. 29. SAP R/3 Architecture 3 Tier Client / Server Architecture The SAP R/3 architecture is based on a 3-tier client/server principle Presentation Server Application Server Database Server Dedicated Servers are linked by Communication Networks
  30. 30. Overview of Presentation & Database Servers The Presentation Server GUI only At workstation Very light Sends requests to application server Obtains screens from application server and displays The Database Server Interface between application server and RDBMS Also holds the vendor specific DB driver
  31. 31. SAP – system landscape Server Client
  32. 32. SAP technology environment Platform Independent Platform Dependent (Basis) SAP Application Modules R/3 Data Repository User Interface Communi cations Database Operating System Hardware Platform and Environment Enterprise Network
  33. 33. R/3 Technology Environment Hardware UNIX Systems Bull IBM Digital SNI HP SUN Operating systems AIX Reliant Digital UNIX UNIX (SINIX) HP-UX SOLARIS Databases ADABAS D DB2 for AIX INFORMIX-OnLine ORACLE Dialog SAPGUI Bull/Zenith Compaq Data General ... Digital NCR HP (Intel) Sequent IBM (Intel) SNI Windows NT ADABAS D MS SQL Server INFORMIX-OnLine ORACLE Windows 3.1, Windows 95, Windows NT, OSF/Motif, OS/2 Presentation Manager (PM), Macintosh, Java IBM AS/400 IBM S/390 OS/400 OS/390 DB2/400 DB2/390 Windows NT, Windows 95, PM, Java Languages ABAP/4, C, C++, HTML, Java, ActiveX-Controls
  34. 34. R/3 System: Hardware/Software Views
  35. 35. Typical Client Server Architectures Presentation Central System Two - tier Distributed System Two - tier Client/Server Three - tier Client/Server Multi-layer Cooperative Client/Server Application Database
  36. 36. R/3 System Configurations Central System 2-Tier Configuration SAP 3-Tier Configuration Web-enabled Presentation Presentation Application Internet Transaction Service/Web Service Database, Application, Presentation Database and Application Database In a central R/3 System configuration, one host is responsible for all processing tasks.
  37. 37. R/3 System Configurations Central Systems 2-Tier Configuration SAP 3-Tier Configuration Web-enabled Presentation Presentation Application Internet Transaction Service/Web Service Database, Application, Presentation Database and Application Database Two-tier R/3 System configurations are usually implemented using special presentation servers that are responsible solely for formatting the graphical interface. Many R/3 System users use PCs with Microsoft Windows -installed, for example, as presentation servers.
  38. 38. R/3 System Configurations Central Systems 2-Tier Configuration SAP 3-Tier Configuration Web-enabled Presentation Presentation Application Internet Transaction Service/Web Service Database, Application, Presentation Database and Application Database An alternative two-tier configuration is to install powerful desktop systems and to use these for presentation and applications (two-tier client/server). This type of configuration is particularly useful for expensive applications (such as simulations) or for software developers.
  39. 39. R/3 System Configurations Central Systems 2-Tier Configuration SAP 3-Tier Configuration Web-enabled Presentation Presentation Application Internet Transaction Service/Web Service Database, Application, Presentation Database and Application Database In a three-tier configuration, you use your own host for the three tiers. Using data from the database server, several different application servers can operate at the same time. To ensure that the load on individual servers is as even as possible and to achieve optimal performance, you can use special application servers for individual application areas such as sales planning, distribution or financial accounting.
  40. 40. R/3 System Configurations Central Systems 2-Tier Configuration SAP 3-Tier Configuration Web-enabled Presentation Presentation Application Internet Transaction Service/Web Service Database, Application, Presentation Database and Application Database To web-enable the SAP Applications, a Web Server and an ITS (Internet Transaction Server) are needed. The web-service and the services for the ITS can run on one server or on two dedicated servers. The presentation in this configuration is provided by an Internet Browser. The new SAP Web platform is NetWeaver.
  41. 41. Basis System: Three-Tier Computer HierarchyCentral Database (Storage of all data) Access to Database: (Read / Write data) Database Input / Output of data to users Application Presentation Processing of data using application logic Presentation of the processed data to the user
  42. 42. Database Server Application Servers Presentation Servers
  43. 43. SAP R/3 Application Modules Financial accounting (FI) Controlling (CO) Asset management (AM) Materials management (MM) Sales and Distribution (SD) Production Planning (PP) Quality management (QM) Plant maintenance (PM) & Customer Service (CS) Project system (PS) Human resources (HR) Workflow (WF)
  44. 44. Module Functionalities MM Material Procurement Inventory Management Batch Management Goods inspection Invoice Verification PP BOM/Work Center/Routing MRP Capacity Evaluations Production Orders QM in production FI General Ledger Accounts Payable Accounts receivable Cash management SD Inquiry processing Sales Order Processing Delivery Processing Billing CO Cost Center Accounting Product Costing Order Contribution Analysis
  45. 45. Module FI – Financial Accounting • External reporting of • General ledger • Accounts receivable/payable • Sub-ledger accounts Key elements • General ledger • Accounts payable • Accounts receivable • Asset Management • Special Purpose Ledger (FI-SL) • Legal consolidation • Accounting Information System
  46. 46. Financial Accounting Foreign exchange management Finance information system Management of secureties and loans Bank Cash management and forecast Accounts payable Bank accounts Payables Accounts receivable Receivables General Ledger Invoice verification Extended General Ledger Consolidation Credit management
  47. 47. Module CO – Controlling • Represents the flow of cost and revenue • Instrument for organizational decisions • Key elements of the CO application module include : • Cost center accounting • Product cost Planning • Product Costing • Profitability analysis • Profit center accounting • Activity based costing • Enterprise controlling
  48. 48. Module SD – Sales and Distributio • Optimize tasks/activities in • Sales • Delivery • Billing • Key elements of the SD application module include : • Pre-sales support • Inquiry processing • Quotation processing • Sales order processing • Delivery processing • Warehouse management • Billing • Credit Management • Sales Information system
  49. 49. Sales activity Sales Inquiry Contract Quotation USD Delivery free of charge Subsequent delivery free of charge Sales order Returns Scheduling agreement Shipping Delivery Billing Debit memo Invoice Credit memo FINANCIAL ACCOUNTING MATERIALS MANAGEMENT SALES INFORMATION SYSTEM Sales and Distribution Sales Processing Support
  50. 50. Module MM – Materials Management • Supports • Procurement • Inventory • Key elements • Materials procurement (purchasing) • Inventory management • Invoice verification • Material valuation • Vendor evaluation • External Services management • Purchasing Information System (Purchasing) • Inventory Controlling Information system
  51. 51. Materials Management  Vendor/one-time customer  Purchasing info record  Service specifications  Workflow  Optical archive  Purchase requisition       Material/service Price comparisons Price comparison list  Purchasing    PP Third-party order Requirements Purchase orders Outline agreements Scheduling agreements Service/ Spare Parts Service / Inspection QM spare parts lot PM FI INVENTORY MANAGEMENT   Classification   Conditions SD  RFQ/Quotation  Texts Mail Communication  Documents MRP Direct requisition Release procedures Vendor evaluation  Material Special stock Batch PURCHASING Purchasing information system BASIC DATA    Goods receipt/issue Transfer posting Quantities and values Physical inventory Storage bins AM CO INVOICE VERIFICATION   Check and post Price update PS G/L accounts Cash management and forecast Fixed assets Cost center / Budget Project
  52. 52. Module PP – Production Planning • To plan and control the manufacturing activities • Key elements • Bill of Material (BOM) • Routings • Work Centers • Sales and Operations planning (SOP) • Master Production Scheduling (MPS) – Capacity Planning • Materials Requirement Planning (MRP) • Shop Floor Control (SFC) • Production orders • Product costing, activity-based costing • Work in process • Production planning for process industries (PP-PI) • Repetitive Manufacturing
  53. 53. Production Planning PP SD Sales Shipping Billing Sales and Operations Planning Demand management / MPS Material requirements planning Purchasing Warehouse Invoice verification Detailed Schedeling and Planning Capacity planning Shop floor control Costing Information system Customers SD MM SD Vendors FI Financial accounting CO Cost accounting HR Human resources PS SD Project Networks PM SD Maintenance Repairs Plant maintenance QM SD Inbound Raw Material Finished Goods
  54. 54. Module QM – Quality Management • Supports • Quality planning • Inspection • Control for manufacturing • Costing • Procurement • Key elements • Quality planning • Quality during procurement, production, distribution • Quality Management Information - Quality inspection • Information System (QMIS)
  55. 55. Module PS – Project Systems • PS – Project Systems • Support planning, control, & monitoring of long term highly complex projects with defined goals • Key elements • Project WBS – Plan • Budget & Monitor • Network Management • Activity monitoring, Material Capacities Scheduling Planning, Milestones, • Project Management Information System
  56. 56. Module HR – Human Resource •HR – Human Resource •Key elements •Recruitment •Payroll & Time management •Travel Expense accounting & Benefits •Workforce planning & Training administration •Organization management
  57. 57. Module IS – Industry Solutions • Combines SAP R/3 application modules to additional industryspecific functionality • Result of the research by industry Centers expertise (ICOE)
  58. 58. Procurement Process Outline Agreement Purchase Requisition Vendor Scheduling Agreement Demand Accounts Payable Invoice Verification Goods Receipt & Inventory Mgmt. Purchase Order
  59. 59. Production Process Schedule/Release Goods Issue Order Settlement Shop Floor Goods Receipt
  60. 60. Sales Process — Trading Goods Customer Order Accounts Receivable Picking Packing Billing Goods Issue
  61. 61. Sales Process Finished Goods Availability Check Goods Issue Customer Order Final Payment Partial Payment Billing
  62. 62. Sales Process Finished Goods Availability Check - Insufficient Independent Demand Customer Order Dependent Demand MRP Run Production Scheduling Purchasing
  63. 63. Process Flow Goods Issue to Shop Floor Accounts Receivable Production Billing Goods Receipt Goods Issue
  64. 64. mySAP  The future of ERP software must include CRM, SCM, SEM, BW, KM, Web-enable …  mySAP is the future or extended of SAP ERP software TEI ERP MRP II MRP
  65. 65. ERP Extension Web Enable Customer Relationship Management (CRM) Supply Chain Management (SCM) Strategic Enterprise Management (SEM) Business Information Warehouse (BIW) Knowledge Management (KM)
  66. 66. mySAP Components BW CRM SAP R/3 SCM SEM KW • • • • • mySAP Business Information Warehouse mySAP Customer Relationship Management mySAP Knowledge Management mySAP Supply Chain Management mySAP Strategic Enterprise Management
  67. 67. mySAP Business Suite mySAP PLM mySAP SRM mySAP ERP ( mySAP SCM SAP NetWeaver mySAP CRM
  68. 68. SAP NetWeaver The core capabilities of SAP NetWeaver are the integration of people, information, and process. In people integration, it simply means that it enables you to bring people together and help them work more efficiently. Information integration means you can bring together information from a variety of locations and have it make sense in the context of what your folks do everyday. Process integration means coordinating the flow of work across departments, divisions, and between companies
  69. 69. SAP Enterprise Portal: helps create software that brings together all the data and software tools that a person needs to do her job in one consistent user interface. SAP Mobile Infrastructure: universal translator for mobile devices. SAP Business Intelligence: provides tool for information integration, so what your people see is consistent and accurate. SAP Master Data Management: is a system for harmonizing information that is distributed across a wide variety of applications . SAP Exchange Infrastructure: Integrates processes and help applications talk to one another
  70. 70. Logging On – SAP Gui  To log on to an R/3 system with the SAP Gui, you need the proprietary SAP Gui (Graphical User Interface) software loaded on your system and an internet connection Internet Connection Account on SAP R/3 System in Missouri PC with SAP Gui
  71. 71. SAP Gui Configuration  First, you need to tell the SAP Gui which system you want to log into: If you don’t have any systems defined, click on New Item
  72. 72. System Definition (provided by UCC) Text description (free) Address of system (e.g. SAP Router usually not required System ID Logical name of system System Number Frequently 00, but not always R/3 System Selected
  73. 73. Configured SAP Gui Select System: double-click or Logon button 76
  74. 74. Logging On Enter Client Enter User (R/3 Account) Enter Password (R/3 Account) Don’t worry about language— English will default in
  75. 75. Logging On On the first time logging in to a new account, you will have to change the password—try To remember your new Password WITHOUT WRITING IT DOWN!
  76. 76. SAP vs. MS Office Database and Application Server Nothing is saved on your PC. Only things saved on our server in Missouri are saved, and they are saved for good.
  77. 77. Benefits of SAP R/3 Business Application Modules Seamless integration across functions and locations Efficient co-ordination of demand, supply and production Addresses all businesses environments – MTO, MTS,ATO etc. Built in best business practices Covers Multi-Country, Multi-Company, Multi-Plant and MultiLanguage implementation Country versions to address local requirements – Legal, statutory etc. Better control and monitoring of business e.g. authorisations, reports Centralised control over de-centralised multi-location operations Handles Mutiple - valuation schemes, accounting system, operating system, RDBMS
  78. 78. Quiz 1. What does SAP stand for? 2. What does ERP stand for? 3. What is the difference between SAP R/2 and SAP R/3? 4. What business application module is the FI module? 5. Is the FI module an R/2 or R/3 business application module?
  79. 79. Quiz - Answers 1. 2. 3. 4. 5. System, Application, and Products in Data Processing Enterprise Resource Planning SAP R/2 is the SAP Mainframe Based Software Package and SAP R/3 is the SAP Client/ Server – 3 Tier Architecture Based Software Package Financial Accounting R/3 – the R/2 Financial Accounting model is RF
  80. 80. Links
  81. 81.