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1. WELCOME TO THE WORLD OF SAP 1

2. 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

3. 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

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

5. 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

6. 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

7. Manufacturing HR/Payroll Sales & Distribution Customer Care Procurement/Stores 1,000 island solution Why ERP? - A Typical IT Story Financial Accounting

8. Projects HR/Payroll Billing& Customer Care Maintenance and Services Procurement/Stores A Typical IT Story Financial Accounting

9. 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

10. ERP Position in Process chain MGMT. Accounts Costing S U P P L IE R C U S T O M E R Purchasing Production Sales Maintenance Quality intranet internet

11. ware- house ware- house Information and Goods Flow long-term short-term Capital resources Logistic process procurement production sales processes purchase orders sales orders • materials • services • products • services vendor client Material resources Capacity resources

12. Why ERP? • 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

13. ERP VS Custom Built Applications • Incorporation of best business practices and process orientation • Legacy systems are typically built around a fixed business scenario.

14. ERP Vendors • Baan • J.D. Edwards • Lawson Software • Oracle Applications • PeopleSoft • SAP

15. 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!

16. 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

17. 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

18. 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

19. SAP R/3 Architecture • SAP R/3 works on Three Tier Architecture Application Server User Terminal Database Server Data Storage Data Creation Modification Retrieval Managing User Requests

20. Communication 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. 3-Tier Client/Server Architecture

21. SD Sales & Distribution FI Financial Accounting MM Materials Mgmt. CO Controlling PP Production Planning AM Fixed Assets Mgmt. R/3 QM Quality Manage-ment PS Project System Client / Server PM Plant Main-tenance WF Workflow HR Human Resources IS Industry Solutions The SAP World

22. 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

23. 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

24. 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

25. Success factors for SAP implementation • Top Management Commitment & communication down-the-line • Empowerment • Change management • Training • Compliance to methodology

26. How It works Multiple Users Multiple Sessions Multiple Locations & Live

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

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

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

30. Human Resource • Personnel Administration (PA) • Personnel Development (PD)

31. Plant Maintenance (PM) • The PM application module supports planning, processing and completion of the plant maintenance tasks. • Helps keep track of maintenance cost and resources • Provides information to facilitate decision-making about plant maintenance concerns • Key elements of the PM application include : • Processing of unplanned tasks • Service management • Maintenance notification by date or counters • Maintenance planning • Maintenance Bill of materials • Plant maintenance Information system

32. Quality Management (QM) • The QM application module is a quality control and information system supporting quality planning, inspection, and control for manufacturing, costing, and procurement • Key elements of the QM application module are : • Quality inspection • Quality planning • Quality Management Information System (QMIS)

33. Production Planning (PP) • The PP application module is used to plan and control the manufacturing activities of a company • PP application module include : • Bill of Material (BOM) • Routings • Work Centers • Materials Requirement Planning (MRP) • Shop Floor Control (SFC) • Product costing, activity-based costing • Discrete and Repetitive manufacturing / Process Manufacturing

34. Materials Management (MM) • The MM application module supports the procurement and inventory functions occurring in day-to-day business operations. • Key elements of the MM application include : • Materials procurement (purchasing) • Inventory management • Reorder point processing • Invoice verification • Material valuation • Vendor evaluation • External Services management • Purchasing Information System (PurchIS) and Inventory Controlling Information system

35. Financial Accounting (FI) • The Financial accounting module is designed for automated management and external reporting of general ledger, accounts receivable, accounts payable, and other sub-ledger accounts with a user-defined Chart of Accounts • FI application module include : • General ledger • Accounts payable • Accounts receivable • Special Purpose Ledger (FI-SL) • Legal consolidation • Accounting Information System

36. Controlling (CO) • The CO application module represents the company’s flow of cost and revenue • CO is a management instrument for organizational decisions • CO application module include : • Cost center accounting • Product cost analysis • Profit center accounting • Activity based costing • Enterprise controlling

37. Sales & Distribution (SD) • The SD application module helps to optimize all the tasks and activities carried out in sales, delivery and billing • SD application module include : • Contracts • Sales order processing • Delivery processing • Billing • Sales Information system

38. 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

39. 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

40. Implementation Methodology

41. Organizational Elements TheSAP business process uses the following organizational elements: • Client • Company Code • Group Company • Controlling Area • Purchase Organization • Plants • Sales Organization • Distribution Channel • Division • Sales Area

42. 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

43. Client - Characteristics • 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

44. 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. Company Code **** BALANCING / (LEGAL) ENTITY Liabilities Assets = Revenues - Expenses Profit/Loss

45. Company **** Liabilities Assets Revenues - Expenses Profit/Loss 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

46. 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.

47. 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.

48. Organization Structure

49. Logon to SAP System • Click on the SAP icon on the desk top

50. Using SAP GUI Menu Bar Tool Bar Title Bar Application Bar Input Fields Screen Body Status Bar