SAP Overview

ATOZ Soltech, Coimbatore.

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.  Judge the use of ABAP programming language.

ERP Overview

Enterprise Resource Planning

Enterprise Resource Planning ... synchronization of Company functions...

Purchase

Manufacturing

Finance

Sales

Enterprise Resource Planning … and extended to the complete value chain...

Tier I Component Manufacturer

Vehicle OEM

Tier II Component Supplier

Enterprise Resource Planning ... delivering administrative and decision support with...

Decision support and analysis

Processes monitoring & feedback

Administrative registration

What is an ERP solution...? …Integrated across the primary and support processes Distribution

Manufacturing

Materials

Marketing

Planning and Execution

Engineering

Finance

Sales Human Resources

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

Why clients buy ERP?  Corporate Initiatives  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 !!!

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.

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.

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

Vendors

Inbound Logistics

Manufacturing

Transportation Distribution

Logistics and Distribution

Delivery

Customer

Consumer

Sales & Customer Service

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

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

SAP R/3 Overview

 Systems Applications and Products in Data Processing

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

SAP R/1 , R/2  The R/1 system    

Developed for ICI Chemical Released 1972 Focused on Sales & Distribution and Materials Management Discontinued after release of R/2

 The R/2 system R/2 Basis 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.

SAP R/3 : 3 Tier Architecture The Presentation Layer Those SAP R/3 software components that specialize in interacting with end-users form the Presentation Layer.

The Application Layer Those SAP R/3 software components that specialize in processing business applications form the Application Layer.

The Database Layer Those SAP R/3 software components that specialize in the management , storage and retrieval of data form the Database Layer

SAP R/3 : 3 Tier Architecture

Presentation Layer components

Application Layer components

Database Layer components

reside in:

reside in:

Presentation servers:

Application servers:

Database servers:

Systems capable of providing a graphical interface.

Specialized systems multiple CPUs and vast amounts of RAM.

Specialized systems with fast and large hard drives.

reside in:

SAP R/3 : 3 Tier Architecture Presentation Layer components are installed across many PCs

The Application Layer components are installed across one or more highend servers. The Database Layer components are installed on high-end database server.

SAP R/3 Overview

FI

SD

Financial Accounting

Sales & Distribution

PP

MM

CO

Materials Mgmt.

Controlling TR

R/3

Product Planning

Treasury

Client/Server ABAP/4

QM

PS

Quality Mgmt.

Project System PM

WF

Plant Maintenance HR Human Resources

Workflow IS Industry Solutions

SAP R/3 Overview

SD

FI

MM

CO

PP

AM

R/3 Client / Server ABAP/4

QM PM

PS WF

HR

IS

Integration

Planned Requirement

PP

SD Customer Order

MRP

MM Requirement on component level Purchase Order

Planned Order

Shipping

Production Order

Invoicing

Goods Receipt Invoice Verification

FI Accounts Payable

Account Receivable

Production completed

CO Order Settlement

FI

Which modules are involved?

Integration All business processes throughout the supply chain are executed in one system sharing all information

SAP R/3 S U P P L

I E R

Workflow

C U S

Procurement

Production

Distribution

MM

PP

SD

T O

M Finance and Accounting FI

E CO

R

Accelerated SAP - SAP Implementation Methodology

 Mapping of business processes  Proven approach  Reduced costs  Ensured quality and know-how transfer  Efficient use of resources  Reusable for subsequent implementation phases

mySAP Technology

SAP NetWeaver

Existing Systems

SAP R/3 : Components Master Data Application

Transaction Data

ABAP Programs

Organization Structure Configuration

Key Data Elements Functionality Configurations

What is Customization ?  Customization  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

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.

Why do we need ABAP Development ?

SAP R/3 scope

SAP Solution

SAP R/3 scope

Specific company requirements

SAP Solution

SAP R/3 scope

Specific company requirements

New Functionality Development

Non SAP applications

Summary  Materials Requirement Planning (MRP-I) began as a technique for developing enterprisewide 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.

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 ?

Thank You