ERP / SAP Overview | 1.

01

ERP / SAP OVERVIEW

March-2005

Objectives
2

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 / SAP Overview | 1.01

March-2005

ERP Overview
3

Enterprise Resource Planning

ERP / SAP Overview | 1.01

March-2005

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

Manufacturing

Finance

Sales
ERP / SAP Overview | 1.01

March-2005

Enterprise Resource
Planning
and
extended to the complete value chain...
Tier I Component
Manufacturer

Vehicle OEM
Tier II Component
Supplier
ERP / SAP Overview | 1.01

March-2005

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

Processes monitoring &

feedback

Administrative
registration

ERP / SAP Overview | 1.01

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What is an ERP solution...?

7

Integrated across the primary and support processes

Distribution
Manufacturing

Materials

Marketing

Planning
and
Execution

Engineering

Finance

Sales
Human Resources
ERP / SAP Overview | 1.01

March-2005

The ERP application

8

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

ERP / SAP Overview | 1.01

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Why clients buy ERP?

9

Corporate Initiatives

Strategic initiatives

Operational initiative

To initiate a major organizational change within the company

Technology

A foundation for performance and cost improvement

via integration

Organizational initiative

A requisite capability in a competitive global business

IT is making the transition from a supporting operational

entity to becoming a strategic competitive tool.

Because others are buying it !!!

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10

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.

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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.

ERP / SAP Overview | 1.01

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12

Business process benefits

clients expect from an ERP
Global process/ Product management
project
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

ERP / SAP Overview | 1.01

March-2005

Major ERP vendors

13

SAP R/3
Oracle ( Peoplesoft and JD Edwards were independent ERP venders earlier,
but are subsets of Oracle now )
Peoplesoft
JD Edwards

Baan

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14

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 Overview | 1.01

ERP

March-2005

SAP R/3 Overview

15

Systems Applications and Products in Data Processing

ERP / SAP Overview | 1.01

March-2005

SAP AG At a Glance
16

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

ERP / SAP Overview | 1.01

March-2005

SAP R/1 , R/2

17

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.

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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
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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.

ERP / SAP Overview | 1.01

reside in:

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20

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.
ERP / SAP Overview | 1.01

March-2005

SAP R/3 Overview

21
FI

SD

Financial
Accounting

Sales &
Distribution
MM
PP

Materials
Mgmt.

Controlling

R/3

Product
Planning

TR
Treasury

Client/Server
ABAP/4

QM
Quality
Mgmt.

CO

PS

PM

WF

Plant Maintenance HR

Project
System

Workflow
IS

Human
Resources

Industry
Solutions

ERP / SAP Overview | 1.01

March-2005

Integration

Planned
Requirement

22

PP

SD
Customer
Order

MRP

MM
Requirement on
component
level
Purchase
Order

Planned
Order

Shipping

Production
Order

Invoicing

Goods
Receipt

FI

Invoice
Verification
Accounts
Payable

Account
Receivable

Production
completed

CO
Order
Settlement

ERP / SAP Overview | 1.01

FI

Which modules are

involved?
March-2005

Integration
23

All business processes throughout the supply chain are executed in

one system sharing all information

S
U
P
P
L
I
E
R

SAP R/3

Workflow

C
U
S

Procurement

Production

Distribution

MM

PP

SD

Finance and Accounting

FI

T
O
M
E
R

CO

ERP / SAP Overview | 1.01

March-2005

mySAP Technology
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ERP / SAP Overview | 1.01

March-2005

SAP NetWeaver
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Existing Systems
ERP / SAP Overview | 1.01

March-2005

SAP R/3 : Components

26

Application

Master Data
Transaction Data

ABAP
Programs

Organization Structure
Configuration

Key Data Elements

Functionality Configurations
ERP / SAP Overview | 1.01

March-2005

What is
27

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

ERP / SAP Overview | 1.01

March-2005

ABAP
28

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.

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29

Why do we need ABAP

Development ?
SAP R/3 scope

ERP / SAP Overview | 1.01

March-2005

SAP Solution
30

SAP R/3 scope

Specific company
requirements

ERP / SAP Overview | 1.01

March-2005

SAP Solution
31

SAP R/3 scope

Specific company
requirements

New Functionality
Development

Non SAP
applications

ERP / SAP Overview | 1.01

March-2005

Summary
32

Materials Requirement Planning (MRP-I) began as a technique for developing

enterprise-wide 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.
ERP / SAP Overview | 1.01

March-2005

Questions
33

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 ?
ERP / SAP Overview | 1.01

March-2005