Introduction to SAP

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Contents• About ERP

• About SAP

• SAP Architecture• SAP Modules & SAP Product Portfolio• IS Solutions• Types of SAP Projects

• ASAP Methodology

• Navigation in SAP• Organization Structure• Master Data

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About ERP

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Business without ERPCustomersCustomers

Customer Calls to

place order for a Car

1Sales

office/Inventory contacts PP

3

Sales office contacts Inventory

2

Production Production PlanningPlanning

InventoryInventory

3

4

PP contacts Purchasing for

raw material

PurchasingPurchasing

SalesSales

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Business without ERP (Contd…)

Let’s add some more Business Processes

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Business without ERP (Contd…)

PurchasingPurchasing

CustomersCustomers

VendorsVendors

Shop floorShop floor

Production Production PlanningPlanning

InventoryInventory

FinanceFinance

Where is my car

Whom to contact for

status?

What is this confusion

What is Cost and

profit

What to manufactur

e??

SalesSales

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Business without ERP (Contd…)

SalesSales

Dear Sir,Your Order…

I did not order for a

TRUCK!!!!

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Overall picture

SalesSales

ProductionPlanning

General LedgerGeneral Ledger

PurchasingPurchasing

CustomersCustomers

VendorsVendors

InventoryInventory Shop Floor execution

A/RA/R A/PA/P

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What is ERP?“ERP comprises of a commercial software package that promises theseamless integration of all the information flowing through the company such as financial, accounting, human resources, supply chain and customer information.” [T.J. Davenport, Harvard Business Review, July Aug., 1998]

PP

GL

Plants

Shop Floor

Sales

HRFA

AP

AR

Purchasing

Partner Systems

Payroll

TreasuryMarketing

Mfg.

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Evolution of ERP

Material Requirements Planning (MRP) systems were developed in the 1970s which involved mainly planning the product or parts requirements according to the master production schedule.

Following this route new software systems called Manufacturing Resources Planning (MRP II) were introduced in the 1980s with an emphasis on optimizing manufacturing processes by synchronizing the materials with production requirements. MRP II included areas such as shop floor and distribution management, project management, finance, human resource and engineering.

ERP systems first appeared in the late 1980s and the beginning of the 1990s with the power of enterprise-wide inter-functional coordination and integration.

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How ERP helps• All data is available in central database• Eliminates data redundancy• Data is updated and available real-time • One point entry of data• Best business practices inbuilt• Modular system

– Can implement only required functions– Others can be easily integrated later

• Transparency and Control to extent required• Managers can utilize their time in analysis and

spend less time in coordination effort

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About SAP

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SAP Overview• Founded in 1972• Headquartered in Waldorf, Germany• In German, means “Systems, Applications &

Products in Data Processing”• More than 35,000 customers worldwide• Employs more than 36,000 people across 50

countries• World’s largest business software company• World’s third largest independent software provider• Revenue: Euro 8,513 million (FY: 2005)• SAP system comprises of a number of fully

integrated modules, which cover virtually every aspect of the business

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For Over 30 Years, SAP Has Been Driving ERP – and They Continue to Do So…

70s

SAP Invents Real-Time ERPSAP defines and establishes a new approach to Integrated Standard Business Software.

ERP = The Business Software IndustryThe approach that SAP established becomes industry standard. New competitors enter the market.

ERP Rapid AdoptionCompanies start to adopt ERP on a massive scale

Dot.com Hype: ERP = Old E-Business = NewTrends seemed to indicate that ERP was an out-of-fashion model

mySAP ERPE-Business is now seen as an extension of ERP, not a replacement. SAP is leading the new industry standard for collaborative business applications.

80s 90s 00s

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Evolution of SAP

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SAP Clients

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SAP Architecture

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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

• Perform tasks without sacrificing data integration and processes within the system, as a whole

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SAP R/3 System Architecture (Contd...2)

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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

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SAP R/3 Conceptual Areas

Application Area(Initiate and execute

SAP transactions)

(Functional)

Basis Area(The technical

administration of the system)

(Authorizations/Ids/etc)

Development Area(1. A developer’s

workbench2. Create & Test

ABAP/4 programs)

(Technical)

SAP Conceptual Areas

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SAP Systems Landscape

DevelopmentSystem(DC)

Quality System(QC)

ProductionSystem

(IC)

Client 110

100 etc..

Transport Request

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Change and Transport Management

SAP Transport Management is used to organize, perform, and monitor transports between SAP Systems. The Transport Management System provides the following functions:

•Configuring transport routes using a graphical editor•Displaying Import queues for all SAP systems in transport domain•Importing all requests in import queue•Importing all requests in a project•Importing individual requests•TMS Quality assurance•Transport Workflow

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Clients in SAP R/3• The Logon Client

– 3 digit number ( 000 to 999)– Maintains independent sets of data within the

same R/3 system

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Platforms and Databases supported by R/3Operating Systems

Supported Hardware

Supported Front ends

Supported Databases

AIX SINIX IBM SNI SUN Win 3.1/ 95 / NT DB2 for AIXSOLARIS HP-UX Digital HP OSF / Motif Informix –

OnlineDigital Unix Bull OS/2

MacintoshOracle 7.1ADABAS D

Windows NT AT&T CompaqBull / Zenith

HP (Intel) SNIIBM (Intel)

Digital (Intel)Data-General

Win 3.1 / 95 / NT

OSF / MotifOS/2

Macintosh

Oracle 7.1SQL Server 6.0

ADABAS D

OS/400 AS/400 Win 95 OS/2 DB2/400

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Client Server Benefit

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Quiz Time• What are the 3 layers in the SAP R/3 architecture?

– Presentation, Application, Database• What are the systems in a typical SAP system

landscape?– Development, Quality, Production

• What functionality is used to transfer Master Data and Transaction Data across different systems?– ALE (Application Link Enabling)

• In the ALE process, the data exchange is carried out using _____.– IDOCs

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SAP Modules & SAP Product Portfolio

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SAP Modules• Financial Modules

– Financial Accounting (FI), Controlling (CO), Investment Management (IM) Treasury (TR), Enterprise Control (EC)

• Logistics Modules– Materials Management (MM), Sales and Distribution (SD),

Production Planning and Control (PP), Product Data Management (PDM), Quality Management (QM), Plant Maintenance (PM), Service Management (SM), Project System (PS)

• Human Resource Management Modules– Personnel Management, Organizational Management, Payroll

Accounting, Time Management, Personnel Development, Training and Event Management

• Cross Application Modules– Workflow (WF), SAP Office

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SAP Modules

SAP SAP R/3R/3

ABAP/4ABAP/4

FIFIFinancial AccountingFinancial Accounting

WFWFWorkflowWorkflow

PSPSProject SystemProject System

QMQMQuality ManagementQuality Management

PMPMPlant MaintenancePlant Maintenance

WMWMWarehouse ManagementWarehouse Management

PPPPProduction PlanningProduction Planning

MMMMMaterials ManagementMaterials Management

SDSDSales & DistributionSales & Distribution

HRHRHuman ResourcesHuman Resources

AMAMFixed AssetsFixed AssetsManagementManagement

COCOControllingControlling

Basis

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Financial Accounting

ConsolidationConsolidation

Extended General LedgerExtended General Ledger

PayablesPayablesReceivablesReceivables

BankBankaccountsaccounts

General LedgerGeneral Ledger

Cash managementCash managementand forecastand forecast

Foreign exchangeForeign exchangemanagementmanagement

ManagementManagementof securitiesof securitiesand loansand loans

Finance informationFinance informationsystemsystem

BankBank

InvoiceInvoiceverificationverification

AccountsAccountspayablepayable

CreditCreditmanagementmanagement

AccountsAccountsreceivablereceivable

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Sales and Distribution

F I N A N C I A L A C C O U N T I N G

Salesactivity

S A

L E

S I

N F

O R

M A

T I

O N

S Y

S T

E M Sales Support

Sales

Shipping

Billing

Subsequentdelivery free

of charge

Inquiry

Quotation Contract

Delivery free ofcharge

Salesorder Returns Scheduling

agreementUSD

Delivery

InvoiceDebit memo Credit memo

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Materials Management

Service /spare parts

Material Special stockBatch

Vendor/one-timecustomer

Purchasinginfo record

Servicespecifications

WorkflowOptical archiveTexts

MailCommunication

ClassificationDocumentsConditions

BASIC DATA

Purc

hasi

ng in

form

atio

n sy

stem

Vend

or e

valu

atio

n

Purchase requisition

PURCHASING

MRP Direct requisition Release procedures

RFQ/Quotation Material/service Price comparisons Price comparison list

Purchasing Purchase orders Outline agreements Scheduling agreements

Goods receipt/issue Transfer posting Quantities and values Physical inventory Storage bins

Check and post Price update

INVENTORY MANAGEMENT

INVOICE VERIFICATION

SDSD

PPPP

PMPM

QMQM

FIFI

AMAM

COCO

PSPS

Third-partyorder

Requirements

Inspection lot

Fixed assets

Cost center /Budget

Project

G/L accountsCash managementand forecast

Service/ Spare Parts

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Production Planning

FIFI COCO HRHRCostCostaccountingaccounting

FinancialFinancialaccountingaccounting

HumanHumanresourcesresources

ProjectProjectNetworksNetworks

MaintenanceMaintenanceRepairsRepairsPlant Plant maintenancemaintenance

Inbound Raw Inbound Raw MaterialMaterial

Finished GoodsFinished Goods

Sales and Operations Sales and Operations PlanningPlanningDemand management / Demand management / MPSMPSMaterial requirements Material requirements planningplanning

Detailed Scheduling and Detailed Scheduling and PlanningPlanningCapacity planningCapacity planningShop floor controlShop floor controlCostingCostingInformation systemInformation system

PurchasingPurchasingWarehouseWarehouseInvoice Invoice verificationverification

SalesSalesShippingShippingBillingBilling

CustomersCustomers

VendorsVendors

SDSDPPPP

SDSDSDSD

SDSDMMMM SDSDQMQM

SDSDPMPM

SDSDPSPS

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mySAP Business Suite

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CRM (Customer Relationship Management)Solution Map

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CRM – Holistic View

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CRM Component Landscape

OLTPR/3 System

BW

APOMobile Clients

Internet

mySAP.com Portal Users

As one big logical box

CRM System

TelephoneCallers

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SRM (Supplier Relationship Management)Solution Map

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mySAP SRM – e Procurement mySAP SCE

Supplier Collaboration Engine

• Enterprise Buyer Prof 3.5

• Business Inf. W’house 3.0B

• Requisite Bugs Eye 3.5

• Requisite eMerge 3.5

• Enterprise Portal 5.0

• Supplier self services 1.0

• Bidding Engine 3.5

• User Management 3.0

Exchange Infrastructure Content Integrator

Key Components of SRM

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SCM (Supply Chain Management)Solution Map

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mySAP SCM

SAP APO (Advanced Planning and Optimizing)Flexible and Adaptive Planning, Integration with CRM, SRM and PLM

SAP ICH (inventory Collaboration Hub)Collaboration with Suppliers

SAP EM (Event Management)Monitor, alert and resolve exceptions

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PLM (Product Lifecycle Management)Solution Map

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SAP NetWeaver•Unifies and aligns people, information and business processesIntegrates across technologies and organizational boundariesA safe choice with full .NET and J2EE interoperabilityThe Business foundation for SAP and partners Powers business-ready solutions that reduce custom integrationIts Enterprise Services Architecture increases business process flexibility

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IS Solutions

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SAP’s Industry Specific (IS) Solutions– Best of Breed Solution for a particular industry– Because every business has unique business logics and

processes– Result of the research by industry Centers expertise

(ICOE)– Currently solutions exist for 26 different industries

For example,• SAP for Aerospace & Defense• SAP for Media• SAP for Automotive• SAP for Banking• SAP for Mining• SAP for Chemicals• SAP for Oil & Gas• SAP for Consumer Products

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Types of SAP Projects

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Types of Projects

• Implementation

• Rollout

• Upgrade

• Maintenance & Support

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A Snapshot of SAP Implementation Framework

GoLive

Implementing functionality

Implement Batch

Environment / Client

Migrate the Customization to

Production

Production Validation

Testing

Final PreparationRealization

BusinessBlueprint

Project Management

ChangeManagement

Testing

Development

Technical & Data

Project Preparation

- Fit-gap analysis /e-application Strategy- Scoping

Conference Room Pilot /

Prototyping

Configuration

of functionality

Module Testing SIT / UAT

- Fit-gap analysisReqmt.of DB,o/s- Hardware Sizing - Install HW/SW

-Identify env. Requirement &

Data conv.Strategy

Preparing Batch Env. /Develop

Client Scripts

Environmental

Checkout / Client Testing

Online/ Batch Customization

Strategy / Design

Coding Unit Testing

SIT / UAT

- DetermineAcceptanceCriteria

Develop Test Strategy Test Plan

Develop Test Scripts

Execute Test Scripts

- Establish ChangeManagementProcedure

Identify Change Agent Change Manager

- Project Kickoff- Training, Risk Mgmt,Communication & Project Plan

Risks & Issues Management / Project Planning & Monitoring Scope, Budget and Quality Management

Communication to Stakeholders Customer Relationship Management

Functional

- Identification of - Online / Batch Customizations- Offshore setup

Execute Change Management Plan

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Roll-out Project• Roll-out Project refers to the process of repeated activation

of one or more templates

Key Complexity Factors Key Components of Rollout

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Upgrade Service Offerings

Upgrade Services

Upgrade Tool Set

Technical upgrade Functional upgrade SAP Modification adjustment Service SAP Unit/Integration Test Support

Business case preparation SAP Upgrade Assessment Business process effectiveness study

SAP data archiving Performance optimizationUnicode implementation SAP exploitation for new functionality

Engagement Models

Operations &Continuous Improvement

ImplementationDiscovery & Evaluation

Technology Consulting ServicesEnd-to-End

Engagement

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Support for Implementation and Operation

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ASAP Methodology

(Accelerated SAP)

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Accelerated SAP: The 5-phase Roadmap

• ASAP is proven, repeatable and successful approach to implement SAP solutions across industries and customer environments. • ASAP provides content, tools and expertise from thousands of successful implementations.

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Navigation in SAP

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Logging on to SAP

Logon pad with different systems

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Steps to add transaction to favoritesStep I: Select the transaction you want to add to favoritesStep II: Right click on the transaction you want to add to favoritesStep III: Select Add to favorites.

Adding to Favourites

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Organizational Structure

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Organizational Structure in SAP

Human ResourcesControlling ClientClient

CompanyCode

PurchasingOrganization

PersonnelArea

Production Planning

Sales and Distribution Materials Management

Financial Accounting

SalesArea

ControllingArea

Plant

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Organizational Structure Terminology

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Organizational Structure - Levels

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Organizational Structure – Business Functions

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Client

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Company Code

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Company Code

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Plant

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Storage Location

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Purchasing Organization & Purchasing Group

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Master Data

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Quiz Time• What is the smallest organizational unit of Financial Accounting for

which a complete set of accounts can be drawn up for purposes of external reporting.– Company Code

• Which Organizational unit in Sales and Distribution defines different ways of reaching the customer.– Distribution Channel

• In a Customer Master, there is shared data at the _________ level and company specific data at the ___________ level.– Client, Company Code

• The Vendor Master record is maintained by __________Dept. and ____________ Dept.– Accounting, Purchasing

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Thank You