Finance and Controlling – Day 1

Introduction to SAP

-3-

Business without ERP

CustomersCustomers

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

-4-

Business without ERP (Contd..)

Lets add some more Business Processes

-5-

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

-6-

Lets Deliver the end product to customer..

SalesSales

Dear Sir,Your Order…

I did not order for a

TRUCK!!!!

-7-

Business without ERP (Contd..)

I AM NOT TAKING DELIVERY AND WILL

NEVER DEAL WITH YOU!

SalesSales

We are SORRY Sir

-8-

Overall Picture

ProductionPlanning

PurchasingPurchasing

CustomersCustomers

VendorsVendors

InventoryInventory

A/RA/R A/PA/P

Shop Floor Shop Floor ExecutionExecution

General General LedgerLedger

SalesSales

-9-

Why Enterprise Architecture

• Why Enterprise Architecture ?

– Numerous disparate information systems

– Integrating the data becomes costly

• Time

• Money

• Resources

– Inconsistencies and duplication of data

– Lack of timely information

– Required: Central enterprise definitions

– Required: Centrally controlled business change

-10-

Enterprise Structure – Integrating Business

PP

GL

Plants

Shop Floor

Sales

HRFA

AP

AR

Purchasing

Partner Systems

Payroll

TreasuryMarketing

Mfg.

-11-

-12-

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• Satisfying Partners/Customers• Reducing required manpower

E R P

-13-

Quiz Time

• What is the full form of SAP?

• When was SAP founded?

-14-

Quiz Time

• What is the full form of SAP?

Systems Applications and Products in Data Processing

• When was SAP founded?Founded in 1972 by Wellenreuther, Hopp, Hector, Plattner and Tschira

– Renamed in 1977– Before 1977 : Systems Analysis and Program Development (German :

Systemanalyse und Programmentwicklung)

-15-

History of SAP

• Systems Applications and Products in Data Processing– German : Systeme, Anwendungen, Produkte in der Datenverarbeitung

• 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

-16-

Steps to Strategic ERPEnterprise Resource Planning is evolved through these stages …

TotalCompany

Value

Evolution of ERP

Create Create Strategic Strategic

Value Value

Efficiency and Efficiency and ControlControl

AutomationAutomation

80’s R/280’s R/2 90’s R/390’s R/3 Today mySAP ERP

Inter-EnterpriseCo-operation

Inter-EnterpriseCo-operation

Enterprise ResourcePlanning

Enterprise ResourcePlanning

CollaborativeBusiness

CollaborativeBusiness

-17-70s

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

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

-18-

Evolution of SAP

-19-

Quiz Time

• SAP R/3 client server architecture evolved in year___________.

• Which is the latest SAP product?– mySAP ERP– mySAP Business Suite– mySAP.com with one step business

-20-

Quiz Time

• SAP R/3 client server architecture evolved in year 1992

• Which is the latest SAP product?– mySAP ERP– mySAP Business Suite– mySAP.com with one step business

SAP R/3 Architecture

-22-

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

-23-

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

-24-

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

-25-

SAP R/3 Conceptual Areas

SAP 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)

-26-

Systems in R3

DevelopmentSystem(DC)

Quality System(QC)

ProductionSystem

(IC)

Client 110

100 etc..

Transport Request

-27-

Clients in R/3

• The Logon Client– 3 digit number ( 000 to 999)– Helps maintain independent sets of data within the same R/3 system

• Client mechanism and handling

-28-

Clients in R/3

R/3 Technology Environment

DB2 forDB2 forOS/390OS/390

ADABAS DADABAS DDB2 for AIXDB2 for AIX

INFORMIX-OnLineINFORMIX-OnLineORACLEORACLE

Windows 3.1, Windows 95, Windows NT,Windows 3.1, Windows 95, Windows NT,OSF/Motif *, OS/2 Presentation Manager (PM),OSF/Motif *, OS/2 Presentation Manager (PM),

Macintosh *, JavaMacintosh *, Java

ADABAS DADABAS DMS SQL ServerMS SQL Server

INFORMIX-OnLine INFORMIX-OnLineORACLEORACLE

ABAP/4, C, C++, HTML, JavaABAP/4, C, C++, HTML, Java

DB2 for DB2 for OS/400OS/400

OS/390OS/390AIXAIX

Digital UNIXDigital UNIXHP-UXHP-UX

ReliantReliantUNIX (SINIX)UNIX (SINIX)

SOLARISSOLARISWindows NTWindows NT OS/400OS/400

HardwareHardware Bull/ZenithBull/ZenithCompaqCompaqData GeneralData General......

NCRNCRSequentSequentSNISNI

DigitalDigitalHP (Intel)HP (Intel)IBM (Intel)IBM (Intel)

BullBullDigitalDigitalHPHP

IBMIBMSNISNISUNSUN

UNIX SystemsUNIX Systems

IBMIBMAS/400AS/400

OperatingOperatingsystemssystems

DialogDialogSAPGUISAPGUI

LanguagesLanguages

DatabasesDatabases

IBMIBMS/390S/390

-30-

Platforms and Databases supported by R/3

Operating Systems Supported Hardware Supported Front ends Supported Databases

AIX SINIX IBM SNI SUN Win 3.1/ 95 / NT DB2 for AIX

SOLARIS HP-UX Digital HP OSF / Motif Informix – Online

Digital Unix Bull OS/2Macintosh

Oracle 7.1ADABAS D

Windows NT AT&T CompaqBull / Zenith

HP (Intel) SNIIBM (Intel)

Digital (Intel)Data-General

Win 3.1 / 95 / NTOSF / Motif

OS/2Macintosh

Oracle 7.1SQL Server 6.0

ADABAS D

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

-31-

Client Server Benefit

-32-

Quiz Time

Match the following

Presentation Server Windows

Application Server Basis

3 Digit number Quality System

Client Testing/ UAT GUI

Unix Systems Oracle

Authorizations Client

Business Administration

-33-

Quiz Time

Match the following

Presentation Server GUI

Application Server Business Administration

3 Digit number Client

Client Testing/ UAT Quality System (QC)

Unix Systems Windows

Authorizations Basis

SAP R/3 Modules

-35-

SAP Modules

SAP R/3SAP R/3

FIFI

WFWF

PSPS

PMPM

WMWM

PPPP

MMMM

SDSD

HRHR

AMAM

COCO

QMQM

PP – Production Planning

WM – Warehouse Management

PM – Plant Maintenance

AM – Asset Management

PS – Project System

MM – Materials Management

SD – Sales and Distribution

QM – Quality Management

WF – Workflow

HR – Human Resources

CO – Controlling

FI – Financial Accounting

-36-

• 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)

SAP R/3 Application Modules

-37-

MMMaterial Procurement

Inventory ManagementBatch ManagementGoods inspection

Invoice Verification

PPBOM/Work Center/Routing

MRPCapacity Evaluations

Production OrdersQM in production

SDInquiry processing

Sales Order ProcessingDelivery Processing

Billing

FIGeneral Ledger

Accounts PayableAccounts receivableCash management

COCost Center Accounting

Product CostingOrder Contribution Analysis

Module Functionalities

-38-

Quiz Time

Match the following

Financial Accounting Inventory Management

Controlling Shop Floor Control

Materials Management Financial Reporting

Sales & Distribution Profit center Accounting

Production Planning Billing

Project System Activity monitoring

Asset Management

-39-

Quiz Time

Match the following

Financial Accounting Asset Management& Financial Reporting

Controlling Profit center Accounting

Materials Management Inventory Management

Sales & Distribution Billing

Production Planning Shop Floor Control

Project System Activity monitoring

-40-

• External reporting of • General ledger

• Accounts receivable/payable

• Sub-ledger accounts

with a user-defined Chart of Accounts

• Key elements• General ledger

• Accounts payable

• Accounts receivable

• Asset Management

• Special Purpose Ledger (FI-SL)

• Legal consolidation

• Accounting Information System

Module FI – Financial Accounting

-41-

ConsolidationConsolidation

Extended General LedgerExtended General Ledger

PayablesPayablesReceivablesReceivables

BankBankaccountsaccounts

General LedgerGeneral Ledger

Cash managementCash managementand forecastand forecast

Foreign exchangeForeign exchangemanagementmanagement

ManagementManagementof securetiesof securetiesand loansand loans

Finance informationFinance informationsystemsystem

BankBank

InvoiceInvoiceverificationverification

AccountsAccountspayablepayable

CreditCreditmanagementmanagement

AccountsAccountsreceivablereceivable

Financial Accounting

-42-

• 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

Module CO – Controlling

-43-

• 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

Module SD – Sales and Distribution

-44-

Sales and Distribution ProcessingM

A T

E R

I A L

S M

A N

A G

E M

E N

T

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

-45-

• Supports

• Procurement

• Inventory

• Key elements

• Materials procurement (purchasing)

• Inventory management

• Invoice verification

• Material valuation

• Vendor evaluation

• External Services management

• Purchasing Information System (PurchIS)

• Inventory Controlling Information system

Module MM – Materials Management

-46-

Materials Management

Service /spare parts

Material Special stockBatch

Vendor/one-timecustomer

Purchasinginfo record

Servicespecifications

Workflow

Optical archive

TextsMailCommunication

Classification

Documents

Conditions

BASIC DATABASIC DATA

Pu

rch

a sin

g i

nfo

rmat

ion

sys

tem

Ven

do

r ev

alu

a tio

n

Purchase requisitionPURCHASINGPURCHASING

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 MANAGEMENTINVENTORY MANAGEMENT

INVOICE VERIFICATIONINVOICE 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

-47-

• 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

• Kanban

• Production planning for process industries (PP-PI)

• Repetitive Manufacturing

Module PP – Production Planning

-48-

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

PurchasingPurchasingWarehouseWarehouseInvoice Invoice verificationverification

SalesSalesShippingShippingBillingBilling

CustomersCustomers

VendorsVendors

SDSDPPPP

SDSDSDSD

SDSDMMMM SDSDQMQM

SDSDPMPM

SDSDPSPS

Production Planning

-49-

• 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))

Module QM – Quality Management

-50-

• 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 Planning, Milestones, Capacities Scheduling

• Project Management Information System

• HR – Human Resource• Key elements

• Recruitment

• Payroll & Time management

• Travel Expense accounting & Benefits

• Workforce planning & Training administration

• Organization management

Module PS – Project System & HR – Human Resource

-51-

• To integrate SAP R/3 with cross-applications

• Support tool for all modules

• Automates business process

• As events occur that trigger a process, the Workflow manager initiates a

Workflow item

• Using the process logic, data and documents are incorporated at each step

• Using the processing rules, the Workflow manager routes the item to the

appropriate role (location, person, unit, etc....).

• Example:

• Posting a PO will trigger automated mail to sales support for customer

service.

Module WF – Work Flow

-52-

Quiz Time

• Is Industry solutions an SAP module like FI/CO/MM etc?

• True/False

– PP Supports procurement and Inventory

– FI Handles project budgeting and monitoring

– WF management is a support tool for all modules

-53-

Quiz Time

• Is SAP - Industry solutions a module like FI/CO/MM etc?

NO

• True/False

– PP Supports procurement and Inventory

(False – MM Supports these functions)

– FI Handles project budgeting and monitoring

(False – PS handles these functions)

– WF management is a support tool for all modules

(True)

-54-

• Combines SAP R/3 application modules to additional industry-

specific functionality

• Result of the research by industry Centers expertise (ICOE)

IS – Industry Solutions

-55-

mySAP Industry Solutions (Some Examples)

• SAP for Aerospace & Defense

• SAP for Media

• SAP for Automotive

• SAP for Mill Products

• SAP for Banking

• SAP for Mining

• SAP for Chemicals

• SAP for Oil & Gas

• SAP for Consumer Products

• SAP for Pharmaceuticals

• SAP for Engineering, Construction & Operations

• SAP for Professional Services

• SAP for Healthcare

• SAP for Public Sector

• SAP for High Tech

• SAP for Retail

• SAP for Higher Education & Research

• SAP for Service Providers

• SAP for Industrial Machinery & Components

• SAP for Telecommunications

• SAP for Insurance

• SAP for Utilities

SAP Product Overview

-57-

Evolution of SAP products

R/3

R/3Enterprise

SAP NetWeaver

mySAP ERP

SolutionsmySAP CRMmySAP SCMmySAP HR

mySAP PLM………..

mySAPBusiness

Suite

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

-58-

Evolution of SAP products

SAP R/3my SAP Solutions

my SAP Business

Suite

-59-

Operations

Corporate Services

HR

Financials

SAP R/3

-60-

Operations

Corporate Services

mySAP HR

mySAP Financials

Adaptive Business Solutions SAP R/3

mySAP SCMmySAP PLM

mySAP SRMmySAP CRM

mySAP Solutions

-61-

mySAP PLM mySAP SCM

mySAP mySAP SRM CRM

Operations

Corporate Services

mySAP HR

mySAP Financials

Application Platform ( Web As)

People Integration (Portal)

Information Integration( BI,MDM)

Process Integration (XI)

SAP NetWeaver

my SAP Business Suite

-62-

mySAP Solutions & Netweaver

• mySAP CRM

• mySAP SRM

• mySAP SCM

• mySAP PLM

• SAP Netweaver

My SAP Customer Relationship Management (CRM)

-64-

CRM Solution Map

-65-

CRM – Holistic view

-66-

Where does a CRM solution fit?

Who Sales ServiceMarketing Executives

What Service

TransactFulfill

Engage

Which way Internet Mobile Telephony

How Operational CollaborativeAnalytical

Workplace

Use a CRM Solution to complete the Cycle

-67-

CRM Component Landscape

OLTPR/3 System

BW

APO

Mobile Clients

Internet

mySAP.com Portal Users

As one big logical box

CRM System

TelephoneCallers

-68-

CRM Internet Sales

B2C Scenario Consumer

BBP Scenario Business Partner

B2R Scenario Reseller

Internet-selling

Enterprise

-69-

Service module within CRM

• Service Planning

• Proactively engage customers with the correct resources at the most

beneficial times

• Customer Care

• Provide customer with 24/7 accessibility from all communication channels

with precise and consistent informationon

• Installed Base Management

• Maintain an accurate, up-to-date record of a customer’s products and

installations to facilitate service and anticipate customer requirements

-70-

Mobile Sales module within CRM

• Suite of tools tailored to the needs of the

offline mobile sales force– Provides an integrated view of customers, prospects, products,

services, competitors, activities, opportunities, quotations,

orders, etc.

– Heavy cross-referencing for easy navigation

• Facilitates the sales process by– Effectively managing customers and prospects

– Providing appropriate customer, product and competitive information

– Determining product and pricing configurations

– Managing sales projects across sales teams

– Generating presentation and proposals

-71-

Quiz Time

• What is the latest version of mySAP CRM

• Name the three service modules with in CRM

-72-

Quiz Time

• What is the latest version of mySAP CRM

(Version 5.0)

• Name three service modules with in CRM– Service Planning

– Customer care

– Installed base management

My SAP Supplier Relationship Management (SRM)

-74-

SRM Solution Map

-75-

Key Components of mySAP SRM

mySAP SRM – eProcurement 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

-76-

Key Components of mySAP SRM

• Strategic Sourcing

•Sourcing analytics: Helps provide analytics based on supplier location, line of business

•Supplier evaluation: Helps you evaluate the supplier base within the organization systems and external market places to identify and select supplier to ensure reliable & uninterrupted supply

•Request for quotation and auctions: Provides electronic auctioning and bidding tools to compress sourcing cycle times

•Contract management: Helps create and manage value and quantity contracts

• Operational Procurement

•Self-service procurement: Enables decentralizing procurement process within organization, without diluting the control

•Plan-driven procurement: Enables automatic purchase order generation for stock materials across the integrated supply chain

•Services procurement: Enables service procurement process to be managed online

-77-

Key Components of mySAP SRM….Contd.

• Supplier Enablement

•Supplier portal: Provides portal features for suppliers to manage their product data

and orders

•Supplier connectivity: Provides capability to connect multiple suppliers through XM_-

based document exchange

• Content Management

•Content consolidation: Provides capability to consolidate product and vendor

information

•Catalog content management: Provides capability to manage OCI compatible catalog

with tools for data import, data edit and a search engine

-78-

Quiz Time

• Name any one key component of mySAP SRM Solution map

-79-

Quiz Time

• Name any one key component of mySAP SRM Solution map

– Following are the three key components of mySAP SRM

• Strategic Purchasing & Sourcing

• Operational Procurement

• Supplier Collaboration

My SAP Supply Chain Management (SCM)

-81-

SCM – Solution Map

-82-

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

-83-

Core Interface

Typical SAP SCM Solution-scape

SAP R/3

Dominant source of Master Data in SAP SCM, destination of transaction data like planning outputs or

Availability Checks for Execution systems

Planning system where selective Master data

maintained and sourced from R/3

SAP SCM

Planning Outputs include Forecasts, SNP

or PPDS Planned Orders, Stock Transfers and

Production Orders

Module includea Demand Planning, SNP & Deployment, PPDS, GATP, TPVS and TLB

Transaction Data

Master Data

Legacy Systems

BAPI

SAP CRM, SAP SRM

and SAP PLM

Core interface

-84-

One-on-One comparison

i2 Technologies (Tradematrix SCM)

SAP SCM ORACLE APS Manugistics (Networks SCM)

Forecasting Demand Planner/Demand Management

Demand Planner Oracle Demand PlannerDemand Management

ATP and Fulfillment Demand Fulfillment SAP GATP (Global ATP)

Oracle GOP (Global Order Promising)

Fulfillment Management

Material and Resource planning

Supply Chain Planning SAP SNP (Supply Network Planning)

Oracle ASCP (Advanced SCP)

Master Planning

Manufacturing Planning

Factory Planning PP/DS (Production Planning and Detailed Scheduling)

Oracle Manufacturing Scheduling

Manufacturing Planning and Scheduling

Transportation TMS (Transportation Management Solutions)

TP/VS (Transportation Planning/Vehicle Scheduling)

Oracle Transportation Logistics Management Solutions

mySAP Product Life Cycle Management (PLM)

-86-

PLM Solution Map

SAP Netweaver

-88-

A Roadmap for Web Services

-89-

Services are changing SAP’s Product portfolio

-90-

From Basis to WAS

-91-

Document Mgmt

E-sales

E-procurement

PLM

Technical systems

Trading

Call Center

ERP

Market Analysis

SCM

Business Drivers

Extended Value Network

Increased Market Dynamics

Integration costs are high

Long integration projects

IT environments become increasingly rigid

Lots of heterogeneous systems

Pressure on IT increases

Must leverage existing investments

Must support new business processes quicker

Must reduce total cost of ownership (TCO)

Integration is the Key Challenge

-92-

Document MgmtMarket Analysis

SCM

E-sales

E-procurement

PLM

Technical systems

Trading

Call Center

ERP

Reduce Complexity

• Minimize the number of connections through hubs

•Use only one platform to integrate all people, information, and systems

Reduce Cost Integration

•Deliver .NET and J2EE interoperability

•Deliver adaptors for ISV products

•Deliver products, not projects

Increase company performance

•Increase ease of use, scalability and adaptability

•Increase business process flexibility by using an Enterprise Services Architecture

How to Address the Integration Challenge

-93-

The fundamental Web services standards are supported by the Web Application Server (Web AS), which is the basis for all other NetWeaver components

-94-

Unifies and aligns people, information and business processes

Integrates across technologies and organizational boundaries

A safe choice with full .NET and J2EE interoperability

The Business foundation for SAP and partners

Powers business-ready solutions that reduce custom integration

It’s Enterprise Services Architecture increases business process flexibility

SAP NetWeaver The integration and application platform for lower TCO

-95-

SAP NetWeaver

People Integration

Application Platform

Process Integration

Information Integration

Multi-channel Access

Portal Collaboration

Master Data Management

Bus. Intelligence Knowledge Mgmt

Integration Broker

Business ProcessManagement

Multi-channel Access

J2EE ABAP

Co

mp

osi

te A

pp

lic a

tio

n F

ram

ewo

rk

Life cycle M

anag

e men

t

SAP Mobile Infrastructure

Tight coupling and alignment with SAP business solutions

SAP Enterprise Portal

Business packages

Collaboration

SAP Business information Warehouse

Business content

Tight integration to Sap

Open architecture (Crystal, Accential )

Master Data Management

Coming in 2003

SAP Exchange Infrastructure

Proxy generation and mapping tools

Integration directory

SAP’s ability to execute

SAP Web Application Server

Proven, scalable, comprehensive toolsets

Leverage existing infrastructure/skillets

SAP NetWeaver in Detail (SAP Internal View) Product components and killer features

-96-

SAP Solutions Powered by SAP NetWeaver Business content makes the business foundation

SAP Organizational units

-98-

Business Scenarios – Main Elements

-99-

Human ResourcesControllingClientClient

CompanyCode

PurchasingOrganization

PersonnelArea

Production Planning

Sales and Distribution Materials Management

Financial Accounting

SalesArea

ControllingArea

Plant

Organizational Structure in SAP

-100-

Company Code

-101-

Organizational Structure - Levels

-102-

Organizational Structure – Business Functions

-103-

Enterprise Structure - Technology

-104-

ClientClient

Chart of Chart of AccountsAccounts

DistributionDistribution ChannelChannel

SalesSales Organ.Organ.

SalesSalesOfficeOffice

SalesSalesGroupGroup

DivisionDivision

PurchasingPurchasingGroupGroup

PlantPlant

Shipping Shipping PointPoint

StorageStorageLocationLocation

CompanyCompanyCodeCode

Loading Loading PointPoint

PurchasingPurchasing Org.Org.

SAP Organizational Structure: Cardinality

-105-

-106-

Quiz Time

• Which is not a part of SAP Business Scenario main Elements

– Master Data

– Organizational Unit

– Transaction

– Document

– All the above

• Answer True or False

– One Chart of accounts can be assigned to many Company Codes

– A plant can be assigned to many Company codes

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Quiz Time

• Which is not a part of SAP Business Scenario main Elements

– Master Data

– Organizational Unit

– Transaction

– Document

– All the above

• Answer True or False

– One Chart of accounts can be assigned to many Company Codes

(True)

– A plant can be assigned to many Company codes

(False)

Organizational Elements in FICO

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Organizational Units in R/3 FI

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Overview: Organizational Elements in Accounting

Organizational Elements in Logistics

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Overview: Organizational Elements in Logistics

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Quiz Time

• State True/False

– Company is obligatory in an organization structure

• Fill in the blank

– Unit responsible for procurement of materials/services and negotiating

with vendors is called ____________.

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Quiz Time

• State True/False

– Company is obligatory in an organization structure

(False – Company code is obligatory)

• Fill in the blank

– Unit responsible for procurement of materials/services and negotiating

with vendors is called Purchasing Organization

Organizational Elements in Sales

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-123-

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Quiz Time

Fill in the blanks

• Sales area is a combination of _____________, ________________ and _______________.

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Quiz Time

Fill in the blanks

• Sales area is a combination of

– Sales Organization,

– Division and

– Distribution Channel

Navigation

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Logging on to SAP System

Logon pad with different systems

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Adding to favorites

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.

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General Settings

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• Variants

• Calendar

– Public Holidays

– Holiday Calendar

– Factory Calendar

• Unit of Measurements

• Currencies

– Currency codes

– Conversions (quotations)

– Exchange Rate Type

– Rates

– Rounding rules

Global Settings (at Country level)

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The Variant Principle

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• Define Public Holidays

• Define Holiday Calendar

– A combination of a yearly 12-month calendar and a list of all public holidays that fall

within a calendar year.

– Gives an overview of all working days and all days off for a calendar year. It can be

created to cover a validity period of several years.

– Can be defined according to the country or region in which they are to be

implemented, and adapted to suit individual business requirements

Calendar

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Calendar

• Define Factory Calendar– Calendar in which working days are numbered sequentially.

– Defined on the basis of a public holiday calendar.

– Validity period of a factory calendar must be within the validity period of the

public holiday calendar.

– The weekdays that are working days must also be specified in this calendar.

– Examples:

• Monday through Friday are working days.

• Saturday, Sunday and public holidays are non-working days.

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• Enables calculations with quantities and physical units.

• Units of measurement are needed for internal conversions (such

as kilogram <-> gram, but also centimeter <-> inch).

• The international system of units (SI) is used for this.

• UOMs are held centrally in the SAP System for all applications.

• Conversion factors are stored in the system with a unique

internal key.

• Unit of measurement can be created according to requirements.

• CAUTION: Extra care to be taken for any creation as this global

setting can affect the whole system performance

Unit of measurement

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Currencies

• Legal means of payment in a country.

• You can manage ledgers in two parallel currencies in addition to the local currency

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• Currency codes

– SAP maintains about 187 currencies. If any transaction in a new

currency will happen for the organization, that currency to be

maintained

• Standard quotation

– Can specify direct or indirect quotation. System by default will take

direct quotes.

• Conversion factors

– Mention the conversion for currency to currency. For example, INR To

Yen will 1:100

• Rounding rules

– ensures that the amounts in this currency are always rounded to this

unit

Currency settings

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• Exchange Rate Type is used for different business purposes

where multiple rates can be maintained for a pair of currencies

• The following exchange rate types exist

– Buying rate (G)

– Bank selling rate (B)

– Average rate (M)

– Historical exchange rate

– Key date exchange rate

• Default exchange rate types can be maintained in document

types

• For posting and clearing, the system uses the exchange rate type

M (average rate). This exchange rate type must be entered in the

system and you must also enter the exchange rates for this type.

Exchange Rate Type

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• Exchange rates in the system for the following purposes

– Posting and Clearing

– To translate amounts posted or cleared in foreign currency, or to check

a manually entered exchange rate during posting or clearing.

– Exchange Rate Differences

– To determine gains or losses from exchange rate differences.

– Foreign Currency Valuation

– To valuate open items in foreign currency and foreign currency

balance sheet accounts as part of the closing operations.

– Valuation of Purchase Documents, Sales documents and

Commitments

• Exchange rates maintained for a exchange rate type for an effective

date between two currencies

Exchange Rate

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Quiz Time

• Fill in the blank

– The difference between ____________ and

____________ is called spread.

– SAP maintains ___________ number of currencies.

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Quiz Time

• Fill in the blank

– The difference between Buying rate and Selling rate is

called spread.

– SAP maintains 187 number of currencies.

Thank You!