13th July Introduction to ERP and SAP

7/31/2019 13th July Introduction to ERP and SAP

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Introduction to ERP Using GBI 2.1


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SAP ERP Agenda

Introduction to ERP Concepts

Introduction to SAP & How to Navigate

The Global Bike Company

Sales & Distribution

Materials Management

Production Planning

Financial Accounting & ControlHuman Capital Management

Warehouse Management


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SAP ERP Discussion Points? What is an ERP?

How it is different from Information Systems? At what level of IS the ERP works?

Why an organization should implement ERP system?

Why an Organization should implement and ERP if theyalready have functional systems?

What are some of the benefits that organizations derive byimplementing ERP?

What do you understand by legacy systems?

What do you understand by Best Practice Methodology?

What do you mean by a business process?

IS BPR necessary for ERP implementation?3


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SAP ERP Why ERP?

What are the Problems of LegacyApplications?

What are some of the problems ofBusinesses that are not on ERP?

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SAP ERP

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Problems of Legacy Systems Automates existing processes

Normally not driven by organization strategy and business vision. Develop one application at a time. No integration between

applications just transaction passing.

Decentralized applications.

Are relatively inflexible to accommodate changes in the businessenvironment.

Written in language / platform prevalent at the time ofdevelopment.

Up gradation to latest technology is difficult

Usually not well documented.

Maintenance is a problem largely because of poordocumentation and staff attrition.


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SAP ERP

What is a Business Process?

Why Integrated Systems needs tounderstand the concept of a BusinessProcess.

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SAP ERP Business Processes A business process is a collection of activities that

takes one or more inputs and creates an output thatis of value to the customer

The customer may be the traditional externalcustomer who buys the product or service, or aninternal customer (a colleague in anotherdepartment)

The business process view is the customers

perspective. The customer does not care that different functions

are involved in processing their order, and will nottolerate mistakes and delays caused by poorcoordination of business functions


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SAP ERP Process View of Business

Sale

s

Function

Accoun

ting

Function

Purchasing

Function

Produc

tion

Function

Logist

ics

Function

Material Order Process

Customer Order Process

A process view of business


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SAP ERP

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Integration of Business Functions

Sharing data efficiently and effectivelywithin and between functional areas leadsto more efficient business processes

Information systems that share databetween functional areas are calledIntegrated Information Systems


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SAP ERP

Why ERP?

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SAP ERP Why ERP? Increasing the efficiency of information systems can

result in more efficient business processes, makinga company more competitive

Integrating information systems across functionalareas is a relatively recent phenomenon

Lack of integration can lead to costly inefficiencies

Errors from keying in the same data more thanonce

Lack of timely data due to periodic updatingbetween systems

Problems with data being defined differently in

different systems


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SAP ERP Why ERP? ERP systems can integrate a companys operations by

providing a company-wide computing environment that:

Includes a single database shared by all functions

Can deliver consistent data to all business functions inreal-time

ERP systems can dramatically reduce costs and increaseoperational efficiency

With ERP, IBM Storage Systems division

Re-prices inventory in 5 minutes instead of 5 days

Ships a replacement part in 3 days instead of 22 Checks customer credit in 3 seconds instead of 20

minutes


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SAP ERP

What is ERP?

How you define ERP?

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SAP ERP What is an Enterprise Resource Planning System?

An ERP System can be defined as amodularised, integrated, real time

information system with broad functional

scope responsible for the processing andmanagement of business transactions

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SAP ERP What is ERP?

Software tools

Manages business systems Supply chain, receiving, inventory, customer orders,

production planning, shipping, accounting, HR

Allows automation and integration of businessprocesses

Enables data and information sharing

Enterprise-wide system Introduces best practices


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SAP ERP Integrated Systems Approach

Common set of applications

Usually requires re-engineering businessprocesses

Better alignment Limited customization

Easier upgrades

Overcomes inefficiencies of independent

systems Integrated data supports multiple business

functions


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SAP ERP

Operations

OperationalManagement

Executive

Management

MiddleManagement

Finance SalesDistribution Production HumanResources

ERP System Drivers

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SAP ERP

Executive

Management

MiddleManagement


Operations

Finance SalesDistribution Production HumanResources

ERP System Drivers

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SAP ERP

Executive

Management

MiddleManagement


Operations

Finance

Sales

&Distribution

Production HumanResources

ERP System Drivers

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SAP ERP

Executive

Management

MiddleManagement


Operations

FinanceSales

Distribution Production HumanResources

ERP System Drivers

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SAP ERP ERP Drivers

Note: Based on multiple answers per respondent

6%

10%

11%

12%

15%

15%

19%

20%

21%

24%

26%

27%

37%

42%

0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

Unable to Support Growth

Inconsistent Processes

Obsolete Systems

Difficult to Integrate Acquisitions

Business Becoming Global

Unable to Implement New Business Strategies

Business Processes or Systems Not Integrated

Complex, Ineffective Business Processes

Not Responsive Enough to Customers

Cost Structure Too High

Poor Quality/Visibility of Info

Poor/Uncompetitive Performance

Disparate Systems

Systems Not Y2K Compliant

Program

Motivation

% Respondents

Source: Deloitte Consulting and Benchmarking Partners(Based on a study of 62 companies that have gone live with an ERP system)

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SAP ERP Enterprise Resource Planning Systems (ERP)

ERP systems are the result of business processengineering.

They are information systems that facilitate theflow of information between all functions within abusiness.

They organise and execute the millions oftransactions that are fundamental to many largebusinesses.

One huge database for storing transaction data. Eliminate many of the existing legacy systems.

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SAP ERP ERP Characteristics

Links all business processes automatically

Reduce inter-processing time (transactionsoccur one time at the source)

Maintain an audit trail of all transactions Utilises a common database

Perform internal conversions automatically (tax,foreign currency, legal rules for payroll)

Improve customer service by putting data at thefingertips of employees

Involve employees in the entire functional cycle

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SAP ERP ERP Evolution

1970s

AR

AP

GLPayroll

FMIS

HR

MRP11

DistributionScheduling

Planning

MRP

EDI

ERP

SCM

e-CommerceSFACRM

e-business

ERP

1980s 1990s 2000s24


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SAP ERP Evolution of ERP

1960s: software packages with inventorycontrol

1970s: MRP systems Production schedule with materials management

1980s: MRPII systems Adds financial accounting system

1990s: MRPII Integrated systems for manufacturing execution

Late 1990s: ERP Integrated manufacturing with supply chain

2000s: ERP II


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SAP ERP

ExecutiveManagement

MiddleManagement

Operational

Management

Operations

Finance

Sales&

Distribution

Production

HumanResources

ERP System

EnterpriseResourcePlanning

System

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SAP ERP

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Why clients buy ERP?

Corporate Initiatives Strategic initiatives

A requisite capability in a competitive global business

Operational initiative

A foundation for performance and cost improvementvia 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 !!!


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SAP ERP

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Business process benefits clients expect from an ERPproject

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

Logistics and Distribution Sales & Customer Service

Vendors Inbound Manufacturing Transportation Distribution Delivery Customer Consumer

Logistics

10/16/2012


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SAP ERP Overall Business Benefits

Information Maximizes information throughput

Provides timely information

Integrates information throughout supply chain

Minimizes response time

Pushes decision making down to lowest levels

Reduces costs

Cuts inventory Improves operating performance


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SAP ERP Department Benefits

Sales Increased efficiency

Lower quotes, reduced lead time, improvedresponsiveness

Manufacturing Concurrent engineering Faster design and production

Data Service Accurate customer service history and warranty

information

Accounts Payable Suppliers paid accurately


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SAP ERP Systems Benefits

Eliminating legacy systems Reduces incompatible data

Can cause fragmentation

Allows sharing and monitoring of information across

organization Foundation of eBusiness

Back-office functions

Standardization

Helps obtain and maintain competitive advantage Improved interactions with customers and suppliers


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SAP ERP ERP Benefits

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

On-Time Delivery

Supplier ManagmentTransportation/Logistics

Maintenance

Financial Close Cycle

Order Management/Cycle Time

Procurement

Revenue/Profit

Cash Management

IT Cost Reduction

Productivity Improvements

Personnel Reductions

Inventory

Tangible

Be

nefits

% Respondents With Measurable Results

Anticipated

Actual

Time-basedbenefits have

exceeded originalexpectations

Source: Deloitte Consulting and Benchmarking Partners

(Based on a study of 62 companies that have gone live with an ERP system) 32


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SAP ERP ERP Implementation Budget

Design andimplementation

Software

Trainingand

change management

Hardware

Datacleansing

35%

35%

10%

10%

10%

Hammer 2000

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SAP ERP

SAPAN ERP.

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SAP ERP SAPSysteme, Anwendungen und Produkte in der Datenverarbeitung

(English: Systems, Applications, and Products in Data Processing)

Global concern with many companies

SAP AG

SAP America

SAP UK etc.

SAP Business Suite SAP Enterprise Resource Planning (SAP ERP)

SAP Supplier Relationship Management (SAP SRM)

SAP Customer Relationship Planning (SAP CRM)

SAP Supply Chain Management (SAP SCM) SAP Product Lifecycle Management (SAP PLM) etc.

SAP Business ByDesign

SAP NetWeaver


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SAP ERP Who is SAP?

SAP AG

Founded in Walldorf, Germany in 1972 Worlds Largest Business Software Company

Worlds Third-largest Independent Software Provider

Company Statistics Over 45,000 employees in more then 50 countries 1,500+ Business Partners

95,000+ customers in more then 120 countries

12 million users 100,000+ installations

Source: SAP AG website


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SAP ERP Integrated Business Solution Vendors

SAP

SAP Business Suite, SAP All-in-One, SAPBusiness ByDesign, SAP Business One

Oracle Applications

Oracle, JD Edwards, PeopleSoft, Siebel, Retek Microsoft Business Solutions

Dynamics: Great Plains, Navision, Axapta,

Soloman The Sage Group

Sage Software Accpac ERP, PeachTree

SSA Global Technologies - BAAN


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SAP ERP SAP Portfolio Strength World-wide usage

Designed to satisfy the information needs for all businesssizes (small local to large all international)

Multi-lingual

Multi-currency

Multi-balance (parallel G/L Accounting) Designed to satisfy the information needs for all industries,

e.g.

Automotive

Banking

Retail

Public Sector

Higher Education and Research etc.


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SAP ERP SAP Architecture

Client/Server Environment Client hardware/software environment that can make a

request for services for a central repository of resources

Server hardware/software combination that can provideservices to a group of clients in a controlled environment

Three Tier Structure GUI

Graphical User Interface or Web Interface

Application Server One or more, help distribute work load

Database Server

One single data repository


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SAP ERP History

SAP NetWeaver

SAP SCM

SAP PLM

SAPSRM

SAPCRMSAP ERP

SD

MM

PP

QM

PM

HR IS

WF

AM

CO

FI

PS

SAP R/3Client/Server

ABAPBasis


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SAP ERP R/2 Realtime 2

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SAP ERP R/3 Realtime 3

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SAP ERP SAP R/3 Enterprise

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SAP ERP SAP ERP 2005 (ECC)

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SAP ERP SAP Business Suite

SAP NetWeaver

SAP SCM

SAP PLM

SAPSRM

SAPCRM

SAP ERP


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SAP ERP SAP Software Applications

Solutions SAP ERP

SAP CRM

SAP PLM SAP SCM

SAP SRM

SAP BusinessObjects

Small & Medium Size Solutions- SAP All-in-One

- Business ByDesign

- Business One

Platforms

- SAP NetWeaver

- SAP Enterprise Services

Architecture


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SAP ERP SAP ERP Business Modules

Collections of logically related transactions

within identifiable business functions MM (Buy)

PP (Make)

SD (Sell)

FI and CO (Track)

HCM (People)

WM (Store) EAM (Maintain)

CS (Service)


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SAP ERP SAP ERP Core Applications

Logistics

Sales & Distribution

MaterialsManagement

Production Planning

Plant Maintenance Quality Management

Finance

Financial Accounting

ManagerialAccounting

Asset Management

Treasury

Human Capital Management

- Personnel Management

- Benefits

- Payroll


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SAP ERP SAP Industry Solutions

Aerospace & Defense

Automotive Banking Chemicals Consumer Products Defense & Security Engineering, Const. Healthcare

High Tech Higher Education Industrial Machinery Insurance Life Sciences Logistics Service Prod.

Media Mill Products

Mining

Oil & Gas

Pharmaceuticals

Postal Services Professional Services

Public Sector

Railways

Retail

Telecommunications

Utilities

Wholesale Distribution


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SAP ERP SAP ERP

Then Works with relational databases

8,900 relational tables

15,000 reports 12,000 screens

most users only interact with 10 screens

Now

37,000 tables50


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SAP ERP Example of How SAP Work

Step 1 : Brazilian retailer orders, via theInternet, 1,000 shoes from International ShoeCo. A sales rep takes the order, routes it toSAPs ordering module, SAP checks the

retailer credit, price, etc. The order isapproved.

Step 2 : Simultaneously SAPs inventorymodule checks the stocks and notifies the repthat half the order can be filled immediatelyfrom stock. The other half will bemanufactured and delivered in 5 days directly

from the factory in Taiwan.

E l f H SAP W k


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Step 3 : SAPs manufacturing module schedules

the production in Taiwan and instructs thewarehouse (in China) to ship the shoes to Braziland print up an invoice (in Portuguese).

Step 4 : SAPs human resources modulecalculates labor requirements. Due to a

shortage, the personnel manager in Taiwan isinstructed to get temporary workers.

Step 5 : SAPs material planning module notifiesthe purchasing manager about a shortage ofpurple dye. A purchase order is automaticallyissued.


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Step 6 : The customer logs on via theextranet to the companys sneakersdivision. He can see that 500 shoes wereshipped from the regional warehouse. This

is done with SAP tracing capabilities. Step 7 : Based on data from SAPs

forecasting and financial modules, the CEOcan determine both demand and profitability

per product. The financial module alsoconverts all foreign money to $U.S.,whenever needed

Documents

13th July Introduction to ERP and SAP