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IBM Global Services
ERP / SAP Overview | 1.01 March-2005 © 2005 IBM Corporation
ERP / SAP Overview
IBM Global Services
© 2005 IBM Corporation2 March-2005ERP / SAP Overview | 1.01
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.
IBM Global Services
© 2005 IBM Corporation3 March-2005ERP / SAP Overview | 1.01
Enterprise Resource Planning
ERP Overview
IBM Global Services
© 2005 IBM Corporation4 March-2005ERP / SAP Overview | 1.01
Enterprise Resource Planning
... synchronization of Company functions...
Manufacturing
Purchase
Sales
Finance
IBM Global Services
© 2005 IBM Corporation5 March-2005ERP / SAP Overview | 1.01
Enterprise Resource Planning
… and extended to the complete value chain...
Tier II ComponentSupplier
Vehicle OEM
Tier I Component Manufacturer
IBM Global Services
© 2005 IBM Corporation6 March-2005ERP / SAP Overview | 1.01
Enterprise Resource Planning
Administrative registration
Processes monitoring & feedback
Decision support and analysis
... delivering administrative and decision support with...
IBM Global Services
© 2005 IBM Corporation7 March-2005ERP / SAP Overview | 1.01
What is an ERP solution...?
…Integrated across the primary and support processes
MarketingManufacturing
Materials
Distribution
Finance
Engineering Sales
Human Resources
Planning and
Execution
IBM Global Services
© 2005 IBM Corporation8 March-2005ERP / SAP Overview | 1.01
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
IBM Global Services
© 2005 IBM Corporation9 March-2005ERP / SAP Overview | 1.01
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 !!!
IBM Global Services
© 2005 IBM Corporation10 March-2005ERP / SAP Overview | 1.01
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.
IBM Global Services
© 2005 IBM Corporation11 March-2005ERP / SAP Overview | 1.01
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.
IBM Global Services
© 2005 IBM Corporation12 March-2005ERP / SAP Overview | 1.01
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
Logistics and Distribution Sales & Customer Service
Vendors Inbound Manufacturing Transportation Distribution Delivery Customer Consumer Logistics
IBM Global Services
© 2005 IBM Corporation13 March-2005ERP / SAP Overview | 1.01
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
IBM Global Services
© 2005 IBM Corporation14 March-2005ERP / SAP Overview | 1.01
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
ERPERP
IBM Global Services
© 2005 IBM Corporation15 March-2005ERP / SAP Overview | 1.01
SAP R/3 Overview
Systems Applications and Products in Data Processing
IBM Global Services
© 2005 IBM Corporation16 March-2005ERP / SAP Overview | 1.01
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
IBM Global Services
© 2005 IBM Corporation17 March-2005ERP / SAP Overview | 1.01
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
R/2Basis System
The R/2 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.
IBM Global Services
© 2005 IBM Corporation18 March-2005ERP / SAP Overview | 1.01
SAP R/3 : 3 Tier Architecture
Those SAP R/3 software components that specialize in the management , storage and retrieval of data form the Database Layer
The Database Layer
Those SAP R/3 software components that specialize in processing business applications form the Application Layer.
The Application Layer
Those SAP R/3 software components that specialize in interacting with end-users form the Presentation Layer.
The Presentation Layer
IBM Global Services
© 2005 IBM Corporation19 March-2005ERP / SAP Overview | 1.01
SAP R/3 : 3 Tier Architecture
Database servers:Specialized systems with fast and large hard drives.
Application servers:Specialized systemsmultiple CPUs andvast amounts of RAM.
Presentation servers:Systems capable ofproviding a graphicalinterface.
Presentation Layer components
Application Layer components
Database Layer components
reside in: reside in: reside in:
IBM Global Services
© 2005 IBM Corporation20 March-2005ERP / SAP Overview | 1.01
SAP R/3 : 3 Tier Architecture
The Database Layercomponents are installed onhigh-end database server.
The Application Layercomponents are installedacross one or more high-end servers.
Presentation Layer components are installed across many PCs
IBM Global Services
© 2005 IBM Corporation21 March-2005ERP / SAP Overview | 1.01
SAP R/3 Overview
Sales &Distribution
SD
MM
PP
QM
PM
HR
FI
CO
TR
PS
WF
IS
MaterialsMgmt.
ProductPlanning
QualityMgmt.
Plant Mainte-nance
HumanResources
FinancialAccounting
Controlling
Treasury
ProjectSystem
Workflow
IndustrySolutions
Client/ServerABAP/4
R/3
IBM Global Services
© 2005 IBM Corporation22 March-2005ERP / SAP Overview | 1.01
Integration
PP
MM
FICO
SD
FI
Which modules are involved?
PlannedRequirement
MRP (Material Requirements Planning)
Requirement on component level
PurchaseOrder
GoodsReceipt
InvoiceVerification
AccountsPayable
PlannedOrder
ProductionOrder
Productioncompleted
OrderSettlement
CustomerOrder
Shipping
Invoicing
AccountReceivable
IBM Global Services
© 2005 IBM Corporation23 March-2005ERP / SAP Overview | 1.01
Integration
SUPPLIER
CUSTOMER
S A P R / 3S A P R / 3
Procurement Production Distribution
Finance and Accounting
MMMM PPPP SDSD
FIFI COCO
All business processes throughout the supply chain are executed in one system sharing all information
Workflow
IBM Global Services
© 2005 IBM Corporation24 March-2005ERP / SAP Overview | 1.01
mySAP Technology
IBM Global Services
© 2005 IBM Corporation25 March-2005ERP / SAP Overview | 1.01
SAP NetWeaver
Existing Systems
IBM Global Services
© 2005 IBM Corporation26 March-2005ERP / SAP Overview | 1.01
SAP R/3 : Components
ABAPPrograms
Configuration
Organization Structure
Key Data Elements
Functionality Configurations
ApplicationMaster Data
Transaction Data
IBM Global Services
© 2005 IBM Corporation27 March-2005ERP / SAP Overview | 1.01
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
IBM Global Services
© 2005 IBM Corporation28 March-2005ERP / SAP Overview | 1.01
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.
IBM Global Services
© 2005 IBM Corporation29 March-2005ERP / SAP Overview | 1.01
SAP R/3 scope
Why do we need ABAP Development ?
IBM Global Services
© 2005 IBM Corporation30 March-2005ERP / SAP Overview | 1.01
SAP Solution
SAP R/3 scope
Specific company requirements
IBM Global Services
© 2005 IBM Corporation31 March-2005ERP / SAP Overview | 1.01
SAP Solution
SAP R/3 scope
Specific company requirements
Non SAPapplications
New FunctionalityDevelopment
IBM Global Services
© 2005 IBM Corporation32 March-2005ERP / SAP Overview | 1.01
Summary 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.
IBM Global Services
© 2005 IBM Corporation33 March-2005ERP / SAP Overview | 1.01
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 ?