13Introduction

Introduction

A new Enterprise Resource Planning (ERP) solution? Which actual benefits can be derived from next generation ERP solu-tions? What are the differences to traditional ERP solutions? These are only some of the questions that will be addressed and answered in the following chapters.

Thirty years ago, SAP introduced a new era of integrated real-time soft-ware for business processing. The products SAP R/2 and, later on, SAPR/3 represented the departure into new dimensions of information tech-nology. Now, the next software generation is ready to continue this suc-cess story.

mySAP ERP as the next generation solution

With mySAP ERP, SAP proactively accommodates the challenges thatorganizations are facing in today’s dynamic and volatile business environ-ment. Investments in extending or modernizing IT structures are mea-sured against generating a rapid return on investment and lowering totalcost of ownership (TCO). At the same time, the demands on IT are con-stantly rising. Flexible support of new business models, extension ofexisting business processes, and maximizing IT capabilities are only a fewexamples.

Consequently, we must deal with a new quality of demands on next gen-eration ERP systems. These systems are not simply expected to continueincreasing organizational efficiency—like traditional ERP systems—butare also expected to serve as an agile platform to flexibly integrate exist-ing and new business models, and act as a seamless unit between ERPand other relevant applications in the organization. This requires anextension of the traditional ERP scope to include all people involved,both internally and externally, comprising customers, vendors, and part-ners. Meeting these requirements efficiently—and without confiningfuture flexibility—determines the basic expectations toward next genera-tion ERP systems. Along with that is the continued need for the func-tional depth and breadth of the solution. By offering unparalleled integra-tion capabilities and flexibility for requirements to come, mySAP ERP livesup to these demands. In addition to its industry-specific capabilities andcomprehensive process scope, its position as the leading ERP solution onthe market is reinforced by the fact that the underlying integration andapplication platform on which it is built is SAP NetWeaver.

Introduction14

With mySAP ERP, SAP has launched a solution that not only combinesmore than 30 years of experience in real-time ERP applications, it alsoensures continuity and secures previous investments for existing custom-ers by offering comprehensive transition paths that allow for gradualenhancements of existing IT landscapes. Through enabling step-by-stepextensions along growing requirements, the often large and costly imple-mentation projects of the past can be cut into concrete implementationsteps with clearly defined quick wins and lower costs. Furthermore, newcustomers can profit from these advantages, whether it be becausethey’re on the lookout for a company-wide next generation ERP solution,or for standardizing existing heterogeneous IT environments.

Target groups These starting points lead to consecutive questions that are addressed inthe chapters to follow. By discussing ERP in a holistic manner, this book isdirected at decision-makers and users in IT and business, as well as thoseusers who are interested in the operational and strategic aspects of ERP.

Structure ofthe book

� Chapter 1: What are the major challenges resulting from the volatilityof our markets and what role does IT play in this dynamic? How can ITlive up to the demands resulting from this relationship?

� Chapter 2: In general, what is the path like to mySAP ERP? What arethe major scenarios, business processes, and functional capabilities ofmySAP ERP?

� Chapter 3: To what extent does mySAP ERP cover industry-specificrequirements and the specific needs of mid-sized companies towardERP solutions?

� Chapter 4: How is a next generation ERP solution defined from a tech-nological perspective, including concepts such as the Enterprise Ser-vices Architecture (ESA)?

� Chapter 5: What are the basic aspects to consider for the transition tomySAP ERP and how are typical transition paths characterized?

� Chapter 6: How have other leading organizations across the globeconducted the step to mySAP ERP and what are the major benefitsthey have obtained?

� An outlook into future versions of mySAP ERP will conclude this bookin Chapter 7.

Frank Forndron, Thilo Liebermann,Marcus Thurner, Peter WidmayerWalldorf, February 2006

37The Key Capabilities of mySAP ERP

2 The Key Capabilities ofmySAP ERP

This chapter looks at the range of processes and functionality offered by mySAP ERP and shows how organizations can gain benefits from deploying these scenarios. But first, we’ll explain the path from SAP R/3 to mySAP ERP in more detail.

2.1 From SAP R/3 to mySAP ERP

One way of comparing traditional Enterprise Resource Planning (ERP)and the next generation ERP is to think of an efficiently run office as a tra-ditional ERP and an efficient and agile enterprise as a next generation ERP.SAP and its customers are entering the third generation of ERP—the thirdtime that SAP is leading the way in defining and driving ERP. With the firstgeneration, SAP R/2, SAP brought value to organizations through real-time integration of systems in a central mainframe environment. The sec-ond generation, SAP R/3, brought value through standardized businessprocesses in a networked client/server environment. With the third gen-eration, mySAP ERP, SAP brings value to its customers through the inte-gration of heterogeneous environments, with the focus on adaptabilityand enabling people in an ever-changing environment.

An evolutionary step

Unlike the move from SAP R/2 to SAP R/3, however, this change is not ofa revolutionary nature. It is far more accurate to describe it as an evolu-tionary step—a step offering a smooth transition, which does not requirecustomers to discard their existing environments (see also Figure 2.1).

In fact, mySAP ERP leverages the second generation by allowing full com-patibility with SAP R/3 Enterprise. That means that customers can moveinto mySAP ERP smoothly, step-by-step, at their own pace, without hav-ing to replace systems.

SAP NetWeaverA significant aspect of the new ERP is extendable integration in a hetero-geneous environment. For that, SAP NetWeaver, SAP’s application andintegration platform, offers a state-of-the-art framework to organizations.IT departments can take control of their environments gradually andincrementally by leveraging the power of Enterprise Portals, ExchangeInfrastructure, Business Intelligence, and SAP Web Application Server(SAP Web AS) in an Enterprise Services Architecture (ESA). One of the

The Key Capabilities of mySAP ERP38

chief benefits of this platform is that it allows businesses to respondquickly to new challenges.

Figure 2.1 Leverage Existing Assets with the Transition to mySAP ERP

With this agility, organizations can gain competitive advantages in theglobal marketplace and exploit opportunities quickly and effectively. Fur-thermore, people-centric processing is critical as organizations realize thenecessity of leveraging their most important assets. Deploying humancapital efficiently is one of the biggest value-creating opportunities andthe principal intangible asset that companies have these days. By simplyemploying the right combination of world-class usability, efficient roledefinitions, and analytic capabilities, people are enabled to capture thefull potential of the ERP environment. Corporate Governance is equallyimportant—a must in a post-WorldCom world in which Sarbanes Oxley,Basel II, IAS/IFRS, and other regulations significantly affect the IT land-scape. mySAP ERP focuses on all of these aspects and provides companieswith long-term sustainable benefits.

We’ll discuss the extended footprint of ERP (see Figure 2.2) further in thecoming chapters and give you an overview of how the scenario coverageand functional breadth and depth of mySAP ERP can provide the afore-mentioned benefits to organizations throughout the world, organizationsof all sizes and industries. Moreover, we’ll discuss how mySAP ERP and its

Advancement in Technology

Busi

ness

Req

uire

men

ts

Integrated Business Processes

Mainframe Architecture

SAP R/2

Replace

x Leverage

�

Strategic Value

Adaptable Business

Efficiency & Control

Automation

Client-Server Architecture

SAP R/3

Enterprise Services Architecture mySAP ERP

39From SAP R/3 to mySAP ERP

evolving landscape can enable you to achieve the chosen business strat-egy and become increasingly successful in an ever-changing world.

Figure 2.2 Extended Footprint of mySAP ERP

Prior to that, however, it is important that you understand the position ofmySAP ERP within the entire SAP solution portfolio.

mySAP ERP is a mySAP solution. In addition to mySAP ERP, SAP offersother mySAP solutions for the areas of Customer Relationship Manage-ment (mySAP CRM), Supplier Relationship Management (mySAP SRM),Product Lifecycle Management (mySAP PLM), and Supply Chain Manage-ment (mySAP SCM). All these solutions are part of the mySAP BusinessSuite (formerly known as mySAP.com), as you can see from Figure 2.3.

SAP NetWeaver represents the technology stack provided by SAP to sup-port the mySAP Business Suite and its solutions, as well as other SAPproducts. Furthermore, SAP NetWeaver and its integration capabilitiesalso allow for the integration of non-SAP products. SAP NetWeaver isdelivered with all of the mySAP solutions and consequently, customerscan utilize the SAP NetWeaver capabilities for a specific solution.

The principle of the mySAP Business Suite and its solutions is that cus-tomers can find the exact solutions they need for their specific require-ments. In that context, mySAP ERP can be seen as the first step towardthe full suite. A customer that primarily requires best-in-class ERP capa-bilities will ideally start with mySAP ERP, and by licensing mySAP ERP, thecustomer will receive the software for state-of-the-art ERP, including SAPNetWeaver.

Your Suppliers &

Partners Customers

STRATEGIC BUSINESS INSIGHT

PRODUCTIVITY AND EFFICIENCY FOR BOTTOM- LINE GROWTH

DIFFERENTIATION FOR TOP-LINE GROWTH

FLEXIBILITY TO ACT TODAY

mySAP ERP Footprint

Your Organization

Your

The Key Capabilities of mySAP ERP40

Figure 2.3 mySAP ERP within the mySAP Business Suite

Key capabilities mySAP ERP addresses the core and extended business requirements ofmidsize and large organizations, whatever their industry or global reach.The solution provides a sophisticated tool that empowers businesses tocoordinate, plan, and execute operations activities quickly and effectivelyin today’s challenging business environment. In addition, it gives enter-prises better control of their assets and business processes by providing afull suite of software functionality:

� Analytics

� Financials

� Human Capital Management

� Operations

� Corporate Services

Organizations can extend capabilities to create truly adaptive businesssystems that support internal business processes, supply chain networks,and collaboration with customers and suppliers, resulting in improvedcustomer relationships and increased revenue, both now and in thefuture. The mySAP ERP solution map, shown in Figure 2.4, shows thecore business processes that the solution supports.

mySAP SCM

mySAP PLM

mySAP SRM

mySAP CRM

,

SAP NetWeaver

mySAP Business Suite

mySAP ERP

Life- Cycle- Data, Project-, Quality- and Asset Management

Inventory and Warehouse Mgmt. Manufacturing and Transportation

Sal

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In

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41Analytics

Figure 2.4 mySAP ERP Solution Map Edition 2004

2.2 Analytics

The accelerating pace of business change, increased competition, andgrowing scrutiny from regulators makes it more important than ever fororganizations to have in-depth insight into their business and up-to-dateinformation about their customers, employees, partners, costs, quality,and other aspects of business performance. Organizations are also underpressure to develop innovative products or services, strengthen theirmarket position, and fulfill ever-growing stakeholder and customerdemands. To achieve these goals, enterprises need information that isaccurate, accessible to the relevant people, and integrated enterprise-wide. The information also needs to consider all business aspects and theimpact of change and dependencies.

“Intelligent” information

In short, information must be more than just a collection of enterprise-wide data; it must be “intelligent” information generated by an integratedbusiness intelligence infrastructure. Organizations can then use this infor-mation to develop and execute corporate strategies that build value anddrive success. The problem is that many organizations have “businessintelligence” systems that, over time, have become fragmented, ineffec-tive, complex, and costly to maintain. They cannot be extended todevelop new business intelligence applications. And most importantly,the information that these systems provide is unreliable and incompleteat best.

Businessintelligenceinfrastructure

Implementing an integrated business intelligence infrastructure presentsa great many challenges, but the benefits are significant. In addition tohelping organizations secure a leading competitive edge, the right busi-ness intelligence infrastructure can help to reduce costs, ease entry into

Self Services

Analytics Strategic Enterprise Management Financial Analytics Operations Analytics Workforce Analytics

Financials Financial Accounting Management Accounting Financial Supply Chain Management Corporate Governance

Human Capital Management

Employee Life-Cycle Management

Employee Transaction Management HCM Service Delivery Workforce Deployment

Operations: Value Generation Procurement

Inventory & Warehouse

ManagementManufacturing Transportation Sales Order

Management Customer Service

Operations: Support Life-Cycle Program & Project Management Quality Management Enterprise

Corporate Services Travel Management Environment, Incentive & Commission Management Real Estate Management

Data Management Asset Management

Health & Safe

The Key Capabilities of mySAP ERP42

new markets, and enable executives to develop more effective competi-tive strategies and plans for long-term revenue growth.

mySAP ERP offers comprehensive analysis, forecasting, and reportingtools that support human capital management, financial, and operationsprocesses. Key functions include the following:

� Strategic enterprise managementmySAP ERP enables enterprises to implement strategies quickly andsuccessfully, as well as manage business performance throughout theentire organization. The solution also supports integrated businessplanning, performance monitoring, business consolidation, and effec-tive stakeholder communication.

� Financial analysisThe solution also helps organizations define financial targets, develop acommensurate business plan, and monitor costs and revenue on exe-cution.

� Operational analysismySAP ERP facilitates the compilation of detailed operations reportsand informed operational decision-making.

� Workforce analysismySAP ERP provides data analysis and reporting tools to analyze andoptimize workforce performance, implement and monitor corporatestrategy, and evaluate how various scenarios may affect business goals.

2.2.1 Strategic Enterprise Management

Strategic Enterprise Management (SEM) enables companies to imple-ment strategies quickly and successfully, as well as manage businessperformance throughout the entire organization. SEM also supports inte-grated business planning, performance monitoring, business consolida-tion, and effective stakeholder communication.

Holisticperformance

measurement

mySAP ERP provides comprehensive SEM functionality that offers twoprimary advantages. First, it delivers a holistic solution that spans theentire performance management cycle—from business planning to per-formance measurement. Furthermore, by integrating tools for businessconsolidation, performance measurement, and strategy managementwith business planning tools, mySAP ERP delivers one of the only closed-loop environments for performance management available today. Sec-ondly, mySAP ERP offers unparalleled SEM functionality in a single solu-

43Analytics

tion; few, if any, companies can match this level of functionality withoutpartnering with other providers.

No programming is necessary to utilize SEM via mySAP ERP. The SEMfunctionality is easy to customize with configuration settings. And withmySAP ERP, employees can make business strategy a part of their dailyactivities and perform the following functions:

� Business planning and simulationmySAP ERP enhances the accuracy and sophistication of a company’sfinancial plans and forecasts while curtailing and simplifying its budget-ing and planning processes. This solution allows organizations toupdate budgets more frequently; meet changing business conditions;and combine traditional, bottom-up budgeting with top-down strate-gic planning. In addition, the solution encourages a more collaborativebudgeting and planning process that involves a greater number ofdepartmental and divisional managers, while at the same time helpingcompanies to integrate strategic, operational, and financial plans toensure that all business activities are in line with the business strategy.

� Performance measurementmySAP ERP provides a management cockpit interface—the idealframework for reporting performance results. The structure of theinterface is predefined yet flexible and enables companies to delivergraphical, numerical, and verbal information to various levels withinthe organization. Users also benefit from fast access to information in aweb-based environment.

� Strategy managementThe solution supports strategy management and provides tools, suchas support for a Balanced Scorecard, that help organizations bettertranslate strategy into action by defining and communicating strategiesin areas such as product innovation, customer relations, and opera-tional efficiency.

� Accounting consolidationmySAP ERP provides comprehensive accounting functions to helpcompanies handle the statutory and management requirements offinancial consolidation. This solution offers powerful, ready-to-usetools, preconfigured business content, and sophisticated reporting fea-tures that help to streamline the consolidation cycle. The accountingconsolidation functions also add significant value to enterprises byproviding advanced automation for a fast close, a user-defined data

The Key Capabilities of mySAP ERP44

model, and user-friendly graphical interface, and fully reconciledreporting for both internal and external business groups.

� Risk managementThe solution supports the entire management process—from identify-ing business risks, administrating risk catalogs, and analyzing and quan-tifying risks to assigning risks and implementing risk-reducing activities.Furthermore, mySAP ERP supports the setting and monitoring of risktargets, exception reporting, and the development of written assess-ments.

� Stakeholder relationship managementmySAP ERP provides functionality for communicating enterprise strat-egy, current financial results, and strategic initiatives to an organiza-tion’s stakeholders. It also facilitates the decentralized assimilation offinancial figures from subsidiaries in a structured and systematic way.

Increase addedvalue with

mySAP ERP

mySAP ERP adds business value in the area of SEM by enabling organiza-tions to control an entire organization using value-based managementprinciples, to set operational objectives, and to convert strategies intoactions. The companies have the ability to perform continuous and effi-cient simulation, planning, and forecasting across an organization, and toaccelerate and automate the legal and management aspects of businessconsolidation. They are also enabled to provide risk forecasts, which arereconciled with business objectives and targets, to collect, structure, andedit relevant external information, and to automatically distribute it toend users on an ongoing basis by using graphical user interfaces that indi-cate performance measurement and significantly improve communica-tion with stakeholders.

2.2.2 Financial Analytics

mySAP ERP provides financial analytics that help organizations definefinancial targets, develop a commensurate business plan, and monitorcosts and revenue during execution. The comprehensive financial analy-tics enable businesses to create and simulate value flows in a cross-func-tional, cross company, or collaborative environment.

mySAP ERP adds business value by supporting comprehensive financialanalysis and reporting for a wide range of users—from C-level executivesto sales assistants. In addition, the solution helps to improve profitabilityand increase working capital and cash flow, to ensure more efficient costcontrols, and to improve insight via better planning and forecasting.

45Analytics

Figure 2.5 Financial Analytics within mySAP ERP

Key functions include the following:

� Financial and management reportingmySAP ERP supports a series of standard analyses to meet a wide rangeof end users’ reporting needs, including C-level executives, line-of-business managers, and sales assistants.

� Planning, budgeting, and forecastingmySAP ERP also supports traditional budgeting, rolling forecasts, andcollaborative planning, such as cost center planning illustrated in Fig-ure 2.5. The analytical planning workbench allows enterprises tomodel planning scenarios and provides preconfigured planning appli-cations for efficient operational planning.

� Cost and profitability managementmySAP ERP supports cost and profitability management. It includesfunctions for the assignment of overhead costs, management of thecosts incurred by products and services, and profitability analysis ofproducts and services.

� Working capital and cash flow managementmySAP ERP supports working capital management via optimized logis-tics processes and improved liabilities and receivables management. Inaddition, it supports cash flow management, including cash flow calcu-lations and mid- to long-term planning.

The Key Capabilities of mySAP ERP46

� Payment behavior analysismySAP ERP provides support for the management of receivables byanalyzing payment histories and determining the days sales outstand-ing (DSO), which form the basis for payment optimization.

2.2.3 Operational Analytics

Facilitateinformed opera-tional decisions

mySAP ERP provides operational analytics that facilitate the compilationof detailed operations reports and support informed operational deci-sion-making. mySAP ERP provides management and employees with theinformation they need to increase insight into business processes. ThemySAP ERP solution also includes sales planning functionality that allowsorganizations to generate a complete picture across the entire supplychain, including the impact of sales on operations.

In the area of operational analytics, mySAP ERP provides business valueby optimizing the entire supply chain; improving revenues via more com-prehensive sales planning and monitoring; increasing customer satisfac-tion through sophisticated quality management and quality monitoring,and providing more detailed, in-depth customer information and morecustomer-oriented processes. It achieves these benefits by providingoperational analytics support in the following areas:

� Operations value generation

� Operations support

� Sales planning and analysis

Added value in“operations”

mySAP ERP provides analytics that help organizations generate value inoperations. Using this solution, organizations can perform the followingfunctions:

� Procurement monitoringmySAP ERP provides various standard analyses and reports to monitorpurchasing operations and provide a detailed analysis of purchasingactivities and procurement processes.

� Inventory and warehouse managementThe solution supports inventory and warehouse management byassessing an organization’s actual stock situation based on quantity-and value-based criteria. In addition, warehouse activities can be ana-lyzed, such as the physical flow of materials and workloads.

� Manufacturing reportingmySAP ERP provides various standard reports and analyses detailingproduction-related information.

47Analytics

� Order fulfillment analysismySAP ERP supports key performance indicators (KPIs) for transporta-tion and order management, allowing organizations to assess businessprocess performance both internally and externally. The solution pro-vides strategic performance measurements, or distribution statisticsneeded for supply chain optimization, as well as operative perfor-mance measurements that capture day-to-day information necessaryfor process optimization.

� Customer service analysisThe solution facilitates the analysis of service profitability by monitoringfinancial trends, costs, and revenues per customer, as well as servicecontracts and operations. It also offers installed-base analysis, whichmonitors the volume of orders from one installation and analyzes asso-ciated costs, revenues, and profits. In addition, it provides customeranalytics that help enterprises understand the value of each customer,customer behavior, and levels of customer satisfaction, as well as war-ranty analytics, which provide information about warranty, no-war-ranty or expired warranty, as well as analyze costs and profits of war-ranty processes.

Operations support capabilities

To enable operations support, mySAP ERP provides the following analy-tics functions:

� Program and project managementmySAP ERP provides a project information system that helps organiza-tions monitor and control project data. The system provides data withvarious levels of project details and facilitates the evaluation of multi-ple, individual, or partial projects. In addition, product design optimi-zation analysis, with its concurrent costing tool, captures and reportson product costs in early product development stages, enablingdesign-to-cost engineering that can help to optimize costs. Lastly, themySAP ERP solution supports the calculation of product characteristicsand design alternatives.

� Quality managementmySAP ERP helps enterprises plan, collect, settle, and evaluate quality-related costs. The solution includes quality management informationsoftware that provides data that can be used as a basis for determiningstandard or user-defined quality scores.

� Enterprise asset managementmySAP ERP provides reporting and asset information software as partof its asset lifecycle management capabilities. The software offers a

The Key Capabilities of mySAP ERP48

broad range of reporting features and performs strategic evaluations,including mean time to repair (MTTR) and mean time between repair(MTBR) analyses.

“Sales planningand analysis”

functionalities

To support sales planning and analysis, mySAP ERP performs the follow-ing:

� Sales planningmySAP ERP supports sales target setting by using multiple dimensionsand key figures, and making it easy to communicate sales plans acrossthe sales organization. In addition, the solution enables organizationsto integrate and consolidate sales planning with marketing or serviceplans.

� Sales analysisThe solution also provides sales organizations with an accurate over-view of current sales performance and an overview of sales force effec-tiveness. As a result, management has the information it needs to pro-actively address trends and measure success or revenue shortfalls.

2.2.4 Workforce Analytics

Workforceanalysis andoptimization

mySAP ERP provides data analysis and reporting tools, as well as SEMfunctions, to support HR policy development and decision-making. Com-panies can analyze workforce data; design, implement, and monitor cor-porate strategies to optimize the workforce; and continuously evaluatehow various courses of action might affect business outcomes. In the areaof workforce analytics, mySAP ERP provides a wide range of functionality,including the following:

� Strategic workforce planning and alignmentmySAP ERP ensures that all business activities are in line with the stra-tegic goals of the enterprise. In the solution’s Balanced Scorecardframework, predefined workforce scorecards provide a series of indica-tors built around general metrics, targets, milestones, and other vari-ables. These workforce scorecards are integrated into department andindividual management-by-objective (MBO) documents, helping orga-nizations to align employee goals with business strategies.

� Workforce analysismySAP ERP also provides reporting and analysis tools for operationaland analytical reporting. These tools help organizations design andmonitor critical success factors by tracking KPIs. Integrated bench-

49Analytics

marking services allow enterprises to analyze cause-and-effect chainsand optimize enterprise-wide processes, which helps build customerand shareholder value.

� Workforce cost planning and simulationThe mySAP ERP solution supports HR professionals in all workforcecost-planning tasks and empowers HR executives to develop effectivestrategies. Users have access to a broad range of workforce-relateddata to support accurate planning, and they can continuously monitoractual performance relative to plan. In addition, flexible decision-sup-port resources, such as the ability to simulate multiple planning scenar-ios or analyze the financial impact of headcount changes, help the HRstaff to make more informed business decisions.

� Organizational planningmySAP ERP enables companies to simulate, analyze, and experimentwith proposed organizational changes. The solution also supportscomprehensive succession planning, which is a critical step in safe-guarding organizations against future risks.

mySAP ERP provides unparalleled insight into the state of an enterprise’sworkforce; alerts management regarding overlooked opportunities; helpsorganizations respond to unforeseen challenges quickly; and enablesmanagement to effectively follow through on major initiatives.

2.2.5 New and Enhanced Analytics Functionality

Briefing BookThe strategy management process within mySAP ERP supports value-based management, management by objectives, and strategic initiatives.It uses the Balanced Scorecard, shown in Figure 2.6, which providesnumerous tools that help organizations to implement strategies effi-ciently within specific business areas, and communicates strategies andobjectives throughout the entire organization.

The Balanced Scorecard briefing book in mySAP ERP is a new BalancedScorecard tool that makes it easy to create custom reports that summa-rize specific Balanced Scorecard data for different audiences. Users simplydrag and drop desired data from the Balanced Scorecard into the briefingbook, tailoring contents for particular audiences as needed while keepingother Balanced Scorecard data confidential. Briefing book data can bedownloaded onto a PC and forwarded to the relevant parties either as aPDF file or as a printout.

The Key Capabilities of mySAP ERP50

Figure 2.6 SEM Balanced Scorecard—Briefing Book

The Balanced Scorecard briefing book adds value because it:

� Enables readers to see only what is of interest to them as knowledgeworkers or managers, even when they are offline

� Combines data from different Balanced Scorecards to meet the indi-vidual demands of the recipient

� Provides options for formatting the contents professionally using stan-dard data transfer protocol (DTP) software to process the XML data

� Provides an easy-to-use, intuitive user environment for creating thebriefing book structure

� Enables users to structure the contents flexibly to meet uniquerequirements

� Enables users to create different briefing books quickly and easily bycopying an existing briefing book and adding the required adjustments

Strategic statutoryand management

consolidation

Consolidation functions in mySAP ERP enable the efficient collection ofdata from internal and external accounting, and ensure the necessaryquality and detail of the data. These functions facilitate an almost fully

51Analytics

automatic creation of consolidated financial statements for a broad spec-trum of accounting methods, and they do so in compliance with variousgenerally accepted accounting rules (GAAP). External and internal groupreporting is based on shared, consolidated data, eliminating time-inten-sive reconciliation and the synchronization of different sets of data. Theresult is an efficient, integrated consolidation process for statutory andmanagement reporting that makes a significant contribution to achievinga fast close. mySAP ERP provides the following new functions:

� Enhanced integration of statutory and management consolidation

� New consolidation of investments

� New data collection capabilities

� New reporting features, like configurable task logs

The news and enhancements to statutory and management consolidationprovide business value in a number of ways. They provide increased sup-port for the full-integration approach to statutory and management con-solidation. In addition, new ease-of-use features, such as an ergonomicuser interface for manual posting system; the ability to personalize theconsolidation workbench; clear definitions of options when customizing;and where-used lists for consolidation units and financial statement itemswhen customizing selections are designed to significantly enhance usabil-ity. Total Cost of Ownership (TCO) is also reduced because time-consum-ing reconciliation processes can be omitted.

In addition, new functions in the consolidation of investments enable aheightened level of automation during the creation of consolidated finan-cial statements on the basis of International Accounting Standards/Inter-national Financial Reporting Standards (IAS/IFRS) or US-GAAP (US-Gen-erally Accepted Accounting Principles), resulting in reduced closingtimes. At the same time, new data collection techniques provide links toSAP and non-SAP systems without the need for custom programming,thus further reducing TCO. And finally, the improved usability and simpli-fied system configuration results in higher user acceptance and fasterimplementations.

Financial analytics Financial planning, budgeting, and forecasting within mySAP ERP com-prises various planning functions, including sales planning, cost centerplanning, personnel cost planning, investment planning, process andproduct cost planning, and financial planning. These planning functionsare integrated with each other, as well as with balance sheet planning,

The Key Capabilities of mySAP ERP52

income statement planning, and cash flow planning—the final step in thefinancial planning and budgeting process.

These enhanced capabilities add business value by:

� Replacing Microsoft Excel spreadsheets with direct entries in SAP soft-ware

� Planning, thereby avoiding consolidation problems

� Enabling organizations to define and provide central planning logics(for example, planning functions, layouts, planning processes) and usethem decentrally for planning tasks, ensuring uniform editing of plan-ning data

� Facilitating the definition of planning and data manipulation functionsso that they can be tailored to meet the specific requirements of anorganization

� Enabling integration with information from transactional systems

� Displaying different planning processes and controlling and monitoringthem

2.3 Financials

mySAP ERP includes mySAP ERP Financials, which helps organizationsachieve these goals by enabling them to process and interpret financialand business data; handle financial transactions; manage business perfor-mance, growth, and profit; manage internal controls; and communicatewith shareholders. Finance managers have access to all of the tools theyneed, including support for secure and transparent accounting, stream-lined financial supply chain management, and a comprehensive corporategovernance solution. Equally important, mySAP ERP enables company-wide control and integration of financial and business information essen-tial to strategic and operational decision-making. By simplifying analyses,improving the management of internal controls, and enabling adaptivechanges to business processes, mySAP ERP can help transform financialaccounting from a purely administrative function to a globally aligned,value-based management resource.

Success factormySAP ERP

mySAP ERP has contributed to the success of more than 3,200 organiza-tions worldwide. Many of the world’s largest construction, service, andR&D projects and programs currently in operation use mySAP ERP toachieve their goals, demonstrating that companies can significantly bene-fit from an integrated, end-to-end operations support solution. mySAP

291Index

Index

AAdd-on 161, 211, 278Agility 26Analytics 40Architecture of mySAP ERP 159Audit Information System 65

BBasel II 38, 65Best practices 152Best-of-breed 16Bill of Materials 208Budgeting 51Business Function Sets 278Business Intelligence 37, 106, 120Business process adaptation 24, 26Business Process Platform 281

CCAD Integration 100cFolders 101Client-server 20Collaboration 170Composite Application Framework

(CAF) 275Composite applications 274Constant change 17Context activities 27Core activities 27Core and context 26Core and context lifecycle 28Corporate governance 64, 65Corporate Services 110, 117COSO 65cProjects 104Credit management 58, 85

DData Retention Tool 64Document Management System

(DMS) 100

EE-business 15Employee Interaction Center (EIC) 128

Employee Lifecycle Management 67, 71

Employee Transaction Management 67, 72

Enterprise Application Integration (EAI) 197

Enterprise Asset Management 47, 92, 93, 97, 106

Enterprise Services 271Enterprise Services Architecture 21, 23Environment, Health, and Safety

(EH&S) 109ESA Roadmap 271

FFinancial analytics 44, 51Financial and management accounting

53, 56Financial planning 51Financial Supply Chain Management

(FSCM) 52, 58, 59Financials 40, 52, 85Flexibility 34Forecast 51

GGAAP see US-GAAPGood Laboratory Practice (GLP) 105Good Manufacturing Practice (GMP)

97, 105Guided procedures 102

HHCM service delivery 68, 71, 73Human Capital Management (HCM)

40, 67, 74, 127, 132

IIncentive and commissions mana-

gement 109, 114, 119Industry Solution 161Information integration 176Integration challenges 163Internal sales 134

Index292

International Accounting Standards (IAS) 38, 51, 64

International Financial Reporting Standards (IFRS) 51

Internet sales 85, 90IT-landscape consolidation 31

JJava 16

KKnowledge Management (KM) 180

MManagement of internal controls 52,

65Midsize businesses 148Mobile Asset Management 87, 107Mobile sales 91Multichannel access 174, 175mySAP Business Suite 21, 39mySAP ERP 2005 273mySAP.com 20, 39

NNew general ledger 56Next generation ERP 242NPDI 94, 99

OOperation value generation

Sales order management 81, 85Operational efficiency 29Operations 79Operations support 46, 47, 79, 92, 99

Asset management 92, 97, 106Lifecycle data management 93, 99Program and project management

47, 93, 94, 103Quality management 47, 93, 95, 105

Operations value generation 46, 79, 80, 88Customer service 81, 86Inventory and warehouse mana-

gement 81, 82Manufacturing 81, 83Procurement 81Transportation 81, 84

PPackaged solutions 31, 150People integration 167Performance management 72Period-end closing 57Portal infrastructure 167Process integration 187

RRadio frequency identification (RFID)

88Ramp-Up 237Real Estate Management 116, 121Real-time 19Return on investment 30Role-based capabilities

Analytics 136Financials 136Human Capital Management 132Operations 134

SSales planning and analysis 46, 48SAP Biller Direct 60SAP Business Intelligence 176SAP Cash and Liquidity Management

62SAP Collections Management 61SAP Credit Management 59SAP Dispute Management 61SAP Easy Document Management

100, 104, 106SAP ECC 5.0 160SAP E-Recruiting 71, 74, 131SAP Exchange Infrastructure (XI) 187SAP for Automotive 140SAP for Banking 141SAP for Consumer Products 143SAP for Retail 147SAP Grants Management 145SAP In-House Cash 62SAP Just-in-Time Process 141SAP Learning Solution 71, 76SAP Master Data Management (MDM)

184SAP NetWeaver 157SAP R/2 19SAP R/3 19

293Index

SAP Recipe Management 99SAP solution portfolio 39SAP Switch Framework 278SAP Treasury and Risk Management

63SAP Web Application Server (Web AS)

194Sarbanes-Oxley 63, 65Search and classification engine 183Self Services

Centralized employee interactions 124, 128

Employee Self Services (ESS) 124, 129

Manager Self Services (MSS) 124, 126, 131

SEM Balanced ScorecardBriefing Book 50

Service-Oriented Architecture 23Strategic business insight 33Strategic Enterprise Management 42

Strategic pillars of ERP 33Sustainable differentiation 18Switch Framework 278

TTotal cost of ownership 15Transition to mySAP ERP 37TREX search 184

UUS-GAAP 51

WWeb Services 23Whistle blower complaints 66Workforce analytics 48, 71Workforce deployment 68, 73Workforce management 73

XXML 16