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    SIPC E-Business Project Phase I (Financial Accounting Level I training)*

  • *What is an ERP ?Enterprise Resource PlanningSingle software that runs Company-widemay need complementary software in a few areas which are too specific or which it does not address

    Addresses all major functional areas / processes of the companyContinuously evolving to address newer areas and processes

    Ready-to-use package from day oneLeading vendors SAP, Oracle (Applications), Peoplesoft, BaaN

  • *What is ERP?multi-module application software that helps organization manage its core business product planning, inventory maintenance, supplier interaction, order tracking, financial and HR management relational database system, client/server distributed architecture business process analysis and retraining rich functionality across all areas

  • *Evolution of ERP1960s: Inventory Management Control (IMC)1970s: Material Requirement Planning (MRP) 1980s: Manufacturing Resources Planning (MRP-II) 1990s: Enterprise Resource Planning (ERP)

  • *ERP Definition

    A Future proof software solution that addresses the enterprise needs taking the process view of an organization to meet the organizational goals tightly integrating all functions of an enterprise

  • *Characteristics of ERP

    Real time decision support Fully integrated Open system Distributed yet integrated applications Ease of use - personalization, browser based Flexible / best business processes comprehensive - all functionalities Adaptability to latest technologies Internet / web applications

  • *Why ERP? - A Typical IT Story

    Financial Accounting

    SIPC E-Business Project Phase I (Financial Accounting Level I training)*

  • *A Typical IT Story

    Financial Accounting

    SIPC E-Business Project Phase I (Financial Accounting Level I training)*

  • *Need for ERPIntegration of Business ProcessesOnline information at the corporate office Standardization of systems across Locations Reduce cash to cash cycle times Faster Consolidation at Head office for statutory reporting

  • *ERP Position in Process chain




    AccountsCosting MaintenanceQuality



  • *Information and Goods Flow

    Capacity resources

    Capital resources


    Material resourcesLogistic processvendorproductionsales purchase ordersprocurement materials services

    processes products services

    sales orders


  • *Centralized Purchasing, Sales, Accounting for Multi-country, Multi-divisional, Multi-product Better Production Resources planningBetter Services Resources planningIntegration with all functionalitiesOptimize the business processesHave Real-time processingGet up-to-date information on business

    Why ERP?

  • *Incorporation of best business practices and process orientationLegacy systems are typically built around a fixed business scenario.

    ERP VS Custom Built Applications

  • **ERP VendorsBaanJ.D. EdwardsLawson SoftwareOracle ApplicationsPeopleSoftSAP

    *J.D. Edwards building accounting software for IBM. The company gradually added functions, its accounting software evolving to become a platform-independent ERP application that was in 1996 renamed OneWorld.In June 2003, the J.D. Edwards board agreed an offer under which PeopleSoft would acquire J.D. Edwards, and the takeover was completed in July.The agreement of this offer was followed by attempts from Oracle Corporation to take over the new enlarged PeopleSoft

    In 2003, PeopleSoft performed a friendly merger with smaller rival J.D. Edwards software.

    Beginning in 2003, PeopleSoft battled with Oracle over control of the PeopleSoft company. In June 2003, Oracle made a $7 billion bid ($19.50/share) to take over PeopleSoft, in what many describe as a hostile corporate takeover attempt. In February 2004, Oracle increased their bid to approximately $9.4 billion ($26/share), a 33% increase; this offer was also rejected forthwith by PeopleSoft's board of directors. Later that month, the U.S. Department of Justice filed suit to block Oracle, on the grounds that the acquisition attempt would break anti-trust laws; however, in September 2004, this suit was rejected by a U.S. Federal judge, who found that the Justice Department had not proven its anti-trust case.

  • *SAP - The Company and its Product R/3Founded in 1972 by ex-IBM employeesHQ in Walldorf64000 + installations10 users to 10000 users

    $ 3mn per day R&D expenditureIndian operations from 1996 200+ Indian companies have implemented itMarket Share and Revenues are bigger than the next three competitors combined!

  • *SAP R/ 3 ?S-A-P (not SAP!): Systems Applications and Products in Data Processing

    R/3 : 3 tier architectureReady to Run SoftwareMost complex package70,000+ tables, 120,000+ programs (Cryptic German), 400+ authorization objects

    Robust Design: wide compatibility for h/w, o/s, d/bDesigned using inputs from best of class companiesExtremely strong integration

  • *What SAP is notA temporary solutionIt will be the main back bone around which all future systems will be built

    A planning and optimizing toolSAPs strengths are in executionIt does not choose the best / most optimized solution

  • *What SAP is notA do-it-your way softwareLarge no. of options in configuration tablesLimitations to going beyond these optionsSource Code cannot be touched - contractual implicationsABAP Development possible in a few cases - technical restrictions in trying ABAP in other casesSystem Performance issuesUpgrades to newer versions may not support developments

    Overall it is the best but not the best for every featurebetter than existing systems for every feature

    A single burst effort sets the foundation for other Technology initiatives

  • *SAP R/3 ArchitectureSAP R/3 works on Three Tier Architecture

    User TerminalApplication ServerDatabase ServerData CreationModificationRetrieval Managing User RequestsData Storage

  • *3-Tier Client/Server Architecture

  • *The SAP World

  • *SAP - characteristicsHighly Integrated solution covering entire business processesTechnically capable of utilizing the network infrastructureOpen system to ensure freedom to choose Provides multiple ways of configuring business processes Solutions in areas where currently no systemsWorkflow enabled business processes Enables to exploit the power of Intranet and Internet

  • *Common SAP objectivesCost Control & increased profitabilityIncreased productivity of all resources man, material & moneyProcess StandardizationTransparency in operations, resulting in better communicationShift from post-mortem scenario to predictive scenario

  • *Results of IntegrationFocus on Business ProcessesElimination of Redundant Data (Common Constant Data)Easier Corporate ConsolidationBetter Managerial Control Elimination of InterfacesFaster reaction to changing structures

  • *Success factors for SAP implementationTop Management Commitment & communication down-the-lineEmpowermentChange managementTrainingCompliance to methodology

  • *How It worksMultiple Users

    Multiple Sessions

    Multiple Locations&Live

  • Modules

    SAP are categorized into 3 core functional areas:

    Logistics Financial Human Resources Technical

    Programming (ABAP)Basis*

  • Logistics

    Sales and Distribution (SD) Material Management (MM) Production Planning (PP) General Logistics (LO) Quality Management (QM) Plant Maintenance (PM)


  • Financial

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


  • Human Resource

    Personnel Administration (PA) Personnel Development (PD) *

  • *Plant Maintenance (PM)The PM application module supports planning, processing and completion of the plant maintenance tasks.

    Helps keep track of maintenance cost and resourcesProvides information to facilitate decision-making about plant maintenance concernsKey elements of the PM application include :

    Processing of unplanned tasksService managementMaintenance notification by date or countersMaintenance planningMaintenance Bill of materialsPlant maintenance Information system

  • *Quality Management (QM)The QM application module is a quality control and information system supporting quality planning, inspection, and control for manufacturing, costing, and procurement

    Key elements of the QM application module are :

    Quality inspectionQuality planningQuality Management Information System (QMIS)

  • *Production Planning(PP)The PP application module is used to plan and control the manufacturing activities of a companyPP application module include :

    Bill of Material (BOM)RoutingsWork CentersMaterials Requirement Planning (MRP)Shop Floor Control (SFC)Product costing, activity-based costingDiscrete and Repetitive manufacturing / Process Manufacturing

  • *Materials Management (MM)The MM application module supports the procurement and inventory functions occurring in day-to-day business operations.

    Key elements of the MM application include :

    Materials procurement (purchasing)Inventory managementReorder point processingInvoice verificationMaterial valuationVendor evaluationExternal Services managementPurchasing Information System (PurchIS) and Inventory Controlli