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IBM Global Services
ERP / SAP Overview
ERP / SAP Overview |
Dec-2008
2005 IBM Corporation
IBM Global Services
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.
Evolution of SAP Architecture to ERP6
Judge the use of ABAP programming language.
Dec-2008
IBM Global Services
ERP Overview
Enterprise Resource Planning
Dec-2008
IBM Global Services

... synchronization of Company functions...
Purchase
Manufacturing
Finance
Sales
Dec-2008
IBM Global Services

and extended to the complete value chain...
Tier I Component
Manufacturer
Vehicle OEM
Tier II Component
Supplier
Dec-2008
IBM Global Services

... delivering administrative and decision support with...
Decision support and

analysis
Processes monitoring &

feedback
Administrative
registration
Dec-2008
IBM Global Services
What is an ERP solution...?

Integrated across the primary and support processes
Distribution
Manufacturing
Materials
Marketing
Planning
and
Execution
Finance
Engineering
Sales
Human Resources
Dec-2008
IBM Global Services
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
Dec-2008
IBM Global Services
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 !!!
Dec-2008
IBM Global Services
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.
10
Dec-2008
IBM Global Services
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.
11
Dec-2008
IBM Global Services
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
Vendors
Inbound
Logistics
Manufacturing
Transportation
Logistics and Distribution
12
Distribution
Delivery
Customer
Consumer
Sales & Customer Service
Dec-2008
IBM Global Services
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
13
Dec-2008
IBM Global Services
What results can be expected from an ERP culture?
14
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
Dec-2008
ERP
IBM Global Services
SAP R/3 Overview

Systems Applications and Products in Data Processing
15
Dec-2008
IBM Global Services
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
16
Dec-2008
IBM Global Services
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
The R/2 system

R/2
Basis 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.
17
Dec-2008
IBM Global Services
SAP R/3 : 3 Tier Architecture

The Presentation Layer
Those SAP R/3 software components that
specialize in interacting with end-users
form the Presentation Layer.
The Application Layer

specialize in processing business
applications form the Application Layer.
The Database Layer

specialize in the management , storage and
retrieval of data form the Database Layer
18
Dec-2008
IBM Global Services
Presentation Layer
components
Application Layer
components
Database Layer
components
reside in:
Presentation servers:
Application servers:
Database servers:
Systems capable of
providing a graphical
interface.
19
reside in:
Specialized systems
multiple CPUs and
vast amounts of RAM
Specialized systems
with fast and large
hard drives.
reside in:
.
Dec-2008
IBM Global Services

Presentation Layer components are installed across many PCs
The Application Layer

components are installed
across one or more highend servers.
The Database Layer
components are installed on
high-end database server
20
.
Dec-2008
IBM Global Services
SAP R/3 Overview

FI
SD
Financial
Accounting
Sales &
Distribution
CO
MM
PP
Materials
Mgmt.
Controlling
TR
R/3
Product
Planning
Treasury
Client/Server
ABAP/4
QM
PS
Quality
Mgmt.
Project
System
PM
WF
Plant Maintenance
Workflow
HR
Human
Resources
21
IS
Industry
Solutions
Dec-2008
IBM Global Services
Integration
Planned
Requiremen
t
PP
SD
Customer
Order
MRP
MM
Requirement
on component
level
Purchase
Order
Planned
Order
Shipping
Production
Order
Invoicing
Goods
Receipt
Invoice
Verification
FI
Accounts
Payable
22
Account
Receivabl
e
Production
completed
FI
CO
Order
Settlement
Which modules are

involved?
Dec-2008
IBM Global Services
Integration
All business processes throughout the supply chain are
executed in one system sharing all information
S
U
P
P
L
I
E
R
23
SAP R/
3
Workflow
C
U
S
Procurement
Production
Distribution
MM
PP
SD
O
M
Finance and Accounting

FI
E
CO
Dec-2008
IBM Global Services
mySAP Technology
24
Dec-2008
IBM Global Services
SAP NetWeaver
Existing Systems
25
Dec-2008
IBM Global Services
Evolution of SAP Architecture

SAP ERP 6.0
Supplier Relationship Management
Self-Services
Internet Sales
Composite Applications
Strategic Enterprise Management
and more
EhP 1
EhP 2
Switch Framework
Enterprise Extensions
Industry Extensions
SAP ECC Core (6.0)
26
Dec-2008
PEOPLE INTEGRATION
Multi Channel Access
Portal
Collaboration
INFORMATION INTEGRATION
Bus. Intelligence
Knowledge Mgmt
Master Data Mgmt
PROCESS INTEGRATION
Business
Integration
Process Mgmt
Broker
Life Cycle Mgmt
Composite Application Framework
SAP NetWeaver 7.0
APPLICATION PLATFORM (7.00)

J2EE
ITS
ABAP
DB and OS Abstraction
IBM Global Services
Enhancement Packages
Enhancement Packages
SAP ERP 6.0
SAP NetWeaver
What Are Enhancement Packages?
n
Optionally installed
Software innovations include; UI simplifications, functional enhancements,

industry specific capabilities
and enterprise services
Cumulative
packages
Enhancement packages are not support packages
27
and activated
software innovations for SAP ERP 6.0
in nature; current enhancement packages contain all contents of earlier
Dec-2008
IBM Global Services
Improved Software Lifecycle

Installation of new functionality separated from activation via Switch Framework
Content of enhancement packages
From a functional view each SAP enhancement package contains several
Business Functions.
From a technical view each SAP enhancement package contains new versions
of existing software components, grouped by a technical usage.
Selective Installation
Enhancement
Packages
Install the parts that are required for the selected Business Function.
If installed:
No UI or process change
Framework
until a business function is activated via Switch
Less Adjustment effort due to selective update of software components

No implications
on the underlying NetWeaver platform, in addition enhancement
packages contain most current Support Package Stack
Selective Activation
Support
Packages
Activate the business functions you need.

If activated:
End-user training is limited to the activated business function(s)
Testing is simplified
28
with templates, provided for every business function

Dec-2008
IBM Global Services
SAP R/3 : Components

Master Data
Application
Transaction Data
ABAP
Programs
Organization Structure
Configuration
Key Data Elements

Functionality Configurations
29
Dec-2008
IBM Global Services
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
30
Dec-2008
IBM Global Services
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.
31
Dec-2008
IBM Global Services
Why do we need ABAP Development ?
SAP R/3 scope
32
Dec-2008
IBM Global Services
SAP Solution
SAP R/3 scope
33
Specific company
requirements
Dec-2008
IBM Global Services
SAP Solution
SAP R/3 scope
Specific company
requirements
New Functionality
Development
Non SAP
applications
34
Dec-2008
IBM Global Services
Summary
Materials Requirement Planning (MRP-I) began as a technique for developing enterprisewide 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.
35
Dec-2008
IBM Global Services
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 ?
36
Dec-2008

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IBM Global Services

ERP / SAP Overview

ERP / SAP Overview |

2005 IBM Corporation

IBM Global Services

ERP / SAP Overview |

2005 IBM Corporation

IBM Global Services

Enterprise Resource Planning

ERP / SAP Overview |

2005 IBM Corporation

IBM Global Services

Enterprise Resource Planning

ERP / SAP Overview |

2005 IBM Corporation

IBM Global Services

Enterprise Resource Planning

ERP / SAP Overview |

2005 IBM Corporation

IBM Global Services

Enterprise Resource Planning

Decision support and

Processes monitoring &

ERP / SAP Overview |

2005 IBM Corporation

IBM Global Services

What is an ERP solution...?

ERP / SAP Overview |

2005 IBM Corporation

IBM Global Services

The ERP application

ERP / SAP Overview |

2005 IBM Corporation

IBM Global Services

Why clients buy ERP?

Because others are buying it !!!

ERP / SAP Overview |

2005 IBM Corporation

IBM Global Services

Recent business trends favoring ERP growth

ERP / SAP Overview |

2005 IBM Corporation

IBM Global Services

Recent business trends favoring ERP growth

ERP / SAP Overview |

2005 IBM Corporation

IBM Global Services

Business process benefits clients expect from an ERP project

Logistics and Distribution

ERP / SAP Overview |

Sales & Customer Service

2005 IBM Corporation

IBM Global Services

Major ERP vendors

ERP / SAP Overview |

2005 IBM Corporation

IBM Global Services

What results can be expected from an ERP culture?

Reduced working capital requirements

ERP / SAP Overview |

2005 IBM Corporation

IBM Global Services

SAP R/3 Overview