Finance and Controlling – Day 1

Introduction to SAP
Business without ERP
PP contacts
Customers Purchasing for
raw material

4
Purchasing

Customer
Calls to
1 place order
for a Car Sales
office/Inventory
contacts PP Production
Planning
3
3
Sales office
contacts
Inventory

Sales Inventory
-3-
Business without ERP (Contd..)

Lets add some more Business Processes

-4-
Business without ERP (Contd..)
Where is my
What is this
car
Customers confusion

What to
manufactur
e??
Whom to Production
contact for Planning
status?

What is
Cost and
Sales Shop floor
profit
Finance

Purchasing
Vendors
Inventory

-5-
Lets Deliver the end product to customer..
I did not order
for a
TRUCK!!!!

Dear Sir,
Your Order…

Sales

-6-
Business without ERP (Contd..)

I AM NOT TAKING
DELIVERY AND WILL
NEVER DEAL WITH YOU!

We are
SORRY Sir

Sales

-7-
Overall Picture

Vendors

Sales Purchasing

General
Ledger A/P
Customers A/R

Production
Planning

Inventory Shop Floor

Execution

-8-
Why Enterprise Architecture

• Why Enterprise Architecture ?

– Numerous disparate information systems

– Integrating the data becomes costly

• Time

• Money

• Resources

– Inconsistencies and duplication of data

– Lack of timely information

– Required: Central enterprise definitions

– Required: Centrally controlled business change

-9-
Enterprise Structure – Integrating Business

Payroll
FA
Marketing HR

GL
Treasury
Partner
Shop
Floor
AP Systems
Purchasing
PP
Sales
AR

Plants
Mfg.

-10-
-11-
Enterprise Architecture - Benefits

• Eliminates the duplication, discontinuity and redundancy in data

• Increases the return on investment made on IT implementations
• Delivers quality information designed for the Enterprise as a whole
• Faster and cheaper
• Delivers quality information to produce a quality enterprise
• Satisfying Partners/Customers
• Reducing required manpower

ERP
-12-
Quiz Time

• What is the full form of SAP?

• When was SAP founded?

-13-
Quiz Time

• What is the full form of SAP?

Systems Applications and Products in Data Processing

• When was SAP founded?

Founded in 1972 by Wellenreuther, Hopp, Hector, Plattner and Tschira
– Renamed in 1977
– Before 1977 : Systems Analysis and Program Development (German :
Systemanalyse und Programmentwicklung)

-14-
History of SAP
• Systems Applications and Products in Data Processing
– German : Systeme, Anwendungen, Produkte in der Datenverarbeitung

• Founded in 1972 by Wellenreuther, Hopp, Hector, Plattner and Tschira

– Renamed in 1977
– Before 1977 : Systems Analysis and Program Development (German : Systemanalyse und
Programmentwicklung)

• SAP is both the name of the Company as well as their ERP Product

• SAP system comprises of a number of fully integrated modules, which covers virtually
every aspect of the business

• Three systems developed : R/1, R/2, R/3

-15-
 Steps to Strategic ERP
Enterprise Resource Planning
is evolved through these stages …

Enterprise Resource Inter-Enterprise Collaborative

Planning Co-operation Business

Create
Strategic
Value

Total Efficiency and

Company Control
Value

Automation

80’s R/2 90’s R/3 Today mySAP ERP

Evolution of ERP
-16-
For Over 30 Years, SAP Has Been Driving ERP – and They
Continue to Do So…
mySAP ERP
ERP Rapid E-Business is
Adoption now seen as an
Companies start to extension of
adopt ERP on a ERP, not a
massive scale replacement.

Dot.com Hype: SAP is leading

ERP = Old the new industry
E-Business = New standard for
ERP = The Trends seemed to collaborative
indicate that ERP business
Business
was an out-of- applications.
Software
SAP Invents fashion model
Industry
Real-Time ERP The approach that
SAP defines and SAP established
establishes a new becomes industry
approach to standard. New
Integrated competitors enter
Standard the market.
Business
Software.

70s 80s 90s 00s

-17-
Evolution of SAP

-18-
Quiz Time

• SAP R/3 client server architecture evolved in

year___________.

• Which is the latest SAP product?

– mySAP ERP
– mySAP Business Suite
– mySAP.com with one step business

-19-
Quiz Time

• SAP R/3 client server architecture evolved in year

1992

• Which is the latest SAP product?

– mySAP ERP
– mySAP Business Suite
– mySAP.com with one step business

-20-
SAP R/3 Architecture
3 Tier Client / Server Architecture

• The SAP R/3 architecture is based on a 3-tier client/server

principle
– Presentation Server

– Application Server

– Database Server

• Dedicated Servers are linked by Communication Networks

• Perform tasks without sacrificing data integration and processes
within the system, as a whole

-22-
SAP R/3 System Architecture (Contd...2)

-23-
Overview of Presentation & Database Servers

• The Presentation Server

– GUI only
– At workstation
– Very light
– Sends requests to application server
– Obtains screens from application server and displays

• The Database Server

– Interface between application server and RDBMS
– Also holds the vendor specific DB driver

-24-
SAP R/3 Conceptual Areas

SAP Conceptual Areas

Basis Area Development Area

Application Area (The technical
(1. A developer’s
(Initiate and execute workbench
administration of
SAP transactions) 2. Create & Test
the system)
ABAP/4 programs)
(Functional)
(Authorizations/Ids/etc)
(Technical)

-25-
Systems in R3
Transport Request

Development Quality Production

System System System
(DC) (QC) (IC)

Client
110
100 etc..

-26-
Clients in R/3

• The Logon Client

– 3 digit number ( 000 to 999)
– Helps maintain independent sets of data within the same R/3 system

• Client mechanism and handling

-27-
Clients in R/3

-28-
 R/3 Technology Environment
Hardware UNIX Systems
Bull/Zenith Digital NCR
Bull IBM Compaq HP (Intel) Sequent IBM IBM
Digital SNI Data General IBM (Intel) SNI AS/400 S/390
HP SUN ...

Operating AIX Reliant

systems Digital UNIX UNIX (SINIX) Windows NT OS/400 OS/390
HP-UX SOLARIS

Databases ADABAS D ADABAS D

DB2 for AIX MS SQL Server DB2 for DB2 for
INFORMIX-OnLine INFORMIX-OnLine OS/400 OS/390
ORACLE ORACLE

Dialog Windows 3.1, Windows 95, Windows NT,

SAPGUI OSF/Motif *, OS/2 Presentation Manager (PM),
Macintosh *, Java

Languages
ABAP/4, C, C++, HTML, Java
Platforms and Databases supported by R/3
Operating Systems Supported Hardware Supported Front ends Supported Databases

AIX SINIX IBM SNI SUN Win 3.1/ 95 / NT DB2 for AIX

SOLARIS HP-UX Digital HP OSF / Motif Informix – Online

Digital Unix Bull OS/2 Oracle 7.1

Macintosh ADABAS D

Windows NT AT&T Compaq Win 3.1 / 95 / NT Oracle 7.1

Bull / Zenith OSF / Motif SQL Server 6.0
HP (Intel) SNI OS/2 ADABAS D
IBM (Intel) Macintosh
Digital (Intel)
Data-General

OS/400 AS/400 Win 95 OS/2 DB2/400

-30-
Client Server Benefit

-31-
Quiz Time
Match the following
Presentation Server Windows

Application Server Basis

3 Digit number Quality System

Client Testing/ UAT GUI

Unix Systems Oracle

Authorizations Client

Business Administration

-32-
Quiz Time
Match the following
Presentation Server GUI

Application Server Business Administration

3 Digit number Client

Client Testing/ UAT Quality System (QC)

Unix Systems Windows

Authorizations Basis

-33-
SAP R/3 Modules
 SAP Modules

SD – Sales and Distribution FI – Financial Accounting

MM – Materials SD FI
CO – Controlling
Management
MM CO
PP – Production Planning AM – Asset Management
PP AM

SAP R/3
QM HR
QM – Quality Management PM WF HR – Human Resources

PM – Plant Maintenance WM PS WF – Workflow

WM – Warehouse
PS – Project System
Management

-35-
SAP R/3 Application Modules

• Financial accounting (FI)

• Controlling (CO)
• Asset management (AM)
• Materials management (MM)
• Sales and Distribution (SD)
• Production Planning (PP)
• Quality management (QM)
• Plant maintenance (PM) & Customer Service (CS)
• Project system (PS)
• Human resources (HR)
• Workflow (WF)

-36-
Module Functionalities

MM
Material Procurement BOM/Work Center/Routing
Inventory Management
Batch Management
Goods inspection
Invoice Verification
PP
SD
Inquiry processing
MRP
Sales Order Processing
Capacity Evaluations
Delivery Processing
Production Orders
Billing
QM in production

FI
CO
General Ledger
Cost Center Accounting
Accounts Payable
Product Costing
Accounts receivable
Order Contribution Analysis
Cash management

-37-
Quiz Time
Match the following
Financial Accounting Inventory Management

Controlling Shop Floor Control

Materials Management Financial Reporting

Sales & Distribution Profit center Accounting

Production Planning Billing

Project System Activity monitoring

Asset Management

-38-
Quiz Time
Match the following
Financial Accounting Asset Management
& Financial Reporting
Controlling Profit center Accounting

Materials Management Inventory Management

Sales & Distribution Billing

Production Planning Shop Floor Control

Project System Activity monitoring

-39-
Module FI – Financial Accounting

• External reporting of
• General ledger
• Accounts receivable/payable
• Sub-ledger accounts

with a user-defined Chart of Accounts

• Key elements
• General ledger
• Accounts payable
• Accounts receivable
• Asset Management
• Special Purpose Ledger (FI-SL)
• Legal consolidation
• Accounting Information System

-40-
Financial Accounting

Bank Management
Foreign exchange of secureties
management and loans
Finance information Cash management
system and forecast

Accounts Accounts
payable receivable
Bank
accounts
Payables
Receivables
General Ledger

Extended General Ledger Credit

Invoice
verification management
Consolidation

-41-
Module CO – Controlling

• Represents the flow of cost and revenue

• Instrument for organizational decisions
• Key elements of the CO application module include :
• Cost center accounting
• Product cost Planning
• Product Costing
• Profitability analysis
• Profit center accounting
• Activity based costing
• Enterprise controlling

-42-
Module SD – Sales and Distribution

• Optimize tasks/activities in
• Sales
• Delivery
• Billing
• Key elements of the SD application module include :
• Pre-sales support
• Inquiry processing
• Quotation processing
• Sales order processing
• Delivery processing
• Warehouse management
• Billing
• Credit Management
• Sales Information system

-43-
Sales and Distribution Processing
Sales Support Sales
SALES INFORMATION SYSTEM

activity

MATERIALS MANAGEMENT
Sales Inquiry

Quotation Contract

Delivery Subsequent
Sales Scheduling
USD free of delivery free Returns
order agreement
charge of charge

Shipping
Delivery

Billing
Debit memo Invoice Credit memo

FINANCIAL ACCOUNTING

-44-
Module MM – Materials Management

• Supports
• Procurement
• Inventory

• Key elements
• Materials procurement (purchasing)
• Inventory management
• Invoice verification
• Material valuation
• Vendor evaluation
• External Services management
• Purchasing Information System (PurchIS)
• Inventory Controlling Information system

-45-
Materials Management
BASIC DATA PURCHASING Third-party
SD
Material  Purchase requisition order
Special stock  MRP
Batch  Direct requisition
 Release procedures
PP Requirements

Purchasing information system

Vendor/one-time
customer  RFQ/Quotation
 Material/service PM Service/
Price comparisons

Vendor evaluation
Purchasing 
Spare Parts
info record  Price comparison list Service /
Service  Purchasing QM spare parts lot
Inspection
specifications  Purchase orders
 Outline agreements G/L accounts
Workflow  Scheduling agreements FI Cash management
and forecast
Optical archive INVENTORY MANAGEMENT
 Goods receipt/issue AM Fixed assets
Texts  Transfer posting
Mail  Quantities and values
Communication  Physical inventory Cost center /
 Storage bins CO
Classification Budget
Documents INVOICE VERIFICATION
 Check and post PS Project
Conditions  Price update

-46-
Module PP – Production Planning

• To plan and control the manufacturing activities

• Key elements
• Bill of Material (BOM)
• Routings
• Work Centers
• Sales and Operations planning (SOP)
• Master Production Scheduling (MPS) – Capacity Planning
• Materials Requirement Planning (MRP)
• Shop Floor Control (SFC)
• Production orders
• Product costing, activity-based costing
• Work in process
• Kanban
• Production planning for process industries (PP-PI)
• Repetitive Manufacturing

-47-
Production Planning

SD
PP
PS
SD
Sales and Operations Project
Planning Networks
Customers Demand management /
SD MPS PM
SD
Sales Material requirements Maintenance
Shipping planning Repairs
Billing Plant
maintenance
Detailed Schedeling and
Planning
Vendors MM
SD Capacity planning QM
SD
Purchasing Shop floor control Inbound Raw
Warehouse Costing Material
Invoice Information system
verification Finished Goods

FI CO HR
Financial Cost Human
accounting accounting resources

-48-
Module QM – Quality Management

• Supports
• Quality planning
• Inspection
• Control for manufacturing
• Costing
• Procurement

• Key elements
• Quality planning
• Quality during procurement, production, distribution
• Quality Management Information - Quality inspection
• Information System (QMIS)

-49-
Module PS – Project System & HR – Human Resource
• PS – Project Systems
• Support planning, control, & monitoring of long term highly complex projects
with defined goals
• Key elements
• Project WBS – Plan
• Budget & Monitor
• Network Management
• Activity monitoring, Material Planning, Milestones, Capacities Scheduling
• Project Management Information System
• HR – Human Resource
• Key elements
• Recruitment
• Payroll & Time management
• Travel Expense accounting & Benefits
• Workforce planning & Training administration
• Organization management

-50-
Module WF – Work Flow

• To integrate SAP R/3 with cross-applications

• Support tool for all modules
• Automates business process
• As events occur that trigger a process, the Workflow manager initiates a
Workflow item
• Using the process logic, data and documents are incorporated at each step
• Using the processing rules, the Workflow manager routes the item to the
appropriate role (location, person, unit, etc....).

• Example:
• Posting a PO will trigger automated mail to sales support for customer
service.

-51-
Quiz Time

• Is Industry solutions an SAP module like FI/CO/MM etc?

• True/False

– PP Supports procurement and Inventory

– FI Handles project budgeting and monitoring

– WF management is a support tool for all modules

-52-
Quiz Time

• Is SAP - Industry solutions a module like FI/CO/MM etc?

NO

• True/False

– PP Supports procurement and Inventory

(False – MM Supports these functions)

– FI Handles project budgeting and monitoring

(False – PS handles these functions)

– WF management is a support tool for all modules

(True)

-53-
IS – Industry Solutions

• Combines SAP R/3 application modules to additional industry-

specific functionality

• Result of the research by industry Centers expertise (ICOE)

-54-
mySAP Industry Solutions (Some Examples)
• SAP for Aerospace & Defense • SAP for Healthcare
• SAP for Media • SAP for Public Sector
• SAP for Automotive • SAP for High Tech

• SAP for Mill Products • SAP for Retail

• SAP for Banking • SAP for Higher Education & Research

• SAP for Mining • SAP for Service Providers

• • SAP for Industrial Machinery &

SAP for Chemicals
Components
• SAP for Oil & Gas
• SAP for Telecommunications
• SAP for Consumer Products • SAP for Insurance
• SAP for Pharmaceuticals • SAP for Utilities
• SAP for Engineering, Construction &
Operations
• SAP for Professional Services

-55-
SAP Product Overview
Evolution of SAP products

Solutions
mySAP CRM mySAP
mySAP SCM Business
mySAP HR Suite
mySAP ERP mySAP PLM
………..
R/3
Enterprise
R/3 SAP NetWeaver
Web AS

•Easing Upgrade Plans & Providing Transition Options

•Bringing benefits of SAP Netweaver into installed base
•New Customers have more entry options & receive world –class ERP

-57-
Evolution of SAP products

my SAP
my SAP
SAP R/3 Business
Solutions
Suite

-58-
SAP R/3

Financials

HR

Corporate Services

Operations

-59-
mySAP Solutions

mySAP PLM mySAP SCM

mySAP Financials

mySAP SRM
mySAP CRM mySAP HR

Corporate Services

Operations

Adaptive Business Solutions SAP R/3

-60-
my SAP Business Suite

mySAP PLM mySAP SCM

mySAP mySAP

SRM CRM
mySAP Financials

mySAP HR

Corporate Services

Operations

SAP NetWeaver
Application Platform ( Web As)
People Integration (Portal)
Information Integration( BI,MDM)
Process Integration (XI)

-61-
mySAP Solutions & Netweaver

• mySAP CRM

• mySAP SRM

• mySAP SCM

• mySAP PLM

• SAP Netweaver

-62-
My SAP Customer Relationship
Management (CRM)
CRM Solution Map

-64-
CRM – Holistic view

-65-
Where does a CRM solution fit?

Who Marketing Sales Service Executives

What Service
Use a CRM Engage
Solution to
complete
the Cycle
Fulfill
Transact

Workplace

Which way Internet Mobile Telephony

How Operational Analytical Collaborative

-66-
CRM Component Landscape
mySAP.com
Portal Users
OLTP
R/3 System

CRM System

BW

As one big
logical box
Internet

Telephone APO
Callers
Mobile Clients

-67-
CRM Internet Sales

Enterprise

B2C Scenario Consumer

Internet-
selling

BBP Scenario Business Partner

B2R Scenario Reseller

-68-
Service module within CRM

• Service Planning
• Proactively engage customers with the correct resources at the most
beneficial times

• Customer Care
• Provide customer with 24/7 accessibility from all communication channels
with precise and consistent informationon

• Installed Base Management

• Maintain an accurate, up-to-date record of a customer’s products and
installations to facilitate service and anticipate customer requirements

-69-
Mobile Sales module within CRM

• Suite of tools tailored to the needs of the

offline mobile sales force
– Provides an integrated view of customers, prospects, products,
services, competitors, activities, opportunities, quotations,
orders, etc.
– Heavy cross-referencing for easy navigation

• Facilitates the sales process by

– Effectively managing customers and prospects
– Providing appropriate customer, product and competitive information
– Determining product and pricing configurations
– Managing sales projects across sales teams
– Generating presentation and proposals

-70-
Quiz Time

• What is the latest version of mySAP CRM

• Name the three service modules with in CRM

-71-
Quiz Time

• What is the latest version of mySAP CRM

(Version 5.0)

• Name three service modules with in CRM

– Service Planning
– Customer care
– Installed base management

-72-
My SAP Supplier Relationship
Management (SRM)
SRM Solution Map

-74-
 Key Components of mySAP SRM

mySAP SRM – eProcurement mySAP SCE

Supplier Collaboration Engine

• Enterprise Buyer Prof 3.5 • Supplier self services 1.0

• Business Inf. W’house 3.0B • Bidding Engine 3.5

• Requisite Bugs Eye 3.5 • User Management 3.0

• Requisite eMerge 3.5

• Enterprise Portal 5.0

Exchange Infrastructure Content Integrator

-75-
Key Components of mySAP SRM

• Strategic Sourcing
•Sourcing analytics: Helps provide analytics based on supplier location, line of
business
•Supplier evaluation: Helps you evaluate the supplier base within the organization
systems and external market places to identify and select supplier to ensure reliable &
uninterrupted supply
•Request for quotation and auctions: Provides electronic auctioning and bidding tools
to compress sourcing cycle times
•Contract management: Helps create and manage value and quantity contracts

• Operational Procurement
•Self-service procurement: Enables decentralizing procurement process within
organization, without diluting the control
•Plan-driven procurement: Enables automatic purchase order generation for stock
materials across the integrated supply chain
•Services procurement: Enables service procurement process to be managed
online

-76-
Key Components of mySAP SRM….Contd.

• Supplier Enablement
•Supplier portal: Provides portal features for suppliers to manage their product data
and orders

•Supplier connectivity: Provides capability to connect multiple suppliers through XM_-

based document exchange

• Content Management
•Content consolidation: Provides capability to consolidate product and vendor
information

•Catalog content management: Provides capability to manage OCI compatible catalog

with tools for data import, data edit and a search engine

-77-
Quiz Time

• Name any one key component of mySAP SRM Solution map

-78-
Quiz Time

• Name any one key component of mySAP SRM Solution map

– Following are the three key components of mySAP SRM

• Strategic Purchasing & Sourcing

• Operational Procurement

• Supplier Collaboration

-79-
My SAP Supply Chain Management
(SCM)
SCM – Solution Map

-81-
mySAP SCM

SAP APO (Advanced Planning and Optimizing)

Flexible and Adaptive Planning, Integration with CRM, SRM and PLM

SAP ICH (inventory Collaboration Hub)

Collaboration with Suppliers

SAP EM (Event Management)

Monitor, alert and resolve exceptions

-82-
Typical SAP SCM Solution-scape
SAP SCM
SAP R/3
Dominant source of
Transaction Data Planning system where
Master Data in SAP selective Master data
SCM, destination of maintained and sourced
Core Interface
transaction data like from R/3
planning outputs or
Availability Checks for
Master Data
Execution systems
Module includea
Demand Planning, SNP
& Deployment, PPDS,
GATP, TPVS and TLB

Core interface
Planning Outputs
include Forecasts, SNP
SAP CRM, or PPDS Planned
SAP SRM Orders, Stock
Legacy Transfers and
and BAPI Production Orders
SAP PLM Systems

-83-
 One-on-One comparison
i2 Technologies SAP SCM ORACLE APS Manugistics
(Tradematrix SCM) (Networks SCM)

Forecasting Demand Demand Planner Oracle Demand PlannerDemand Management

Planner/Demand
Management

ATP and Fulfillment Demand Fulfillment SAP GATP (Global Oracle GOP (Global Fulfillment Management
ATP) Order Promising)

Material and Resource Supply Chain Planning SAP SNP (Supply Oracle ASCP Master Planning
planning Network Planning) (Advanced SCP)

Manufacturing Factory Planning PP/DS (Production Oracle Manufacturing Manufacturing Planning

Planning Planning and Detailed Scheduling and Scheduling
Scheduling)

Transportation TMS (Transportation TP/VS (Transportation Oracle Transportation Logistics Management

Management Solutions) Planning/Vehicle Solutions
Scheduling)

-84-
mySAP Product Life Cycle Management (PLM)
PLM Solution Map

-86-
SAP Netweaver
A Roadmap for Web Services

-88-
Services are changing SAP’s Product portfolio

-89-
From Basis to WAS

-90-
 Integration is the Key Challenge

Business Drivers
Extended Value Network
Document Mgmt
Increased Market Dynamics
Call Center Market
Analysis
Integration costs are high
Long integration projects
SCM IT environments become increasingly rigid
Lots of heterogeneous systems
ERP

E-sales
Pressure on IT increases
Must leverage existing investments

Trading Must support new business processes

quicker
E-procurement
Must reduce total cost of ownership (TCO)
Technical
systems PLM

-91-
 How to Address the Integration Challenge

Reduce Complexity
• Minimize the number of connections
through hubs
Document Mgmt
Market •Use only one platform to integrate all
Call Center Analysis people, information, and systems

Reduce Cost Integration

SCM
ERP •Deliver .NET and J2EE interoperability
•Deliver adaptors for ISV products
•Deliver products, not projects

Increase company
E-sales
performance
•Increase ease of use, scalability and
adaptability
Trading
E-procurement •Increase business process flexibility
Technical by using an Enterprise Services
systems Architecture

PLM -92-
The fundamental Web services standards are supported by the Web
Application Server (Web AS), which is the basis for all other
NetWeaver components
-93-
SAP NetWeaver
The integration and application platform for lower TCO

Unifies and aligns people,

information and business
processes
Integrates across technologies
and organizational boundaries
A safe choice with full .NET and
J2EE interoperability

The Business foundation for

SAP and partners
 Powers business-ready solutions
that reduce custom integration
It’s Enterprise Services
Architecture increases business
process flexibility

-94-
 SAP NetWeaver in Detail (SAP Internal View)
Product components and killer features
SAP Mobile Infrastructure
Tight coupling and alignment with SAP business solutions
SAP NetWeaver
SAP Enterprise Portal
Business packages
People Integration
Collaboration
Multi-channel Access

Composite Application Framework

SAP Business information Warehouse Portal Collaboration
Business content

Life cycle Management

Tight integration to Sap Information Integration
Open architecture (Crystal, Accential ) Bus. Intelligence Knowledge Mgmt

Master Data Management

Master Data Management
Coming in 2003
Process Integration
SAP Exchange Infrastructure Integration Business Process
Proxy generation and mapping tools Broker Management
Integration directory
SAP’s ability to execute Application Platform
J2EE ABAP
SAP Web Application Server
Multi-channel Access
Proven, scalable, comprehensive toolsets
Leverage existing infrastructure/skillets

-95-
SAP Solutions Powered by SAP NetWeaver
Business content makes the business foundation

-96-
SAP Organizational units
Business Scenarios – Main Elements

-98-
Organizational Structure in SAP

Production Planning Financial Accounting

Company
Plant
Code

Controlling Human Resources

Client
Controlling Personnel
Area Area

Sales and Distribution Materials Management

Sales Purchasing
Area Organization

-99-
Company Code

-100-
Organizational Structure - Levels

-101-
Organizational Structure – Business Functions

-102-
Enterprise Structure - Technology

-103-
SAP Organizational Structure: Cardinality

Client

Chart of
Accounts

Purchasing
Group
Company
Code

Purchasing Sales
Plant Organ.
Org.

Shipping Storage Distribution Sales Sales

Point Channel Office Group
Location

Loading Division
Point

-104-
-105-
Quiz Time

• Which is not a part of SAP Business Scenario main Elements

– Master Data
– Organizational Unit
– Transaction
– Document
– All the above
• Answer True or False
– One Chart of accounts can be assigned to many Company Codes
– A plant can be assigned to many Company codes

-106-
Quiz Time

• Which is not a part of SAP Business Scenario main Elements

– Master Data
– Organizational Unit
– Transaction
– Document
– All the above
• Answer True or False
– One Chart of accounts can be assigned to many Company Codes
(True)
– A plant can be assigned to many Company codes
(False)

-107-
Organizational Elements in FICO
Organizational Units in R/3 FI

-109-
Overview: Organizational Elements in Accounting

-110-
Organizational Elements in Logistics
Overview: Organizational Elements in Logistics

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Quiz Time

• State True/False
– Company is obligatory in an organization structure

• Fill in the blank

– Unit responsible for procurement of materials/services and negotiating

with vendors is called ____________.

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Quiz Time

• State True/False
– Company is obligatory in an organization structure

(False – Company code is obligatory)

• Fill in the blank

– Unit responsible for procurement of materials/services and negotiating

with vendors is called Purchasing Organization

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Organizational Elements in Sales
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Quiz Time

Fill in the blanks

• Sales area is a combination of _____________, ________________

and _______________.

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Quiz Time

Fill in the blanks

• Sales area is a combination of

– Sales Organization,

– Division and

– Distribution Channel

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Navigation
Logging on to SAP System

Logon pad with

different systems

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Adding to favorites

Steps to add transaction to favorites

Step I: Select the transaction you want to add to
favorites
Step II: Right click on the transaction you want to
add to favorites
Step III: Select Add to favorites.

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General Settings
Global Settings (at Country level)

• Variants
• Calendar
– Public Holidays
– Holiday Calendar
– Factory Calendar
• Unit of Measurements
• Currencies
– Currency codes
– Conversions (quotations)
– Exchange Rate Type
– Rates
– Rounding rules

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The Variant Principle

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Calendar

• Define Public Holidays

• Define Holiday Calendar

– A combination of a yearly 12-month calendar and a list of all public holidays that fall

within a calendar year.

– Gives an overview of all working days and all days off for a calendar year. It can be

created to cover a validity period of several years.

– Can be defined according to the country or region in which they are to be

implemented, and adapted to suit individual business requirements

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Calendar

• Define Factory Calendar

– Calendar in which working days are numbered sequentially.
– Defined on the basis of a public holiday calendar.
– Validity period of a factory calendar must be within the validity period of the
public holiday calendar.
– The weekdays that are working days must also be specified in this calendar.
– Examples:
• Monday through Friday are working days.
• Saturday, Sunday and public holidays are non-working days.

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Unit of measurement

• Enables calculations with quantities and physical units.

• Units of measurement are needed for internal conversions (such
as kilogram <-> gram, but also centimeter <-> inch).
• The international system of units (SI) is used for this.
• UOMs are held centrally in the SAP System for all applications.
• Conversion factors are stored in the system with a unique
internal key.
• Unit of measurement can be created according to requirements.
• CAUTION: Extra care to be taken for any creation as this global
setting can affect the whole system performance

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Currencies

• Legal means of payment in a country.

• You can manage ledgers in two parallel currencies in addition to the

local currency

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Currency settings
• Currency codes
– SAP maintains about 187 currencies. If any transaction in a new
currency will happen for the organization, that currency to be
maintained
• Standard quotation
– Can specify direct or indirect quotation. System by default will take
direct quotes.
• Conversion factors
– Mention the conversion for currency to currency. For example, INR To
Yen will 1:100
• Rounding rules
– ensures that the amounts in this currency are always rounded to this
unit

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Exchange Rate Type
• Exchange Rate Type is used for different business purposes
where multiple rates can be maintained for a pair of currencies
• The following exchange rate types exist
– Buying rate (G)
– Bank selling rate (B)
– Average rate (M)
– Historical exchange rate
– Key date exchange rate

• Default exchange rate types can be maintained in document

types
• For posting and clearing, the system uses the exchange rate type
M (average rate). This exchange rate type must be entered in the
system and you must also enter the exchange rates for this type.

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Exchange Rate

• Exchange rates in the system for the following purposes

– Posting and Clearing
– To translate amounts posted or cleared in foreign currency, or to check
a manually entered exchange rate during posting or clearing.
– Exchange Rate Differences
– To determine gains or losses from exchange rate differences.
– Foreign Currency Valuation
– To valuate open items in foreign currency and foreign currency
balance sheet accounts as part of the closing operations.
– Valuation of Purchase Documents, Sales documents and
Commitments
• Exchange rates maintained for a exchange rate type for an effective
date between two currencies

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Quiz Time

• Fill in the blank

– The difference between ____________ and

____________ is called spread.

– SAP maintains ___________ number of currencies.

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Quiz Time

• Fill in the blank

– The difference between Buying rate and Selling rate is

called spread.

– SAP maintains 187 number of currencies.

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Thank You!