TERP01 SAP ERP Introduction

About This Module Organizational Levels and Master Data is the basic framework that supports business processes. As part of this module, you will be introduced to the transition from R/3 to SAP ERP, and therefore understand how to create the Organizational Levels and Master Data for the business processes inside SAP ERP. Module Objectives • Understand the positioning of R/3 to SAP ERP, identify its various components, describe the Organization Levels and Master Data, which are needed to support business processes in SAP ERP, explain reporting and analysis solutions available in SAP ERP to support internal and external reporting needs of an organization. • Appreciate the transition from R/3 to SAP ERP. • Identify the various components of SAP ERP. • Describe the various Organization Levels and Master Data which are needed to support various Business Processes in SAP ERP. • Explain Reporting and Analysis solutions available in SAP ERP, to support various internal and external reporting needs of an organization. Module Content • • • • SAP ERP Positioning Organizational Levels Master Data Reporting Solutions

Target Audience Solution architect, project managers, team members, and solution consultants who want to gain a broad fundamental understanding of the core processes, business interrelations, and integration of the individual business applications within the SAP ERP solution.

SAP ERP Positioning
About This Topic This topic explains the transition from R/3 to SAP ERP. It also aims to introduce participants to the various components of SAP ERP. Estimated time to complete this topic: 30 minutes What's in it for me? • To understand the positioning of R/3 enterprise towards SAP ERP A New Wave of Information Technology

is the evolutionary successor of the previously offered SAP R/3 Enterprise. internet sales. SAP R/3 has always been an “integrated” system where business processes were integrated within an enterprise’s operations. and Internet Transaction Server integrated into SAP ECC. Later. like the new general ledger. software has to upgrade accordingly. Customers now have the option to run these components on the same instance that runs SAP ECC to reduce the system landscape and save costs. SAP ERP and SAP NetWeaver Audio Transcript . Inside SAP ERP. with Technology advances and the internet revolution. since it offers many functional enhancements like Self Services. SAP introduced SAP R/3. thus paving the way for incorporating future developments. Finally. SAP Net Weaver also contains the SAP Web Application Server. With SAP ERP. SAP released SAP ERP. As you can see here. a new SAP solution was born. you now have services catering to adaptive businesses like Web services. business suites and xApps offerings. SAP believes in an environment where you do not have to scrap your existing software setup. from this point on SAP ERP was more than just SAP R/3 Enterprise with SAP NetWeaver. SAP’s Enterprise service architecture platform features Netweaver. enhanced usability and new developed functionality. where many other SAP components were included along with SAP R/3. technology changes were made from R2 to three tier R/3 and moved from Mainframes to Client-Server Architecture. keeping pace with the business requirements of today and the future. SAP Web Application Server contains all capabilities of SAP basis as well as additional web capabilities. and is the central core of SAP ERP. thereby reducing costs. The SAP ERP Central Component or SAP ECC. SAP R/3 enterprise was just a component. SAP Business Warehouse. Running the components on separate instances is also possible. SAP Strategic Enterprise Management. Compared to the SAP R/3 Enterprise.Audio Transcript As technology grows and changes. self service procurement. you can see that to begin with SAP’s technology was based on Mainframe architecture – based on ABAP and R2. Capable of e-commerce since 1996. However. it would provide upgrades and extend the functionality of the existing software. and SAP SEM. In this image. SAP products incorporated business technology for the future. in SAP ECC there are architectural changes with respect to Enterprise Services Architecture. Instead. Architecture of SAP ERP (Image) Audio Transcript After the SAP R/1 and SAP R/2 products. in March of 2003. This eliminated the need for customers to change existing systems and allowed for “integration” of business processes “between” enterprises. Keeping pace with business requirements and integrated business processes.

and others. SAP SCM. and Self-Service Procurement in Procurement. the core component of the Business Suite is ERP. and SAP SRM. strategic management.NET and IBM WebSphere. E-Learning. For example. a solution map shows you the processes enabled by a specific solution. SAP NetWeaver is used as a technology platform for integration and as an application infrastructure with open connections to Microsoft . As is the case with other SAP solutions. In the image shown here. SAP ERP Solution Map (Image) Audio Transcript The slide here shows the solution map. SAP ERP is built on the NetWeaver technology. SAP ERP also supports mobile technologies featuring GPS and GSM-supported service options for collaborative businesses. SAP ERP consists of: • Life Cycle Data Management • Quality and Asset Management • Sales Order Management • Internet Sales • Inventory Warehouse Management • Manufacturing and Transportation • Purchase Order Processing. you can see various highlighted areas in different colors. Summary We now come to the end of the topic on SAP ERP Positioning. These areas indicate additional capabilities offered by SAP ERP as against those already available to SAP R/3. SAP ERP is an integrated and personalized functionality. Organizational Levels About This Topic This topic describes the Organizational Levels which provide a framework to support Business Processes in SAP ERP. SAP Business Suite is built on SAP NetWeaver. SAP PLM. and E-Recruitment in Work Force Process Management.SAP ERP is the result of an ERP offering to SAP R/3. . SAP ERP is a Solution within SAP Business Suite (image) Audio Transcript SAP Business Suite comprises SAP ERP. As you can see from this image. you have New General Ledger in Financial Accounting. SAP ERP includes all the functionality of SAP R/3 Enterprise with the large number of additional business processes like self service. SAP CRM.

This is required for Financial Accounting. the Sales Organization is the central organizational element that controls the terms of sales to the customer. and extracted from the system. retail and direct sales. Here company and subsidiary in SAP can be called as company code. A sales organization is responsible for the sale and distribution of goods and services. Typical distribution channels include wholesale. Next would be the company code followed by Plant. The sales organization is an organizational unit within logistics that structures the company according to its sales requirements. A combination of these three organizational units forms the sales area. Familiar terminology like Storage Location. When you define the organizational units for your enterprise. 1000 and 3000. eliminating the need to enter this information more than once. An example would be a company within a corporate group. Organizational Levels (image) Audio Transcript In this image. Plant is the central organizational unit for Production Planning and in the context of Sales and Distribution. can be defined for a wide-ranging . as this is a representation of the existing business processes. and Legal Entity are all represented by the team Organizational Unit inside the SAP Application. the Organizational Unit “CLIENT” is the highest on the order and is used to represent the complete Enterprise. Division is usually used to represent a product line. Sales Organization. Product groups. you can define a division-specific sales organization. In the SAP ECC System. you can see how Organizational Units are used to represent the Enterprise Structure. A client usually represents a company in an SAP system. Similarly. This has two derivative Company Codes. Division and Storage Location.What's in it for me? • Describe the SAP enterprise organizational levels Organizational Levels – Terminology (image) Audio Transcript An Organizational Unit is a unit used to map an Organizational Structure of an enterprise to the SAP Application. Sales Office. or divisions. At the highest level is the Client. tracked. specifications or data that is valid for all organizational units in all R/3 applications can be entered at the CLIENT level. For example. The distribution channel represents the channel through which saleable materials or services reach customers. please bear in mind how you would like the data to be entered. distribution channel and division. Sales Areas image Audio Transcript Sales and distribution is organized according to the sales organization. In the image here. Profit Center. The purpose of this hierarchy or Organizational Unit is to avoid re-entering data more than is required. A company code is an independent legal accounting entity. Company Code 1000 has two derivation Plants under it. and similarly Company Code 3000 has one plant and one Controlling area under it.

and 1400 are all assigned to the company code 1000. products of divisions 02. 1200. you will notice that Purchasing organization 1000 purchases for plants 1000. you can see that in sales organization 1000. Master Data About This Topic This topic describes the Master Data that are needed to support Business Processes in SAP ERP. Any data that has to be used across several business processes and is consistent for longer periods of time can be termed as Master Data in the SAP . Any relevant company-code transaction from one of these five plants is posted to company code 1000 in Accounting. subdividing an enterprise according to the requirements of Purchasing. and 1400. 1100. negotiates conditions of purchase with vendors. which are located in one country and posts all the entries into the country’s company code in 1000.spectrum of products. Each country in which plants operate has one purchasing organization. Here you can see plants 1000. In this image. Summary We now come to the end of the topic on Organizational Levels for ERP Basics. 1200. Plants image Audio Transcript Let us now look at what a Plant is in the Organizational Structure. 03 and 05 are only sold through distribution channel 10. Estimated time to complete this topic: 20 minutes What's in it for me? • Describe the functions of master data Master Data: Customer Master image Audio Transcript Let us now understand what we mean by Master Data. 1300. A Plant is an organizational unit defined in Material Management which represents a location where stock of material is kept or manufactured. Hence. A purchasing organization is an organizational unit within logistics. This Unit procures materials and services. 1300. Purchasing Organizations image Audio Transcript Let us now look at a Purchasing Organization. This means any number of Plants can be assigned to one Company Code. 1100. The assignment of plants to company code can be n to 1. and bears responsibility for such transactions.

or approving a leave request. You can post the goods receipt or invoice receipt for the concerned purchase order. This is typically termed as the “Purchase to Pay” process flow. Example of such activities would include customer requests. and payments. material. data such as supplier. in “Purchase order” process you order a material by using a basic form of the “purchase order” document. such as creating a customer order. no document is created in the FI course during purchase order creation. posting an incoming payment. Note that at this stage no postings are created in the FI course. plant and any other data relevant to the purchasing of an organization must be provided. This data is only relevant to Sales and Distribution. distribution channel and division. Order Requirement can be done manually by registering a requirement using Order Requirement. As you have seen earlier. In the SAP ECC system.System. Process Overview: Purchase to Pay Image Audio Transcript Let us understand the business process flow from purchasing goods to paying for the same. Transactions Image Audio Transcript While Master Data refers to data that remains unchanged for longer periods of time. Any transaction that has been executed in the system creates a document. General Data: which does not depend on the company code. the sales area is a combination of sales organization. A customer master contains information that defines the business relationship between a company and its customer. Financial Accounting Data: is relevant to Financial Accounting and applies to one company code. they will automatically copy the referenced predefined data from the master eliminating the need to enter it again. the MM or Material Management Course and FI or Finance Course. Order Requirement: The first step in the purchase to pay process is the “Order Requirement”. We will be referring to two courses. Order a Material: Next. transactions are application programs which execute repeating business processes. The customer master is organized into three views which are located at different organizational levels. . the purchaser can control or supervise the processing status of the purchase order. While creating a purchase order. Sales Data: wherein data for one customer can differ for each sales area. the Order Requirement can also be automatically created. In the SAP ECC system. deliveries. Master data is usually created centrally and is then available across applications and users. The master contains data that is required to execute key business processes between the customer and the company. This purchase order creation is handled only in the MM course. When these documents are created. you will look at the Customer Master as an example. For this slide. invoices. In the SAP ECC system. This data is entered at the client level. referencing the master data.

Process Overview: Order to Cash image Audio Transcript Next. Two documents are created in real time in the system. an FI document is created. From the incoming order. and crediting the vendor account. by debiting the goods receipt or invoice receipt account. the system compares the goods receipt with purchase order quantity. Summary We now come to the end of the topic on Master Data for ERP Basics. A goods receipt entry is passed in the MM course. The goods to be delivered are posted as goods issue. . in real time. Then outbound delivery document is created. In the FI course. one for the material document and the other for the FI document. billing. If you have not received payments from your customers by the net due date. Invoice Verification: The vendor invoice receipt is then verified during invoice verification. Payment: The final step is the payment process which is finally updated in Financial accounting. The sales order item is a cost bearer. One in MM as a goods issue document and another in FI as an accounting document. you need to define Goods lnward accounts in order to post the entries in to FI. Let us understand with the help of two examples: product sale ex-stock and sale of service.Good Receipt: Once goods are received after the purchase order is processed. Reporting Standards About This Topic This topic explains the Reporting and Analytical Solutions available in SAP ERP. Billing is done only after the goods issue is posted. with details like the payment methods and bank settlement. A sales order is the basis of the sales process. Finally you come to payment and dunning. Our second example is for Sale of service: . When payment is received from the customer an entry of receipt is posted in FI. to support the internal and external reporting needs of an organization. During billing an invoice document is created. All these purchasing processes are settled in the SAP ECC system via Logistics. The vendor invoice is posted in MM and. in this case. A direct service generation process can also be displayed via a sales order item. you will understand the “Order to Cash” process flow.Here you sell a service. payment are almost identical to the steps in sales ex-stock. where in required goods are removed from the stock and prepared for delivery. The material document is created to update the inventory. you create the transport order. At the time of goods issue two documents are created. values are posted by debiting the Material stock account or the consumption account and crediting goods receipt or the invoice receipt account. Product sale ex-stock: In this process. All the other steps like incoming orders. a sales order is created for material which is kept in inventory. the customers will be dunned. Costs and revenues are derived automatically from the material production costs or from the SD Course.

Distinction: Operative/Informative Environments image Audio Transcript This slide discusses some of the most important demands placed on a modern data warehouse. The transaction-oriented Online Transactional Processing. all other business applications and external data sources such as databases. This knowledge helps the organization to define its business strategy and supports the business processes derived from it. because of the variety of its sources. online services. marketing. typically for data entry and retrieval transaction processing.What's in it for me? • Explain ERP analytical and reporting solutions Data Warehouse Concepts imafge Audio Transcript OLAP or Online Analytical Processing is an approach to quickly provide the answer to analytical queries that are dimensional in nature. You can also update information from other systems in the LIS. Therefore. Master data. identify the various components of SAP ERP and describe the various Organization Levels and Master Data which are . it is prepared both technically and in terms of content. Typical applications of OLAP are in business reporting for sales. Summary We now come to the end of the topic on Reporting and Analytical Solutions for ERP Basics. Module Summary The participant should now be able to appreciate the transition from R/3 to SAP ERP. OLTP or Online Transaction Processing is a class of programs that facilitate and manage transactionoriented applications. It is part of the broader category of business intelligence. business process management or BPM. or OLTP and the analysis-oriented Online Analytical Processing or OLAP environment must be seen as an integrated entity. produce a multitude of information that cannot easily be used for target-oriented analysis. Decision criteria for the efficiency of a data warehouse solution are highlighted here. and other similar areas. management reporting. and the business processes that result from it. data is cleansed first and. the Logistics Information System (LIS) updates relevant information. The LIS aggregates and stores this information in the data warehouse. and the Internet. If you are using the transactions in the Logistics applications. financial reporting. budgeting and forecasting. SAP BW enables the analysis of data from operative SAP applications. Knowledge can then be generated from the analysis that follows. as well as.

.needed to support various Business Processes in SAP ERP. The participant should also be able to describe the Reporting and Analysis solutions available in SAP ERP to support various internal and external reporting needs of an organization.

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