2 What in the world is SAP? ‘What SAP is not Imagine you're a top shot consultant working for a software house. One day the Account Manager asks you to make a project proposal for a one of their major customers. ‘The customer has companies in several countries. They have automation in place at various levels. Each employee has his own PC for his daily work, and there is a separate computer running systems for administration and invoicing. You have lengthy conversations with the IT manager. Over the years they have built many systems to automate the business. But users are not satisfied. Managers complain they get printouts with hundreds of numbers, while they use only two or three figures as key performance indicators. If something is out of line, they can’t drill down to figure out what needs to be adjusted. Corporate management is missing condensed information, and actual production quantities do not match administrative quantities. On top of that it’s difficult to make reports from distributed data stored at the various companies. You as an expert are asked to draw up a new business automation structure, That structure will serve as a basis for new automation systems to be implemented. The software house will provide system designers and programmers to implement these new systems. Because it’ such a major task your software house has to make teams with various disciplines. People are needed with know how about technical automation, such as distributed databases. People are needed with information systems expertise such as how to design a database. People are needed to draw up specifications for the new systems which are going to be designed from seratch, And oh yeah, did I mention in the process we want to optimize the business processes and get a higher return on investment? ‘That, my friend, was the scenario in the 1970s. Tens of millions of dollars were spent implementing systems from scratch, and reinventing the wheel over and over. ‘This was also a time that companies such as SAP, JD Edwards, Baan and others saw an opportunity to do it differently. Welcome to the SAP world Now imagine a different scenario, You would now be talking to corporate management and business process experts instead of only the IT manager and they would still be asking for your help. But this time you could say you didn’t have to build the system from scratch because you had © Thousands of business experts in your company * A dedicated organization taking 35 years to develop and enhance a system automating the business processes * Already have a system with built in best practices of almost all kinds of companies around the world. So developers wouldn’t have to figure out things like VAT procedures, Sarbanes Oxley acts, and other non-techie requirements * Made the system so flexible that it could easily adapt to a changing organization, Even if those changes were selling off parts of the company or buying extra companies © PKR Beheer BY. ww erptraining com Version 11 Page 7 of 143* Millions of people using the system in their daily operations for the last 35 years successfully implemented it in most of the largest companies of the world # People using the same system at all levels in all core departments of their company, even if it had worldwide branches © Set up communities for exchanging information, know-how and experience * A solution for your customer to interact more easily with many of your customer’ business partners because they were using the same system also This is the scenario of 21° century. It’s no longer necessary to design and develop systems from seratch; SAP AG has most of the solutions in place today. © PKR Beheer BV. ww erptraining com Version 11 Page 8 of 1432.1 SAP - the business automation powerhouse SAP AG SAP AG, founded in 1972 by five former IBM engineers, is headquartered in Walldorf, Germany and currently has over 50,000 employees. The top five nationalities (in Walldor!) are German, British, American, Indian, and Russian. Today SAP is an abbreviation for Systeme, Anwendungen und Produkte in der Datenverarbeitung ("Systems, Applications and Products in Data Processing"). Together with its subsidiaries and business partners it develops, markets, and sells enterprise application software products for corporations, government agencies, and educational institutions in Europe, the Middle East, Africa, North America and Latin America, and the ‘Asia Pacific Japan region. These are solutions that companies worldwide, from small to large, need to stay ahead in their business. They need to keep on top while constantly facing changes such as growth and globalization, cutting costs in an increasingly competitive market, reducing complexity of their IT solutions, meeting new legislation, and so on, The business SAP AG is into, originates from an area called Enterprise Resource Planning (ERP). ERP is a catchall phrase with several explanations, In the 1970s, business applications focused on helping companies manage financial data and human resources. Over the years ‘more business areas were encompassed, such as manufacturing and controlling the supply line. An ERP system is a business support system that handles data for a variety of business functions. In the beginning, there were huge amounts of data in databases scattered over various locations, and the challenge was (o integrate the data and keep them up-to-date. Today the integration of these data is a fact and ERP systems are used to manage financials, human resources, operations, sales, manufacturing, and supply line and corporate services. An ERP system can handle anything from managing an employee’s own holidays to controlling your warehouse inventory to handling a customer order. To be more precise, SAP AG is a company delivering software consisting of enterprise resource planning and related applications such as supply chain management, customer relationship management, product lifecycle management and supplier relationship management. If you're wondering what these terms are, don’t worry, they will be explained later. Together these kinds of applications are also called business applications. SAP is the world’s largest provider of these business applications. In 2007, SAP AG had more than 47.800 customers (i. from small companies to multinationals) in more than 120 countries. 75% of the Fortune Global 1000 companies run SAP software. In 2008 according to their website www.sap.com they have more than 75,000 customers and employ more than 51,800 people in more than 50 countries worldwide. © PKR Beheer BV. ww erptraining com Version 11 Page 9 of 143Ree Headcount by region * EMEA* 26,764 © Americas 13,793 «Asia Pacific Japan 11,306 Fieadcount by functional area Software and software-related 6.457 services 14,193 * Professional and other servie: 15,458 ¢ Research and development 10,909 © Sales and marketing 3,303 © General and administration Infrastructure 5roup 31,863, * Europe, Middle East, Africa ‘Table I. SAP AG headcount in full time equivalents as of September 30,2008 SAP AG not only develops and delivers software systems but also provides business support, consulting and training. Services include helping their customers with SAP experts, methodologies, tools and certified partners, delivering migration tools and support services, technical quality management for implementation and upgrade projects, and solutions for implementing, supporting, and monitoring their customer's enterprise solutions. SAP services include having 77 training centers, eight global support centers, more than 6.000 employees in service and support, and 11,000 SAP consulting and education employees. SAP AG spends fortunes on R&D and innovation. The company has nine custom development centers in Europe, Asia, and the Americas. SAP Labs is SAP AG's research and development organization, spread across the globe. SAP Labs in Germany, North America, Canada, China, Hungary, India, Israel and Bulgaria focus on R&D and solutions development. SAP Research focuses on longer term innovation projects to drive the development of new products and technologies. SAP Labs in the US is famous for innovation and research, whereas SAP Labs India has the largest number of employees outside SAP headquarters in Germany and contributes to many areas such as product development, services and support, customer solutions and operations. SAP’s products and services result in ineome streams that are mind boggling: Software revenue. ‘Support revenue Subscription and other software related service revenue Subtotal 7,427 million Consulting revenue 2.221 million Training revenue 410 million Other service revenue 113 million Subtotal 2,744 million Total revenue 2007 10,242 million “Table 2. SAP income statement 182 million © PKR Beheer BV. ww erptraining com Version 1.1. Page 10 of 143SAP is pronounced as S-A-P ( company) or to a product (as in eparate characters), and can refer either to SAP AG (the “AP Business Suite). SAP’s customers SAP delivers solutions in six sectors: process industries, discrete industries, consumer industries, service industries, financial services, and public services. In these sectors there are more than 25 industry solution portfolios for large enterprises and more than 550 vertical solutions for small and medium enterprises (SMEs). SAP currently offers the following industry solutions: SMRT ons Manufacturing industries Public services SAP for aerospace and defense SAP for defense and security SAP for automotive SAP for healtheare SAP for chemicals SAP for higher education and research SAP for consumer-products Service industries SAP for engineering, construction and SAP for logistics service providers operations SAP for high-tech SAP for media SAP for industrial machinery and components | SAP for professional services SAP for mill products SAP for postal servi SAP for mining SAP for retail [ SAP for oil and gas JSAP for railways SAP for life sciences SAP for telecommunications Financial Serv SAP for utilities SAP for banking, SAP for wholesale distribution SAP for insurance Table 3. SAP's industry solutions Among those 47.800 customers are companies li ‘Adobe Systems | Chrysler General Nike Starbucks Coffee American Coca-Cola Electric Nokia Target Express Colgate- General PepsiCo The Body Shop Apple Palmolive Motors Procter&Gamble | Unilever BMW US Department | Hershey Samsung BP of Defense Foods Siemens Canon Disney Home Depot | Sony Chevron Ford Kellogg's McDonald’s Nestlé Tabled, SAP customers Many people have the impression that SAP is only applied in very large companies. The truth is, SAP offers solutions for companies as small as 10 people and is taking the small and midsize enterprise market (SME) by storm. In 2008 the company had more than 36.000 SME, customers, representing nearly 75% of its total customer base. SME’s contribute to over € 1 © PKR Beheer BY. ww erp-training com Version 1.1. Page 11 of 123,billion (more than 30%) of SAP’s yearly software orders. This offers great opportunities for people wanting to be in this business segment professionally. SAP in the ERP market SAP’s competitors are mainly in the Enterprise Resource Planning (ERP) software industry While in the past several large competitors such as the Dutch Baan have fallen over, there are several others battling to get a piece of the pie. Major competitor is Oracle Corp. which is remarkable, because although SAP systems run on the majority of database platforms, the Oracle database platform is used within many companies as part of their SAP system. In the midmarket Microsoft is a player also. All are big players as you can see in the table below: MURS ad (Approximate, 2008) | SAP Microsoft Oracle Market Cap 61 billion $ 234 billion S 105 billion $ Employees, 52,000 79,000 84,000 Market share * 33.4% 3.6% 17.3% * Relevant core application enterprise software and software related services market Table 5. SAP in the ERP market & SAP, Oracle, Microsoft and IBM are sometimes called the Big Four. The Big Four can also apply to other companies such as the Big Four banks, or the Big Four auditing firms that also operate in the SAP market: Deloitte Touche Thomatsu, Price WaterhouseCoopers, Emst& Young, and KPMG. © PKR Beheer BV. ww erptraining com Version 1.1. Page 12 of 143,SAP’s products SAP offers a number of products to support business processes. Because even in the same industry business processes can be different, each SAP product can be configured to match the various situations of companies using SAP. = You can use the search function in your reader such as Acrobat Reader to find where an SAP term is used in this book. Rather than speaking of products, you'll find that SAP uses the term ‘Solutions’ ‘A solution can be a combination of components, modules, services, ete. to best fit the business processes of the company. Over the years SAP has gained considerable experience with what works best for virtually any kind of business. This experience is laid down in “Best Practices’ which serve as a sort of template to realize the best solution when using SAP. LARGE companies: MIDSIZE COMPANIES SMALL COMPANIES. < 2500 4100 -500 > 2500 omployoos 10 - 100 omployoos: SAP Business SAP Business | SAP Busine! Harmonized process models Fig 1. SAP Product portfolio © PKR Beheer BV. ww erptraining com Version 1.1. Page 13 of 143,Produets for large companies SAP Business Suite ‘The flagship for large enterprises is the SAP Business Suite. This is a powerful family of business applications that allow companies to manage their entire business processes; Cornerstone of the SAP Business Suite is the SAP ERP application. Other components of the SAP Business Suite are: SAP CRM, SAP PLM, SAP SRM, and SAP SCM. The SAP Business Suite has more than 25 industry solutions. © Ifthe SAP terminology used is a bit overwhelming in the beginning, don't worry. Within the scope of this book it’s not necessary to know all the SAP terms, even people with years of SAP experience don’t know it all, SAP ERP This SAP ERP application supports core business requirements of midsize and large companies in almost all industries and sectors. There are four main areas within SAP ERP: © SAP ERP Financials Includes financial reporting and compliance management e.g. for Sarbanes-Oxley. ‘Areas covered by SAP ERP Financials are: GRC (Governance, Risk and Compliance), financial and managerial accounting, controlling, treasury management, global trade, financial supply chain management and more. * SAP ERP Human Capital Management Helps managing the “human capital’: the people working in a company. Includes personnel administration, workforce deployment, e-recruiting, e-learning, time ‘management, succession management, etc. * SAP ERP Operations Management of core business processes such as procurement and the flow of materials (logistics), the manufacturing lifecycle, sales and service. Involves modules such as Production Planning and Control (PP), Materials Management (MM), Plant Maintenance (PM), Sales and Distribution (SD). + SAP ERP Corporate Services ‘Management of services such as real estate, projects and portfolios, corporate travel, environment, health, safety compliance, quality As of 2008 there are more than 10,000 SAP ERP 6.0 customers. SAP CRM ‘The SAP Customer Relationship Management Application (SAP CRM) deals with managing the business interactions and relationships with customers. Core features include marketing support, sales support, service support, e-commerce, support for interactions with customers, partner channel management. SAP PLM The SAP Product Lifecycle Management application (SAP PLM) supports management of the development of a company’s products, and new product introductions. This includes processes such as innovation, design and engineering management, quality and maintenance ‘management. There are more than 5,500 SAP PLM customers worldwide (2007). © PKR Beheer BV. ww erptraining com Version 1.1. Page 14 of 143,SAP SRM ‘The SAP Supplier Relationship Management application (SAP SRM) helps to manage the relationships between a company and it’s suppliers of goods and services. This includes areas like sourcing (finding the right supplier), contract management, procurement (the actual purchasing process), and collaboration with suppliers. There are more than 3,200 SRM customers worldwide (2007). SAP SCM ‘The SAP Supply Chain Management application (SAP SCM) is used to coordinate the elements of the supply chain: supply, manufacturing and distribution. Areas covered are: planning of safety stock, distribution, procurement, service parts planning, production planning, transportation planning, warehouse management, supply chain analyties and much more. ‘There are more than 14,500 SAP SCM customers worldwide (2007). © PKR Beheer BV. ww erptraining com Version 1.1. Page 18 of 123,iidmarket products SAP Business Al 1-One SAP Business All-In-One is one of the three families of solutions for small businesses and midsize companies. The other two solutions are SAP Business ByDesign and SAP Business One, SAP Business All-In-One can be hosted on-premise or hosted by one of SAP's partners. It uses the SAP ERP Application of the Business Suite as a basis and has been specially packaged for quick implementation. It has specialized industry functionality for each industry SAP ERP mySAP ERP 2005 > SAP ERP 6.0 ‘AP ERP Financials -> SAP ERP Financials AP ERP HCM -> SAP ERP HCM. mySAP ERP Operations -> SAP ERP Operations mySAP ERP Corporate Services -> SAP ERP Corporate Services SAP BW. SAP Business Information Warehouse (SAP BW) is the name of the SAP solution now known as SAP NetWeaver BI. Among other things it contains analytical and reporting features, data modeling capabilities and tools for importing transactional data. It's often used by companies that run their business on systems such as SAP ERP. SAP Netweaver also includes components such as SAP Enterprise Portal (EP), Web Application Server (WAS), SAP Process Integration (PI) and Master Data Management (MDM). See Chapter 4 for more info. SAP xApps SAP xApps (or Composite Applications) are applications that automate business scenarios or user-specifie processes spanning multiple functional areas, SAP xApps are based on SAP's Enterprise Service Oriented Architecture. For example several financial services might be combined to build a customer ordering process. SAP xApps can be developed by SAP and © PKR Beheer BV. ww erptraining com Version 1.1. Page 21 of 143,selected partners. Examples of SAP xApps already developed are: SAP xApp Resource and Program Management, SAP xApp Mergers and Acquisitions, SAP xApp Product Definition, SAP xApp Employee Productivity, Visiprise ERP Shop Floor Integration. Legacy systems. Legacy systems are systems which were already in place at the company before an SAP solution was implemented. Or formerly implemented systems which exist next to an SAP solution. They are ‘inherited’, For example a tailor-made financial system, or a system from one of SAP’s competitors such as JD Edwards. © PKR Beheer BV. ww erptraining com Version 1.1. Page 22 of 143,2.2 The SAP Ecosystem - have you ever seen anything like it? ‘The SAP Ecosystem is a system very much like the ecosystems found in nature, i.e. a group of living and nonliving things, continually engaged in a set of highly interrelated relationships with each other, and constituting the environment in which they exist. The SAP Ecosystem is continuously evolving and transforming like a living organism. ‘The SAP Ecosystem incorporates SAP and it’s * Customers and employees + Business partners + Universities and communities as well as individuals engaged in creating value and efficient SAP business management solutions. SAP actively pushes the SAP Ecosystem forward. Getting this off the ground is a major achievement. It’s sort of a major economy around SAP. An economy, which offers great opportunities for SAP professionals. ‘Customers and employees SAP AG encourages its customers and employees to benefit from the SAP Ecosystem in many ways to maximize their business and technology potential. There are directories of SAP partners that can provide solutions, directories of solutions, success stories to see how others have improved their business using SAP, and much more. A lot of information can be found at SAP AG's website www.sap.com, which explains SAP Solutions (products), SAP Services, and the SAP Ecosystem/Partners in detail, SAP's business partners Companies which meet stringent requirements such as defined in SAP's PartnerEdge Program can apply to become an official SAP partner. SAP’s certified partners account for 185,000 employees. You can find them through the SAP Ecosystem pages by clicking the Partner Search button, Last time we looked there were nine SAP partner categories, but this is subject to changes as. SAP is moving forward. © PKR Beheer BV. ww erptraining com Version 1.1. Page 23 of 143Sua Category Description Examples, Business Proce ‘Companies using SAP Accenture, ADP, ARINSO| Outsourcing (BPO) solutions ean outsource Providers business processes to third parties (human resources, procurement, finance, and accounting, ete.) Channel partners These parties deliver SAP __ | IBM, Accenture, Deloitte, solutions to small and. Siemens midsize enterprises Content Partners These partners integrate data_| Dun & Bradstreet, FedEx or other information content with SAP solutions Education Partners Selected partners that deliver | Genovate, Hewlett-Packard, SAP training RWD Technologies Hosting Partners These companies provide _ | Cap Gemini, EDS, Fujitsu, hosting services for SAP Logica applications, and the SAP NetWeaver technology platform Service Partners Help SAP customers -aCMG, BearingPoint, optimize their business PricewatethouseCoopers, processes, design and Tata, implement their SAP solutions Software Solution Partners | Companies providing third- | Adobe, Symantec, Collabera, party applications, working | Cycos, Saperion together with SAP solutions Support Partners Partners providing SAP Realtech, Hewleti-Packard, support during the lifecycle | Allied Information Systems Technology Partners These companies provide the | Aesis, Hewlett-Packard, hardware such as databases, storage systems, networks Table 7, SAP Partner categories ‘There are thousands of companies which have been acknowledged by SAP as SAP partners and on top of that there are even more companies which offer services and products related to SAP. Universities and communities Over 900 schools are participating in the SAP University Alliances Program. Universities from all over the world have graduate and undergraduate learning programs, research and collaboration projects and more, adding value to the SAP Ecosystem. © PKR Beheer BV. ww erptraining com Version 1.1. Page 24 of 123SAP Community Network ‘One of the successful strategies SAP uses is the SAP Community Network. Brought together by SAP for the SAP community to collaborate, contribute, exchange know-how so anyone involved with SAP can benefit and advance their business. Being active in the SAP Community is also a great way to advance your SAP career. The SAP Community Network is actually a community of communities. It’s a collection of websites, forums, blogs and more, utilizing any form of electronic media you can think of. It has similarities with the whole Web 2.0 concept, but the difference is that SAP AG is the great enabler and pushing the concept with success. The SAP Community Network is an extremely powerfil network, currently consisting of the SDN community, BPX community, Business Objects community, forums, wiki, blogs, articles, downloads, eLearning, events, and subscriptions sections. = The latest addition is the SAP EeoHUb at https://ecohub.sdn.sap.cony/, an online marketplace that makes it easier for customers to discover, evaluate and buy pariner solutions to complement their SAP installations. © PKR Beheer BV. ww erptraining com Version 1.1. Page 25 of 143errr Cen) SAP developer network (SDN) This is a community anybody who registers can join for free, with over 700,000 registered users in more than 200 countries. It’s an enormous pool of shared knowledge with people collaborating, contributing, and bringing their SAP knowledge to a higher level. SDN hosts forums, an SAP wiki, expert blogs, an article library, downloads, eLearning material, events information and more. Business Process Expert Community (BPX) Also this huge community can be accessed free of charge like the SDN network. According to the website, Business Process Experts are people such as business analysts, business consultants, process consultants, application consultants and process developers knowing, how to advance businesses from their knowledge of both business processes and Information Technology (IT). Business Objects Community (BOC) A community with resources for Business Objects solutions. Brings together developers, report and dashboard designers, and IT professionals to get the most out of SAP Business Objects business intelligence (BI) and information management (IM) s is a knowledge center for SAP customers introducing the product family, downloads, sources for application developers ete. Forums There is a tremendous amount of information available in the forums on almost any kind of topic. Sub forums are for example Business Process Expert, Enterprise SOA, ABAP Development, Emerging Technologies, and more. For frequently asked questions there is also a separate Wiki. Wiki The Wiki has answers to common questions on all kinds of topics such as found in the forums. The difference with the forum is that the forum is more interactive, i.e. if you have a question you ean post it in the forum. Blogs The Blogs section is a huge collection of weblogs and fits perfectly in the new trend of Social Media. Ideal to build up your network. Articles ‘You can find thousands and thousands of articles by topic from the SAP Developer Network (SDN) and the Business Process Expert (BPX) Communities. From ABAP to Data Warehousing to Java to Master Data Management to Web Services, the amount of information is enormous. Downloads This is an area to download, trial software, tools, templates, plug-ins, samples in all kinds of areas such as SAP NetWeaver, Mobile applications, Business Intelligence, Duets, ete. eLearning E-books, webcasts, podcasts. Again enormous amounts to learn yourself more about SAP, © PKR Beheer BV. ew erp-training com Version 1.1. Page 26 of 143it’s products and solutions. Events Announcements of all kinds of events such as SAP TechEd, the annual technical education conference offering multiple days of technical and business process training on a wide range of topics. SAP TechTour brings a host of technical content and expertise to over 50 locations worldwide and you can look up the Webinar Schedule. Subscriptions On-line, lower cost access to educational content such as SDN Software Subscriptions to practice your skills. Ideal for consultants and developers to keep up-to-date, You can even jew the SAP TechEd sessions which were recorded and are now accessible online. Table &, Components of the SAP Community Network © PKR Beheer BV. ww erptraining com Version 1.1. Page 27 of 143,“This publication contains references to the products of SAP AG. SAP, R/3, SAP NetWeaver, Duet, PartnerEdge, ByDesign, Clear Enterprise, SAP BusinessObjects Explorer, and other SAP products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of SAP AG in Germany and other countries. Business Objects and the Business Objects logo, BusinessObjects, Crystal Reports, Crystal Decisions, Web Intelligence, Xcelsius, and other Business Objects products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of SAP France in the United States and in other countries. ‘SAP AG is neither the author nor the publisher of this publication and is not responsible for its content. SAP Group shall not be liable for errors or omissions with respect to the materials. The only warranties for SAP Group products and services are those that are set forth in the express warranty statements accompanying such products and services, if any. Nothing herein should be construed as constituting an additional warranty.” © PKR Beheer BV -104/104-