A Study on SAP ERP SOFTWARE AND

HOW TO DEDUCT TDS WITH

REFERENCE TO BLUE STAR IN INDIA
Project submitted to

S.A.V ACHARYA INSTITUTE OF MANAGEMENT STUDIES

In partial fulfillment of the requirements for

Master in Management Studies

By

ABHIJIT ASHOK GAWADE

Roll No:26
Specialization-FINANCE
Batch: 2016 - 2017

Under the guidance of

(PROF. MINAL SATURKEKAR.)

A Study on SAP ERP SOFTWARE AND

HOW TO DEDUCT TDS WITH
REFERENCE TO BLUE STAR IN INDIA
Project submitted to

S.A.V ACHARYA INSTITUTE OF MANAGEMENT STUDIES

In partial fulfillment of the requirements for

Master in Management Studies

By

ABHIJIT ASHOK GAWADE

Roll No:26
Specialization-FINANCE
Batch: 2016 - 2017

Under the guidance of

(PROF. MINAL SATURKEKAR.)

2

Students Declaration
I hereby declare that this report submitted in partial fulfillment of the requirement of
MMS Degree of University of Mumbai to S.A.V ACHARYA INSTITUTE OF
MANAGEMENT STUDIES. This is my original work and is not submitted for award of
any degree or diploma or for similar titles or prizes.

Name

: Abhijit Ashok Gawade.

Class

: MMS-2nd year- Finance

Roll No. : 26
Place

: SHELU

Date

Students
Signature :

Certificate
This is to certify that the dissertation submitted in partial fulfillment for the award of MMS
degree of University of Mumbai to S.A.V ACHARYA INSTITUTE OF MANAGEMENT
STUDIES is a result of the bonafide research work carried out by Mr. Abhijit Ashok
Gawade under my supervision and guidance, no part of this report has been submitted
for award of any other degree, diploma or other similar titles or prizes. The work has
also not been published in any journals/Magazines.

Date
Place: SHELU

Faculty Guide
Prof. Minal saturkekar
(Name of Faculty)

Director

(Dr.C.SatyaNarayan)

TABLE OF CONTENTS:
Chapter
No.
1
2

3
4

5
6
7
8

Particulars

Executive Summary
Introduction
Introduction Study on Sap ERP
Software And How To Deduct TDS
With Reference To Blue Star In India
.
Introduction to the industry profile/sector
Introduction to the company profile
Literature Review (Secondary Data)
Research Methodology
Problem Definition
Objectives
Coverage of area
Research design
Tools of analysis
Limitations
Analysis and Findings
Suggestions/Recommendations
Conclusions
Bibliography and References

Page No.
7
8

11
17
38
43
48
49
53
56
59
66
67
68
93
95
96

ACKNOWLEDGEMENT

I am very thankful to our DR.C. SatyaNarayan

sir for providing all the facilities to complete
my project.
I, gratefully acknowledge the valuable
guidance and support of ,
Prof. Minal Saturkekar my project guide, who
had been of immense help to me in choosing
the topic and successful completion of the
project.
I extend my sincere thanks to all who
have either directly or indirectly helped me for
the completion of this project.

EXECUTIVE SUMMARY
This project gives an overview of the Systems
Applications and Products in Data Processing (SAP)
Enterprise Resource Planning (ERP) implementation
roadmap and tools that make up a complete
implementation method to allow any organization to plan
and execute the implementation of SAP ERP software.
The ASAP (Accelerated SAP) implementation methodology
is used as the SAP implementation reference model in
this study as most of the companies implementing SAP
use ASAP methodology
In a survey of software implementation effectiveness,
more than 30% of projects were perceived to have failed
because of a lack of effective project planning, while 10%
were perceived to have failed because of technologydriven causes1 . Critical success factors and reasons for
SAP ERP implementation success and failures are
discussed in this project. Content analysis of articles
reporting SAP implementations in twenty companies from
7

all over the world have been done. Ten of these

companies had a successful SAP ERP implementation and
the other ten were failures.

INTRODUCTION TO IT IN FINANCE
Finance is a field lush with great earning potential and
rewarding career options in a wide range of industries.
The field has seen large growth despite recent economic
downturn, so its a little more guaranteed than other
fields. There are definitely more than five reasons why
studying finance is a smart choice for potential students,
but weve compiled a list of the most pertinent reasons to
help you decide which program of study is right for you!
The reasons below touch on areas that are going to
emphasize perks for the career-driven individual who is
looking to implement exciting changes to their life in
beneficial ways.

WHY NEED I.T. IN FINANCE?

REASONS :-

1. Narrow Focus
If youre interested in a business career then you have an array of college
degree options such as business, accounting, or management. One great
reason to become a finance major is because of its more narrow focus,
but it still allows you to explore a field that is dense with job
opportunities.
8

A finance degree allows you to work with the decision makers of outside
organizations. Examples of these organizations include: banks,
government agencies, stockholders, suppliers, businesses, and more.
Being able to distinguish yourself with a finance degree will help you
when searching for jobs, especially from a large number of business
majors. As a finance degree is harder to attain, its guaranteed to set you
apart.

2. Personality Driven
Anyone can get a business degree or do accounting, but in order to be in
a finance career you must be outgoing and inquisitive. Though youll need
to be good at mathematics, you also must be good and talking with
people and making friendly conversation on a variety of subjects.
Therefore education, intelligence, and personality are all taken into
account for finance jobs. Additionally, you must be diplomatic and
consider your organizations or clients goals, resources, and options
when discussing their options for financial growth and well-being.

3. Growing Job Prospects

According to The Bureau of Labor Statistics, due to a growing range of
financial products and the need for in-depth knowledge of geographic
regions finance positions are growing faster than the average for
employment in the United States.
For example, careers in financial analysis are to grow by 23
percent, financial managementby 14 percent, and financial advising by 32
percent. The opportunities will continue to present themselves as the
economy continues to recover. As a with any major, its important to keep
a focus on what its like in the job market upon graduation and its very
fortunate that things look promising for those in this major.

4. Wide Variety of Job Opportunities

As you can see above, finance careers are growing. This also means that
the variety of careers opportunities are growing as well. With a finance
degree you can work in:

Corporate management

International financial management

Investment services

Financial planning services

Personal financial planning for individuals and private organizations

Brokerage firms

Insurance companies

Commercial and investment banks

Credit unions and private banks

As well as many other financial intermediary companies all employ
finance graduates.

5. Financially Rewarding Careers

In addition to having a wide range of job opportunities, the jobs that
present themselves to you will also be very rewarding from a salary
standpoint. Salary information varies from job title and experience, but
the following are a few baseline ideas of the average salary you can earn
with a finance degree:

Personal Financial Advisors: $64,750

Financial Managers: $103,910

Financial Analysts: $74,350

10

Financial Examiners: $74,940

The job market has underwent some large changes in the past decade,
partly due to different technological innovations and partly because of the
economy. Finance majors are placed into a very fortunate position that
keeps options available to continue to grow unhindered from many
circumstances that have impacted others.

2.1 Introduction Study on Sap ERP Software And How To Deduct

TDS With Reference To Blue Star In India.

For a long time, companies struggled with extremely long

project timelines in order to develop information systems
11

that met their specific requirements. Companies had to

develop a custom code which was tedious process
requiring many programmers as well as significant enduser involvement. Moreover, after implementation most
of these programmers needed to be retained for the
maintenance of custom programming. Project timelines
were dragged out because often business owners didnt
know what they wanted until they saw it (analysis
paralysis)

. Many companies had departmentalized

systems, which did not share information and thus

became the information silos within an organization.
This resulted in data discrepancies which resulted in
companies taking a long time to close the books for
quarter and year-end reporting. These unconnected and
multiple systems also created a need for many distinct
interfaces between systems that were not designed to
talk with each other.
In order to eliminate these problems, a new breed of
software systems, called Enterprise Resource Planning
(ERP), was created. These systems provide a single
source

of

data

with

designed

integration

between

different functional modules (for example, Accounting,

Sales and Distribution, Materials Management, Production
12

planning, etc.). These ERP systems are customized using

the table-driven customization method, which provide a
common set of data source to the whole organization.
Due to table settings instead of old-fashioned hard-coded
program logic, new and changed business requirements
are rapidly implemented and tested in the system. There
are various ERP products available today for example
from

SAP,

Oracle,

PeopleSoft,

JD

Edwards,

Salesforce.com, Baan, Microsoft, and HP to name a few.

SAP AG founded in 1972 is the worlds largest
Enterprise Resource Planning (ERP) software with 82,000
customers / 91,500 installations / 12 million users in 120
countries as of year 2009 . The SAP system comprises of
a number of fully integrated modules:
Financials
Human Resources
Customer Relationship Management
Supplier Relationship Management
Product Lifecycle Management
Supply Chain Management
Business Intelligence
These modules or solutions, as SAP would like
to call them, cover virtually every aspect of business
13

management. SAP provides a standard business

application software which reduces the amount of time
and money spent on developing and testing all the
programs.
With hundreds of companies implementing the
ERP systems to make their business more efficient only
few are very successful in implementing them. According
to a survey done by Gartner only 60% of companies
implementing ERP system claim they got expected
benefits3 . In general an implementation is considered
successful if it is done within budget and time with
meeting all the preset implementation goals as measured
by ROI, etc. Also, it is important to understand that
elivering an ERP system on time and budget doesnt
make sense if no one in the company uses it.
In any ERP implementation lots of variables
are involved like personnel (business side, technical side,
support side, users), implementation partner (for e.g.,
IBM, Accenture, Cap Gemini, Delloite, Wipro, independent
consultants, etc.), software and hardware vendor (SAP,
Oracle, QAD, Peoplesoft, JD Edwards, Baan,
Salesforce.com, Baan, HP, Microsoft, etc.), and
implementation strategy. With so many things coming
together in a matter of few months to a year or so for
implementation it is important to know the critical factors
for success and failures of an implementation. This field
project is a study in depth of twenty SAP ERP
implementations all across the globe (ten of them
14

successful and ten of them failures) to determine critical

success factors and what needs to be done and what
mistakes to avoid for a successful implementation.

History:
SAPs success story is one of a steady rise from a small, fiveperson start-up headquartered in southwest Germany's RhineNeckar region to one of the world's largest enterprise software
companies and an employer of more than 47,598 people in over
50 countries. Major milestones along the ERP software giant's
progress include the following:

2010: After less than one year as CEO, Lo Apotheker is

replaced by co-CEOs Bill McDermott and Jim Hagemann
Snabe. SAP acquires Sybase.

2009: The company unveils its SAP Business Suite 7

software.

2007: SAP acquires Pilot Software, Yusa, OutlookSoft,

Wicom, and MaXware, and also announces its intent to
acquire Business Objects. The company announces the new
Business ByDesign software as a service ERP product.

2006: The company shows success down market with All-inOne and Business One. In June, the company announces that
the latter solution has gained its 10,000th customer and
generates about 30% of its 3.1 billion in total software
revenues from companies with fewer than 2,500 employees.

2004: SAP releases the first version of NetWeaver, an

integration and application platform designed to offer fast,
15

open, and flexible business applications that support end-toend business processes.

2001: SAP acquires TopTier, a leading portal company and

founder, Shai Agassi, takes over the management of this
business area and is appointed to the SAP Executive Board
one year later.

1999: SAP co-CEO Hasso Plattner announces a new

strategy that realigns the company and its product portfolio:
mySAP.com. The new strategy will combine e-commerce with
SAP's existing ERP software applications.

1991: SAP previews its R/3 system at CeBIT in Hanover.

The next evolution flagship product is a client-server
technology with a uniform graphical interface, dedicated use of
relational databases and support for servers from various
manufacturers.

1989: SAP releases a more user-friendly interface for SAP

R/2. The company also kicks off development projects in
production and other areas with new tools, such as ABAP/4.

1988: The company goes public in October 1988 at a share

price of DM 750. SAP continues to bolster its global business
by opening offices in Denmark, Sweden, Italy, and the United
States. The company now employs 940 and generates
revenues of DM 245 million. Dow Chemicals becomes SAP's
1,000th customer and the company begins developing RIVA
a billing and administration system for utility companies.

1987: Following the foundation of its first non-Germanspeaking subsidiary in the Netherlands, SAP opens offices in
France, Spain, and Great Britain in the same year. At the end
of the year, SAP employs more than 500 and generates DM
152 million in revenue.

16

1981: The growing power of mainframes enables SAP to

grow its customer base to approximately 200 companies. SAP
R/2 achieves stability and the company expands its range of
products with a production management module.

1980: SAP moves into its first facility on Max-Planck-Strasse

in the Walldorf industrial park. The company now employees
50 and expands its product suite with RV, a custom
development for sales and distribution.

1975: RF advances to accommodate purchasing, inventory

management, and invoicing.

1973: SAP finishes its first financial accounting system called

RF. This system becomes the cornerstone in the continued
development of other application software that will eventually
bear the name SAP R/1.

1972: Five former IBM staff start a company they call SAP
Systemanalyse und Programmentwicklung ("System Analysis
and Program Development") in Weinheim, Germany, and open
an office in nearby Mannheim. SAP's five founders perform
most development work at nights and weekends and spend
most of their day time in the data centers of their first
customers, which include the German branch of Imperial
Chemical Industries in stringen. At the end of its first year in
business, SAP employs nine people and generates DM
620,000 in revenue.

17

2.2 Introduction to the industry profile / sector

Core business performance to boost your
business In terms of software that is truly industryoriented and sturdy for large global organizations, there
is probably no company in the market that is as reliable
and robust as SAP.And if you are looking for a system
integrator that combines business savvy with process
knowhow as well as IT expertise, Atos is the premium
European player with global reach. The longstanding
(over 30 years) partnership between SAP and Atos is a
natural relationship that results in leveraging the best of
both to our mutual customers.
If youre looking for a partner to implement SAP
industry solutions with the aim of accelerating your
business, look no further. With decades of hands-on
experience working with customers in industry, finance
and retail, we feel your pain and know your needs.
So when we sit down with you, we do so as a trusted
partner and not as consultants. We help you choose the
18

right technology to get the job done while making a solid

investment in the future.

Atos has developed core business performance solutions

around some of SAPs most sturdy and reliable industry
software packages for all industries. Our business
technologists have the expertise it takes to leverage
product promises into benefits for your business.

Optimize your SAP Investment with the Industry and

Innovation Experts from Atos.

Accenture and SAP are collaborating on a number of innovative

industry-specific solutions to help our clients get the most out of
their enterprise solutions investments and create greater
enterprise value. These include solutions for the following
industries:

Automotive

Building Materials

Chemicals

Communications

Consumer Packaged Goods

Electronics and High Tech

19

Energy

Financial Services

Forest Products

Health

Industrial Equipment

Manufacturing

Metals

Mining

Oil and Gas

Public Service

Retail

Transportation and Travel Services

Utilities
When you create a material master record, you are required
to classify the material according to industry sector and
material type.
Like material types, industry sectors have control functions in
the SAP system. For example, it is a factor determining
the screen sequence and field selection in a material
master record. Once you have assigned an industry sector

20

to a material, you cannot change the industry sector again

afterwards.

Features
The standard system contains the following industry sectors. The
ID used to identify the industry sector internally appears in
parentheses.

Plant engineering and construction (A)

Chemical industry (C)

Mechanical engineering (M)

Pharmaceuticals (P)

21

SAP industry sector tcodes (Transaction

Codes)
OMS3 - Configure industry sectors Logistics - Material
Master
MCB_ - Determine industry sector Logistics - Data
Collection
OMT3U - Maintain User Settings Logistics - Material Master
MCH_ - Activate IS-R Enhancement for RIS Logistics - Retail
Information System (RIS)
MMDE - Delete All Materials Logistics - Material Master
MM70 - Sel. Materials Flagged for Deletion Logistics Material Master
MMR1 - Create Raw Material & Logistics - Material Master
MMM1 - Create Message: Material Master MMW1 - Create Competitor Product & Logistics - Material
Master
IP42 - Add strategy-controlled plan PM - Maintenance Task
Lists
FMIT - Totals-Based Distribution Procedure PSM - Budgeting
and Availability Control

22

KKAQ - Display WIP - Collective Processing CO - Cost

Object Controlling
V/C7 - CondTable: Create (Batches, SD) Logistics - Batches
GENSTATUS - Generation Status CRM - Generation
MMZ2 - Change Material (Old MM02) Logistics - Material
Master
KOB8 - Orders: WIP/Results Anal. Line Items CO Overhead Cost Controlling
KKAY - WIP Display for Order CO - Cost Object Controlling
MMH1 - Create Trading Goods & Logistics - Material Master
FMGL - Maintain Text for Grouping PSM - Information
system
MMF1 - Create Finished Product & Logistics - Material
Master
MMI1 - Create Operating Supplies & Logistics - Material
Master
SMOGTOTAL - Start of total generation CRM - Generation
MMV1 - Create Packaging & Logistics - Material Master
MMK1 - Create Configurable Material & Logistics - Material
Master
MMB1 - Create Semifinished Product & Logistics - Material
Master
MMG1 - Create Returnable Packaging & Logistics - Material
Master
MML1 - Create Empties & Logistics - Material Master

23

SAP is the world leader in enterprise applications in terms of

software and software-related service revenue. Based on market
capitalization, we are the worlds third largest independent
software manufacturer.
Rev up innovation across all areas of the automotive industry
from design and manufacturing to the dealership floor with onpremise and cloud solutions from SAP. Our automotive software
can help you manage geopolitical and demographic changes,
enterprise mobility, responsive supply chains, short development
cycles, high service expectations, and more.
SAP helps companies of all sizes and industries run
better. From back office to boardroom, warehouse to
storefront, desktop to mobile device, SAP empowers
people and organizations to work together more
efficiently and use business insight more effectively to
stay ahead of the competition. We do this by extending
the availability of software across on-premise
installations, on-demand deployments, and mobile
devices.
We believe that the power of our people, products, and
partners unleashes growth and creates significant new
value for our customers, SAP, and, ultimately, entire
industries and the economy at large.
Our mission is to help companies of all sizes and
industries to run better. Our vision is to help the world
run better.

24

Headquartered in Walldorf, Germany, SAP is the market

leader in enterprise application software. Founded in
1972, SAP (which stands for "Systems, Applications, and
Products in Data Processing") has a rich history of
innovation and growth as a true industry leader. SAP
applications and services enable more than 172,000
customers worldwide to operate profitably, adapt
continuously, and grow sustainably. With revenue (IFRS)
of 12.5 billion for the year 2010, SAP has more than
54,000 employees and sales and development locations
in more than 75 countries worldwide.

SAP is listed on several exchanges, including the

Frankfurt stock exchange and NYSE, under the symbol
"SAP".
SAPs authoring solution, SAP Workforce Performance
Builder, empowers companies to create and deploy any
kind of documentation, software simulations, mobile
learning & performance support, context-sensitive help,
test scripts, rapid learning, and much more with
unprecedented ease. SAP Workforce Performance Builder
supports the entire workforce, across all roles and
processes, by providing an easy to use content creation
toolset for enablement materials of any kind, in any
language, independent of subject, for formal and
informal/social training needs.
25

SAPs software forms a companys nerve centre. Its enterprise

resource planning software integrates back-office functions such
as analytics, accounting, distribution and human resources, and
comes in on-premises and cloud-linked forms. While the sale and
servicing of its legacy on-premises offering brings in the majority
of the companys revenue, SAP is going all-in on cloud computing
and the digitalization of business with the release of S/4HANA in
2015 as an alternative to its existing SAP Business Suite.

PROCURMENT TO PURCHASE (P2P)

Procure to pay (purchase to pay or P2P) is the process of
obtaining and managing the raw materials needed for
manufacturing a product or providing a service. It involves the
26

transactional flow of data that is sent to a supplier as well as

the data that surrounds the fulfillment of the actual order and
payment for the product or service. According to the
Chartered Institute of Purchasing and Supply, procure to pay
should be a seamless process from point of order to payment.
Technology can assist this process.
The goal of a procure-to-pay software system is to automate
processes by introducing efficiency controls. For instance, to
enforce buying controls, the software might cross-reference
purchasing budgets to ensure compliance with pre-defined
buying limits. A requisition that was within pre-defined limits
would be programmatically routed for approval, converted into
a purchase order once approved and immediately sent to the
correct supplier by email.
A sophisticated procure to pay system is capable of extracting
invoice and payment data from a general ledger, enterprise
resource planning (ERP) or customer relationship
management (CRM) systems while also accepting transaction
data from banks, vendors, shipping and other outside sources
and reconciling complex and multiple supplier statements to
payments and good received.

27

The Accounts Payable / Procure to Pay (P2P) overall process

covers the complete cycle from Vendor Master Maintenance
through procurement and Vendor Invoice Processing, the
resulting Payment Processing to external vendors and the Period
Closing Activities.

Assumption for an effective P2P process:

1) The P2P process assumes that the following SAP modules are
in place:
FI, AM, MM, PM (optionally for equipment master records).
The described Invoice Processing is designed as an SAP
Business Workflow/SAP Webflow process including Optical
Archiving for all incoming documents. Therefore a scanning and
optical archiving infrastructure needs to be in place to support the
workflow functionality. The optical archive storage system needs
to fulfill legal and tax requirements to enable the storage of
'original documents'.
2) Accounts payable /P2P Process interfaces at SAP's SSC
It is interesting to see how different companies approach their AP
process. The most common is a partially decentralized processing
of AP, as it has developed over time. This works as follows:
companies keep invoices at the local subsidiaries and only the
financial data get passed over to the SSC for processing. In order
to minimize the administrative effort of transferring paper invoices
into electronic formats, more advanced companies have
centralized the AP processing completely. In this case invoices
are sent to the SSC.

28

3) Vendor Master Data Set-up/Maintenance

The process 'Vendor Master Data Set-up/Maintenance' includes
activities of requesting a new vendor or vendor changes,
processing the committed data and the SOX compliant approval
of all changes. The final product - updated or new vendor master
record - is used for procurement and Accounts Payable purposes.
Technically the described process is implemented as an SAP
Business Workflow started by a WEB Dynpro to enter the request
data as an Employee Self Service Scenario. Attached
documentation (vendor letters, legal/taxforms) are optical
archived and linked to the vendor master.
4) Request to Receipt
The process 'Request to Receipt' covers the procurement
activities within local organizations. The responsibility for this
process stays with the local units and the Global Purchasing
Organization (GPO). Based on the requirements by the different
Lines of Business (LOB) goods or services are ordered via the
Enterprise Buyer Professional (EBP) system or directly using the
ERP system. A requestor expresses his needs to the Purchasing
department that contacts the conerned suppliers for different bids.
After the bid selection, a shopping cart is created by the
Purchaser. Once it has been approved by the manager's cost
center or the Managing Director, the shopping cart os transformed
into a purchase order that is sent to the supplier.
Once the service or the goods are delivered the purchaser
validates the good receipt to launch the payment bill.
5) Invoice booking
The main sub-process in P2P is Invoice Processing.
In the SSC model all incoming vendor invoices are routed directly
29

or indirectly (via courier) to the SSC, where further processing

takes place.
The efficiency of the P2P process as well as the quality of the
result is influenced by the quality of the purchase orders prepared
outside the scope of the P2P process-specifically the purchase
orders which refers to services or deliveries spanning over
multiple accounting periods. The purchase orders are therefore to
be prepared with a clear system indication of the relevant periods.
For processing incoming vendor invoices, also a workflow is in
place to effectively serve the process and approval/control steps.
In this case the Incoming Invoice Verification Workflow is used.

6) Payment process
When an invoice has been released for payment (e.g. after the
approval in the invoice booking process) it can be paid-out to the
vendor.
As a standard a Shared Service Center will make outgoing
payment runs with a fixed schedule. In most cases there will be a
weekly payment run. Besides standard payment runs, the SSC
also has an option for an exceptional payment run, where urgent
items on request can be paid out immediately.

30

The description below is based on a standard payment run:

Standard payment types included in a

payment run can be:
Vendor invoices, Customer reimbursements, Netting items and
Intercompany payments.
Normally payment types as Tax payments, Salary payments,
Cheques are not part of the A/P payment run due to their country
local dependency or sensitivity.

Step 1: The P2P clerk starts the payment program

(transaction F110). The 'run date' is entered and by entering
parameters, specific filters can be set on the full payment range.
As standard all vendors will be chosen as a range, so that every
applicable document will be included in the run.
After this the clerk is able to produce a payment proposal list.
Firstly, this list has to be verified/approved by the local unit. In this
step individual payments can still be altered.

Step 2: After payments have been reviewed, possibly

altered, and eventually approved by the local unit, the P2P clerk
can excecute the actual payment run. At the same time actual FI
payment documents (KZ type) are booked (Vendor <-> Bank).

31

Step 3: The P2P clerk uploads the payment documents

created by the payment run (KZ, number range) into the online
payment tool in ISP (this is a different tool compared
to transaction F110!).
After upload the tool creates/sends ISP work items to defined
payment approvers in the local unit. These users are authorized
to sign payment orders for their bank.
In the work item the local payment authorizer enters the tool via a
hyperlink in the item and has the possibility to review, to analyse
and eventually to approve the payment documents with a digital
signature. Two digital signatures are required before a payment
document can be sent to the bank. Whenever a second signature
has been set to the payment document(s), the tool sends the
payment order to the connected bank (via an online connection),
which then excecutes the actual payment.

Step 4: As last step, the tool (automated) will send out

payment advises by email to the payment receivers. This only
happens in case this email address is maintained in the master
record from the concerned receiver (e.g. vendor master record).
After these steps the P2P clerk will archive the payment list from
this run and by this step the process is finished.

7) Period Close
Closing guidelines and timeline will be communicated for every
month-end closing and year-end closing by Corporate Finance
Reporting (CFR) to both the local unit F&A responsibles as to the
SSC clerks. Both teams have a joined task to bring each closing
to a timely and successful one.

32

8) Prepare and post accruals

At the end of each period we need to make sure that all expenses
are booked for all goods and services delivered. For invoices not
yet received/booked there is therefore a need to reflect these in
the financial statements.
Bases on inputs such as invoices from the rejected invoice
workflow, expectations from local departments such as marketing,
checking of accrual relevant accounts, and future obligations
extracted from "open purchase order reports". There are as well
some accruals for Parked items and rejection invoices. The basis
of these accruals are coming from ISP standard report run
by SSC clerk and this proposal is then sent to the local
unit's responsible for approval and review.
After approval the local unit will request to General Accounting
team (see process GA) at the SSC via a posting template to book
the final accrual amount(s).
9) Reconcile (settle/clear) transitory accounts
At the end of each period there is a need to reconcile transitory
accounts, such as intercompany transitory accounts. In this case
the SSC-clerk checks if the
accounts' balance is zero. If this is not the case, the clerk contacts
the respective person at the concerned subsidiary from where the
booking is missing. He or she needs then to instruct either their
local or SSC responsible clerk to make the missing posting.
The missing invoices/goods receipt accounts are also checked.
On the day of period-end closing, the SSC clerk prepares an
account statement and checks whether the balance of the goods
receipt account is equal to zero. The list of missing invoices is
printed. If necessary, the local purchasing department is
contacted in order to obtain the missing invoices.
10)

Reconcile vendor accounts

33

Depending on the Service Level Agreement with the local unit, the
SSC clerk sends reconciliation statements to vendors. A possible
agreement could be for example: The top 10 vendors are
reconciled every month and all vendors are reconciled once a
year.
The SSC clerk examines the reply sent back by the vendors. In
case the reply agrees with the ISP system account balance, the
process ends here. In case of a mismatch, for example due to a
missing invoice they contact the vendor in order to obtain a copy
of the concerned document. The document can then
be processed in the invoice booking process described earlier. If
the mismatch reason is an improper posting by SSC, the AP clerk
reverses the improper entry. Then the original invoice is routed
back into the regular invoice processing workflow.
It is possible that the vendor itself sends the SSC a reconciliation
statement. The activities are then similar to described above. In
case there is a match of balance, checked by the SSC clerk, the
local unit's responsible for A/P will sign the vendors reconciliation
statement, which is then sent back to the vendor.
If the statement mismatches, the SSC clerk fills out a mismatch
report and/or prints a separate account statement from the ISPSystem and sends it to the vendor/auditors.
11)

Provide audit support/prepare country specific reports

In period-end closing activities the SSC-A/P team provides

support for the local unit, in ways like creating and sending out
vendor reconciliation letters (in most cases this is a year-end
activity).

34

12) Period Close

Closing guidelines and timeline will be communicated for every
month-end closing and year-end closing by Corporate Finance
Reporting (CFR) to both the local unit F&A responsibles as to the
SSC clerks. Both teams have a joined task to bring each closing
to a timely and successful one.
13)

Prepare and post accruals

At the end of each period we need to make sure that all expenses
are booked for all goods and services delivered. For invoices not
yet received/booked there is therefore a need to reflect these in
the financial statements.
Bases on inputs such as invoices from the rejected invoice
workflow, expectations from local departments such as marketing,
checking of accrual relevant accounts, and future obligations
extracted from "open purchase order reports". There are as well
some accruals for Parked items and rejection invoices. The basis
of these accruals are coming from ISP standard report run
by SSC clerk and this proposal is then sent to the local
unit's responsible for approval and review.
After approval the local unit will request to General Accounting
team (see process GA) at the SSC via a posting template to book
the final accrual amount(s).
14) Reconcile (settle/clear) transitory accounts
At the end of each period there is a need to reconcile transitory
accounts, such as intercompany transitory accounts. In this case
the SSC-clerk checks if the
accounts' balance is zero. If this is not the case, the clerk contacts
the respective person at the concerned subsidiary from where the
booking is missing. He or she needs then to instruct either their
35

local or SSC responsible clerk to make the missing posting.

The missing invoices/goods receipt accounts are also checked.
On the day of period-end closing, the SSC clerk prepares an
account statement and checks whether the balance of the goods
receipt account is equal to zero. The list of missing invoices is
printed. If necessary, the local purchasing department is
contacted in order to obtain the missing invoices.
15) Reconcile vendor accounts
Depending on the Service Level Agreement with the local unit, the
SSC clerk sends reconciliation statements to vendors. A possible
agreement could be for example: The top 10 vendors are
reconciled every month and all vendors are reconciled once a
year.
The SSC clerk examines the reply sent back by the vendors. In
case the reply agrees with the ISP system account balance, the
process ends here. In case of a mismatch, for example due to a
missing invoice they contact the vendor in order to obtain a copy
of the concerned document. The document can then
be processed in the invoice booking process described earlier. If
the mismatch reason is an improper posting by SSC, the AP clerk
reverses the improper entry. Then the original invoice is routed
back into the regular invoice processing workflow.
It is possible that the vendor itself sends the SSC a reconciliation
statement. The activities are then similar to described above. In
case there is a match of balance, checked by the SSC clerk, the
local unit's responsible for A/P will sign the vendors reconciliation
statement, which is then sent back to the vendor.
If the statement mismatches, the SSC clerk fills out a mismatch
report and/or prints a separate account statement from the ISPSystem and sends it to the vendor/auditors.
16)

Provide audit support/prepare country specific reports

36

In period-end closing activities the SSC-A/P team provides

support for the local unit, in ways like creating and sending out
vendor reconciliation letters (in most cases this is a year-end
activity).

Procure to pay Process consists the

following processes.
1.

Material requirement planning

2. Vendor Selection
3. Request for Quotation
4. Purchase Requisition
5. Purchase Order
6. Goods Receipt
7. Goods Receipt Invoice
8. Invoice Verification
9. Payment to Vendors
1. Material requirement planning (MRP) :Materials requirements planning (MRP)
37

refers to the technique of using a projected manufacturing

production schedule to figure out what supplied materials you will
need, and when you will need them. Materials requirements
planning (MRP) type controls the MRP procedure, pricing,
material valuation. Material requirement planning carried
out by MRP controller in production department.

2. Vendor selection :Vendor selection is one of the important step in procurement

process. With the help of obtained quotations from sources and by
comparing them, vendors are selected

3. Request for Quotation :Requesting potential vendors to submit a quotation for a

material or services. Quatation contains the vendors terms and
conditions and constitutes the basis for vendor selection

4. Purchase Requisition :-

38

A purchase requisition is an internal request to purchasing. You ask

the buyer to provide a certain quantity of a material or service on a
certain date.A purchase requisition can be created automatically
by Material Requirement Planning (MRP) or manually created. PR
converts to RFQ, PO or outline agreement. Purchase Requisition
forms include the following information

Material Qty, description of goods & service and total value.

Department Account number.

Signature by an Authorized Department.

Attached Quote from the vendor.

Delivery instructions.

Attach Quote from the suggested vendor.

5. Purchase Order :Purchase Order (PO) is a formal request to a vendor to supply certain
materials or services under the certain conditions. A Purchase Order
(PO) can be created with reference, or without reference to a purchase
requisition, a request for quotation, or another purchase order.
POs usually specify terms of payment, incoterms, delivery date,
specifications, material qty, price and reference or part numbers.

39

Types of purchase orders in procurement process:- Standard PO,

Planned PO, Contract PO.

6. Goods Receipt :Goods Receipts (GR) is created to reflect the Goods Receipts for the
specified material ordered from a vendor using Purchase Order
process. After receiving the goods the company can record the
following information, this information can be used for accounting,
stock check and rotation, to return any goods if there is a problem

What goods were delivered,

Which vendor delivered the goods.

Who, how, when goods were delivered and received the goods.

7. Goods Receipt Invoice (GRIN) :Goods receipt Invoice process is one of the important process in
procurement process cycle. It is matching the goods that a company
receives with the company PO (purchase order). It involves checking
the goods are not damaged and fit for use, verifying the price,
quantity, payment terms. Goods movement are entered in to the
system with reference of Purchase order and goods receipt material

40

documents are posted, automatically appropriate general ledgers are

posted and stock accounts are updated.

8. Invoice Verification :After GRIN process, next process of procurement to pay is invoice
verification.

It

plays

an

important

role

in procurement

process and Materials Management Module which performs the

following tasks

A Vendor Invoice can be created with reference to a Purchase

Order, a Goods Receipt, a Delivery Note..

Invoice is verified in-terms of prices, quantity,

Necessary approvals by project managers

After verifying all the data, the invoice is posted and the data is saved
in the system. The system updates the invoice data in Materials
Management and Financial Accounting.

41

2.3 Introduction to the company

Blue Star Infotech Ltd, based in Mumbai, Bangalore, Santa

Clara, New Jersey, London, Singapore, Malaysia, is a global
provider of product development services, enterprise solutions
42

and services, travel technology solutions and testing services with

operations in North America, Europe, UK, and India. It is part of
the US$700M Blue Star Group.They have service delivery centers
in the United States, United Kingdom, India, Singapore and
Malaysia. Blue Star Infotech is ranked in the list of 2013 Global
Services 100 companies as a leader Global IT and Business
Process Outsourcing.
It was founded 1983, when the International Software Division of
Blue Star was founded at SEEPZ, Mumbai in partnership with
HP.In March 1990, Blue Star Infotech acquired a 100% owned
subsidiary in the USA called USIN International Inc, later renamed
Blue Star Infotech America, Inc. In 1998, Blue Star Infotech set up
a 100% owned subsidiary in the United Kingdom. Blue Star
Infotech has been ranked 12th amongst the top fifteen global
R&D service providers.
Microsoft awarded Blue Star Infotech with the "Best Dynamics
Partner of the Year" in India for financial year 2006 & 2008. They
Named to the Microsoft Dynamics President's Club for the year
2006 and 2008.Effective January 1, 2016 Blue Star Infotech
Limited has sold its Information Technology business to the
Infogain group of Companies. This marks the exit of Blue Star
from this business after 33 years.

Industry

IT services
IT Consulting

43

Founded

1983 as a business. Separate entity

since 2000

Headquarter
s

Key people

Services

Mumbai, Bangalore,Santa
Clara,New
Jersey, Singapore,Malaysia, Lond
on

Sunil Bhatia (CEO)

Application development &

management
Product development & support
Professional services
Independent testing services
Analytics
Business Intelligence

44

VALUES OF BLUE STAR COMPANY

Blue Star is founded on five core values:
1.

Relentless pursuit of customer satisfaction

Striving for customer satisfaction is our foremost commitment.
Blue Star is customer-centric in everything we do. Being a
reliable partner and creating sustainable value for our customers
is vital to our success as a company.

2.

Follow through on commitments

Blue Stars integrity hinges on honoring the commitments we
make to our customers and employees. They are promises by
which we measure ourselves. We will do everything in our power
to accomplish a task and hold ourselves accountable to achieve
success.

3.

Shoot high in expectations and performance.

An entrepreneurial spirit will be pervasive in everything we do.
We will grow, as individuals and as a company, by reaching for
goals that initially appear to exceed our grasp. We will hold
ourselves to standards of performance that demand our best
efforts.

4.

Be a leader
Blue Star will not be constrained by the historical behavior of any
competitive company. We will, however, leverage the collective
45

experience of our people to build a better company. Whatever we

think are the limitations and constraints of today, we will choose
what we want to be and act to change for the betterment of our
customers.
5.

Honesty, open communications, and respect for people

Fostering open and direct communication among all levels of the
company is critical for maintaining respect and trust. Honesty and
fair treatment should never be compromised.

VISION OF BLUE STAR COMPANY

Blue Star will be the entrepreneurial leader in the high
performance lubricants and metalworking fluid industry. We will be
persistent in our pursuit of customer satisfaction. Intelligent and
successful ideas will translate into customer growth, employee
growth and business growth. We will be the chosen and
preferred partner for our target customers and will earn this
distinction through excellent technology coupled with highly
competent field support to create the highest productivity
standards. The Blue Star brand will be synonymous with
EXCELLENCE as conveyed in each and every customer
experience.

MISSION OF BLUE STAR COMPANY

46

For our customers; become the compelling supplier of choice for

high performance lubricants and metalworking fluids.
For our employees; provide exceptional opportunities and
rewards for achievement.

3.0 Literature Review (Secondary Data)

The name of scientist who are start on sap and
when start.?
1. Grant Norris, Ian Wright, James R. Hurley, John Dunleavy and Alison Gibson,
" SAP An Executive's Comprehensive Guide", John Wiley & Sons.Inc,
1998.
2. Jonathan Blain, " Using SAP R/3", II Ed., ASAP World Consultancy, PrenticeHall of India, 1997.
3. Nancy H.Bancroft, Hemming Seip, Andrea Sprengel, "Implementing SAP
R/3", II Ed., Manning Publications Co., 1997.
4. Michael Hammer, James Champy, "Rengineering the Corporation", Harper
Collins Publishers, 1993.
5. Eddie Obeng, Stuart Crainer, "Making Reengineering Happen", Pitman
Publishing, 1994.
6. Daniel R. Tobin, "Transformational Learning", John Wiley & Sons, 1996.
7. Ken Eason, "Information Technology and Organizational Change", Taylor
and Francis, 1988.
8. Dorine C. Andrews, Susan K. Stalick, "Business Reengineering - The
Survival Guide", Prentice Hall, 1994.

47

9. Tony Gunton, "Information Systems Practice - The Complete Guide", NCC

Blackwell Ltd, 1993.

Literature review is divided into three sections: ASAP

Methodology, Critical Success Factors, and Case Studies.
ASAP METHODOLOGY SAP ERP implementation is the
group of processes that defines a complete method to
implement SAP software in an organization. The two
methodologies used to implement SAP ERP are
Conventional and ASAP4 . Conventional methodology also
known as SAP Procedure Model was widely used initially.
In recent past years SAP Procedure Model has been
overshadowed by the ASAP methodology as
implementations with later methodology are fast and
provide flexibility. Most of the companies implementing
SAP ERP system use ASAP methodology with the
exception of very large companies with revenues in billion
dollars. Therefore, in this project ASAP is used as the
reference methodology.
In 1996, SAP AG introduced the ASAP (Accelerated SAP)
methodology. This methodology provides an excellent
tool for small and midsize companies to rapidly
implement SAP and take advantage of its integrated
business processes. ASAP provides content, tools, and
expertise based on thousands of successful
implementations by SAP and its partners. The ASAP
methodology consists of a roadmap that defines the five
48

phases of SAP implementation process and supports

these with a comprehensive project plan5 .
ASAP Roadmap Phase 1: Project Preparation - This phase
provides initial planning and preparation for the
implementation which includes project plan, project
scope, and project team organization. In this phase the
initiation of the SAP ERP project, which includes the
overall goals, detailed task plans, and processes is
formally announced to the company. Main activities in the
project preparation phase include a Kickoff meeting and
Project team standard meeting which include the
following tasks:
Define project mission statements which reflect the
overall company goals and vision for the SAP ERP
implementation.
Identify specific company objectives and business
drivers for initiating the SAP ERP implementation like
improved inventory turnover, reduced shipping costs,
improved customer service.
Identify business measurements and document the
implementation goals. These business measurement
tasks measure the success of the project, specifically the
business-related goals. Examples of business related
goals are: Integration of business processes, reduction of
on-hand inventories
Identify project measurements and document
implementation goals, and how they are measured,
49

specifically the project-related goals. Examples of projectrelated goals are: Target dates for completion of specific
implementation phases or milestones, measurement of
actual expense performance versus budgeted costs,
completion of a specific deliverable(s).
Develop the change charter: develop a comprehensive
charter for the change project within the organization.
Assemble project charter components: prepare a
document that consolidates the mission statement,
business drivers, business measurements, and project
measurements.
Approve project charter: reach agreement between
company executive management, the project sponsor,
and members of the project team on the project charter.
It is important to have all members in agreement so that
total commitment can be achieved.
Finally, most important milestone of this phase is kickoff
meeting. This meeting should be conducted with high
energy and should be attended by company senior
management. A strong first impression is important to
project momentum.
Phase 2: Business Blueprint - In this phase the scope of
the implementation are documented and defined and the
Business Blueprint is created. The Business Blueprint is a
detailed documentation of the companys requirements.
Application consultants and the Business Process Teams
achieve a common understanding of how the enterprise
50

intends to run its business within the SAP ERP System, by

carrying out requirements-gathering workshops. The
Business Blueprint is created by detailed documentation
of the resultsgathered during these requirements
workshops. Furthermore, the Business Blueprint serves to
document the business process requirements of the
company. On this basis, a common understanding of how
the company intends to run their business within the R/3
System is achieved.
A Business Blueprint comprises the following structure
elements in a hierarchy:
Organizational Units;
Master data;
Business scenario;
Business processes; and
Process steps. The major milestones of the business
blueprint phase are:
Workshops to gather business requirements with the
customers functional leads;

Creation of the detailed business blueprint document;

Determination of changes to initial project scope and

time schedule (if applicable); and
Project phase review and sign-off from customer.
COMMENTS ON CASE STUDY:51

Above study shows how SAP Services plans to address the software
industrys transformation challenge of shifting from (software) goods-dominant
logic to service-dominant logic. For the services unit of a world leader in its
domain of enterprise software, this transformation challenge is significant and
might provide many insights even far beyond the software industry.

4.0 Research Methodology

4.0 Research Methodology

52

Research is often described as an active, diligent and systematic process

of
inquiry aimed at discovering, interpreting and revising facts. This
intellectual
investigation produces a greater understanding of events, behavior or
theories and makes
practical applications through laws and theories. The term research is
also used to
describe a collection of information about a particular subject, and is
usually associated
with science and scientific method.
BASIC RESEARCH:
Basic research is also called as fundamental or pure research. Its primary
objective is the advancement of knowledge and the theoretical
understanding of the
relations among the variables. It is exploratory and often driven by
researchers curiosity
or interest. It is conducted without any practical end in mind. Basic
research often lays
down the foundation for further applied research.
APPLIED RESEARCH:
53

Applied research is done to solve specific, practical questions. Its

primary
objective is not to gain knowledge for its own sake. It is usually
descriptive in nature. It is
almost always done on the basis of basic research.
As far as equity research is concerned there are two types of research
methods
that are followed:
Fundamental analysis
Technical analysis
Financial statement analysis is the biggest part of Fundamental analysis
also known as quantitative analysis, it involves looking at historical
performance data to estimate the future performance of stocks whereas
Technical analysis does not care onebit about the value of the company,
it is only interested in the price movements of thecompany s share in the
market. This project deals with the fundamental analysis aspect of the
equity research. The researcher in this project has tried to look into the
details of the financial statements of the companies, the environment
surrounding the telecom sector, the latest
developments in this regard, the management discussions on the part of
every company
and the government policies concerned with the telecom sector.

54

4.2 OBJECTIVES
Provide hands-on experience for students by embedding
SAP software and resources to enhance their learning of
ERP and CRM concepts, an integral part of global business
Build relevant ERP, CRM and SAP skills for students to
create competitive hiring advantage
Provide faculty necessary SAP software tools and resources
to teach Enterprise Resource Planning (ERP) and Customer
Relationship Management (CRM) concepts

Strengthen Drexels research program in ERP, CRM and

global business.

RESEARCH ON SAP
SAP was founded in 1972 in Walldorf, Germany. It stands for Systems,
Applications and Products in Data Processing. Over the years, it has
grown and evolved to become the world premier provider of
client/server business solutions for which it is so well known today. The
SAP R/3 enterprise application suite for open client/server systems has
established a new standards for providing business information
management solutions.
SAP product are consider excellent but not perfect. The main problems
with software product is that it can never be perfect.
The main advantage of using SAP as your company ERP system is that
SAP have a very high level of integration among its individual
applications which guarantee consistency of data throughout the system
and the company itself.

55

In a standard SAP project system, it is divided into three

environments, Development, Quality Assurance and Production.
The development system is where most of the implementation work
takes place. The quality assurance system is where all the final testing is
conducted before moving the transports to the production environment.
The production system is where all the daily business activities occur. It
is also the client that all the end users use to perform their daily job
functions.
To all company, the production system should only contains transport
that have passed all the tests.
SAP is a table drive customization software. It allows businesses to
make rapid changes in their business requirements with a common set of
programs. User-exits are provided for business to add in additional
source code. Tools such as screen variants are provided to let you set
fields attributes whether to hide, display and make them mandatory
fields.
This is what makes ERP system and SAP in particular so flexible.
The table driven customization are driving the program functionality
instead of those old fashioned hard-coded programs. Therefore, new and
changed business requirements can be quickly implemented and tested
in the system.
Many other business application software have seen this table driven
customization advantage and are now changing their application
software based on this table customizing concept.
In order to minimized your upgrading costs, the standard programs
and tables should not be changed as far as possible. The main
purpose of using a standard business application software like SAP is to
reduced the amount of time and money spend on developing and testing

56

all the programs. Therefore, most companies will try to utilized the
available tools provided by SAP.

Competitors
primary SAP competitors include the following:

Oracle - in the enterprise on-premise and hosted ERP and

CRM software market

Lawson - in the enterprise, on-premise ERP and CRM

software market

Infor - in the enterprise, on-premise ERP and CRM software

market

NetSuite - in the SaaS ERP software market

Sage - in the SMB on-premise accounting software, CRM

and ERP software market

Microsoft Dynamics - in the SMB accounting software, CRM

and ERP software market

Partners:
SAP manages nine business partner programs which collectively
include thousands of partners and partner solutions and extend
SAP's ERP products. The company also facilitates ecosystems of
third party solutions, such as its EcoHub which includes about
500 solutions from about 250 partners and gives customers both
a marketplace to review and purchase solutions as well as a
community forum to review and rate solutions. SAP is now in an
57

assertive push to grow a cloud community of solutions for its

Business ByDesign and On Demand line of business apps (such
as Sales On Demand) and keep pace with rival SaaS vendors
such as Salesforce.com's AppExchange, NetSuite's SuiteCloud
and Microsoft's Marketplace which have taken online ecosystems
to a new level, and made them necessities for achieving market
share in the cloud.

SAP ERP & CRM Product Portfolio

SAP's software product portfolio includes SAP Business Suite
software for large organizations; SAP Business All-in-One
solutions, the SAP Business ByDesign SaaS solution, and the
SAP Business One application for SMB (small and midsize
businesses); The SAP BusinessObjects portfolio, sold from
small to large companies; SAP solutions for sustainability to
help enable organizations' sustainability initiatives, and The
SAP NetWeaver technology platform.

58

Key ERP and CRM applications include the

following.

SAP
Product
SAP
Business
Suite 7

SAP
Business
All-in-One

SAP
Business
ByDesign

SAP
Business
One

Customer
Segment
Large
enterprises

SMB

SMB

Small
business

Sales
Distribution

Market
Sizing

Direct

Designed for
companies with
2,500+ staff and
select vertical
markets.

Direct and
channel

Upper middle
market (500 to
2,500 staff) onpremise ERP and
CRM solution.

Direct and
channel

Lower middle
market (100 to 500
staff) software as a
service (SaaS)
ERP and CRM
system.

Channel

Small business
(less than 100
staff) on-premise
ERP and CRM
application.
59

SAP Market Sizing

Key to understanding SAPs business application product
portfolio and target markets is understanding their market sizing
and customer definitions.

SAP recognizes that lower midsize enterprises (100-999

employees) represent the largest opportunity in the SME
market and the company has aggressively ramped up to grow
this customer share. There are ~1.3 million companies in this
segment representing more than half of the SME revenue
opportunity.

Thus far SAP is showing success in growing SMB market

share but significantly lower than in the LE segment. Overall,
the competitor landscape is highly fragmented with many local
players.

60

SAP ERP Advantages and

Disadvantages
SAP ERP Advantages

Market share leadershipSAP is marquee brand that is

arguably the ERP software market share leader. For
reference, Oracle would take that argument and would point to
different criterion to measure market share. Nonetheless, SAP
is a very sophisticated marketer and able to retain most of its
customer base, thereby suggesting it is likely to retain its
leadership position.

Corporate viabilityWith over 65,00 employees, 232,000

customers, 16,22 billion in revenues and an impressive four
decade history, the company shows no signs of going away
anytime soon.

Software scopeThe application breadth of SAP ERP, and

even wider scope when considered within the SAP Business
Suite, provides a central and enterprise-wide system for the
largest of companies while delivering some consistent
benefits, such as streamlined business processes, more
accessible information and a reduction of interfaces among
disparate applications.

A global solutionSAP supports global functionality with

45 standard country versions and eight add-on country
editions. The application is also scalable to support thousands
of concurrent users across multiple locations.

61

ExpandabilitySAP business applications can be procured

modularly for individual functions such as CRM or SCM, or
customers can acquire the SAP Business Suite to integrate all
or most of their business processes. Similarly, the financial
applications can be operated stand-alone or as a part of a
broader suite.

SAP ERP Disadvantages

Complex pricingSAP pricing is unnecessarily complex
and lacks transparency which facilitates sales
gamesmanship. Further, new SAP software maintenance
models have been very controversial with the customer
base. Even after getting past the hurdle of understanding
the software acquisition costs, customers are required to
then track multiple licensing metrics, such as role-based
and named user categories, licensing use based on
operating metrics and hardware utilization metrics for
certain products. Other pricing challenges occur in the forms
of periodically changing licensing programs and product
bundles, unfavorable policies for shelfware and difficult to
interpret policies for third party indirect use integration
clauses.
Very high TCOIts no secret that SAP comes with a very
high Total Cost of Ownership (TCO), consisting of high
acquisition costs, very high deployment costs, reasonably
priced but recurring maintenance costs and very high
internal support costs. Its incumbent upon ERP buyers to
identify, calculate, analyze and optimize their investment in
each of these categories prior to making a purchase
decision. Without a firm handle of the costs in each of these
categories, its very unlikely an ERP buyer would achieve
their budget or software investment ROI objectives.

62

 Deployment riskContinuing one of the prior points a step

further, ERP buyers must recognize SAP ERP software is
broad, deep and complex, thereby rendering the conditions
for a perfect storm and a very challenging and costly
deployment. Run-away ERP projects are legendary and ontime/on-budget ERP implementations are exceedingly rare.
Recurring upgradesAlso adding to TCO and budget
considerations are the recurring nature of new version
releases. As is typical of complex on-premise ERP systems,
new version releases are regarded as Fork Lift upgrades
with deployment costs that often exceed the purchase price
of the original ERP software. ERP upgrade costs can rise
exponentially based on software customization, and to a
lesser extent business process designs and system
integration. The upgrade projects are so complex and costly
that it has become common for customers to simply avoid
thema practice that defers short term pain but ultimately
catches up with these customers.
RigidSAP ERP software has earned a reputation of being
very rigid. While configuration is pervasive throughout the
application, configuration options are limited and seldom
extend beyond the original design intent and software
architecture constructs. Although most customers believe
ERP software should be flexible enough to accommodate
their business processes (which many companies believe
represent their uniqueness and competitive advantages),
SAP customers are often forced to adjust their business
processes to accommodate SAP software. This can be a
very strong barrier for companies whose business models
are in motion (i.e. M&A, divestitures, geo expansions, new
products, etc.) or who are increasingly adaptive to fluid
market conditions or pursuing more agile business
strategies.
63

 Technology implicationsSAP has a reputation among

many of being antiquated technology. Putting the
technology purists aside, this may or may not be a fair
accusation. It is true that SAP ERP technology traces back
to the 1992 R/3 release, and has been progressively
updated through continuous iterations as opposed to a
complete rewrite in a more modern technology. The
technology foundation becomes more important for
companies that are complimenting significant software
customization or system integration. Particularly in these
scenarios, ERP buyers must do their due diligence in order
to truly understand the cost and operational impact as a
result of the SAP ERP technology.

SAP ERP Challenges

SAP is challenged in the two primary areas of innovation and
net new customer acquisitions. For example, as highlighted, the
company has been unable to respond to the market demand for
cloud solutions which has resulted in not just lost opportunity,
but the erosion of their own install base by more innovative
competitors. Companies such as Salesforce.com have
displaced SAPs CRM software within SAPs own customer
base. Gartner projects Salesforce.com will overtake SAPs
leadership position in the CRM market this year. Companies
such as Microsoft and NetSuite are winning Tier 2 ERP deals
within the SAP install base. For a decade, SAP has argued that
its enterprise install base isnt looking for cloud solutions, which
is partially true, however, is clearly changing with each passing
day.
Similarly, SAPs slow growth of net new customer acquisitions is
limiting its upside potential. SAP holds a near dominating ERP
64

software market position among the Global 2000, which is

great, except for the fact that there are only 2000 of these
customers and once they become saturated business growth
becomes limited. For SAP and the ERP software market at
large to grow, enterprise ERP software publishers must
consider new market opportunities such as the cloud ERP
market and the midmarket; two overlapping sectors but not
necessarily the same. SAP does effectively compete in the
midmarket ERP space with its Business All-in-One and
Business One solutions, however, these solutions are not
market share leaders and are in need of technology refresh and
overall innovation infusion. If the company were to improve
midmarket vision and clarity, and grow their investment in the
Business All-in-One and Business One solutions, its quite
probable they would compete more favorably with the market
share leaders (Microsoft Dynamics and Sage), however, at this
point these solutions dont seem to be high on the priority list.

SAP ERP Challenges

SAP is challenged in the two primary areas of innovation and
net new customer acquisitions. For example, as highlighted, the
company has been unable to respond to the market demand for
cloud solutions which has resulted in not just lost opportunity,
65

but the erosion of their own install base by more innovative

competitors. Companies such as Salesforce.com have
displaced SAPs CRM software within SAPs own customer
base. Gartner projects Salesforce.com will overtake SAPs
leadership position in the CRM market this year. Companies
such as Microsoft and NetSuite are winning Tier 2 ERP deals
within the SAP install base. For a decade, SAP has argued that
its enterprise install base isnt looking for cloud solutions, which
is partially true, however, is clearly changing with each passing
day.
Similarly, SAPs slow growth of net new customer acquisitions is
limiting its upside potential. SAP holds a near dominating ERP
software market position among the Global 2000, which is
great, except for the fact that there are only 2000 of these
customers and once they become saturated business growth
becomes limited. For SAP and the ERP software market at
large to grow, enterprise ERP software publishers must
consider new market opportunities such as the cloud ERP
market and the midmarket; two overlapping sectors but not
necessarily the same. SAP does effectively compete in the
midmarket ERP space with its Business All-in-One and
Business One solutions, however, these solutions are not
market share leaders and are in need of technology refresh and
overall innovation infusion. If the company were to improve
midmarket vision and clarity, and grow their investment in the
Business All-in-One and Business One solutions, its quite
probable they would compete more favorably with the market
share leaders (Microsoft Dynamics and Sage), however, at this
point these solutions dont seem to be high on the priority list.
66

Financial planning and analysis of

sap erp software
Financial Planning and Analysis (FP&A)
Improve financial performance and control costs with
our software for financial planning and analysis

Accelerate planning cycles and make decisions based on

real-time financial insights using FP&A software from
SAP. Our solutions support strategic planning, budgeting,
forecasting, financial analysis, enterprise performance
management (EPM), and more. They can help you
increase profitability, track and control costs, and tightly
align operations with business strategy. Use the latest
technologies to adapt to changing market conditions
and seize new opportunities for growth.
Financial planning teams need to add strategic value to the
business while keeping a sharp eye on costs and budgets. SAP
S/4HANA Finance can help by dramatically simplifying FP&A
processes, accelerating strategy execution, and paving the way
for success in the digital economy.

67

SAP Modules
1) Logistics
- Sales and Distribution (SD)
- Materials Management (MM)
- Production Planning and Controlling (PP)
- Quality Management (QM)
- Plant Maintenance (PM)
2) Financials
- Financial Accounting (FI)
- Controlling (CO)
- Asset Management (AM)
- Project System (PS)
3) Common Systems
- Workflow (WF)
- Industry Solutions (IS)
4) Human Resources
- Human Resources (HR)

68

SAP SOFTWARE APPLICATIONS

Solutions
SAP ERP
SAP CRM
SAP PLM
SAP SCM
SAP SRM
SAP Analytics
SAP Manufacturing
SAP Service
SAP Mobile Solutions
SAP xApps
Small & Medium Size Solutions

69

 Business One
Business by Design
SAP All-in-One
Platforms
Enterprise Services Architecture
SAP NetWeaver Platform

70

SAP ERP SOFTWARE GRAPHICS AND

DIAGRAM

71

72

73

74

75

76

HOW TO DEDUCT TDS WITH

REFERENCE TO BLUE STAR IN
INDIA
Section 194C - ClearTDS Guide on TDS on
Payment to Contractor
WHO IS THIS GUIDE FOR ?
Persons to whom payments of any amount in relation to
contractors or sub-contractors are made.
What is Section 194C?
Section 194C states that any person responsible for
paying any sum to resident contractor for carrying
out any work (including supply of labor),
In pursuance of a contract between the contractor
and the following:
a. The Central Government or any State
Government;
b. Any local authority;
c. Any corporation established by or under a
Central, State or Provisional Act;
d. Any company;
e. Any co-operative society;
f. Any authority constituted in India by or
under any law, engaged either for the
purpose of dealing with and satisfying the
needs for housing accommodation or for the
77

purpose of planning, development or

improvement of cities, towns and villages or
for both;
g. Any society registered under the Society
Registration Act, 1980 or under any such
corresponding law to the Act in any Part of
India;
h. Any trust;
i. Any university or deemed university;
j. Any firm
What is the meaning of work for the purpose to Section
194C?
The expression "work" in this section would includea. advertising;
b. broadcasting and telecasting including production
of programs for such broadcasting or telecasting;
c. carriage of goods and passengers by any mode of
transportation, other than railways;
d. catering;
e. Manufacturing or supplying of a product according
to the requirement or specification of a customer
by using the materials purchased from such
customer, But does not include manufacturing or
supplying of a product according to the
requirements or specifications of a customer by
using the materials purchased from a person, other
than such a customer.
What is a Sub-Contractor as per Section 194C?
A "sub-contractor" would mean any person

78

 who enters into a contract with the contractor for

carrying out, or
for the supply of labor for carrying out the whole or
part of the work undertaken by the contractor
under a contract with any of the authorities or
for supply of, whether wholly or partly, any labor
which the contractor has undertaken to supply in
terms of his contract with any of the authorities
mentioned under this section.
What is TDS to Sub-Contractor?
As per the provisions of Income Tax Act, any person
(being a contractor and not being an individual or a Hindu
Undivided Family),
responsible for paying any sum to any resident
in pursuance of a contract with the sub-contractor
for carrying out, or for the supply of labor for
carrying out, the whole or any part of the work
undertaken by the contractor or for supplying
whether wholly or partly any labor which the
contractor has undertaken to supply shall,
o at the time of credit of such sum to the
account of the sub-contractor or
o at the time of payment thereof in cash or
o by issue of a cheque or draft or by any other
mode, whichever is earlier,
deduct amount equal to 1 % of sum as income-tax
on income comprised therein.

79

Where the Payment is made to Sub-contractors, what

Conditions must be Satisfied?
1. Payment is made to a sub-contractor who is
resident within the meaning of Section 6 of the
Income Tax Act, 1961.
2. Payment is made by a resident contractor, not
being an individual or an HUF.
3. Payment is made to carry out any work, including
supply of labor.
4. The amount of consideration of the contract in
respect to which payment is made should not be
less than Rs. 30,000.
5. The sum should be credited or paid by the
contractor in respect of a contract undertaken by
him with the specified bodies.
When does TDS under Section 194C need to be
deducted?
The person responsible for making payment to
resident contractor/sub-contractor should deduct
TDS
o either at the time of crediting such sum to
the account to the payee or
o at the time of payment thereof in cash or
o by issue of a cheque or by any other mode,
whichever is earlier.
Where any sum is credited to any account, whether
called "Suspense account" or by any other name, in
the books of account of the person liable to pay
such amount, such crediting shall be deemed to be
credit of such income to the account of the payee
and the provisions of this section shall apply
accordingly. Thus, tax has to be deducted even if
80

amount payable to resident

contractor/subcontractor is transferred to suspense
account by the payer in his books.
What is the rate of TDS?
Nature of Payment

TDS Rate if
PAN
available

TDS Rate
PAN not
available

Payment / Credit to resident

individual or HUF

1%

20%

Payment/Credit to any resident

person other than individual /
HUF

2%

20%

Payment/ credit to Transporters

NIL

20%

S.
No

Note:- No Surcharge, Education Cess and SHEC shall be

added. Hence, TDS shall be deductible at basic rates.
What are the Exceptions to TDS on Payment to Contractor
?
Deduction of TDS in case of composite
contract
o Where materials are supplied by the
government, the question is whether
deduction will be made with reference to
gross payment to the contractor or the net
payment, i.e., gross payment minus
deductions, if any,
81

o On account of materials supplied by the

government, will have to be decided in the
light of the terms of the particular contract
and the conduct of parties thereto.
o Where the contractor has undertaken to
construct a building or a dam,and the
government or other specified person has
undertaken to supply all or any of the
materials necessary for the work at the
stipulated prices, the deduction will be
related to the gross payment without
excluding any adjustments on account of
cost of materials.
o Where the contractor has undertaken
only to provide the labor for the
work, the ownership of the materials
supplied remaining at all times with the
government or other specified person, the
sum payable to the contractor in respect of
the contract will only be the amount paid for
such labor or services and will, thus, not
include the price of the materials supplied by
the government or other specified persons.
o Thus, the rate of TDS from payments made
by the government or other specified
persons to any contractor will be 2% or 1%
of the gross payment or, as the case may be,
the net payment, depending on the terms of
the contract.
Deduction when party supplies materials to
the contractor
o When materials are supplied no deduction is
possible. Consequently, no TDS is required to
82

be made. However, when payment is made

either in cash or in kind to contractor/subcontractor tax is required to be deducted.
Time Limit within which Tax is to Deposited
Where the payment is made by or on behalf of the
Government - On the same day.
Where the payment is made in any other case than the
government
a. If the amount is credited in the month of March
- On or before April 30th
b. In Other months - Within 7 days from the end of
the month in which the deduction is made.
Note: The payer is the person responsible for TDS.
Issue of TDS certificate
In case of payments other than salary, TDS certificates
are to be issued on quarterly basis in Form No.16A. As per
rule 31, every person responsible for deduction of tax
from payments other than salary has to issue a quarterly
TDS certificate in Form No. 16A. The certificate is to be
issued by following dates:

Quarter

Due date for NonGovernment deductor

Due date for

Government
deductor

April to June

30th July

15th August
83

July to
September

30th October

15th November

October to
December

30th January

15th February

January to
March

30th May

30th May

As per CBDT Circular No. 1/2012, dated 9-4-2012, it is

mandatory for all the deductors to issue TDS certificate in
Form No. 16A by generating the certificate through TIN
central system by downloading the certificate from the
TIN website with a unique TDS certificate number. These
provisions are applicable in respect of all sums deducted on or after 1-4-2012. The
certificate so issued can be authenticated either by using digital signature or
manual signature.

Section 194H - TDS on Commission and

Brokerage
WHO IS THIS GUIDE FOR ?
84

Persons who are earning income from commission or

brokerage.
What is Section 194H?
Section 194H is for income tax deducted on any
income by way of commission or brokerage, by any
person responsible for paying to a resident.
Individuals and Hindu Undivided Family who were
covered under section 44AB are also required to
deduct TDS.
Section 194H does not include insurance
commission referred to in section 194H.
When does TDS under Section 194H need to be
deducted?
TDS under Section 194H will be deducted at the
time of credit of such income to the account of the
payee or to any other account.
Whether called suspense account or by any other
name at the time of payment, of such income in
cash or by the issue of a cheque or draft or by any
other mode, whichever is earlier.
What do you mean by Commission and Brokerage?
Commission or brokerage includes any
payment
received or receivable,
directly or indirectly, OR
by a person acting on behalf of another person
TDS on commision or brokerage includes,

85

1. for services rendered (not being professional

services), or
2. for any services in the course of buying or selling of
goods, or
3. in relation to any transaction relating to any asset,
valuable article or thing, except securities
Exceptions to Commission/Brokerage
People are under the presumption that Presumptive
Taxation is applicable to Income from commission but
technically it is not correct.
What is the rate of TDS?
The rate of TDS shall be 10%.
No surcharge, education cess or SHEC shall be
added to the above rates. Hence, tax will be
deducted at source at the basic rate.
The rate of TDS will be 20% in all cases, if PAN is
NOT quoted by the deductee.
Under what circumstances TDS u/s 194H is not
deductible?
No deduction shall be made under this section in a
case where the amount or the aggregate amounts
of such income to be credited or paid during the
financial year does not exceed INR 5,000
The Person can make an application to the
assessing officer under section 197 for deduction of
tax at NIL rate or at a lower rate.

86

What is the time limit on depositing TDS ?

Tax Deducted during the month of April to February
is to be deposited on or before the 7th of next
month. Tax Deducted in the month of March is to
be deposited on or before 30th April.
For example, tax deducted on 25 April is to be
deposited on or before 7th May and tax deducted
on 15 march is to be deposited on or before 30
April.
TDS at a Lower Rate
The deductee (person whose tax is deducted) can make
an application to the assessing officer under section 197
for deduction of tax at NIL rate or at a lower rate.
Actions to be taken by deductor:
Validate the PAN of the deductee submitting 197
certificate.
The Certificate should be valid for the PAN, Section,
Rate and relevant financial year which has been
mentioned in the statement filed.
Verify that the threshold limit for the certificate has
not been exceeded in previous quarters.
Correct certificate number should be quoted in the
statement. Example of Correct Certificate Number 3XXXAH7X

87

Section 194I - TDS on Sale of Immovable

Property
WHO IS THIS GUIDE FOR ?
Persons who are earning from sale of immovable property
or agricultural land
What is Section 194I ?
The person (not being an Individual or HUF) who is
responsible for paying of rent is liable to deduct tax
at source.
in case the aggregate of the amount of rent
credited or paid or likely to be credited or paid
during the financial year exceeds Rs. 1,80,000/ Also, individuals and/or HUFs who are subject to tax
audit are also under an obligation to deduct the tax
at source.
The limit of Rs. 1,20,000/- was enhanced to Rs.
1,80,000/- w.e.f. 1.7.2010
What is the Reason for Introduction of TDS u/s 194I?
The Finance Act, 1994 inserted the Section 194I,
regarding deduction of tax from rent
The Government felt that an item of income which
should be covered under TDS Deduction should be
the income by way of rent
In other countries as well, such income is subject to
deduction of income tax at source

88

What is the Meaning of 'Rent' in reference to Section

194I ?
'Rent' means any payment, by whatever name
called, under any lease, sub-lease, tenancy or any
other agreement or arrangement for the use of
(either separately or together) any:
a. land or
b. Building (including factory building) or
c. Land appurtenant to a building (including
factory building) or
d. Machinery or
e. Plant or
f. Equipment or
g. Furniture or
h. Fittings
whether or not any or all of the above are owned
by the payee-Explanation (i) to Sec. 194-I. Subletting is also covered.
If the landlord collects security or advance
payment at the time of letting out a building to a
tenant on the condition that the deposit will be
refunded at the time of vacating the building, then
such a receipt is not in the nature of income and,
therefore, no tax is to be deducted at source u/s
194I.
However, advance rent (not in the nature of
refundable security deposit) paid is, subject to tax
deduction. Moreover, where any such rent is
credited to 'suspense account' or to any other
account shall also be liable to deduct tax at source.

89

What Payment is Covered u/s 194I?

Income from letting out of factory building

o Where a factory building is let out, the rent
received generally is income from business in the
hands of the lessor or the owner of the factory.
Only in a few cases it is income from property in
the lessor's hands.
o But such payment also, which is business
income in the hands of the lessor and for which
he will necessarily be paying advance tax and
finally be returning the rental income, will be
subject to tax deduction at source or TDS.
o This is an unnecessary burden on both taxpayer
and the tax administrator, because collection of
tax will take place as TDS from the lessor without
much delay.

Rent includes service charges

o Service charges payable to business centres are
covered under the definition of rent, as they
cover payments by whatever named called.

TDS requirement where building and furniture,

etc., let out by separate persons
o In case where building is let out by one person,
and furniture, fixtures, etc., are let out by another
person, then the payee is required to deduct tax
under Sec. 194I only from the rent paid/credited
for the hire of building.

TDS requirement where rent not payable on

monthly basis

90

o Sec. 194-I does not mandate that the tax

deduction should be made on month-to-month
basis.
o Therefore, if the crediting of the rent is done on
quarterly basis then deduction at source will have
to be made on the quarterly basis only. Where
the rent is paid on yearly basis deduction also will
have to be made once a year on the basis of
actual payment or crediting.

Charges regarding cold storage facility

o In the case of cold storage where milk, ice
cream, vegetables, etc., are stored, the payment
may be styled as charges for use of plant and not
for use of building. Cold storage is a plant.

Hall rent paid by an association for use of it

o Since the association is assessed as an
association of persons and not as an individual or
HUF, the obligation of tax deduction will be there,
provided payment for the use of hall exceeds Rs.
1,80,000

Payments to hotels for holding seminars

including lunch
o Where hotels do not charge for use of premises
but charge for catering/meal only, then provisions
of Sec. 194I would not apply. However, Sec.194C
would apply for catering part.

91

Who is Liable to Deduct TDS u/s 194I ?

The person (not being an Individual or HUF) who is
responsible for paying any income to resident by
way of rent is liable to deduct tax at source.
In case the aggregate of the amount of such
income credited or paid or likely to be credited or
paid during the financial year by the aforesaid
person to the account of, or to payee exceeds Rs.
1,80,000/What is the Point of Deduction of TDS?
Tax is required to be deducted at source at the time
of credit of 'income by way of rent' to the account
of the payee or at the time of payment thereof in
cash or by the issue of a cheque or draft or by any
other mode, whichever is earlier.
What is the Rate of TDS?
S.
No

Nature of Payment

Rates of tax
deduction

Rent of plant and machinery

2%

Rent of land or building or furniture or

fitting

10%

92

No deduction or Deduction at Lower Rate under Sec. 197

On application by payee in Form no. 13, if the
Assessing Officer is satisfied that this total income
justifies no deduction of tax or deduction at lower
rate, he may issue a certificate in Form No. 15AA to
that effect directly to the payer.
Under what circumstances TDS u/s 194I is not deductible?
Amount payable/paid not exceeding Rs.
1,80,000 during the financial year
No tax from the amount payable in respect of rent
is deductible where the amount of such rent
credited or paid or likely to be credited or paid
during the financial year to the payeelandlord or
lessee does not exceed Rs. 1,80,000.
Where tenant is individual or Hindu
Undivided Family
Deduction is not required under Sec. 194I if the
amount is paid or payable by an individual or Hindu
Undivided Family. If :
a. the individual/HUF is not to carrying on any
business/profession or
b. individual/HUF not liable to tax audit in
preceding year
Sharing or proceeds of film exhibition
between a film distributor and a film
exhibitor owning a cinema theatre
Representations have been received from various
93

quarters regarding applicability of the provisions of

Sec. 194-I of the Income Tax Act to the sharing of
the proceeds of film exhibition between film
distributor and film exhibitor owning a cinema
theatre.
The matter has been examined by the Board and
the Board is of the view that the provisions of
Sec.194-I would not be attracted to such payment
because: the exhibitor does not let out the cinema
hall to the distributor.
Generally, the share of the exhibitor is on account
of composite services; and The distributor does not
take cinema building on lease or sub-lease or
tenancy or under an agreement of similar nature.
Where the payee is the Government at
agency
Under the provisions of Sec. 196, no tax is required
to be deducted at source from any sums payable to
the government.
The matter with regard to the statutory authorities
and the local authorities referred to above, has
been examined by the Board. Sec. 190. And it
provides for deduction of income tax at source as
one of the modes of collection of income tax with
respect of an income. And this is notwithstanding
that the regular assessment in respect of such an
income is to be made in a later assessment year.
94

The income of an authority constituted in India by

or under any law enacted either for the purpose of
dealing with and satisfying the need for housing
accommodation or for the purpose of planning,
development or improvement of cities, towns and
villages, is exempt from income tax under Sec.
10(20A).
Similarly, the income of a local authority which is
chargeable under the head 'Income from house
property' or 'Income from other sources', is exempt
from Income-tax under Sec.10(20).
There is no other condition specified in these two
clauses of Sec.10 which is necessarily to be
satisfied to avail of the income-tax exemption.
There is no requirement to deduct income-tax at
source on income by way of 'rent' if the payee is
the governmental agency.
In the case of the local authorities and the
statutory authorities, there will be no requirement
to deduct income-tax at source from income by
way of rent if the person responsible for paying it is
satisfied about his tax-exempt status under clause
(20) or (20A) of Sec.10 on the basis of certificate to
this effect given by the said authorities.
What is the time limit on depositing TDS?
Where the payment is made by or on behalf
of the Government- On the same day (without
using any challan form)

95

 Where the payment is made in any other case

than the Government- On or before 7 days from
end of month in which deduction is made, where
tax is paid accompanied by an Income tax challan
a. If the amount is credited or paid in the
month of March- On or before April 30th
b. In any other case- On or before 7 days
from the end of the month in which the
deduction is made.
c.

Section 194J Fees for Professional or Technical

Services
Any person (other than individual or huf who is not liable to audit
u/s 44AB) who is responsible for paying to a resident
1. Fees for professional services
2. Fees for technical services
3. Royalty
4. Any remuneration or fees or commission by whatever name
called, other than those on which tax is deductible u/s 192 to
a director of a company
5. Any sum referred u/s 28(va)
Rate of TDS 10%. If the recipient of income doesnt furnish his
PAN to deductor then TDS is to be deducted @ 20%. No
surcharge, education cess or SHEC shall be added to the
mentioned rates.
Tax is to be deducted at the time of credit of such income to the
account of the payee or at the time of payment whichever is
earlier.
96

TDS not required to be deducted in following cases

1.

If payment is made by an Individual or Huf exclusively for

personal purposes, then tax is not required to be deducted.

2.

Assessee can apply to assessing officer for no TDS or TDS

at lower rate underSection 197.
3.
No tax is required to be deducted where the amount of such
sum or the aggregate of the amounts of such sums credited or
paid or likely to be paid or credited during the financial year
does not exceed

30,000 in case of fees for professional services or

30,000 in case of fees for technical services or

30,000 in case of royalty or

30,000 in case of sum referred u/s 28(va)

The amounts are calculated for each of the above categories

separately.
Professional Services covered under section 194J
Professional services means services which are notified by the
board under section 44AA and sports person, coaches and
trainers, event manager, anchors, film artists.
Technical Services covered under section 194J
Technical services mean any consideration for rendering services
of managerial, technical ,consultancy nature But does not include
consideration for any construction, assembly, mining or like
project undertaken by the recipient or consideration which would
be income of the recipient chargeable under the head salaries.
97

Other Points
No limit is defined for payment to director, it means any payment
to director is liable to TDS.
Actual expenses which are reimbursed cannot be deducted out of
bill amount for the purpose of calculation of TDS. If the amount
reimbursed is claimed separately then no TDS provisons
applicable on such amount.
TDS on service tax component If the service tax amount is
indicated separately in the invoice or agreement/contract then
the tax shall be deducted on the amount paid/payable without
including such service tax component. Circular no. 01/2014
Also Read:

98

SUGGESTION ON SAP ERP

SOFTWARE
1. Split the company into two apps and platforms and
assign them to two divisional heads with P&L responsibility
If SAP is to become a great platform company (its already a great
apps company) it needs specific focus . Platform is a nebulous
term but for true greatness, SAP needs to play in more layers of
the IT stack . Similarly apps that were created decades ago
need to evolve without being constrained by pace of platform
evolution . For the cloud company powered by Hana to be a
reality both apps and platform business need cloud as a vital
component .
2. Go make some bold acquisitions
Look at BI and middleware from SAP for example . They have
large install bases but they are a bit tired . Surely some of the
innovation can be done organically like how Lumira started . But
SAP doesnt have time to just build all the way . They need to
make bold acquisitions quickly on both platform and apps side .
3. Sunset products with limited upside

99

SAP has built and bought a lot of stuff over the years . There are
many products (not naming them because people who run them
are friends that I dont want to offend ) that have low adoption or
no clear forward path . Those products need to be sunset (or
migrated to something new ) and investment redirected to new

CONCLUSION ON SAP ERP

SOFTWARE
100

There is a limiting factor, and this brings us full circle. Small

suppliers do need to integrate with their larger suppliers ERP
systems, but their internal processes and requirements will
often be very different. Many will buy the ERP application that
most suits their internal use and seek to integrate it with
whatever applications are used by organisations they trade
with. In other words, tier-two fragmentation of ERP is not just
something that exists in large organisations, it is also a fact of
life across broader business communities. The interests of
ERP users are so diverse that the market will continue to
support a wide range of products, including those for
enterprise-wide needs and those for specialist niches, and the
various products will always need to talk to each other at
some level.While SAP has the largest marketshare for ERP
applications, there still leaves a lot of share for other suppliers,
the names of which may not trip off the tongue. It can be hard
to find out where the applications of some of the smaller
players are being used.
Tying down ERP market share is tricky. Large enterprises also
buy mid-market products. That is not to say they ignore the
big players, but they select certain products to fit niches that
SAP and Oracle do not serve well.
101

SearchManufacturingERP.com gives the example of French

company Areva using Infor SiteLine for site operations
alongside SAP for its financials.

BIBLIOGRAPHY
http://finance.mapsofworld.com/saperpsoftware/india.htm
l
http://www.economywatch.com/saperpsoftware
/international/banking-sector.html
http://www.labnol.org/india/corporate
http://www.banknetindia.com/banking/80142.htm
http://www.rediff.com/money/2008/feb/25hdfc.htm
http://www.businessworldindia.com/index_archives.aspx
http://www.moneycontrol.com
https://www.obcindia.co.in/obcnew/site/index.aspx

102

http://www.indiainfoline.com/Markets/Company/Fundam
entals/Directors-Report/Oriental-Bank-ofCommerce/500315
http://www.pwc.com/gx/en/financial-services/
saperpsoftware-reports/asia-march-2009.jhtml

OTHER: a)The Economic Times

b) Financial Express.

c) Business world.

Books

a) SAP ERP SOFTWARE- J. Fred Weston & Samwel

C. Weaver
b)Financial Services M. Y. Khan
c) SAP ERP SOFTWARE text and cases Kevin K.
Boeh, Paul W. Beamish 2007
103

d)Gaplin and Henron, The Complete Guide to SAP

ERP SOFTWARE
e) Corporate growth through SAP ERP SOFTWARE
S. Shiva Ramu 1998

104