SESSION 3 : ERP

DEFINITION

ERP = Enterprise Resource Planning

® Includes applications that integrate the process for the following functions

CRM = Customer Relationship Management

Make the design, production, distribution, check the price of the materials, check the production time

2 key characteristics of ERPs :

- single source of truth
- integrated processes
=> data is stored in a single database and can be shared across processes in various departmental areas

COMPONENTS

5-Component Framework :
® Hardware : Local implementation or on cloud ; ex : laptop
® Software : Configuration or Customization ; ex : Salesforce
® Data : Transactional Data, Master Data, Organizational Data ; ex : information about like
music, video, document, figures
® Procedures : Training, Organizations schedule trainer sessions whereby a third party vendor
would train individuals
® People : Users, Consultants, Systems analysts

CHALLENGES
Challenges of implementing ERP :
 Decision-making challenges
  People challenges

 Upgrading challenges (after initial implementation

TYPES
What types of organizations use ERP ?
® ERP by Organization Size
® International Firms and ERP
® ERP by Industry Type

SIDEBAR : Digital & Ethical

Some rules :
- The golden rule
- The categorical imperative
- The slippery slope rule
- The utilitarian principle : take the action that achieves the higher value for the greatest nbr of
people
- The risk aversion principle : take the action that produces the least potential cost
- The no-free Lunch rule

E-LEARNING
Efficiently working with SAP ERP
SAP ERP provides large businesses with a single software to support all major business functions.
SAP’s ERP is a suite of integrated modules used to collect, transact and report on data from all of a
company’s business activities.
This powerful software enables the flow of information btw different parts of a company and with
outside stakeholders like customers and suppliers.

Benefits and limitations of SAP ERP

SAP implementations and customizations
There are multiple successful strategies to implement SAP but they all follow a similar flow.

SAP ERP modules

There are 2 types of modules in SAP :

Technical modules deal with SAP infrastructure. Work done in technical modules make sur the
system runs correctly. Developing or maintaining functional applications is completed in technical
modules.
Because of this, most SAP end users never come in direct contact with any technical modules. We’ll
spend most of our time focusing on functional modules.
Functional modules support transactions that align with business processes. These modules have very
strong integration. This means they send information between each other very efficiently, and this is
one of the biggest strengths of SAP.

There are many functional modules in SAP. Each organization can chose which modules they need to
implement to suit their specific business.
Let’s look at the most common functional modules :
 Accounting modules
- SAP financial accounting : includes the general ledger, accounts payable and
accounts receivable.
- SAP controlling : this is where profit center and cost center accounting are done.
- SAP Project System : this module houses project planning, project monitoring, and
project costing functionality.
 Logistics modules
- SAP Sales and Distribution : has sales order processing and shipping.
- SAP Materials Management : includes purchasing, inventory management, and
valuation.
- SAP Production Planning : includes order processing and materials requirement
planning.
- SAP Quality Management : is where incoming, in process and final inspection are
done
- SAP Plant Maintenance : includes breakdown, predictive and preventive
maintenance functions.
 Human Resources modules
- SAP Human Capital Management : in the human resources area can capture the
entire cycle of an employee at the company, from new hire all the way to termination.

Besides the typical functional modules, there are many industry specific modules available.

SAP Sales and Distribution (SD)

SAP Sales and distribution module OR/ SAP SD, is the backbone of the selling and the transportation
of products and services.
SAP SD is a logistics module that is sued to deal with customer and product related data.

organizations use this data to manage all of the sales, ordering, shipping, billing and invoicing of their
goods and services.
SD is best visualized when broken into the sales cycle.
Each of the step in SAP SD module generate transactions in the other modules in SAP.
2 common examples of this integration :
o When a sales order is generated, the system does a product availability check in the materials
management module to make sure there is actually stock to be sold.
o At the same time, SAP also runs a credit check for customer in the finance module to ensure
this customer will be reliable about paying their invoices.
The sales and distribution process is highly dependent on other modules. This tight integration enables
efficient selling and transportation of products and services at a company.

SAP Materials Management (MM)

This is a logistics module that many other modules rely on to keep the supply chain functioning.
Materials management ensure that there are always the required materials in stock. The key benefits of
MM are the way it can help increase productivity and reduce costs by handling materials efficiently.
Here are the 4 major components of a SAP MM :

® Material Master Data : components…

- material master records : they include a huge amount of information about a specific
material
- business partner records for suppliers : records document all the physical and financial
info pertaining to the suppliers a company is working with.
- Purchasing information records : act as the marriage btw material info & supplier info
® Purchasing :
- Materials procurement : includes procurement activities like purchase requisitions and
purchase orders.
® Inventory management :
- Manages inventory : includes goods receipts from suppliers, and internal transfers
where we move a material from one storage area to another
® Physical inventory : this is where physical inventory is documented. Various inventory
strategies can be implemented.
- Periodic inventory : count all inventory at a specified time
 - Cycle counts : where a small sample of inventory in one storage location is counted at
a specific time.

SAP Human Capital Management (HCM)

This module is a SAP solution to manage all human resources processes. The HCM module has a huge
amount of capabilities.
Major HCM functions are broken down into different areas. All these functions in the HCM module
rely on organizational management. This is where the organization is populated with different areas,
positions, and employee names.

(Détail des round sur LinkedIn learning)