What is ERP?

facilitates company-wide integrated information systems, covering all functional areas

performs core Corporate activities and increases customer service augmenting Corporate Image

ERP is a solution, which

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ERP - Definition

“Software solution that addresses theEnterprise needs, taking a process view ofthe overall organization to meet the goals,by tightly integrating all functions andunder a common software platform”

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The Current Scenario

Islands of Information Difficult to get timely & accurate information Heterogeneous Hardware & Software

platforms & practices Poor connectivity between different

organizational locations Sticking with obsolete technology Resist to change Lack of proven man-power to develop

integrated softwareEn

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Information Islands

B

Why ERP?

For Management – to know what is happening in the company

One solution for better Management For cycle time reduction To achieve cost control & low working capital To marry latest technologies To shun the geographical gaps To satisfy the customers with high expectations To be Competitive & for survival

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Evolution of ERP

• 1960’s: Inventory Control Systems• 1970’s: MRP: Material Requirement

Planning • 1980’s: MRPII: MRP & Distribution• 1990’s: MRPII ERP with introduction

of other business functions CRM’s

• Today: Web Enabled ERP – Connecting ERP Externally

What is SAP R/3?

• SAP = Systems, Applications and Products in Data Processing (R = real time, 3 = 3 tier)

• German Based Company • 3rd Largest Independent Software Vendor in

the World• SAP: ERP Market Leader• 21 Industry Vertical Solutions• 80% Fortune 500 Companies Use SAP• 66% Market share in India• Over 18,500 Customers 76000 installations in

120+ Countries, +2500 installations in India• Over 12 million users

SAP R/3 – Why ?

1 Long-term vendor viability

2 Integration

3 Best Business Practices

4 Flexible Scaleable

6 Lowest Cost of Ownership

7 Industry Specific Functionality in IS

8 Accelerated Implementation

9 Secured Future with Proven Software

5 Simple and User Friendly

SAP R/3 Technology

• SAP R/3 is– Client Server

• 3 Tier– Presentation

– Application

– Database

– Relatively hardware and database independent

• SAP R/3 offers– comprehensive suite of

integrated applications meeting the needs of most business

– best practice process design

– ability to configure to• industry sector

• unique business requirements

Varieties of Client Server

Name Presentation Application Database

Centralised System

2 Tier System

3 Tier System

NOTE: a truly distributed system may distribute the database; the processing of an application or processing of presentation calculations

Mainframe with terminals

Mainframe with intelligent terminals

Mainframe or MiniHigh End Workstation

PC or NC

What is 3-Tiered?

• 3 Functional Areas– Presentation

• workstations

– Application Logic• small boxes

– Data Management• large box

Database Server

Application Servers

HR

Inte

rnet

FI

Presentation Servers

R/3 Middleware: Interfaces to Systems Software

Database

OperatingSystem

Presentation

R/3DB

Inter-face

OS Interface

PresInter-face

SAP R/3 – The Solution

R/3R/3Client / ServerClient / Server

ABAP/4ABAP/4

FIFIFinancialFinancial

AccountingAccounting

COCOControllingControlling

AMAMFixed AssetsFixed Assets

Mgmt.Mgmt.

PSPSProjectProjectSystemSystem

WFWFWorkflowWorkflow

MMMMMaterialsMaterials

Mgmt.Mgmt.

HRHRHumanHuman

ResourcesResources

SDSDSales &Sales &

DistributionDistribution

PPPPProductionProductionPlanningPlanning

QMQMQualityQuality

Manage-Manage-mentment PMPM

Plant Main-Plant Main-tenancetenance

SMSMServiceServiceManage-Manage-

mentment

ECECEnterpriseEnterpriseControllingControlling

IndiaIndiaVersionVersion

Integratedturnkey solutions

Open systems

Client / serverarchitecture

Enterprisedata model

Industry-neutral

Multi-national

Comprehensivefunctionality

Basis

SAP AG 1999

SAP

EnterpriseEnterprise

WarehousesWarehouses

DepartmentDepartment DivisionDivision BusinessArea

BusinessArea

Client

CompanyCode

Plant

StorageLocations

SalesOrganization

Division

CompanyCompany SubsidiarySubsidiary

SalesOrganization

SalesOrganization

FactoryFactory

Enterprise Structure Terminology

SAP AG 1999

Client

Plant 1000 Plant 1100 Plant 1200

StorageLocation

0002

. . .. . .

Company Code3000

Company Code3000

Company Code1000

Company Code1000

Controlling Area2000

Controlling Area2000

StorageLocation

0001

StorageLocation

0003

Organizational Structures - Levels

SAP AG

Business Process Overview

orderSalesSalesorderorder

SOPSOP MPSMPSPlannedPlannedorderorder

ProductionProductionorderorder

DeliveryDelivery InvoicingInvoicing

Shop floorShop floorcontrolcontrol

Financial ControllingFinancial Controlling

Cost ControllingCost Controlling

Logistics ControllingLogistics Controlling SalesSales,, Production Production, , PurchPurch .,., Warehouse Warehouse Man. Man.

GoodsGoodsreceiptreceipt

ProductionProduction

SalesSales Kunden -auftrag

PurchasingPurchasing

CustomerCustomerpaymentpayment

StockStockchangechange

PresalesActivity

VendorVendorselectionselection

MRPMRP

Purchase Purchase requisitionrequisition

PurchasePurchaseorderorder

InvoiceInvoice

verificationverificationVendorVendor

paymentpayment

Hu

man

Hu

man

Res

ou

rces

Res

ou

rces

SAP AG

Integrated Technical Architecture

Operating SystemOperating System

HardwareHardware

SDMM

PP

QAPM

HR

FICO

AM

PSWF

IS

R/3

Feb 2003 Nov 03-April04

Current Position (SAP Roll Out for Expansion Project)

SAP AG

Cost Accounting

Financial Accounting/Sales

Inventory Management

Business

Company Code 1000

Client - 009

HZL Organizational Units

3000DistributionChannel 10 – Domestic20 – Export30 – Stock Transfer

. . .

Controlling Area 1000

Production/ Distribution

Sales Organization1000

2000

StorageLocation

FG01

StorageLocation

0002

StorageLocation

0003

Enterprise

Organizational Structures - Business Functions

SAP R/3 – Finance

SAP AG

Profit center

Product costs

Financial statement

Overhead costs

PURCHASING

INVENTORY MANAGE.

SALES

Accounts receivableaccounting

FI-AR

Accounts payableaccounting

FI-AP

General Ledger

Profit & LossBalance Sheet

Treasury Management

Assetaccounting

FI-AA

HUMAN RESOURCES

SAP R/3 – Costing

Cost elements

Cost centers

Calc.

Controlling

area

Profit Center

Cost object

Profitability segments

OrdersProjects

Processes

CO-CO-PAPA

Billing doc. CO-CO-PAPA Revenue elements Calc.

EC-EC-PCAPCA

..

..

..

Asset portfolio

CO-CO-CCACCA

CO-CO-CCACCA

CO-CO-ABCABC

CO-CO-OPAOPA

CO-CO-ABCABC

CO-CO-PCPC

AAAA

Labour

Material

Confirm- ation

Ext. procurmt FIFI

HRHR

Equity AMAM

PMPM

PPPP

MMMM

SDSD

SAP R/3 – Materials Management

Material Special stockBatch

Vendor/one-timecustomer

Purchasinginfo record

Servicespecifications

TextsMailCommunication

Classification

Documents

Conditions

BASIC DATABASIC DATA

Pu

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g i

nfo

rmat

ion

sys

tem

Ven

do

r ev

alu

atio

n

Purchase requisitionPURCHASINGPURCHASING

MRP Direct requisition Release procedures

RFQ/Quotation Material/service Price comparisons Price comparison list

Purchasing Purchase orders Outline agreements Scheduling agreements

Goods receipt/issue Transfer posting Quantities and values Physical inventory Storage bins

Check and post Price update

INVENTORY MANAGEMENTINVENTORY MANAGEMENT

INVOICE VERIFICATIONINVOICE VERIFICATION

SDSD

PPPP

PMPM

QMQM

FIFI

AMAM

COCO

PSPS

Third-partyorder

Requirements

Service /spare parts

Inspection lot

G/L accountsCash managementand forecast

Fixed assets

Cost center /Budget

Project

SAP AG

R

Functions in QM Application Component

SAP R/3C

om

po

ne

nts

Supporting Functions

Document management system

Engineering change management

Classification system

Controlling

Information system

Workflow

ArchiveLink

SAPoffice

Supporting Functions

Document management system

Engineering change management

Classification system

Controlling

Information system

Workflow

ArchiveLink

SAPoffice

Quality planning

Quality inspection

Quality control

Quality certificates

Quality notifications

Test equipment mgmt.

MMMM

PM/SMPM/SM

PPPP

QM

SAP AG

R

PM Concept

Bill of material

Spare parts

Assemblies

Gen. maintenancetask list

Characteristics

Classes

Networking

Equipment/functional loc.

Cost rates

Cost center

Capacity

Maintenancework centers

Maintenance notification

Materialreservation

Materialissues

Maintenance order

Capacityload

Completionconfirmation

Goods receipt/Invoice receipt

Purch.orders/contract release order

Purchaserequisition

Maintenance strategy

Maintenanceplans

Master data

Planning

Order processing

Maint. task lists

SAP AG

R

Sales and Distribution

MATERIALS

MANAGEMENT

Pre-SalesPre-Sales

Sales OrderSales OrderProcessingProcessing

Delivery/Delivery/TransportationTransportation

BillingBilling

Customer payment/Customer payment/Financial AccountingFinancial Accounting

Accounts Receivable

Accounts Receivable

Schedulingagreement

Schedulingagreement

InventoryInventory Sourcing Sourcing

ContractContract

SALES

INFORMATION

SYSTEM

InvoiceInvoice

Transfer Order

Transfer Order

ContactContact

InquiryInquiry

QuotationQuotation

DeliveryDelivery Goods IssueGoods Issue

Material Stock Account

Material Stock Account

ShipmentShipment

PPRROODDUUCCTTIIOONN

PPLLAANNNNIINNGG

OrderOrder

Benefits of SAP • Seamless integration across functions and locations• Efficient co-ordination of demand, supply and production• Addresses all businesses environments – MTO, MTS,ATO

etc.• Built in best business practices• Covers Multi-Country, Multi-Company, Multi-Plant and Multi-

Language implementation• Country versions to address local requirements – Legal,

statutory etc.• Better control and monitoring of business e.g. authorisations,

reports• Centralised control over de-centralised multi-location

operations• Handles Mutiple - valuation schemes, accounting system,

operating system, RDBMS

Thanks….