IBM Global Services

2005 IBM Corporation ERP / SAP Overview | 1.01 March-2005

ERP / SAP Overview
IBM Global Services
2005 IBM Corporation 2 March-2005 ERP / SAP Overview | 1.01
Objectives
The participants will be able to:
Recognize the evolution of ERP solutions.
Appraise the concept, benefit and use of ERP solution.
Define the SAP R/3 Overview.
Identify the different SAP R/3 Functional modules/areas.
Distinguish the components of SAP R/3.
Judge the use of ABAP programming language.
IBM Global Services
2005 IBM Corporation 3 March-2005 ERP / SAP Overview | 1.01
Enterprise Resource Planning
ERP Overview
IBM Global Services
2005 IBM Corporation 4 March-2005 ERP / SAP Overview | 1.01
Enterprise Resource Planning
... synchronization of Company functions...
Manufacturing
Purchase
Sales
Finance
IBM Global Services
2005 IBM Corporation 5 March-2005 ERP / SAP Overview | 1.01
Enterprise Resource Planning
and extended to the complete value chain...
Tier II Component
Supplier
Vehicle OEM
Tier I Component
Manufacturer
IBM Global Services
2005 IBM Corporation 6 March-2005 ERP / SAP Overview | 1.01
Enterprise Resource Planning
Administrative
registration
Processes monitoring &
feedback
Decision support and
analysis
... delivering administrative and decision support with...
IBM Global Services
2005 IBM Corporation 7 March-2005 ERP / SAP Overview | 1.01
What is an ERP solution...?
Integrated across the primary and support processes
Marketing
Manufacturing
Materials
Distribution
Finance
Engineering
Sales
Human Resources
Planning
and
Execution
IBM Global Services
2005 IBM Corporation 8 March-2005 ERP / SAP Overview | 1.01
The ERP application
An integrated suite of business applications, which..
Closely links, monitors, and controls primary enterprise resources like manpower,
machine, material, methods, market and money.
Enables corporates to readily change their processes to adapt to the ever changing
business scenario.
Provides expertise in industry specific business processes.

Entails
Parameterization / Configuration
Designing & Customization
Testing and Implementation
Training

IBM Global Services
2005 IBM Corporation 9 March-2005 ERP / SAP Overview | 1.01
Why clients buy ERP?
Corporate Initiatives
Strategic initiatives
A requisite capability in a competitive global business
Operational initiative
A foundation for performance and cost improvement
via integration
Organizational initiative
To initiate a major organizational change within the company
Technology
IT is making the transition from a supporting operational entity to becoming a strategic
competitive tool.
Because others are buying it !!!
IBM Global Services
2005 IBM Corporation 10 March-2005 ERP / SAP Overview | 1.01
Recent business trends favoring ERP growth
Business Process Reengineering ( BPR )
Most large companies are attempting to cut in-house development costs, improve
customer service, and speed products to market by reorganizing their existing
business processes.

Software Pricing
Licensing and pricing of mainframe based packaged applications are tied to the size of
mainframe system on which the applications run, but now customers are now
demanding user-based licensing options and major corporate applications like SAP
provide this instead of the conventional platform-based pricing technique.
IBM Global Services
2005 IBM Corporation 11 March-2005 ERP / SAP Overview | 1.01
Recent business trends favoring ERP growth
Globalization
As businesses are becoming more global in scope, people are demanding packaged
corporate applications that are available in a variety of languages with support for
multiple currencies.

Integration
As more and more companies are going for BPR, there is increase in demand for
integrated solution e.g.. different applications sharing a common database and thus
enabling data definitions and business rules to be applied across an entire
organization with the facility of doing modifications at one location only.
IBM Global Services
2005 IBM Corporation 12 March-2005 ERP / SAP Overview | 1.01
Business process benefits clients expect from an ERP project
Global process/ Product management
Integrated Supply Chain Management
Leverage purchasing and vendor management
Order cycle time/ customer service improvement
Inventory reductions
Reduced information systems costs on an ongoing basis
Improved business management through worldwide integration and information
Logistics and Distribution Sales & Customer Service
Vendors Inbound Manufacturing Transportation Distribution Delivery Customer Consumer
Logistics
IBM Global Services
2005 IBM Corporation 13 March-2005 ERP / SAP Overview | 1.01
Major ERP vendors
SAP R/3
Oracle ( Peoplesoft and JD Edwards were independent ERP venders earlier,
but are subsets of Oracle now )
Peoplesoft
JD Edwards
Baan
IBM Global Services
2005 IBM Corporation 14 March-2005 ERP / SAP Overview | 1.01
What results can be expected from an ERP culture?
Reduced working capital requirements
Improved customer service
Improved direct labor productivity
Reduced purchase costs
Reduced obsolescence
Reduced overtime
Having the figures to make decisions
Having accountability throughout the organization
Improved quality of life
ERP
IBM Global Services
2005 IBM Corporation 15 March-2005 ERP / SAP Overview | 1.01
SAP R/3 Overview
Systems Applications and Products in Data Processing
IBM Global Services
2005 IBM Corporation 16 March-2005 ERP / SAP Overview | 1.01
SAP AG At a Glance
Founded in Germany in 1972
Market Leader in Industrial Enterprise Application (IEA)
About 56% market share in the ERP market.

Employs more than 38,400 people in more than 50 countries.
As the world's third-largest independent software provider, SAP delivers
business solutions to more than 36,200 customers in more than 120 countries
around the world.
Strength lies in its high degree of integration, mainly for large, global corporate
enterprises
Significant presence in Global Fortune 500 companies

IBM Global Services
2005 IBM Corporation 17 March-2005 ERP / SAP Overview | 1.01
SAP R/1 , R/2
The R/1 system
Developed for ICI Chemical
Released 1972
Focused on Sales & Distribution and Materials Management
Discontinued after release of R/2
R/2
Basis System
The R/2 system
Reorganized as leading mainframe software for large multinational
corporations
No sales effort planned reactive only
4,300 copies worldwide in 1993
Mainframe-based to replace user legacy software;
co-existence and migration strategy underway for R/2 and R/3
Keeping in mind its multinational customers, SAP designs SAP
R/2 to handle different languages and currencies.
Note: "R" stands for real-time data processing.
IBM Global Services
2005 IBM Corporation 18 March-2005 ERP / SAP Overview | 1.01
SAP R/3 : 3 Tier Architecture
Those SAP R/3 software components that
specialize in the management , storage and
retrieval of data form the Database Layer
The Database Layer
Those SAP R/3 software components that
specialize in processing business
applications form the Application Layer.
The Application Layer
Those SAP R/3 software components that
specialize in interacting with end-users
form the Presentation Layer.
The Presentation Layer
IBM Global Services
2005 IBM Corporation 19 March-2005 ERP / SAP Overview | 1.01
SAP R/3 : 3 Tier Architecture
Database servers:
Specialized systems
with fast and large
hard drives.
Application servers:
Specialized systems
multiple CPUs and
vast amounts of RAM.
Presentation servers:
Systems capable of
providing a graphical
interface.
Presentation Layer
components
Application Layer
components
Database Layer
components
reside in:
reside in:
reside in:
IBM Global Services
2005 IBM Corporation 20 March-2005 ERP / SAP Overview | 1.01
SAP R/3 : 3 Tier Architecture
The Database Layer
components are installed on
high-end database server.
The Application Layer
components are installed
across one or more high-
end servers.
Presentation Layer components are installed across many PCs
IBM Global Services
2005 IBM Corporation 21 March-2005 ERP / SAP Overview | 1.01
SAP R/3 Overview

Sales &
Distribution
SD
MM
PP
QM
PM
HR
FI
CO
TR
PS
WF
IS
Materials
Mgmt.
Product
Planning
Quality
Mgmt.
Plant Mainte-
nance
Human
Resources
Financial
Accounting
Controlling
Treasury
Project
System
Workflow
Industry
Solutions
Client/Server
ABAP/4

R/3
IBM Global Services
2005 IBM Corporation 22 March-2005 ERP / SAP Overview | 1.01
Integration
PP
MM
FI
CO
SD
FI
Which modules are
involved?
Planned
Requirement
MRP (Material
Requirements
Planning)
Requirement
on component
level
Purchase
Order
Goods
Receipt
Invoice
Verification
Accounts
Payable
Planned
Order
Production
Order
Production
completed
Order
Settlement
Customer
Order
Shipping
Invoicing
Account
Receivable
IBM Global Services
2005 IBM Corporation 23 March-2005 ERP / SAP Overview | 1.01
Integration
S
U
P
P
L
I
E
R
C
U
S
T
O
M
E
R
S A P R / 3
Procurement Production Distribution
Finance and Accounting
MM PP SD
FI CO
All business processes throughout the supply chain are executed in
one system sharing all information
Workflow
IBM Global Services
2005 IBM Corporation 24 March-2005 ERP / SAP Overview | 1.01
mySAP Technology
IBM Global Services
2005 IBM Corporation 25 March-2005 ERP / SAP Overview | 1.01
SAP NetWeaver
Existing Systems

IBM Global Services
2005 IBM Corporation 26 March-2005 ERP / SAP Overview | 1.01
SAP R/3 : Components
ABAP
Programs
Configuration
Organization Structure
Key Data Elements
Functionality Configurations
Application
Master Data
Transaction Data
IBM Global Services
2005 IBM Corporation 27 March-2005 ERP / SAP Overview | 1.01
What is Customization ?
Customization
The adaptation of application software to customer-specific needs is
accomplished in two ways :
Coding
Programming customer-specific code that replaces or complements
components of the application
Configuration
Rendering the application appropriate to a specific customer by specifying
data on which the application operates
IBM Global Services
2005 IBM Corporation 28 March-2005 ERP / SAP Overview | 1.01
ABAP Programming
SAP R/3 applications are written in the ABAP (Advanced Business
Application Programming) programming language, and run within the
application layer of the R/3 System.
ABAP programs communicate with the database management system of the
central relational database (RDBMS), and with the graphical user interface
(SAP GUI) at presentation level.

IBM Global Services
2005 IBM Corporation 29 March-2005 ERP / SAP Overview | 1.01
SAP R/3 scope
Why do we need ABAP Development ?
IBM Global Services
2005 IBM Corporation 30 March-2005 ERP / SAP Overview | 1.01
SAP Solution
SAP R/3 scope
Specific company
requirements
IBM Global Services
2005 IBM Corporation 31 March-2005 ERP / SAP Overview | 1.01
SAP Solution
SAP R/3 scope
Specific company
requirements
Non SAP
applications

New Functionality
Development
IBM Global Services
2005 IBM Corporation 32 March-2005 ERP / SAP Overview | 1.01
Summary
Materials Requirement Planning (MRP-I) began as a technique for developing enterprise-
wide business solutions by providing automated tools for forecasting demands and
planning according to the forecast.
ERP is an integrated suite of Applications to meet corporate needs.
Some major ERP vendors are : SAP R/3, Oracle, Baan
SAP AG was founded in Germany in 1972 and it is a Market Leader in Industrial Enterprise
Application (IEA).
SAP NetWeaver is a vision, or paradigm, of total integration of :
People
Information
Business Processes
Applications
SAP has a 3 tier architecture comprising of the Presentation layer, Application layer and
the Database layer.
The SAP solution is divided in different areas or Functional Modules like SD, MM, PP, QM,
PM, FI, CO etc. which are reorganized under services in mySAP Business Suite.
R/3 applications are written in the ABAP programming language, and run within the
application layer of the R/3 System.
IBM Global Services
2005 IBM Corporation 33 March-2005 ERP / SAP Overview | 1.01
Questions
What is MRP ?
What is ERP ?
When was SAP AG founded ?
What are the 3 layers of the SAP R/3 ?
What is SAP Netweaver ?
What are the different functional modules of SAP ?
What programming language is used for SAP applications ?
Why do we need ABAP developments ?