Enterprise Resource Planning[1]

Enterprise Enterprise Resource Resource PlanningPlanningAkshay BhushanAkshay BhushanAndrew ConleyAndrew ConleyWaqas SheikhWaqas Sheikh

ERP OutlineERP Outline IntroductionIntroduction ERP SolutionsERP Solutions

BenefitsBenefits DisadvantagesDisadvantages Functional Areas Functional Areas Leading Vendor ComparisonLeading Vendor Comparison

Implementation Implementation Cisco SystemsCisco Systems

Technical Aspects of SAPTechnical Aspects of SAP ERP MarketERP Market Future of ERPFuture of ERP Video SaaSVideo SaaS

IntroductionIntroduction Motivation behind ERP productsMotivation behind ERP products ERP products are marketed as “ERP ERP products are marketed as “ERP

Solutions” – multiple H/W and S/W Solutions” – multiple H/W and S/W componentscomponents

Key component – central, unified DBKey component – central, unified DB Associated with very large Associated with very large

implementation projectsimplementation projects

Introduction (cont’d)Introduction (cont’d) Focus is on integration of resources Focus is on integration of resources

across the enterpriseacross the enterprise Implemented by centralizing data Implemented by centralizing data

and building customized applicationsand building customized applications Are cross-functional & enterprise-Are cross-functional & enterprise-

widewide

ERP Solutions - BenefitsERP Solutions - Benefits Integration of ServicesIntegration of Services EfficiencyEfficiency Cost ReductionCost Reduction Less PersonnelLess Personnel Accurate DataAccurate Data Long-term BenefitsLong-term Benefits

ERP Solutions - ERP Solutions - DisadvantagesDisadvantages

ExpensiveExpensive Requires Business Process ChangesRequires Business Process Changes Generally inflexibleGenerally inflexible

ERP Solutions - ERP Solutions - Functional AreasFunctional Areas

ManufacturingManufacturing Projects Projects Human Resources (HR) Human Resources (HR)

Management Management Financials Financials Supply Chain Management (SCM)Supply Chain Management (SCM) Customer Relationship Management Customer Relationship Management

(CRM)(CRM)

ERP Solutions – ERP Solutions – Leading Vendor Leading Vendor

ComparisonComparison  SAP mySAP Oracle E-Business Suite Microsoft Dynamics

Manufacturing × × ×

Engineering × × ×

Bills of Materials × × ×

Scheduling × × ×

Capacity   × ×

Workflow Management × ×  

Quality Control × × ×

Cost Management × × ×

Manufacturing Process × × ×

Manufacturing Projects   × ×

Manufacturing Flow × ×  

Projects × × ×

Costing × × ×

Billing   × ×

Time & Expense × × ×

Activity Management ×    

HR Management × × ×

Payroll × × ×

Training ×    

Time & Attendance × × ×

Benefits × × ×

ERP Solutions – ERP Solutions – Leading Vendor Leading Vendor

ComparisonComparison  SAP Oracle Microsoft

  mySAP E-Business Suite Dynamics

Financials × × ×

General Ledger × × ×

Cash Management × × ×

Accounts Payable × × ×

Accounts Receivable × × ×

Fixed Assets   ×  

SCM × × ×

Inventory × × ×

Order Entry × × ×

Purchasing × × ×

SC Planning × ×  

Scheduling × × ×

CRM × × ×

Sales & Marketing × × ×

Service × × ×

Commissions ×    

Channel Management × × ×

Call Center Support   ×  

ImplementationImplementation Typically large-scale, complex projectsTypically large-scale, complex projects Involve significant business process Involve significant business process

changeschanges May take few months to several yearsMay take few months to several years Mostly requires external consultants Mostly requires external consultants

to provide:to provide: ConsultingConsulting CustomizationCustomization Maintenance & SupportMaintenance & Support

Case StudyCase Study

Cisco SystemsCisco Systems Cost for implementation ~ $15mCost for implementation ~ $15m Length ~ 9 monthsLength ~ 9 months Chosen Product: OracleChosen Product: Oracle Integration Consultants: KPMGIntegration Consultants: KPMG

Cisco Systems (cont’d)Cisco Systems (cont’d) SelectionSelection ImplementationImplementation ChallengesChallenges RewardReward

Technical Aspects of SAPTechnical Aspects of SAPModes of Operation:Modes of Operation:

SAP R/3 can be made to run on very different SAP R/3 can be made to run on very different configurations.configurations.

In a central implementation, all the processing In a central implementation, all the processing takes place on a single computer, analogous to takes place on a single computer, analogous to a mainframe.a mainframe.

In a two-layer implementation, servers are In a two-layer implementation, servers are specifically used for presentation and specifically used for presentation and computation.computation.

SAP advocates the three-layer implementation.SAP advocates the three-layer implementation.

Three-Layer SAP Three-Layer SAP ConfigurationConfiguration

The three-layer configuration in SAP The three-layer configuration in SAP uses a client or presentation layer, an uses a client or presentation layer, an application server layer and a database application server layer and a database layer.layer.

This mode of operation takes demand off This mode of operation takes demand off of the client and database and of the client and database and streamline business processing.streamline business processing.

SAP Client SAP Application Server

Relational Database

Presentation Data

Data Request Queries

The SAP ClientThe SAP Client The SAP client is a thin-client; very little The SAP client is a thin-client; very little

processing takes place on the client-side.processing takes place on the client-side. The purpose of the client is mainly for The purpose of the client is mainly for

presentation of data and input from the presentation of data and input from the user.user.

This allows for the separation of data from This allows for the separation of data from the client.the client.

This is useful for updates: Only the few SAP This is useful for updates: Only the few SAP application servers need to be updated application servers need to be updated rather than the many clients.rather than the many clients.

The SAP Application The SAP Application ServerServer

The SAP application server is the go-The SAP application server is the go-between for the SAP client and the between for the SAP client and the database.database.

Most of the processing is meant to take Most of the processing is meant to take place on the SAP application servers.place on the SAP application servers.

The SAP application servers can be task The SAP application servers can be task specific, e.g. presentation preparation, data specific, e.g. presentation preparation, data analysis, etc.analysis, etc.

The SAP application servers process most The SAP application servers process most of the presentation data for the clients.of the presentation data for the clients.

SAP Application Server SAP Application Server OperationOperation

SAP application servers can run on SAP application servers can run on a variety of operation systems.a variety of operation systems.

Data or processing requests from Data or processing requests from clients go to the server with the clients go to the server with the least load.least load.

Application servers cache recently Application servers cache recently used data.used data.

Having a few application servers Having a few application servers allows for easier updates.allows for easier updates.

SAP Application Servers SAP Application Servers Use ABAP/4Use ABAP/4

The business processing on SAP The business processing on SAP application servers is done in ABAP/4.application servers is done in ABAP/4.

““Advanced Business Application Advanced Business Application Programming.”Programming.”

SAP applications exists as ABAP SAP applications exists as ABAP modules, e.g. shipping, human modules, e.g. shipping, human resources or CRM.resources or CRM.

ABAP/4 runs on the ABAP virtual ABAP/4 runs on the ABAP virtual machine.machine.

ABAP/4 CodeABAP/4 Code DATA: BEGIN OF wa,DATA: BEGIN OF wa,

        connid   TYPE spfli-connid,        connid   TYPE spfli-connid,        cityfrom TYPE spfli-cityfrom,        cityfrom TYPE spfli-cityfrom,        cityto   TYPE spfli-cityto,        cityto   TYPE spfli-cityto,      END OF wa.      END OF wa.

DATA c1 TYPE spfli-carrid VALUE 'LH'.DATA c1 TYPE spfli-carrid VALUE 'LH'. EXEC SQL PERFORMING loop_output.EXEC SQL PERFORMING loop_output.

  SELECT connid, cityfrom, cityto  SELECT connid, cityfrom, cityto  INTO   :wa  INTO   :wa  FROM   spfli  FROM   spfli  WHERE  carrid = :c1  WHERE  carrid = :c1ENDEXEC.ENDEXEC.

FORM loop_output.FORM loop_output.  WRITE: / wa-connid, wa-cityfrom, wa-cityto.  WRITE: / wa-connid, wa-cityfrom, wa-cityto.ENDFORM.ENDFORM.

SAP Database SAP Database ConnectivityConnectivity

SAP systems use a central relational SAP systems use a central relational database for data storage.database for data storage.

SAP employs different adapters for SAP employs different adapters for different databases.different databases.

Clients do not access the database, Clients do not access the database, but go through the SAP application but go through the SAP application servers.servers.

SAP Database Connectivity SAP Database Connectivity (cont’d)(cont’d)

Database access is encoded in Database access is encoded in database specific ABAP modules in database specific ABAP modules in the SAP business applications.the SAP business applications.

ABAP Open SQL is used for all ABAP Open SQL is used for all database systems.database systems.

ABAP Native SQL is used to take ABAP Native SQL is used to take advantage of non-standard SQL advantage of non-standard SQL features.features.

SAP Application Server

Database Adapter Module Relational

Database

Native SQL

Open SQL Native SQL

Typical SAP Typical SAP ConfigurationConfiguration

The configuration for a company The configuration for a company will depend on the size of the will depend on the size of the company and its processing needs.company and its processing needs.

A large company will require A large company will require application servers dedicated to application servers dedicated to specific tasks.specific tasks.

ERP MarketERP Market SegmentationSegmentation

SizeSize Small to Midsize BusinessesSmall to Midsize Businesses Large BusinessesLarge Businesses

Industry VerticalsIndustry Verticals PlayersPlayers

Tier 1Tier 1 OracleOracle SAPSAP

Tier 2Tier 2 MicrosoftMicrosoft IntentiaIntentia

Tier 3 - Misys, Cerner and moreTier 3 - Misys, Cerner and more

ERP VerticalsERP Verticals

ERP Market TrendsERP Market Trends Growth Rates: 4.8% Growth Rates: 4.8%

CAGRCAGR Current Market: $16.67BCurrent Market: $16.67B Industry ActivityIndustry Activity

Consolidation Consolidation Service Oriented Service Oriented

ArchitectureArchitecture Emerging MarketsEmerging Markets Industry DiversificationIndustry Diversification

ERP Market ShareERP Market Share

Future of ERP: Paradigm Future of ERP: Paradigm Shift?Shift?

Current: Software LicenseCurrent: Software License Ownership based – one time paymentOwnership based – one time payment Product Support contractsProduct Support contracts Software hosted and run by buyerSoftware hosted and run by buyer

Future: SaaS – ‘Software as a Service’Future: SaaS – ‘Software as a Service’ Web 2.0Web 2.0 Service/user based – monthly paymentsService/user based – monthly payments Software hosted by providerSoftware hosted by provider Pros and consPros and cons

Future of ERPFuture of ERP Oracle OnDemandOracle OnDemand SAP netSuiteSAP netSuite Salesforce.comSalesforce.com

Future of ERP Future of ERP

Oracle SaaS VideoOracle SaaS Video