SAP Fundamentals
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SAP
Fundamentals
Enterprise Resource Planning
An ERP system is a set of applications that integrate all business
functions from Marketing to Financial Reporting within a single
database instance. More and more, Advanced Planning is also being
included within this definition.
All Product,
Customer,
& Supplier
InformationPlan
Order
HR
Finance
Source
Sell
Service
Projects
Procure
Market
Fulfill
Maintain
Manufacture
Develop
ERP permits authorized users to view data that is relevant
only to their business. An ERP:
• Collects data from all operational sources of an
enterprise
• Integrates and stores data in one central place
• Provides users access to data they are authorized to
see and use
ERP – An Overview
Procurement
Production
HR
Management
Planning
Warehousing
Finance/Accounts
Sales and
Dispatch
ERP – An Overview
Procurement
Management
Planning
Finance/Accounts
Sales and
Dispatch
Production
HR
Warehousing
ERP
ERP – An Overview
Procurement
Management
Planning
Finance/Accounts
Sales and
Dispatch
Production
HR
Warehousing
ERP
ERP – An Overview
ERP
There are a number of ERP tools available today. Some of
the most popular brands are:
Customized
Software
ERP – An Overview
8
ERP Market Share 2008
Source: SAP_Annual_Report.pdf
What do you think SAP stands for?
a) Systems Applications and Products in Data Processing
b) Single Application Program
c) Simplification, Accountability and Performanace
d) Systeme, Anwendungen, Produkte in der Datenverarbeitung
Ok, it was a bit of a trick question…
a) Systems Applications and Products in Data Processing
b) Single Application Program
c) Simplification, Accountability and Performanace
d) Systeme, Anwendungen, Produkte in der Datenverarbeitung
Here’s the real story
is a German-based company for Enterprise Resource Planning
Founded in 1972
The world's largest business software company
More than 41,200 customers worldwide
Recognized leader in providing collaborative business solutions
SAP – History
1970’s - Over the course of three decades, SAP has evolved from a small, regional
enterprise into a world-class international company.
1980’s - The SAP R/2 system attains the high level of stability of the previous generation
of programs. Keeping in mind its multinational customers, SAP designs SAP R/2 to
handle different languages and currencies. With this and other innovations in SAP R/2,
SAP sees rapid growth.
1990’s - SAP R/3 is unleashed on the market. The client-server concept, uniform
appearance of graphical interfaces, consistent use of relational databases, and the ability
to run on computers from different vendors meets with overwhelming approval.
2000’s - With the Internet, the user becomes the focus of software applications. SAP
develops SAP Workplace and paves the way for the idea of an enterprise portal and role-
specific access to information.
13
SAP – Customers
16 out of the 21 global
upstream companies use
SAP and 20 out of the top 21
downstream companies use
SAP.
Some examples include
Petronas, British Petroleum,
Saudi Aramaco, Petrobas,
Pdavesa, Exxon Mobil, Total,
Chevron and Shell.
Receive
Request
Pick
Material
Update
Inventory
Pack
Material
Load
Material
Issue
Dispatch
Note
Confirm
Delivery
Issue
Invoice
Order
Transport
Typical Sales & Distribution
cycle
SAP – An Overview
Order
Goods
Receive
Goods
Inspect
Goods
Clear
Invoice
Update
Inventory
Issue
Material
Update
Inventory
Plan
Material
Bin the
Material
Typical Materials Management
routine
SAP – An Overview
SAP integrates the activities of both functions to provide
a real-time status to users of both departments.
Similarly, SAP integrates all the different functions of an
enterprise to create a centralized database. All functions
have access to data real-time data that is relevant to
their business.
SAP – An Overview
Procurement
Management
Planning
Finance/Accounts
Sales and
Dispatch
Production
HR
Warehousing
SAP – An Overview
The key to SAP’s success is that it is highly customizable to every client’s
needs. The main benefits of SAP are:
•Availability of real-time data
•Minimal paperwork
•Data security and system supported controls
•Highly customizable reports
•History of business activities performed
Like every tool, SAP has a user interface to collect and display data.
SAP – An Overview
SAP Structure
The SAP System consists of various application modules. Application modules are where day-to-day
tasks are performed. Each application module manages a different business function in SAP. These
are listed below:
Financial Accounting (FI)
Controlling (CO)
Production Planning (PP)
Quality Management (QM)
Plant Management (PM)
Human Resources (HR)
Business Workflow (WF)
Industry Solutions (IS
Fixed Assets Management (AM)
Project Systems (PS)
Sales and Distribution (SD)
Materials Management (MM)
All SAP components link into a central database, which connects various business activities of the
company and is where all company data is stored
Scenario
You are the Material's Planner of your company – ABC
Engineering Ltd. A new material is introduced in your
company’s products. This material does not exist in your
records.
Create the material in SAP. Use transaction MM01.
Every transaction has a code. You can type the code in the Command
Window and click Enter.
OR
Navigate the menu tree to locate the transaction and double click it.
SAP – Transactions
Where did the different data come from?
Installed and
customized by SAP
Implementers
Used by us and
clients for creating
material
Used in daily business
like ordering and
dispatching material
Org StructureMaster DataTransactional Data
• Industry Sector
• Material Types
• Material Group
• Plant
• Org
• Sales Org
• Forecast Model
• Warehouse No.
• Material
• Customer
• Vendor
• Asset
• Vehicle
• Supplier
• Transporter
• Employee
• Building
• Create Purchase Order
• Receive Goods
• Update Inventory
• Execute Material
Forecast
• Issue Quality
Certificate
• Dispatch Goods
• Bill Customer
• Pay Vendor
SAP – Organization and Architecture
Where did the different data come from?
Installed and
customized by SAP
Implementers
Used by us and
clients for creating
material
Used in daily business
like ordering and
dispatching material
Org StructureMaster DataTransactional Data
SAP – Organization and Architecture
SAP Implementation methodology
The phases of the ASAP
methodology include:
Project Preparation
Business Blueprint
Realization
Final Preparation
Go Live & Support
ASAP Implementation Roadmap
Project Preparation
This is the initial planning for the SAP project. The activities include general project management requirements, an issues management plan, an organizational change management plan, and the establishment of other policies and procedures for running the project. This phase must be completed before the next phase begins.
Business Blueprint
The business blueprint phase comprises of activities for aligning the Organization business and technical requirements to the SAP standard software. Just as a blueprint of a house is a plan by which an architect conveys the building requirements to the contractor, so the business blueprint in ASAP becomes the plan for the eventual configuration of the Organization’s SAP software solution. This phase concludes with the approval of a business blueprint document.
Realization
The realization phase comprises the building and testing of the solution as prescribed by the business blueprint document. Activities in this phase include customizing the SAP system to suit the Organization’s business requirements and processes. The realization phase also includes software enhancements, special programming, building and executing test plans, and finally signing-off the configured system.
ASAP Implementation Roadmap
Final Preparation
During the final preparation phase many crucial tasks remain, such as
acceptance testing of the production system hardware, the completion of end-
user training, and plans for transfer to the production system.
Go Live & Support
During this phase, items such as service level agreements and help-desk
procedures are established and tested. The conclusion of this phase is the
hand-over to the operations and monitoring staff.
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