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Slide No 8 What is an ERP?

The keyword in Enterprise Resource Planning is

Enterprise. This is the ambitious goal of an ERP, to
integrate an organization into one information system.
That is a tall order, building a single software program
that serves the needs of people in finance as well as it
does the people in human resources and in the
warehouse. Each of those departments typically has its
own computer system, each optimized for the
particular ways that the department does its work. But
ERP combines them all together into a single,
integrated software program that runs off a single
database so that the various departments can more
easily share information and communicate with each
Slide No 12 Evolution of ERP
Here you can see a general evolution of ERP systems.
They started as customized and proprietary Inventory
control systems in the 1960s. In the 1970s the
focus shifted to Material Requirement Planning
which provided raw materials and component
management and procurement. In the 1980s the
model continued to grow by including distribution
channel functions.
In the 1990s This model grew further into the fully
defined business suites that we have come to know
as Enterprise Resource Planning Systems. The
development of these products was perpetuated by the
desire to move programs off of customized mainframe
programs, the development of new technologies, the

decentralization of businesses, and the desire to

implement BPR.
CRM, which first gained prominence in the mid1990s, was the logical progression of ERP, as it was
designed to enhance a company's front-desk activities.
Customer interaction entered a new era with the
advent of call centers supported by CRM software,
which allowed companies to direct marketing activities
and build relationships with distinct groups of
customers. CRM also promised to improve the
profitability and effectiveness of the company by
automating many processes, making better use of
available staff and reducing overall costs.
CRM offers a utopian answer to many challenges. With
an integrated CRM solution, companies can detect
changes in customer buying habits, understand their
needs faster than the competition and respond to
customer demands in double-quick time.
Today, the model grows and ERP companies are trying
to fully Internet Enable their products and redesign
their products for the new business models. What was
once internally focused is now externally focused.

Slide No 13 What is the State of the ERP Market?

In the 1990s the key was internal integration and ERP
implementations in the US were being rapidly

completed. This has left the ERP as a standard in many

mid-size and large organizations.
Today the focus is on linking your internally focused
applications to front-end web systems and B2B
exchanges. In the same manner the CRM systems are
also being linked accordingly.
The ASP market was hot, but is now cooling
considerably. In any case it is a model that will persist
and will create the ability to have external companies
host your ERP for you. This opens new markets for
smaller organizations that do not have the IT staff or
the knowledge necessary to manage their own ERP.
Overall, the market has been in a state of decline for
approximately two years. There are a number of
factors which have caused this decline, but saturation
is certainly one main factor.
The latest market segment for ERPs is the public sector
which is now implementing these systems
Finally, overall new implementations will continue to
decline due to the fact that the new business models
are externally focused. Therefore if you are building a
system today you would probably use a best of breed
solution to create your information system. However
the ERP manufacturers certainly can rebound to
address the needs of these users and create more
flexible solutions to Internet enable their applications.

Slide No 16 History of SAP.

SAP is the leading ERP software package. SAP was the

first to integrate a corporation's worldwide functions
tightly into one application.
SAP, translated from its original German name, stands
for Systems Applications and Products in Data
Five former IBM programmers founded SAP AG in
Germany, and released the first version of their
software, SAP R/2, in 1979.
SAP renamed itself in 1977, prior to which it was called
as Systems Analysis and Program Development.
Its domination of the market occurred during the 1980s,
expanding first throughout Europe (early 1980s) and
then North America (1988). SAP R/3, an advanced,
client-server based version of the popular R/2 product,
was released in 1992 and sparked a stunning takeover
of America's largest businesses.
SAP is both the name of the company and their ERP
SAP system comprises of a number of fully integrated
modules, which virtually covers every aspect of the
business management
Using SAP's products, companies can now integrate
their accounting, sales, distribution,
manufacturing, planning, purchasing, human
resources, analysis and other transactions into
one application. SAP applications thus provide an
environment where "transactions are synchronized
throughout the entire systems."

With 56,000 installations serving 10 million users at

18,800 organizations in 120 countries across the globe,
SAP ranks as the world's third-largest independent
software provider.
So far, there have been 3 systems developed by SAP.
namely, R/1, R/2, R/3.
Slide No 17 Development of SAP
ERP is not new to the marketplace. In fact, SAP created
ERP over 30 years ago. 30 years ago the private sector
was looking to streamline the business process,
eliminate redundancy and frankly reduce the number of
systems required to run the business.
ERP was the answer. Many organizations we able to
significantly reduce systems, cycle time, reconcilation
processes etc.
With ERP, we were able to reduce cost, simplify the IT
landscape, and most importantly impact the operation
of the business. During those times, most organizations
were able to achieve headcount reduction, inventory
reduction, reduction of close time etc.
In the late 80s and into the 90s companies started to
embrace decision support. Many companies embraced
the data warehouse concept. It was primarily used for
reporting. Sap initially embedded many reports into our
solution set.
Today, not only is operational excellence and decision
support necessary to survive but we must do more. In
fact, we must create value in order to survive and

effectively compete. Today, organizations are focused

on business performance, collaboration and innovation.
Look at the President Bushs management agenda.
Technology can not only reduce cost but it can
definitely impact the operation. ERP is part of the
In fact, we have many choices for efficiency and control
business process outsourcing, hosting etc. Yet we
know that the data captured in our transactional
systems is the exact data that is needed to provide
transparency across the enterprise. It is the analysis of
this data that gives organizations the opportunity to
make much better decisions. Not only can we make
those decisions but we can see the impact on the
business and the performance of the business.

Slide No 20 For Over 30 Years, SAP Has Been Driving

ERP and They Continue to Do So
SAP is the inventor of REAL TIME ERP solutions. This is
what originally made SAP unique, and it is still a major
SAP became the industry standard; we have remained
the yardstick ever since.
In the 90s, dot.com madness took over and the
spotlight fell on eBusiness for a while.
Now the spotlight is firmly on ERP. And SAP is becoming
the standard for collaborative business applications.


Slide No 21 SAP Milestones

SAP stands for Systems, Applications & Products in
data processing. Head-quartered in Waldorf, Germany,
SAP is the recognized leader in providing collaborative
business solutions for all types of industries and for
every major market Over the course of three decades,
SAP has evolved from a small, regional enterprise into a
world-class international company. Today, SAP is the
global market leader in collaborative, inter-enterprise
business solutions.
SAP Snapshot:
1.1 Leader in providing collaborative e-business
1.2 Solutions for all types of industries and for every
major market
1.3 Greater market-share than any other business
software organization
1.4 Strong ecosystem allows for continued growth,
thought leadership and ability to meet all customer

Slide No 30 SAP R/3 System Architecture

The picture here illustrates a typical R/3 system.

Multiple presentation layers from multiple computers

communicate with the application servers over the
local or wide area network.
For a single R/3 system, there may be multiple
application servers in order to balance the operational
All these application servers interact with a single
database server.
And as the picture illustrates, the database server acts
as the interface between the external RDBMS and the
application servers.
A single database, the R/3 database server that
accesses it and the set of one or more application
servers and their processes, that govern the business
administration and the data sent and received from the
database server all these components that constitute
a logically single R/3 system, is called as an R/3
Slide No 32 Overview of Presentation & Database
Let us now have a very brief overview of the
presentation layer and the database server.
The presentation server is simply a GUI that is
running at the users workstation. It is a very light

component, called as a thin client in common

terminology. It is capable of sending requests to
the application server, receiving the requests back
and displaying the screen back to the user.
Multiple instances of presentation servers can execute
in the same work station.
And generally the presentation layers are, to a good
extent, downward compatible with the application
servers, in terms of the version. For e.g., A 4.6 C
version GUI would be able to communicate with a 4.5
B version application server.
The messages exchanged between the presentation
layer and the application server are in a SAP
proprietary format. The presentation layer is capable of
accepting the screen information sent from the
application server, format and generate the screens
appropriately for the platform it is running on.
The database server, as we saw earlier, acts as an
interface between the application server and the
As we know already, the R/3 system does not include
the RDBMS. In other words, R/3 is independent of the
RDBMS. R/3 is operational on a number of commercial
The vendor specific DB driver resides in the database

Slide No 33 SAP R/3 Conceptual Areas

The R/3 system, as an application, is conceptually

divided into 3 areas. Namely the application area, the
basis area and the development area.
This is in being synonymous to the 3 main type of
users. Viz., the application users or the end users, the
admin users, popularly called as the basis people and
the developers.
The application area is where users initiate and execute
transactions of the various functional areas of R/3 like
Accounting, Human Resources, Logistics etc.
The basis area is where the basis people or the admin
users execute transactions that are used for monitoring
the R/3 system like performance, database
administration, scheduling etc.
The development area is where tools and transactions
are available for developers and programmers to create
and test ABAP/4 programs. This is referred to as a
developers workbench.

Slide No 47 Clients in R/3

Basic SAP R/3 and ABAP/4 concepts
We will now brush through a few basic concepts of the
R/3 System
The Logon Client
The term logon client has nothing to with the
Client/Server terminologies.

A client in R/3, is a 3 digit number which enables one to

maintain multiple independent sets of data within the
same R/3 system.
Within the same R/3 system we can have client with
range 000 to 999.
The client id is also supplied along with user id and
password at the time of login.
This means that each client will have an independent
set of data. For e.g., when a person logs into client 800,
the data he sees, for e.g., purchase orders or vendor
details etc., will not be available when he logs into
client 700.
Client mechanism and handling
The client concept is implicitly handled within the same
R/3 system.
In the figure illustrated, when a user logs on to client
800 and runs a program that selects the field LIFNR
from the table LFA1, the result of that selection would
only be two rows though there are 6 rows available in
the table. Similarly, had the user logged on to client
700, the selection would have yielded only 4 rows.
As we see, the client concept is handled using an extra
field MANDT in the table to store the client. We need to
note here that the table illustrated here is clientdependent. Which means that the data stored within
the table is dependent on the logon client. But
however, an R/3 table can also be client independent
i.e., the MANDT field would not be present in the table

and the data contained in the table is same across all

The SAP client concept allows you to map each
customer to one client, without having to install and
administer a separate systems for each customer. This
makes it possible for the provider to install a small
number of SAP Systems, but still cater to a large
number of customers. Costs are not only saved by
sharing hardware and software, multiple customers also
use the same application solution, including
administration and support. But however, to guarantee
the secure and reliable co-existence of customers
under a common system umbrella, certain rules and
guidelines must be followed.

Slide No 48 Clients in R/3

Clients are used to divide data in a SAP System into
various data areas for various purposes. If a company,
for example, wants to use its SAP System for both test
and training purposes, a client is created for each
A client is identified via a three character code. Data
can be moved via transports and corrections from one
client to another.
When logging on to the system, the user has to select a
client in which he/she wants to work. The user can then
only access data in this client.

Slide No 53 Sample SAP System Landscape

SAP R/3 Technical Configuration
An SAP R/3 System can consist of one or more
instances (e.g. a central instance or a distributed SAP
R/3 System).
Multiple instances are represented by the configuration
of a database server and one or more application
Only one database and dictionary will exist for an SAP
R/3 System.
Note: with R/4, you can have multiple database
To isolate each distinct phase of an implementation, a
typical or recommended configuration for an SAP R/3
System implementation will consist of three separate
Development: for configuration of SAP applications
with user specific data and user development.
Quality Assurance Testing: to isolate development
from final testing and user training for production.
Production: of live business transactions and company
Slide No 79 R/3 Technology Environment
When you use R/3, you are free to choose your
technical infrastructure. You determine which hardware,
operating systems, or databases you want to use. The
entire gamut of offerings from the leading international

vendors is open to you; you can even plan your IT

strategy with various systems from different
manufacturers. Most importantly, the openness of R/3
protects your investment for the long term. As your
company grows, R/3 grows with you. And if you change
your hardware environment, R/3 stays with you on your
path of change without jeopardizing your software
Infinitely expandable
The number of workstations you include with the
R/3 in your client/server solution is determined solely
by your individual need. R/3 is infinitely expandable,
and can be used just as well in client/server
architectures with 30 seats as in installations with
3,000 end-users. This scalability ensures that R/3 can
always grow with your requirements. We offer total
solutions for qualified client/server information
processing that combines a variety of products and
services in a smoothly functioning communication
network. R/3 incorporates not only system
management, database recovery, and print
management, but also network administration and
backup solutions. Our partnerships with hardware
manufacturers, database providers, and technology and
service companies play a significant role here.
Everything is possible...
The benefit: Cooperative client/server processing
distributes applications and computing capabilities
almost at will across a number of levels, and
systematically takes advantage of the strengths of

different hardware and software components. Whether

you use R/3 in two- or three-tier client/server
architectures, locally or worldwide.
Slide No 79 Platforms and Databases
supported by R/3
The R/3 Application server can be installed on multiple
operating systems including Solaris HP Unix, Windows
NT and OS/400. And for each of these operating
systems, multiple hardware platforms are also
The presentation layer GUI is also supported in many
operating system which includes Win 95, Win NT, OS/2
and Macintosh.
The R/3 database server can also be implemented of
various RDBMS including DB/2, Informix, Oracle and
SQL Server.
Slide No 90 SAP Modules
Let us see a few of the R/3 Modules in brief
Financial Accounting
Financial Accounting is designed for automated
management and external reporting of general ledger,
accounts receivable, accounts payable and other subledger accounts with a user defined chart of accounts.
As entries are made relating to sales production and
payments journal entries are automatically posted. This
connection means that the "books" are designed to
reflect the real situation.

Controlling represents the company's flow of cost and
revenue. It is a management instrument for
organizational decisions. It is also automatically
updated as events occur.
Assets Management
Asset Management is designed to manage and
supervise individual aspects of fixed assets including
purchase and sale of assets, depreciation and
investment management.
Sales and Distribution
Sales and Distribution helps to optimize all the tasks
and activities carried out in sales, delivery and billing.
The key elements are; pre-sales support, inquiry
processing, quotation processing, sales order
processing, delivery processing, billing and sales
information system.
Materials Management
Materials Management supports the procurement and
inventory functions occurring in day-to-day business
operations such as purchasing, inventory management,
reorder point processing, etc.
Production Planning
Production Planning is used to plan and control the
manufacturing activities of a company. This module
includes; bills of material, routings, work centers, sales
and operations planning, master production scheduling,

material requirements planning, shop floor control,

production orders, product costing, etc
Quality Management
Quality Management is a quality control and
information system supporting quality planning,
inspection, and control for manufacturing and
Plant Maintenance
In a complex manufacturing process, maintenance
means more than sweeping the floors. Equipment must
be services and rebuilt. These tasks affect the
production plans. Plant Maintenance module supports
and supervises these maintenance.
Warehouse Management
Warehouse Management provides flexible, automated
support to assist in processing all goods movements
and in maintaining current stock inventories in the
warehousing complex.
Human Resources
Human Resources is a complete integrated system for
supporting the planning and control of personnel
Workflow is a solution which has been integrated fully
in the R/3 System and which enables customer-specific
business process flows to be coordinated and controlled
on a cross-application and cross-workplace basis.

Project System
Project System is designed to support the planning,
control and monitoring of long-term, highly complex
projects with defined goals.

Slide No 105 Sales Order Process(Order-to-Cash)

Not unlike the procure to pay process, this is completely configurable. You
decide how you want the order to cash process to work and configure the system
May start with Sales Order
Check inventory
If you do not have inventory procurement process or production process
Pick materials: from inventory
Pack material: (optional) pack in box appropriate box or other
Post Goods Issue (Title transfer)
Invoice Customer Create Accounts Receivable
Collect Money

Slide No 107 Procurement Process (Procure-toPay)

This is a standard view of the procure to pay process and the most common. It
may vary significantly based upon the company procedures, the
products/services purchases and other factors.
SAP allow businesses to tailor it to their needs.
Starts with a requisition or need that needs to be filled. This can come from
Planning (MRP), manually or other
The purchase order is the document to fill the need: usually includes the vendor,
cost/price, quantity, terms and other pertinent information. [ part one of the 3way match]
Notifying the vendor

The goods are shipped and brought to the organization

The goods are received (typically at the dock) and then put away [ part two of
the three way match]
An invoice is received from the vendor [third part of the 3-way match]
After the tolerances/verification of the 3-way match are met a payment is made
according to the terms agreed to on the purchase order.

Slide No 111, 112, 113

ERP - QM Module
RHR Quality Management (QM) assures that products meet stringent regulatory
standards, are safe and uniform, and meet company product specifications. RHR
QM processes are thoroughly integrated into the manufacturing process.
The Quality Management module covers all classic quality management tasks,
such as quality planning (setup of data for QM tasks), quality inspection, and
quality control. RHR has several QM terms that are important to note.
Quality Planning: the creation and management of master data that is required
to plan and complete inspections.
Quality Inspection: the identification of whether an inspection unit meets
specified criteria.

Quality Certificates: documents that contain text, value, and inspection

results, which are used to certify the material.

Quality Notifications: the recording and processing of internal or

external problems that result from poor quality.

Quality Control: the combination of specification from inspection

planning, results from quality inspections, and quality notifications form
the basis for quality control.

Test Equipment Management: the management of test equipment in

the form of master data records in RHR.

Slide No 118 mySAP Industry Solutions (Some

Industry solution is the latest value proposition of SAP to customer. Industry
solutions are aimed at addressing the specific business process areas of different

industries differently, hence pre-customizing the package for generic industry

purpose. Through its industry solutions, SAP addresses the unique core
processes of more than 25 distinct industries. Combined with industry-specific
applications and best business practices, all industry solution sets use and build
upon mySAP Business Suite solutions, powered by the SAP NetWeaver
platform. SAP currently around 27 Industry solutions. Some of the key verticals
are listed below:
1. Manufacturing Industries
SAP for Automotive
SAP for Chemicals
SAP for Consumer Products
SAP for Engineering, Construction & Operations (SAP for EC&O)
SAP for High Tech
SAP for Oil & Gas (SAP for O&G)
2 Service Industries
SAP for Media
SAP for Professional Services
SAP for Retail
SAP for Telecommunications
SAP for Utilities
3 Public Services
SAP for Healthcare and SAP for Public Sector
4 Financial Services
SAP for Banking, SAP for Financial Service Providers and SAP for Insurance

Slide No 129 Where does a CRM solution fit ?

Business partner master data is the building block for the whole customer
interaction cycle.
Business partner master data is not restricted to customers but reflects also
competitors, partners and employees that may be involved in the sales or
service cycle.

Slide No 141 SAP NetWeaver - The integration

and application platform for lower TCO
It is a comprehensive integration and application platform, SAP NetWeaver works
with your existing IT infrastructure to enable and manage change. With SAP
NetWeaver, you can flexibly and rapidly design, build, implement, and execute
new business strategies and processes. The platform enables you to drive
innovation throughout your organization by recomposing existing systems while
maintaining a sustainable cost structure. You can also add innovative, industryspecific business processes with reduced risk to existing systems and a strong
return on investment.
SAP NetWeaver unifies integration technologies into a single platform and is
preintegrated with business applications, reducing the need for custom
integration. The platform is based on industry standards and can be extended
with commonly used development tools such as
Java 2 Platform, Enterprise Edition (J2EE); Microsoft .NET; and IBM WebSphere.
SAP NetWeaver makes change sustainable by helping you contain costs and
reduce risk as you evolve your business. The platform is the technical foundation
of mySAP Business Suite
solutions, SAP xApps composite applications, partner solutions, and custom-built
applications -- including composite applications -- providing the best way to
integrate all systems running SAP or non-SAP software. It also enables Enterprise
Services Architecture, SAP's blueprint for
service-oriented business solutions. Finally, SAP NetWeaver is the technology
foundation that powers SAP solutions.