Project Report on Information System of PEPSICO

An insight on strategic business evolution

KINSHUK KALIA (501004029) KUNAL KAPOOR (501004030) MANISH KAMRA (501004034) MAYANK KAPOOR (501004038) 1/5/2011

TABLE OF CONTENTS ACKNOWLEDGEMENT ........................................................................4 ABOUT PEPSI CO ................................................................................5 EXECUTIVE SUMMARY ...............................................................7 Introduction to Information Systems ................................................8
Information & Organizations .................................................................................................................... 9 Functional aspects of MIS ........................................................................................................................ 9 Financial MIS...................................................................................................................................... 10 Manufacturing MIS ............................................................................................................................. 10 Marketing MIS .................................................................................................................................... 11 Human Resource MIS ......................................................................................................................... 11

Business functions ........................................................................... 12

The order fulfillment process .................................................................................................................. 13 Role of Information Systems in a business: ............................................................................................ 13

Systems from a functional perspective ............................................ 14

Sales & Marketing systems: ................................................................................................................. 14 Manufacturing & production systems: ............................................................................................... 15 Finance & accounting systems:............................................................................................................ 16 Human resources systems .................................................................................................................... 16

Systems from a constituency perspective ........................................ 17

Transaction processing systems .............................................................................................................. 17 Management Information Systems (MIS) & Decision Support Systems (DSS) .................................... 17

How MIS obtain data from Organizations TPS............................. 18

Decision Support Systems (DSS) ........................................................................................................... 18 Executive Information Systems (EIS)..................................................................................................... 19 Relationship of Systems to one-another.................................................................................................. 20

ERP SYSTEMS .............................................................................. 21

Enterprise Resource Planning ................................................................................................................. 22 ERP systems automate business processes ............................................................................................. 22 ERP bringing the organization together ............................................................................................... 23 SAP modules:.......................................................................................................................................... 24 Enterprise Applications:.......................................................................................................................... 25 Enterprise Systems: ................................................................................................................................. 26 Supply Chain Management (SCM) systems: .......................................................................................... 27 SAPs vision of SCM .............................................................................................................................. 28 What is an Adaptive Supply Chain Network? ........................................................................................ 29 Customer Relationship Management (CRM) systems ............................................................................ 29 Integrating SCM, CRM & ERP........................................................................................................... 30 Knowledge Management Systems .......................................................................................................... 31

Management Information System In PepsiCo ................................ 31

Status of MIS .......................................................................................................................................... 32 Strategic Business Units ......................................................................................................................... 32 Business Process ..................................................................................................................................... 32 Current Enterprise Applications: ............................................................................................................ 32 Current Enterprise Resource Planning Systems (ERP) ....................................................................... 32 Current Supply Chain Management (SCM)........................................................................................ 33 Current Customer Relationship Management System (CRM)............................................................ 33

The decision makers dilemma ....................................................... 34 MySAP ERP: SAP next generation ................................................ 39
MySAP: a user centric approach............................................................................................................. 39 MySAP E-Business solutions ................................................................................................................. 40

Proposed Enterprise Applications .................................................. 42 Information systems in PepsiCo...................................................... 47 Softwares Used by PepsiCo ............................................................. 53 RECOMMENDATIONS ................................................................ 54

ACKNOWLEDGEMENT

It is our duty to record my sincere thanks and deep sense of gratitude to Ms. Jagdeep Ahuja ( IT MANAGER , PEPSICO CHANNO) for his valuable guidance interest and constant encouragement for the fulfillment of the report.

ABOUT PEPSI CO
MISSION
To be the world's premier consumer products company, focused on convenient foods and beverages. We seek to produce healthy financial rewards to investors as we provide opportunities for growth and enrichment to our employees, our business partners and the communities in which we operate. And in everything we do, we strive for honesty, fairness and integrity.

VISION
"To build Indias leading total beverage company, delighting consumers by best meeting their everyday beverage needs, and stakeholders, by delivering performance with purpose, through our talented people."

SUSTAINABILITY VISION "PepsiCos responsibility is to continually improve all aspects of the world in which we operate environment, social, economic creating a better tomorrow than today" Tomorrow better than Today

HISTORY AND PROFILE PepsiCo entered India in 1989 and has grown to become the countrys largest selling food and Beverage Company. One of the largest multinational investors in the country, PepsiCo has established a business which aims to serve the long term dynamic needs of consumers in India. PepsiCo nourishes consumers with a range of products from treats to healthy eats that deliver joy as well as nutrition and always, good taste. PepsiCo Indias expansive portfolio includes iconic refreshment beverages Pepsi, 7 UP, Mirinda and Mountain Dew, in addition to low calorie options such as Diet Pepsi, hydrating and nutritional beverages such as Aquafina drinking water, isotonic sports drinks - Gatorade, Tropicana 100% fruit juices, and juice based drinks Tropicana Nectars, Tropicana Twister and Slice, non-carbonated beverage and a new innovation Nimbooz by 7Up. Local brands Lehar Evervess Soda, Dukes Lemonade and Mangola add to the diverse range of brands.

PepsiCos foods company, Frito-Lay, is the leader in the branded salty snack market and all Frito Lay products are free of trans-fat and MSG. It manufactures Lays Potato Chips, Cheetos extruded snacks, Uncle Chipps and traditional snacks under the Kurkure and Lehar brands and the recently launched Aliva savoury crackers. The companys high fibre breakfast cereal, Quaker Oats, and low fat and roasted snack options enhance the healthful choices available to consumers. Frito Lays core products, Lays, Kurkure, Uncle Chipps and Cheetos are cooked in Rice Bran Oil to significantly reduce saturated fats and all of its products contain voluntary nutritional labeling on their packets. The group has built an expansive beverage and foods business. To support its operations, PepsiCo has 36 bottling plants in India, of which 13 are company owned and 23 are franchisee owned. In addition to this, PepsiCos Frito Lay foods division has 3 state-of-the-art plants. PepsiCos business is based on its sustainability vision of making tomorrow better than today. PepsiCos commitment to living by this vision every day is visible in its contribution to the country, consumers and farmers.

EXECUTIVE SUMMARY
Introduction PepsiCo is a world leader in convenient snacks, foods & beverages, with revenue of more than $39 billion & more than 1, 85,000 employees. The company consists of PepsiCo American Foods (PAF), PepsiCo Americas Beverages (PAB) & PepsiCo International (PI). PAF includes Frito-lay North America, Quaker foods North America & all Latin America food & snack businesses. PAB includes PepsiCo Beverages North America & all Latin America beverage businesses. PI includes all PepsiCo businesses in UK, Europe, Asia, Middle East & Africa. PepsiCo brands are available in nearly 200 countries & generate sales at the retail level of more than $98 billion. Some of PepsiCos brands names are more than 100 years old, but the corporation is relatively young. PepsiCo was founded in 1965 through a merger of Pepsi-Cola & Frito-Lay. Tropicana was acquired in 1998 & PepsiCo merged with Quaker Oats Company, including Gatorade, in 2001. PepsiCo offers product choices to meet a broad variety of needs & preferences from fun-foryou items to product choices that contribute to healthier lifestyles. PepsiCos mission is To be the worlds premiere consumer Products Company focused on convenient foods & beverages. We seek to produce healthy financial rewards to investors as we provide opportunities for growth & enrichment to our employees, our business partners & the communities in which we operate. And in everything we do, we strive for honesty, fairness & integrity.

PepsiCo Headquarters PepsiCo World Headquarters is located in Purchase, New York. The 7 building headquarters complex was designed by Edward Durrell Stone, one of Americas foremost architects. The unit of PepsiCo we visited manages the supply for several wholesalers, retailers, restaurants, hotels & other such food outlets. In order to achieve the projected sales target effectively, the organization ensures a comprehensive strategic alignment with the overall PepsiCos business strategy. The units primary functions are to conduct a systematic manufacturing & supply of the product without any tactical flaws. Pepsi products are safe, Pepsi analyze water, sugar &

flavorings in accordance with the best international guidelines. Pepsi products comply with most stringent international regulations, including the new regulations for carbonated soft-drinks.

Introduction to Information Systems

Information & Organizations

Functional aspects of MIS

MIS is an integrated collection of functional information systems, each supporting particular functional area.

Financial MIS
This MIS provides financial information to all financial managers within an organization.

Manufacturing MIS

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Marketing MIS
This MIS supports managerial activities in product development, distribution, pricing decisions & promotional effectiveness.

Human Resource MIS

This type of MIS is concerned with all the activities related to employees & potential employees of the organization.

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Business functions
There are 4 major business functions: 1. 2. 3. 4. Manufacturing & production. Sales & marketing. Finance & accounting. Human resources.

Every business regardless of its size must perform the above mentioned 4 functions to succeed. It must produce the product or service; market & sell the product; keep track of accounting & financial transactions & perform basic human resource tasks such as hiring & retaining employees.

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The order fulfillment process

Fulfilling a customer order involves a complex set of steps that require the close coordination of the sales, accounting & manufacturing functions.

Role of Information Systems in a business:

Firms invest in information systems in order to: Achieve operational excellence. Develop new products & services. Attain customer intimacy & service. Improve decision making. Promote competitive advantage. Ensure survival.

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Systems from a functional perspective

Sales & marketing systems Manufacturing & production systems Finance & accounting systems Human resources systems

Sales & Marketing systems:

They support activities for selling & marketing firms products or services. Senior management: monitor trends affecting product & sales, planning for new products & services, monitor performance of competitors. Middle management: support market research; analyze marketing campaigns, pricing decisions & sales performance. Operational management & employees: locating & contacting potential customers, process orders, provide customer service support. Sales Information Systems

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Manufacturing & production systems:

This system support activities for producing firms product or services. Senior management: help plan long-term manufacturing goals such as technology investments & locating new plants. Middle management: analyze & monitor manufacturing & production costs & resources. Operational management: manage status of production tasks

An Inventory Control System

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Finance & accounting systems:

This systems support activities for managing financial assets, firms capitalization & financial records. Senior management: establish long-term investment goals & provide long range forecasts of firms financial performance. Middle management: oversee & control firms financial resources. Operational management: track flow of funds in firm through transactions (paychecks, payments, securities reports, receipts etc.) An Accounts Receivable System

Human resources systems

This system support activities for attracting, developing & maintaining firms workforce. Senior management: identify manpower requirements (skill, education level, types & number of positions etc.) for meeting long term business plans. Middle management: monitor & analyze recruitment, allocation & compensation of employees. Operational management: track recruitment & placement of employees.

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An Employee Record Keeping System

Systems from a constituency perspective

Transaction processing systems
It serves operational managers Its principal purpose is to answer routine questions & to track the flow of transactions through the organization. For e.g. inventory status, granting credit to customers etc. It monitors status of internal operations & firms relationship with external environment. Major producer of information for other systems. It is highly central to business operations & functioning.

Management Information Systems (MIS) & Decision Support Systems (DSS)

It provide middle level managers with reports on firms performance which helps them to monitor firms operations & helps in predicting future performance. It summarizes & gives reports on basic operations using data from TPS. It provides weekly, monthly, annual results but may enable drilling down into daily & hourly data. It is typically not very flexible system with little analytical capability.

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How MIS obtain data from Organizations TPS

In the system illustrated by this diagram, 3 TPS supply summarized transaction data to the MIS reporting system at the end of the time period. Managers gain access to the organizational data through the MIS, which provide them with appropriate reports.

Decision Support Systems (DSS)

It supports non-routine decision making for middle level management. For e.g. what would impact on production schedules be if the sales doubled in any previous month? It uses information from TPS, MIS & external sources. The system uses various modules to analyze the data. It focuses on extracting, analyzing information from large amounts of data.

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Executive Information Systems (EIS)

This type of information serves senior managers. It addresses strategic issues & long term trends for e.g. what types of products should we make in next 5 years? The system addresses non-routine decision making. It provides generalized computing capacity that can be applied to changing set of problems. The system draw summarized information from MIS, DSS & data from external events. It typically uses web portal interface to present the content.

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Relationship of Systems to one-another

TPS: it is the major source of data for other systems. EIS: it is primarily a recipient of data from lower level systems. Exchange of data between functional areas for e.g. sales order transmitted to manufacturing system.

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ERP SYSTEMS
ERP systems integrate business processes & information from entire enterprise. The system helps in coordinating the operation of business functions. ERP systems are software packages that can be used for the core systems necessary to support enterprise systems.

ERP systems vendors

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Enterprise Resource Planning

At the heart of all ERP systems is a database, when a user enters or updates information in one module, it is immediately & automatically updated throughout the entire system.

ERP systems automate business processes

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ERP bringing the organization together

After implementing ERP

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SAP modules:

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Enterprise Applications:
Enterprise applications are systems that span functional areas & automate processes for multiple business functions & organizational areas; they include: Enterprise systems Supply Chain Management (SCM) systems. Customer Relationship Management (CRM) systems. Knowledge Management systems.

Enterprise Application Architecture

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Enterprise Systems:
It integrates data from key business processes into a single system. It speeds up the communication of information throughout the system. The system enables greater flexibility in responding to customer requests, greater accuracy in order fulfillment. It enables managers of large firms to assemble overall view of operations.

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Supply Chain Management (SCM) systems:

The system manages relationships with suppliers, purchasing firms, distributors & logistic companies. It manages shared information about orders, production, inventory levels etc., the goal is to move correct amount of product from source to point of consumption as quickly as possible & at lowest cost.

Customer orders, shipping notifications, optimized shipping plans & other supply chain information flow among Warehouse Management System (WMS), Transportation Management System (TMS) & its back-end corporate systems.

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SAPs vision of SCM

SAPs vision of changing SCM corresponds to businesses by changing their supply chains into adaptive supply chain networks. Sequential Supply Chain

SAPs Transformation of Supply Chain

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What is an Adaptive Supply Chain Network?

Adaptive refers to the ability to rapidly sense & respond to changing internal & external conditions. Network refers to the ability to have real-time collaboration & co-ordination across all partners in the supply chain. An adaptive supply chain network is a community of customer-focused companies that share knowledge & resources to intelligently adjust to changing market condition. Tradition supply chains are linear, sequential &designed for predictable & controlled conditions. So what happens when customer orders change or are canceled, rush orders are placed, breakdowns create bottlenecks, or problems with shipment arise? Because visibility is limited and information moves slowly, responses happen slowly, too. Changes take days, weeks, or even months to make. But companies today, of course, increasingly need to respond to changes in hours and minutes. Within the adaptive supply chain network, a customer can control business processes from end to end, allowing seamless collaboration with partners, suppliers, distributors, and customers. This allows them to: Increase business visibility. Accelerate response velocity. Increase the ability to manage variability. Raise operational flexibility.

And these changes result in sustainable value creation. Adaptive supply chain network is basically architecting business for flexibility.

Customer Relationship Management (CRM) systems

The system helps in managing relationship with customers. It coordinates business processes that deal with customers to optimize revenue & customer satisfaction & increase sales. The system combines sales, marketing & service record data from multiple communication channels to provide unified view of customer & eliminate duplicate efforts.

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Integrating SCM, CRM & ERP

Data points where SCM, CRM & ERP integrate

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Knowledge Management Systems

The system helps in capturing, storing, distributing & applying knowledge so that it can be leveraged for strategic benefit. It includes systems for managing & distributing documents, graphics & other digital knowledge objects. It includes systems for creating knowledge directories of employees with specialized expertise.

Management Information System In PepsiCo

The microcomputers are linked up to PepsiCos central computer system daily to update inventory information system. Management estimates that over $25,000 (Rs. 12,50,000) per year may be saved because of the system. 1. In PepsiCo it helps to recognize market trends: MIS helps PepsiCos managers to recognize market trends, in respect of price, designs of products, fashions etc. timely information of the market trend enable the firm to follow the right course of action. 2. It facilitates marketing planning & control: effective marketing planning is required in terms of product planning, pricing, promotion & distribution. Such planning will be possible only if the company is possessing adequate & relevant information. This is also possible through MIS. 3. Quick supply of information in PepsiCo: today a form has to take quick decisions, for this purpose it requires fast flow of information which is facilitated by a properly designed MIS. 4. Improves quality of decision making: properly designed MIS supplies reliable & relevant information. With the help of computers & other data processing equipments, the marketing managers over there can make effective decisions at the right time.

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Status of MIS
Computer Based Information Systems: Electronic Data Interchange (EDI) Information exchange between companies. Direct Exchange (DEX) Information exchange between hand-held computer & stores delivery system.

Strategic Business Units

1. 2. 3. 4. A distinct mission & specific target market. Control over their resources. Their own competitors. Plans independent of other businesses.

Business Process
There are so many products, operations centers, & offices required for massive co-ordination of each department, activity, geographic location & employees. PepsiCo uses MySAP Business Suite applications in the management of their enterprise resource management. The systems help to standardize the internal software & systems through the elimination of legacy systems, thus reducing the redundancy & error that are common in nature of legacy systems. The system is built with the industry best practices that allow Pepsi to be at the forefront of the industry in each area of the business.

Current Enterprise Applications: Current Enterprise Resource Planning Systems (ERP)

The ERP Corporate portion of MySAP serves to streamline the processes of everyday business to reduce costs. It has reduced the number of steps needed to accomplish a single activity by not sending it through as many departments. Also included is a tool related to reducing travel expenses. There is, of course, a portion of software devoted to financial & management accounting. These programs are linked to the production lines & the sales software in order to account for certain expenditures & sales.

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The Enterprise Performance Management portion of the software is used to measure how management objectives are being met by profits. This then allows managers to plan & strategize for operations, profit & growth. It allows for the integration of information from, for e.g., both human resources & operations, in order to budget personnel for a specific production line. The entire company can be consolidated into representation in single budget. Individual employees at all levels of the organization are able to access information documenting their own contributions & the progress made within their department. Another important part of the ERM at Pepsi is the Enterprise Human Capital Management. This system has processes that help managers place employees, provide rewards for performance & promote valuable employees.

Current Supply Chain Management (SCM)

PepsiCo is in charge of managing the suppliers of many of its smaller subsidiaries. Right now PepsiCo has many bottling plants situated all over the globe. PepsiCo must make sure that all of its suppliers (water, corn syrup, food colorings, carbonation, plastics, aluminum & paints etc.) come into an appropriate plant so as to keep customers satisfied with no shortages, yet not make too much additional inventory in stock which hangs up extra resources & cash flows. As stated earlier, PepsiCo uses the help of MySAP Business Suites applications for its business solutions. MySAP helps communicate with its suppliers & generate forecast of demand so than an overabundance of inventory does not happen. MySAP helps PepsiCo generate a forecast in order to keep up with demand. Forecast takes into account past sales plus additional information about sales right now, seasonal changes, economic turns, diet habits, health changes & environmental changes. PepsiCo also has been trying to broaden their supplier base. They have a program in place to encourage minority & women in their business program. In fact, in October 2004 both PepsiCo & Toyota received a Corporation of the Year award from the National Minority Supplier Development Council. The encouragement will encourage suppliers to take part in PepsiCos functions & hopefully broaden their customer & market base.

Current Customer Relationship Management System (CRM)

Businesses use customer relationship management system to capture & integrate customer data from all over the organization, consolidate the data, analyze the data & then distribute the results to various systems & customer touch points across the enterprise. These systems are useful in improving sales, marketing & customer service in a business. Through the use of CRM system, PepsiCo has been able to deliver top-line growth & superior customer service.

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Pepsis current CRM application has allowed for conversion of former disparate sales systems into an integrated internet application solution, a 360 degree view of the entire customer base, simplification of the resolution process, accurate & timely deliveries & reduction of product inventory close time by 1-2 days. Through the use of real time customer information, the managers are able to have up-to-date information on any issue of needs of the customer through their account, allowing a clear picture of their customers & their relationships with the company. This also allows workers to uncover potential sales opportunities with their customers. The real time information system is also used to improve customer interaction & satisfaction through the use of help desks, customer service representatives & allowing customers themselves to access the real time information system. Pepsi uses CRM applications to determine profitable customers, uncover potential sales opportunities, improve customer interaction & relations & provide the enterprise with up-to-date information.

The decision makers dilemma

Integrate the new stand alone applications, or Wait for (& trust) the already integrated equivalent in their vendors infrastructure solutions.

The toss: Strategic vs. Tactical Strategic: total Business Process Re-engineering (BPR) = tremendous challenge. Tactical: it is a point solution & perhaps a more controllable project. It is perceived to increase short term benefits & decrease risk. Fast ROI, seeking dramatic results in short time frame with complete implementation measured in months, not in years.

The Fiscal concerns in evaluating the integration of multiple applications Initial product purchase & implementation. Integration of the application with one or more other applications across the enterprise. Ongoing upkeep of the points of integration & data fields as the products change over time. Issues of timing: in a multi-application environment, new releases & patches appear sporadically, adversely affecting the ability to plan upgrades strategically. Cost of user training & re-training on multiple interfaces.

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ROI balancing act There is a complicated ROI analysis that evaluates & effectively gauges the level of benefits & costs for each option & then discount them for time-to-benefit, cost distribution over time & the risk associated with each option. Once the enterprise vendor offers the same solution as the point product supplier, integration of the solution into the production environment is both faster & easier, delivering a more rapid ROI.

Hidden cost effects of integration on cumulative benefit stream

Comparative cost of implementing integrated business suite solution vs. integrated point solutions (per $1 of software expenditure

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Integrating to the infrastructure effort of point solutions vs. additional suite models over time

Cost comparisons over time are the telling data points for determining the effects of integrating multiple third-party applications. Looking at the benefits obtained from implementing applications in relation to time can provide a view into the costs of both delay and integration. Above figure shows the payback from a typical project where applications are integrated. At the beginning of a project, before the application is in use, the organization incurs costs related to the initial software purchase, and implementation and integration. Once implementation and integration are complete, the organization begins to accumulate benefits and at some time the breakeven point is, in theory, reached. The maintenance of the integration points created by revision by the point solution supplier causes additional costs, reducing the benefit stream temporarily. In some instances, the time needed for a positive ROI can take many months typically years.

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Adding an ERP module to the existing solution vs. adding a new point solution

Above figure depicts the contrast between the two strategies. It exemplifies the decision to add new functionality via a third-party point solution as opposed to adding the same functionality through an integrated module of the existing infrastructure suite. By eliminating the need for significant integration and by reducing implementation costs, the time to reach breakeven and a positive benefit stream can be reduced. With functional parity between the point product and the module, the time to benefit within the organization is reduced. An early implementation of the integrated module could cause the accumulation of benefits (the slope of the line) to be steeper. Not only is the time to breakeven reduced, but the organization also accumulates more benefits. The area between the solid line and the dashed line in the figure denotes that additional benefit achieved by avoiding integration time and costs. For example, with all things being equal in product functionality between a suite providers integrated solution and a third-party providers

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point solution, the benefit return on the integrated application is both greater and more rapidly achieved. Integration delays initial arrival at breakeven; it also has an iteratively negative effect with repeated re-integration over time. The effect on time to net benefit can be significant.

Advantage dissipation over time

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MySAP ERP: SAP next generation

SAP was introduced somewhere around 1972 & at that time the version launched was SAP R/2. There has been revolution in the industry since then & with continuous development a new version of SAP i.e. SAP R/3 was launched in 1992. The business suite was of great help to the organizations & continuing the development of former business suite a new SAP application: MySAP Business Suite was launched in year 2000.

MySAP ERP SAP R/3

STANDARD BUSINESS PROCESS CLIENT SERVER BASED DISTRIBUTED ARCHITECTURE.
EXTENSIBILITY via SAP NETWEAVER. TRANSPARENCY & CORPORATE GOVERNANCE. CUSTOMER & HUMAN BASED

SAP R/2
REAL TIME

MySAP: a user centric approach

Flexibility & scalability to incrementally add the right mix of Customer Relationship Management (CRM), Supply Chain Management (SCM) & product life-cycle management functionality as business needs evolve. It offers a comprehensive business scope & can be the basis for all industry solutions.

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MySAP E-Business solutions

What is MySAP ERP?

MySAP ERP is an orderable software package which combines the worlds best and most complete Enterprise Resource Planning (ERP) software functionality and the most scalable world-class technology platform into an extended ERP software solution that addresses the core business software requirements of the most demanding medium and large organizations, whatever their industry in any part of the world.

What does MySAP ERP include?

MySAP ERP includes full-suite software functionality for world-class analytics, finance, human capital management, operations and corporate services, all enhanced by SAP NetWeaver. SAP NetWeaver is a full suite of enabling software technologies including functionality for Portal Infrastructure, Business Warehousing, Exchange Integration, Web Application Server, Mobile Technologies and more.

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How does MySAP ERP relate to MySAP Business Suite?

MySAP ERP is a MySAP software solution (similar to MySAP SCM, MySAP CRM, etc.) within the MySAP Business Suite.

What is the difference between MySAP ERP & SAP R/3 Enterprise?
MySAP ERP includes function available in SAP R/3 Enterprise and additional functionalities entire functional areas: Analytics, Strategic Enterprise Management (SEM), Financial Supply Chain Management, Manager Self Services (MSS), SAP Learning Solution, SAP E-Recruiting, Employee Self Services (ESS), Self-Service Procurement and Internet Sales R/3 Edition. MySAP ERP also contains the complete SAP NetWeaver platform; SAP R/3 Enterprise includes a subset of SAP NetWeaver, the SAP Web Application Server.

What is recommended transition path for an existing customer?

For a modern ERP environment, it is highly recommended that the customer convert the existing license to MySAP ERP to benefit from the additional capabilities.

What is the difference between MySAP ERP, MySAP All-In-One & SAP Business One?
MySAP ERP is an enterprise resource planning solution for medium to large companies; MySAP ERP focuses on the optimization of internal business processes. MySAP All-In-One is targeted at small companies. It is a preconfigured MySAP Business suite that runs on one database & makes a pre-configured system with various scenarios. All-In-One incorporates, for example, additional functionality in the areas of SCM & CRM. SAP Business One is a PC project for very small subsidiaries or companies needing rudimentary finance & logistic functions.

Will MySAP ERP replace SAP R/3 enterprise?

No, MySAP ERP includes functions available in SAP R/3 Enterprise & additional functionalities & entire functional areas: Analytics, Strategic Enterprise Management (SEM), Financial Supply Chain Management, Manager Self Services (MSS), E-learning, E-recruiting, Employee Self Services (ESS), Self-Service procurement & Internet Sales R/3 edition.

How does MySAP ERP integrate with other SAP products & potential third-party applications?

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MySAP ERP is designed to offer real-time integration with other SAP products. Third-party applications can be integrated with MySAP ERP through SAP NetWeaver.

Proposed Enterprise Applications

Proposed ERP system Something that PepsiCo could do to improve their ERP is to take the advantage of Business Process Outsourcing. for a growing number of organizations, outsourcing peripheral activities Business Process Outsourcing (BPO) to external providers is becoming an attractive, cost effective alternative to handle them initially. By outsourcing non-core business processes, such as human resources & procurement, companies can focus more on core competencies & free up valuable resources to drive growth & innovation, which is essential in todays tough markets. MySAP does not provide BPO services, but SAP supports BPO providers in setting up services that generate sustainable business benefits by reducing costs, lowering risks & improving process quality. Proposed SCM system We would like to propose to do things as they are doing it right now, because they are doing a good job, but like any business, they can never be too careful, especially if PepsiCo continues to encourage more suppliers to enter their domain. PepsiCo needs to keep an information system like MySAP that will integrate all their suppliers to the main needs. PepsiCo needs to also make sure that whatever information they use in future can accurately predict changing consumer demand. Proposed CRM system Overall, Pepsis CRM applications seemed to have greatly improved after trying a new variety of software systems. Currently, PepsiCo is using MySAP enterprise applications, where they had previously used other applications including Oracles PeopleSoft. We see the current CRM application as being very beneficial to the company. One proposition that would more likely improve the system is the integration of a CRM application across all subsidiaries under PepsiCo. This will allow for further interaction between the company & the customers to see where the improvements in the interactions can be made, as well as to determine overall profitability of the customer. We also feel the CRM application can be used to develop future marketing campaigns to meet the needs & desires of customers in specific areas. Other than these minor changes, we feel that the present CRM application is very promising for PepsiCo.

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Predictable supply & demand

Predictable supply & uncertain demand or uncertain in supply & predictable in demand

Highly uncertain supply & demand

PEPSICO

Electronic Business Applications in PepsiCo PepsiCo & Pepsi Bottling Group (PBG) select MEDSTAT Advantage Suite System to manage Employee Benefits. This multi year license agreement provides PepsiCo & PBG with a Decision Support System (DSS) & reporting applications for proactively managing individual & organizational health in order to improve productivity & profitability. The MEDSTAT decision support system integrates all our health benefits information into a single, central source. It will enable us to understand the potential impact of benefit plan design changes & evaluate the clinical effectiveness of our benefit programs. Greg Heaslip, director of benefits at PBG added, We plan to use the system to help us identify the drivers of rising healthcare expenditures & ensure all employees are receiving the highest quality care available. PepsiCo provides health benefits for more than 1,16,000 employees & the retirees while PBG covers some 83,000 employees & retirees.

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MEDSTAT advantage suite seamlessly integrates data warehousing capabilities, advanced healthcare analytic methodologies & business intelligence applications to provide a powerful decision support solution.

FRM
Finance Resource Management

MRP
Manufacturing Resource Planning

SCM

ERP system

Supply Chain Management

CRM
Customer Relationship Management

HRM
Human Resource Management

Supply chain strategy or design During this phase a company decides how to structure the supply chain over the next several years. The company makes long term decisions in regards to location & capacities of production & warehousing facilities, the products to be manufactured or stored at various locations, the models of transportation to be made & information systems & so on. The supply chain design is very expensive to alter on short notice & supports the companys strategic objectives. In order to ensure a good supply chain strategy, planning is to be made years in advance. The unit has several contracts with manufacturers & receives raw materials on a convenient basis. The company also decides where production plants are to be placed. The company has to provide & manage transport for the delivery of the products as well as the arrangement of 3rd party services for the procurement of the products. The shipping department handles orders & the transport department decides the vehicles for safe delivery. Material planning & sourcing is carried out as well. Sources of supply of raw material both local & foreign are identified & terms & conditions are negotiated. Capacity planning is also done at

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this stage. Sales forecasting & production planning depends upon the capacity of the organization with respect to: 1. Production. 2. Storage: raw & packing. 3. Storage: finished goods. The unit has a procurement budget of approximately Rs. 3 billion. Approved suppliers cant go beyond this budget the supplier is audited by the most efficient quality control department. Distributors are also decided by the company, keeping in mind past performances. Supply chain planning As the above configurations have been set, planning must be done within the above stated constraints. Planning establishes parameters within which a supply chain will function over a period of time. Companies start the planning phase with a forecast for the coming year of demand. Pepsi carries out sales forecasting for local demand as well as for export purposes to countries such as Nepal, Bhutan & Bangladesh. The annual sales target is conveyed to the supply chain department of the unit. Planning is carried out on a monthly, weekly & daily basis. Supply chain operation Company makes decision regarding individual customer orders. The goal of supply chain operations is to handle incoming customer orders in the best possible manner. During this phase, firms allocate inventory or production to individual orders, set a date that an order is to be filled, generate pick lists at a warehouse, allocate to shipping, set delivery & so on. There is less uncertainty about demand. At this unit, sales & supply chain departments get together to decide the inventory usually on a weekly basis. Achieving the strategic fit Making one stage more responsive allows the other stage to focus on being more efficient. The Pepsi supply chain assign different roles to its different stages, the company has to decide either to transfer the responsiveness to manufacturing stage or the retailer stage. While discussing Pepsis supply capability it is seen that Pepsi tends to be more responsive in cities & a bit less in towns. Therefore, transferring the responsiveness to the retailer & distributor, allowing them to face the higher implied demand uncertainty. This in returns allows the manufacturer & supplier to be more effective. At the same time, multiple beverages type contributes to a broader product portfolio causing the unit to adjust its strategies accordingly; tailoring the supply chain to best meet the needs of each beverage demand.

Expanding strategic scope of Pepsi

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In Pepsi the agile inter-company scope of strategic fit is essential because the competitive playing field has shifted from company-versus-company to supply chain-versus-supply chain. Strategic scope must cover all these boxes, at least at the supply chain end. The agile intercompany scope of strategic fit requires the company to evaluate very action in the context of the entire supply chain. As competition increases, Pepsi is expanding their strategic scope as they are increasing their product line by adding Pepsi Max, Mountain Dew & Mirinda Apple to their beverage line. Human resource management In PepsiCo the goal of HRM is the effective & efficient use of the human resources of a company: Human resource information systems are designed to support: Planning to meet the personnel needs of the businesses. Development of employees to their full potential. Control of all personnel policies & programs. Accounting information systems In PepsiCo computer based accounting information systems record & report the flow of funds through an organization on a historical basis & produce important financial statements such as balance sheets & income statements. Also emphasizes on Cost Accounting reports, Development of Financial budgets & Projected Financial statements, Analytical reports comparing actual to forecasted performance.

Technological factors in PepsiCo Development of additives such as sugarless sweeteners, caffeine free products & new flavoring enables PepsiCo to provide products that meet changing customer tastes & preferences. In addition, computerized manufacturing technologies are great contributions to higher efficiency & quality in bottling operations. For Pepsi, a critical business challenge is ensuring the distribution processes can deliver the right products to the right customers at the right place & at the right time. According to Jerry Gregoire, Vice President, Information Services, the competitive advantage will go to the company that can apply technology to areas such as logistics, getting costs out of the distribution pipeline & getting products into the stores less expensively while increasing the availability of sales information. Pepsi North Americas data communication network is an important element in the companys efforts to address sales & distribution challenges with technology. Sales data also helps Pepsis managers make decisions about products before they reach the freshness date & must be pulled from the shelf & discarded.

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Strategic alternatives Out of the many strategic alternatives that PepsiCo could choose to follow, we have chosen to endorse one that fosters continued growth & diversification. Although their over-satisfied portfolio has hindered their international growth, these strategies strengthen their overall corporate worth & make presence domestically. Pepsi should focus on increasing sales globally to compete effectively with Coke. They have been beaten badly in some markets & need to focus more on un-tapped areas. They should: Continue to diversify their beverage selection through acquisitions. This will enable PepsiCo to combat the decreased interest in Cola. Going along with this, PepsiCo needs to ensure that they can properly manage all of these acquired companies & should divest that show limited potential. Increase the use of exclusivity agreements to boost their sales in key markets. This may make it harder to keep costs low but will ensure added revenues. Another reason why Coke has continued to beat Pepsi is through its exclusivity agreements with restaurant chains, sports & entertainment complexes & college campuses. More attention in this area will help to battle Cokes dominance. Capitalize on their aggressive corporate culture in overseas dealing. This can help to combat the weakness of their current international strategies.

Information systems in PepsiCo

In responding to market demands for efficient 24 hour order-to-delivery process for customer orders, PepsiCo has installed a computer system that links an effective wide area network that allows immediate transmission of customer orders. The outcome has been to integrate with a wide area network, transmit accurate, complete customer data, allowing the company to more efficiently loads trucks, schedule deliveries & save labor hours. Information systems link the vendor partners, who share relevant work, personal, & health related information about employees.

Logistics

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In order to manage its distribution systems effectively, PepsiCo had put in place advanced logistics systems. PepsiCo sold beverage concentrate to bottlers, who added carbon dioxide, sweetener & water to make beverages & beverage syrup. Syrup was sold either directly to the fountain accounts or was combined with carbonated water for bottling. Bottling companies were owned & operated by local companies in the countries where PepsiCo operates. The transportation network has been designed with a view to ensure responsiveness & boost the availability of the product. For the unit we visited, using fast mode of transport increases responsiveness as well as the transportation cost but lowers the inventory holding cost. The unit decides different mode of transportations having different characteristics with respect to speed & size of shipment. Electronic commerce in PepsiCo Pepsi takes the plunge with an online campaign PepsiCos recent announcement that it would conduct a joint promotion of its products with Yahoo, one of the most popular sites on the internet, is promising news for website operators that have struggled to persuade the richest advertisers to spend their money online. Even as the internet achieved mass market audience levels, consumer goods advertisers like Coca-cola, Nabisco & until now Pepsi, have kept their wallets shut, spending mere pocket change on the web. They have argued that the medium may be great for direct marketing, but it does little to advance their primary advertising goal: increasing brand awareness. SAP announced global brand leader PepsiCo has selected MySAP Business Suite SAP has announced that global brand leader PepsiCo has selected MySAP Business Suite as the primary business platform for unifying its operations, standardizing business processes & increasing efficiency across its divisions. The USD 27 billion convenience food & beverage company produces Frito-Lays snacks, Pepsi-cola beverages, Gatorade sports drinks, Tropicana juices & Quaker foods. SAP spokespeople declined to comment the value of the deal in monetary terms. John Grozier, SAPs Vice-President of CRM product marketing, told CRM buyer in an interview that PepsiCo selected MySAP to kick off a major business transformation for the company. Information Technology improvements Executive Support System (ESS) ability to closely monitor sales/market share. Decision Support System (DSS) reduces costs of raw materials & supplies. Packaging Application Expert (PAX) automates production & logistical processes. Transaction Processing System (TPS) saves 30-50 thousand man hours weekly.

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 Management Reporting System (MRS) eliminated stales, improved product quality, less waste & encompasses profit-vision.

MYSAP TPS VIEW:-

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MYSAP OFFICE AUTOMATION SYSTEM VIEW:-

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MYSAP DSS VIEW:-

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MYSAP MIS VIEW:-

Marketing & Sales strategies PepsiCo has developed the national marketing, promotion & advertising programs that support its many brands & brand image; oversees the quality of the products; develops new products & packaging, & coordinates selling efforts. Competitive advantages of Information Technology Inter-relates with strategic strategy. Creates barrier for new competition. Makes switching bands difficult for retailers. Gains efficiency through value chain analysis. Provides centralized data.

Competitive disadvantages of Information Technology Creates claims of unfair competition. Shelf space issues.

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Softwares Used by PepsiCo

MySAP Business Suite PepsiCo Inc. has selected SAPs full MySAP Business Suite to streamline its distribution & delivery processes, improve planning & forecasting & give better visibility to its global supply chain. PepsiCo, which manufactures, distributes & markets Frito-Lays snacks, Pepsi-Cola beverages, Gatorade sports drinks, Tropicana juices & Quaker foods, is aiming to better link its supply chain & inventory data with its customer data. PepsiCo softwares costs PepsiCo capitalize certain computer software & software development costs incurred in connection with developing or obtaining computer software for internal use when both the preliminary project stage is completed & it is probable that the software will be used as intended. Capitalized software costs include only: 1. External direct costs of materials & services utilized in developing or obtaining computer software. 2. Compensation & related benefits for employees who are directly associated with the software project. 3. Interest costs incurred while developing internal-use computer software. Capitalized software costs are included in property, plant & equipment on the balance sheets & amortized on a straight-line basis when placed into service over the estimated useful lives of the software, which approximates 5-10 years. Software amortization totaled $119 million in 2009, $58 million in 2008 & $30 million in year 2007. Net capitalized software & development costs were $1.1 billion as of December 26, 2009 & $940 million as of December 27, 2008.

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RECOMMENDATIONS
Continue developing new Information Technology. Enhance & upgrade DEX system. Develop & implement training programs like shared incentive programs, shared purpose top-to-bottom implementation programs. Implement new processes & Mindsets Company wide.

SAP: Pepsis software for a new generation Date: 9th June 2004 PepsiCo Inc. has selected SAP's full MySAP Business Suite to streamline its distribution and delivery processes, improve planning and forecasting, and give better visibility to its global supply chain. PepsiCo, which manufactures, distributes and markets Frito-Lay snacks, Pepsi-Cola beverages, Gatorade sports drinks, Tropicana juices and Quaker foods, is aiming to better link its supply chain and inventory data with its customer data. Big win for SAP Steve Trotta, software industry analyst at Technology Business Research, told CRM Buyer that he thinks PepsiCo is a great competitive win for SAP because some of PepsiCo's subsidiaries were already running Oracle for enterprise resource planning (ERP) systems, as well as PeopleSoft and Siebel CRM systems. "PepsiCo was probably fed up with Oracle's inability to execute on the integration of Pepsi's disparate software applications spread across its subsidiaries," Trotta said. "Now its SAP's turn to see what it can do." Paul Greenberg, president of The 56 Group and author of best selling CRM at the Speed of Light, agreed. According to him, the reason for the deal is SAP's NetWeaver platform, the highly efficient architecture that underlies every facet of MySAP. "It's one of the better platforms when data, application and process integration with other nonSAP applications and databases is an issue," he told CRM Buyer.

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From Oracle to SAP For his part, Grozier noted that consumer product companies are looking to SAP to displace disparate systems, give geographic locations real-time process visibility and remove process redundancies. PepsiCo is also interested in MySAP trade promotion functionality, Grozier commented, although he didn't know when it might be deployed. As one of the world's largest players in the competitive food and beverage companies, PepsiCo joins other major consumer product companies using SAP. A year ago, detergent-maker Dial Corp said that it planned to spend $35 million over 18 months to install and configure a full suite of SAP ERP software, replacing the similar products it had been using from Oracle. In terms of dollars, SAP's deal with PepsiCo is likely many times over to exceed Dial's spending. And only a month ago, Tyson Foods also selected the MySAP Business Suite as the backbone technology platform to complete the integration of its operating units for reasons similar to PepsiCo. Food & Beverage play SAP has cast an eye on the midrange of the food and beverage business too. The company announced last month entering an agreement with certain Deloitte Touche Tohmatsu member firms to create a new selection of packaged software and service solutions aimed at helping midsize food and beverage companies improve operational efficiency and address regulatory compliance issues. The two plan to produce packages that combine functionality from mySAP and industry-specific SAP best practices with implementation and services from food and beverage industry specialists of the DTT member firms. PepsiCo's competitor Coca-Cola Enterprises partnered with SAP in February for direct store delivery. PepsiCo will also partake of this integration between bottlers' back-end IT systems and mobile devices, field sales representatives, delivery drivers and equipment service staff can quickly and more effectively respond to a comprehensive range of customer requests. According to Greenberg, PepsiCo is recognizing that the integration of the supply chain, demand chain and back office functionality are necessary in a world dominated by the customer ecosystem. "Everything is now a customer issue and PepsiCo is aware of it," he said. NetWeaver proof "PepsiCo is proof that consumer product companies are leveraging to NetWeaver to drive up ROI and costs down," said Grozier. NetWeaver is SAP's open integration and application platform for enabling SAP infrastructure.

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Meanwhile, software analyst Trotta believes that, over the course of the PepsiCo deployment, SAP's MySAP Business Suite will eventually replace the majority of systems that are currently running within PepsiCo and its subsidiaries. "This is certainly a testament to SAP's ability to execute and demonstrate the value that NetWeaver brings to the table," said Trotta.

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