Mphasis an HP Company ERP SAP Overview

Mphasis an HP Company ERP / SAP Overview 3/18/2018

Objectives § The participants will be able to: § Recognize the evolution of ERP solutions. § Appraise the concept, benefit and use of ERP solution. § Define the SAP ECC Overview. § Identify the different SAP ECC Functional modules/areas. § Distinguish the components of SAP ECC. § Judge the use of ABAP programming language. 2 ERP / SAP Overview 3/18/2018

ERP Overview Enterprise Resource Planning 3 ERP / SAP Overview 3/18/2018

Enterprise Resource Planning. . . synchronization of Company functions. . . Purchase Manufacturing Finance Sales 4 ERP / SAP Overview 3/18/2018

Enterprise Resource Planning … and extended to the complete value chain. . . Tier I Component Manufacturer Vehicle OEM Tier II Component Supplier 5 ERP / SAP Overview 3/18/2018

Enterprise Resource Planning. . . delivering administrative and decision support with. . . Decision support and analysis Processes monitoring & feedback Administrative registration 6 ERP / SAP Overview 3/18/2018

What is an ERP solution. . . ? …Integrated across the primary and support processes Distribution Manufacturing Materials Marketing Planning and Execution Engineering Sales Human Resources 7 ERP / SAP Overview Finance 3/18/2018

The ERP application § An integrated suite of business applications, which. . § Closely links, monitors, and controls primary enterprise resources like manpower, machine, material, methods, market and money. § Enables corporates to readily change their processes to adapt to the ever changing business scenario. § Provides expertise in industry specific business processes. § Entails § Parameterization / Configuration § Designing & Customization § Testing and Implementation § Training 8 ERP / SAP Overview 3/18/2018

Why clients buy ERP? § Corporate Initiatives § Strategic initiatives § A requisite capability in a competitive global business § Operational initiative § A foundation for performance and cost improvement via integration § Organizational initiative § To initiate a major organizational change within the company § Technology § IT is making the transition from a supporting operational entity to becoming a strategic competitive tool. § Because others are buying it !!! 9 ERP / SAP Overview 3/18/2018

Recent business trends favoring ERP growth § Business Process Reengineering ( BPR ) § Most large companies are attempting to cut in-house development costs, improve customer service, and speed products to market by reorganizing their existing business processes. § Software Pricing § Licensing and pricing of mainframe based packaged applications are tied to the size of mainframe system on which the applications run, but now customers are now demanding user-based licensing options and major corporate applications like SAP provide this instead of the conventional platform-based pricing technique. 10 ERP / SAP Overview 3/18/2018

Recent business trends favoring ERP growth § Globalization § As businesses are becoming more global in scope, people are demanding packaged corporate applications that are available in a variety of languages with support for multiple currencies. § Integration § As more and more companies are going for BPR, there is increase in demand for integrated solution e. g. . different applications sharing a common database and thus enabling data definitions and business rules to be applied across an entire organization with the facility of doing modifications at one location only. 11 ERP / SAP Overview 3/18/2018

Business process benefits clients expect from an ERP project § Global process/ Product management § Integrated Supply Chain Management § Leverage purchasing and vendor management § Order cycle time/ customer service improvement § Inventory reductions § Reduced information systems costs on an ongoing basis § Improved business management through worldwide integration and information Vendors Inbound Logistics Manufacturing Transportation Distribution Logistics and Distribution 12 ERP / SAP Overview Delivery Customer Consumer Sales & Customer Service 3/18/2018

Major ERP vendors § SAP ECC § Oracle ( Peoplesoft and JD Edwards were independent ERP venders earlier, but are subsets of Oracle now ) § Peoplesoft § JD Edwards § Baan 13 ERP / SAP Overview 3/18/2018

What results can be expected from an “ERP culture”? § § § § § 14 Reduced working capital requirements Improved customer service Improved direct labor productivity Reduced purchase costs Reduced obsolescence Reduced overtime Having the figures to make decisions Having accountability throughout the organization Improved quality of life ERP / SAP Overview 3/18/2018 ERP

SAP ECC Overview § Systems Applications & Products 15 ERP / SAP Overview 3/18/2018

SAP AG – At a Glance § Founded in Germany in 1972 § Market Leader in Industrial Enterprise Application (IEA) § About 56% market share in the ERP market § Worldwide presence in over 50 countries § 18, 000+ employees § Trained consultants doubled since 1996 (40, 000) § About 20, 000 companies in 120 countries § Around 64, 500 installations of SAP § Strength lies in its high degree of integration, mainly for large, global corporate enterprises § Significant presence in Global Fortune 500 companies 16 ERP / SAP Overview 3/18/2018

SAP R/1 , R/2 § The R/1 system § § Developed for ICI Chemical Released 1972 Focused on Sales & Distribution and Materials Management Discontinued after release of R/2 § The R/2 system R/2 Basis System 17 § Reorganized as leading mainframe software for large multinational corporations § No sales effort planned – reactive only § 4, 300 copies worldwide in 1993 § Mainframe-based to replace user legacy software; co-existence and migration strategy underway for R/2 and ECC ERP / SAP Overview 3/18/2018

SAP ECC : Latest Release 18 ERP / SAP Overview 3/18/2018

SAP ECC : Latest Release (Contd. ) 19 ERP / SAP Overview 3/18/2018

SAP R 3 E and my. SAP. com 20 ERP / SAP Overview 3/18/2018

SAP Net. Weaver Existing Systems 21 ERP / SAP Overview 3/18/2018

SAP ECC : 3 Tier Architecture The Presentation Layer Those SAP ECC software components that specialize in interacting with end-users form the Presentation Layer. The Application Layer Those SAP ECC software components that specialize in processing business applications form the Application Layer. The Database Layer Those SAP ECC software components that specialize in the management , storage and retrieval of data form the Database Layer 22 ERP / SAP Overview 3/18/2018

SAP ECC : 3 Tier Architecture Presentation Layer components Application Layer components Database Layer components reside in: Presentation servers: Application servers: Database servers: Systems capable of providing a graphical interface. 23 reside in: Specialized systems multiple CPUs and vast amounts of RAM. Specialized systems with fast and large hard drives. ERP / SAP Overview reside in: 3/18/2018

SAP ECC : 3 Tier Architecture Presentation Layer components are installed across many PCs The Application Layer components are installed across one or more highend servers. The Database Layer components are installed on high-end database server. 24 ERP / SAP Overview 3/18/2018

SAP ECC Overview SD FI Sales & Distribution Financial Accounting MM PP CO Materials Mgmt. Controlling ECC Product Planning TR Treasury Client/Server ABAP/4 QM PS Quality Mgmt. PM WF Plant Maintenance HR Human Resources 25 ERP / SAP Overview Project System Workflow IS Industry Solutions 3/18/2018

Integration All business processes throughout the supply chain are executed in one system sharing all information S U P P L I E R 26 SAP R/3 Workflow C U S Procurement Production Distribution T MM PP SD O M Finance and Accounting FI ERP / SAP Overview E CO 3/18/2018 R

SD: Sales and Distribution SAP ECC SD 27 Sales & Distribution. . . . ERP / SAP Overview 3/18/2018

SD Overview SD Inquiry Quotation Purchasing Materials Planning Sales Order Production Pricing Delivery to Customer Picking Goods Receipt Packing Customer Stock Goods Issue Invoicing 28 ERP / SAP Overview Transportation 3/18/2018

Process Chain: Sales Distribution Sales/Distribution Chain Inbound Logistics from Materials Management Outbound Logistics to Customer Sales Order & Distribution Process Receive Payment Support Customer Sales (Customer Info Analysis) - Optional - FI Create Invoice - Create pick list - Create transportation work list - Create loading work list FI/CO/PA Process Customer Inquires - Optional - Issue Goods (Ship Product) (Documents) FI MM Provide Customer Quotations - Optional - Create Delivery Note - Check credit Check product availability - Determine pricing - Estimate delivery schedule - Determine conditions of sale (Activities) - 29 ERP / SAP Overview Create Sales Order FI/CO/PA MM PP Support Customer Agreements - Optional 3/18/2018

Order Entry FI PP MM FI Credit Management Dynamic Availability Check Cash Forecast ? OK 30 ERP / SAP Overview 3/18/2018

Delivery/Shipment Processing FI MM WM MM Ship to party: C 100 Item Material Qty 10 6301 10 20 6412 10 30 1507 25. . Delivery Note Credit Management Static Availability Check Picking List Picking Packing Transportation 31 ERP / SAP Overview 3/18/2018

Picking/Packing Sales Order Delivery Picking without Picking Confirmation Picking with Picking Confirmation Picking Request Print Picking List Confirm Picking Request Goods Issue 32 ERP / SAP Overview 3/18/2018 Picking Confirmation

Invoicing Profit Center Accounting/Profitability Analysis CO PA CO PCA FI Accounts Receivable/General Ledger Cash Forecast Single Invoices Collective Invoices EDI Invoice Lists Credit/Debit Notes 33 ERP / SAP Overview FI 3/18/2018

MM Overview SAP ECC MM 34 §Materials Management. . ERP / SAP Overview 3/18/2018

MM Overview (Contd. ) MM Material requirement planning External procurement Purchasing Invoice verification Internal procurement Production Goods receipt Warehouse management Inventory management Goods issue Internal and external accounting 35 ERP / SAP Overview Transfer posting Sales and distribution 3/18/2018 Master data Material Batch Vendor Customer G/L Storage bins

MM Overview (Contd. ) MM Material requirement planning External procurement Purchasing Invoice verification Internal procurement Production Goods receipt Warehouse management Inventory management Goods issue Internal and external accounting 36 ERP / SAP Overview Transfer posting Sales and distribution 3/18/2018 Master data Material Batch Vendor Customer G/L Storage bins

Material - Central Master “Record” for Logistic 456 123 Inventory Quality Sales Information Production Information Desc: ----------- Inventory Purchasing Desc: ----------- Raw Material - 456 Product - 123 37 ERP / SAP Overview 3/18/2018

Data in the Vendor Master Maintenance Level Client Purchase Organization • Mandatory maintenance at the Purchasing Organization Level Company Code • Optional Maintenance at the Plant Level, the Vendor Sub-Range Level or a combination of the two General Data Account Data Address Phone and Fax No. Control Data 38 Purchasing Data Terms of Payment Contact Person Minimum Order Value Payment Terms Payment Method Accounting Clerk ERP / SAP Overview 3/18/2018

External Procurement Environment Requirement Determination Source List RFQ Purchase Requisition Quota Arrangement Outline Agreement Goods Receipt 39 ERP / SAP Overview Source Determination Vendor Selection Purchase Order Price History Purchasing Data Info Record Invoice Receipt 3/18/2018

Goods Movement Ad hoc. Goods Receipt Delivery Production Inventory Transfer Posting Goods Issue Consumption 40 Goods Issue Samples ERP / SAP Overview Sales Order 3/18/2018

Invoice Verification CO FI Orders / Projects /Cost centers G/L accounts / Accounts payable Vendor invoice Vendor 3 Tolerance Check? Invoice Verification e. g. . . Release of Blocked Invoice Automatic Price Update ERP / SAP Overview OK ! Blocked Invoice Delivery Invoice Preliminary Posting 41 Payment 3/18/2018

PP Overview SAP ECC PP 42 §Production Planning. . ERP / SAP Overview 3/18/2018

PP Production Planning Cycle Sales and Operations Planning Master Data Sales & Distribution Demand Management Material Master Bill of Materials Work Centers Routings PRT Materials Management MRP Capacity Planning MRP List Plant Maintenance Master Production Scheduling Costing 43 ERP / SAP Overview Production Order Cycle or Purchase Order Cycle 3/18/2018

Production : Process Chain Production Chain Inbound Logistics from Procurement or Production Chain Outbound Logistics to Materials Management or Sales Chain Manufacturing Process Archive/Delete Order Determine Production Requirements via MRP Output or Manually) Settle Production Order FI CO Create production order (via conversion of planned order to production order or manually) Transfer Produced Goods to Inventory FI Check material availability (Automatic) Confirm production of goods is completed Release Production Order Print shop floor papers (actual work orders) Produce Goods Withdraw materials from inventory (automatic/manual) MM 44 ERP / SAP Overview 3/18/2018

Production Planning § § § 45 Production Planning Functionality Master Data Sales and Operations Planning & Demand Management MRP Production Order & Capacity Planning ERP / SAP Overview 3/18/2018

Material Requirements Planning Demands Quantity: 12. 000 Stochastic Deterministic Demands 3. Qrt 4. Qrt Planning Bill of Material Explosion Capacity Planning Lot Sizing Procedure Net Change 46 ERP / SAP Overview 3/18/2018

MRP - Planning Procedures Deterministic MRP Consumption-Based Planning Forecast-Based Planning Reorder Point Planning Automatic Reorder Point 47 ERP / SAP Overview 3/18/2018 Manual Reorder Point

Production Control MM FI CO Goods Issue Costs Open Production Order Release Production Order Planned Orders 48 ERP / SAP Overview 3/18/2018

QM Overview SAP ECC QM 49 Quality Management. . ERP / SAP Overview 3/18/2018

QM QM Overview è The QM application module is a quality FI SD control and information system supporting Financial Sales & Accounting Distribution quality planning, inspection, and control for CO MM manufacturing Controlling and procurement Materials PP EC C Mgmt. Product Planning QM Quality Mgmt. HR Human Resources ERP / SAP Overview PS PM Plant Maintenance 50 AM Fixed Assets Mgmt. WF Project System Workflow IS Industry Solutions 3/18/2018

QM in Logistics Goods receipt History-dependent intensity of quality inspections Production Inspection during production Defects recording in QM Control charts Goods issue Quality management in SD (certifies quality) 51 ERP / SAP Overview 3/18/2018

PM Overview SAP ECC PM 52 Plant Maintenance. . ERP / SAP Overview 3/18/2018

Plant Maintenance - Overview Pre-defined work steps PM External Services Parts/Supplies Material Requisitions Reporting Notifications Create Work Orders Emergencies 53 Labor ERP / SAP Overview Schedule WO’s Planned Work Orders Special Tools Close and Settle WO Shop Papers Preventive/Predictive Maint. WO’s 3/18/2018

FI Overview SAP ECC FI 54 Finance. . ERP / SAP Overview 3/18/2018

Components of FI FI General Ledger FI-GL FI-SL Special Ledger Accounts Receivable FI-AR FI-LC Legal Consolidation Accounts Payable FI-AP Asset Accounting FI-AA 55 ERP / SAP Overview 3/18/2018

Corporate Structure Financial Management Area Corp. Group Level Company Code (Company) Legal Entity Controlling Area Plant Controlling Area Controlling Level Cost Centers Management Units Work Place/Job 56 ERP / SAP Overview Material Product 3/18/2018

The Elements of Financial Accounting Foreign Exchange Management Finance Information System Executive Information System G/L Information System Business Analysis Cash Management and Forecast Multiledger Accounts Payable Invoice Verification Bank Accounts Receivables Payables General Ledger Extended General Ledger Credit Management Consolidation 57 ERP / SAP Overview 3/18/2018

The Components of FI Functionality Configuration Organizational Structures Company Codes Business Area Organization of Accounting Ledger/Sub-ledger Chart of Accounts Credit Control Setting Credit Limits Master Records G/L Accounts Customers Vendors Banks Chart of Depreciation Areas Assets Extended General Ledger 58 ERP / SAP Overview Documents/Transactions Posting Payment Terms Foreign Currency Taxes Special G/L Transactions Planning Payment Program Fiscal Year Adjustments Balance Sheets/Income Statements Closings On-Line Display Interest Calculation Correspondence Fixed Assets Reporting Analysis Legal Consolidations Modules General Ledger Accounts Payable Accounts Receivable Asset Accounting Special Ledger Legal Consolidations Credit Management Cash Management and Forecast Treasury 3/18/2018

CO Overview SAP ECC Controlling. . CO 59 ERP / SAP Overview 3/18/2018

Components of CO CO CO Modules CO Configuration Organization Structures Planning Setup • Profit Center Acctg. • Order and Project Acctg. Master Data • Cost Center Accounting • Product Costing • Transaction-Based Postings • Activity-Based Costing • Product Costing • Periodic Allocations • Budgeting Criteria and Values • Profitability Analysis Valuation • Business Planning & Control Functionality • Settlement • Planning • Internal Orders • Transaction-Based Posting • Open Item Management • Periodic Allocations • Profitability Analysis • Monitoring Actual Activities vs. Planned • Overhead Management 60 ERP / SAP Overview 3/18/2018

The Elements of Managerial Accounting Overhead Cost Controlling Cost Centers Profitability Analysis PA Cost of Sales PCA Cost of Period Controlling 61 ERP / SAP Overview Report Structure: Profit Center, GL Accounts 3/18/2018 Report Structure: Market Segment Region Division

Integration within FI/CO FI Financial Accounting Asset Accounting Gen. Ledger Accounting Investment Controlling Accounts Receivable Plant Maintenance Accounts Payable Account Revenue Cash Management Central Documents 62 CO Chart of Accounts ERP / SAP Overview Management Accounting Overhead Cost Controlling Cost Center Controlling Actual Costing Static Standard Costing Flexible Standard Costing Order Controlling Product & Production Controlling Sales & Profitability Controlling Mass Production Cost of Sales Accounting Continuous Flow Prod. Period Accounting Batch Production Make to Order Prod. Project Controlling 3/18/2018 Central Line Items Central Totals

Integration Planned Requirement PP SD Customer Order MRP MM Requirement on component level Purchase Order Planned Order Shipping Production Order Invoicing Goods Receipt FI Invoice Verification Accounts Payable 63 ERP / SAP Overview Account Receivable Production completed CO Order Settlement FI Which modules are involved? 3/18/2018

SAP ECC : Components Application Master Data Transaction Data ABAP Programs Organization Structure Configuration Key Data Elements Functionality Configurations 64 ERP / SAP Overview 3/18/2018

What is Customization ? § Customization § The adaptation of application software to customer-specific needs is accomplished in two ways : § Coding § Programming customer-specific code that replaces or complements components of the application § Configuration § Rendering the application appropriate to a specific customer by specifying data on which the application operates 65 ERP / SAP Overview 3/18/2018

Organizational Structures in ECC Organizational Units Cost Accounting Client External Logistics Controlling Areas Accounting Company Codes Sales Organizations Internal Logistics (MRP/Production) Purchasing Organizations Valuation Areas Plants Inventory Management 66 ERP / SAP Overview Storage Locations/Batches/Special Stocks 3/18/2018

Organizational Structure in SAP ECC Production Planning Financial Accounting Company Code Plant Controlling Human Resources Client Controlling Area Personnel Area Sales and Distribution Sales Area 67 ERP / SAP Overview Materials Management Purchasing Organization 3/18/2018

ABAP Programming § SAP ECC applications are written in the ABAP programming language, and run within the application layer of the ECC System. § ABAP programs communicate with the database management system of the central relational database (RDBMS), and with the graphical user interface (SAP GUI) at presentation level. 68 ERP / SAP Overview 3/18/2018

Why do we need ABAP Development ? SAP ECC scope 69 ERP / SAP Overview 3/18/2018

SAP Solution SAP ECC scope 70 ERP / SAP Overview Specific company requirements 3/18/2018

SAP Solution SAP ECC scope Specific company requirements New Functionality Development Non SAP applications 71 ERP / SAP Overview 3/18/2018

Summary § Materials Requirement Planning (MRP-I) began as a technique for developing enterprise-wide business solutions by providing automated tools forecasting demands and planning according to the forecast. § ERP is an integrated suite of Applications to meet corporate needs. § Some major ERP vendors are : SAP ECC, Peoplesoft, Oracle, Baan and JD Edwards. § SAP AG was founded in Germany in 1972 and it is a Market Leader in Industrial Enterprise Application (IEA). § The latest SAP R 3 E Enterprise Architecture, have separate release numbers and release cycles for each of the 3 layers. There is no R 3 E release number as a whole. § § § SAP Web Application Server (6. 20) SAP ECC Enterprise Core (4. 7) SAP ECC Enterprise Extension Set (1. 10) § SAP Net. Weaver is a vision, or paradigm, of total integration of : § § 72 People Information Business Processes Applications ERP / SAP Overview 3/18/2018

Summary (Contd. ) § SAP has a 3 tier architecture comprising of the Presentation layer, Application layer and the Database layer. § The SAP solution is divided in different areas or Functional Modules like SD, MM, PP, QM, PM, FI, CO etc. § ECC applications are written in the ABAP programming language, and run within the application layer of the ECC System. 73 ERP / SAP Overview 3/18/2018

Questions § What is MRP ? § What is ERP ? § When was SAP AG founded ? § What are the 3 layers of the SAP ECC ? § What is SAP Netweaver ? § What is the latest version of SAP ? § What are the different functional modules of SAP ? § What programming language is used for SAP applications ? § Why do we need ABAP developments ? 74 ERP / SAP Overview 3/18/2018