Notes - SAP ERP Introduction

SAP ERP: Introduction TERP01 v.062 1. SAP ERP is powered by SAP NetWeaver 2. The central organizational unit in Logistic is Plant 3. Views available in Customer Master include: General Data, Financial Accounting Data, Sales Area Data 4. HCM supports Recruitment, Hiring, Training and Personnel Development & Managing Work Time: True 5. Financials support the following business activities: Financial and Managerial Accounting, Corporate Governance, Financial Supply Chain Management: True 6. In the context of Sales and Distribution, the Sales Area is a combination of sales organization, distribution channel and plants: False (should be: Sales Org + Distribution Channel + Division) 7. The highest-level element of all organizational element is the Company Code: False (should be client) 8. Controlling Area represents a separate unit for cost accounting: True 9. A client corresponds to a customer in the SAP system: False 10. SAP BW enables the analysis of data from operative SAP applications as well as other business applications and external data sources such as databases, online services, and the Internet: True A New Wave of Information Technology As technology grows and changes, software has to upgrade accordingly. However, SAP believes in an environment where you do not have to scrap your existing software setup. Instead, it would provide upgrades and extend the functionality of the existing software, thereby reducing costs. In this image, you can see that to begin with SAP’s technology was based on Mainframe architecture – based on ABAP and R2. Keeping pace with business requirements and integrated business Processes, technology changes were made from R2 to three tier R/3 and moved from Mainframes to Client-Server Architecture. SAP R/3 has always been an “integrated” system where business Processes were integrated within an enterprise’s operations. Capable of e-commerce since 1996, SAP products incorporated business technology for the future, thus paving the way for incorporating future developments. This eliminated the need for customers to change existing systems and allowed for “integration” of business processes “between” enterprises. Finally, with Technology advances and the internet revolution, you now have services catering to adaptive businesses like Web services. SAP’s Enterprise service architecture platform features NetWeaver, business suites and xApps offerings, keeping pace with the business requirements of today and the future.   Architecture of SAP ERP After the SAP R/1 and SAP R/2 products, SAP introduced SAP R/3. Later, in March of 2003, SAP released SAP ERP, where many other SAP components were included along with SAP R/3. Inside SAP ERP, SAP R/3 enterprise was just a component. As you can see here, from this point on SAP ERP was more than just SAP R/3 Enterprise with SAP NetWeaver, since it offers many functional enhancements like Self Services, self service procurement, internet sales, and SAP SEM. SAP Net Weaver also contains the SAP Web Application Server. With SAP ERP, a new SAP solution was born. The SAP ERP Central Component or SAP ECC, is the evolutionary successor of the previously offered SAP R/3 Enterprise, and is the central core of SAP ERP. Compared to the SAP R/3 Enterprise, in SAP ECC there are architectural changes with respect to Enterprise Services Architecture, enhanced usability and new developed functionality, like the new general ledger. SAP Business Warehouse, SAP Strategic Enterprise Management, and Internet Transaction Server integrated into SAP ECC. Customers now have the option to run these components on the same instance that runs SAP ECC to reduce the system landscape and save costs. Running the components on separate instances is also possible. SAP Web Application Server contains all capabilities of SAP basis as well as additional web capabilities.   SAP ERP and SAP NetWeaver SAP ERP is the result of an ERP offering to SAP R/3. SAP ERP includes all the functionality of SAP R/3 Enterprise with the large number of additional business Processes like self service, strategic management, and others. SAP ERP is an integrated and personalized functionality. SAP ERP is built on the NetWeaver technology. SAP NetWeaver is used as a technology platform for integration and as an application infrastructure with open connections to Microsoft .NET and IBM WebSphere.   SAP ERP is a Solution within SAP Business Suite SAP Business Suite comprises SAP ERP, SAP PLM, SAP CRM, SAP SCM, and SAP SRM. SAP Business Suite is built on SAP NetWeaver. As you can see from this image, the core component of the Business Suite is ERP. SAP ERP consists of: Life Cycle Data Management Quality and Asset Management Sales Order Management Internet Sales Inventory Warehouse Management Manufacturing and Transportation Purchase Order Processing. SAP ERP also supports mobile technologies featuring GPS and GSM-supported service options for collaborative businesses.   SAP ERP Solution Map The slide here shows the solution map. As is the case with other SAP solutions, a solution map shows you the Processes enabled by a specific solution. In the image shown here, you can see various highlighted areas in different colors. These areas indicate additional capabilities offered by SAP ERP as against those already available to SAP R/3. For example, you have New General Ledger in Financial Accounting, E-Learning, and E-Recruitment in Work Force Process Management, and Self-Service Procurement in Procurement.   Master Data: Customer Master Let us now understand what we mean by Master Data. any data that has to be used across several business processes and is consistent for longer periods of time can be termed as Master Data in the SAP system. Master data is usually created centrally and is then available across applications and users. For this slide, you will look at the Customer Master as an example. A customer master contains information that defines the business relationship between a company and its customer. The master contains data that is required to execute key business processes between the customer and the company. Example of such activities would include customer requests, deliveries, invoices, and payments. The customer master is organized into three views which are located at different organizational levels. General Data: which does not depend on the company code. This data is entered at the client level. Financial Accounting Data: is relevant to Financial Accounting and applies to one company code. Sales Data: wherein data for one customer can differ for each sales area. As you have seen earlier, the sales area is a combination of sales organization, distribution channel and division. This data is only relevant to Sales and Distribution.   Transactions While Master Data refers to data that remains unchanged for longer periods of time, transactions are application programs which execute repeating business Processes, referencing the master data, such as creating a customer order, posting an incoming payment, or approving a leave request. any transaction that has been executed in the system creates a document. When these documents are created, they will automatically copy the referenced predefined data from the master eliminating the need to enter it again.   Process Overview: Purchase to Pay Let us understand the business process flow from purchasing goods to paying for the same. This is typically termed as the “Purchase to Pay” process flow. We will be referring to two courses, the MM or Material Management Course and FI or Finance Course. Order Requirement: The first step in the purchase to pay process is the “Order Requirement”. Order Requirement can be done manually by registering a requirement using Order Requirement. In the SAP ECC system, the Order Requirement can also be automatically created. Note that at this stage no postings are created in the FI course. Order a Material: Next, in “Purchase order” process you order a material by using a basic form of the “purchase order” document. While creating a purchase order, data such as supplier, material, plant and any other data relevant to the purchasing of an organization must be provided. In the SAP ECC system, the purchaser can control or supervise the processing status of the purchase order. You can post the goods receipt or invoice receipt for the concerned purchase order. This purchase order creation is handled only in the MM course. In the SAP ECC system, no document is created in the FI course during purchase order creation. Good Receipt: Once goods are received after the purchase order is processed, the system compares the goods receipt with purchase order quantity. A goods receipt entry is passed in the MM course. Two documents are created in real time in the system, one for the material document and the other for the FI document. The material document is created to update the inventory. In the FI course, values are posted by debiting the Material stock account or the consumption account and crediting goods receipt or the invoice receipt account. Invoice Verification: The vendor invoice receipt is then verified during invoice verification. All these purchasing processes are settled in the SAP ECC system via Logistics. The vendor invoice is posted in MM and, in real time, an FI document is created, by debiting the goods receipt or invoice receipt account, and crediting the vendor account. Payment: The final step is the payment process which is finally updated in Financial accounting, with details like the payment methods and bank settlement.   Process Overview: Order to Cash Next, you will understand the “Order to Cash” process flow. A sales order is the basis of the sales process. Let us understand with the help of two examples: product sale ex-stock and sale of service. Product sale ex-stock: In this process, a sales order is created for material which is kept in inventory. Costs and revenues are derived automatically from the material production costs or from the SD Course. From the incoming order, you create the transport order, where in required goods are removed from the stock and prepared for delivery. Then outbound delivery document is created. The goods to be delivered are posted as goods issue. At the time of goods issue two documents are created. One in MM as a goods issue document and another in FI as an accounting document. Billing is done only after the goods issue is posted. During billing an invoice document is created. Finally you come to payment and dunning. When payment is received from the customer an entry of receipt is posted in FI. If you have not received payments from your customers by the net due date, the customers will be dunned. Our second example is for Sale of service: - Here you sell a service. A direct service generation process can also be displayed via a sales order item. The sales order item is a cost bearer; in this case, you need to define Goods lnward accounts in order to post the entries in to FI. All the other steps like incoming orders, billing, payment are almost identical to the steps in sales ex-stock.   Data Warehouse Concepts OLAP or Online Analytical Processing is an approach to quickly provide the answer to analytical queries that are dimensional in nature. It is part of the broader category of business intelligence. Typical applications of OLAP are in business reporting for sales, marketing, management reporting, business process management or BPM, budgeting and forecasting, financial reporting, and other similar areas. OLTP or Online Transaction Processing is a class of programs that facilitate and manage transaction-oriented applications, typically for data entry and retrieval transaction processing. If you are using the transactions in the Logistics applications, the Logistics Information system (LIS) updates relevant information. You can also update information from other systems in the LIS. The LIS aggregates and stores this information in the data warehouse.   Distinction: Operative/Informative Environments This slide discusses some of the most important demands placed on a modern data warehouse. Decision criteria for the efficiency of a data warehouse solution are highlighted here. SAP BW enables the analysis of data from operative SAP applications, as well as, all other business applications and external data sources such as databases, online services, and the Internet. The transaction-oriented Online Transactional Processing, or OLTP and the analysis-oriented Online Analytical Processing or OLAP environment must be seen as an integrated entity. Master data, and the business processes that result from it, produce a multitude of information that cannot easily be used for target-oriented analysis. Therefore, data is cleansed first and, because of the variety of its sources, it is prepared both technically and in terms of content. Knowledge can then be generated from the analysis that follows. This knowledge helps the organization to define its business strategy and supports the business processes derived from it.