Section 1: SAP Overview

Section 1: SAP Overview Introduction to Auditing SAP ERP IIA_dsa_Section01.ppt Section 1: SAP Overview Section Objectives • Describe Enterprise Resource Planning (ERP) systems • Describe the SAP company profile • Describe the SAP ERP product • List the SAP ERP modules • Describe the SAP ERP business processes • Describe the technical architecture • List the audit cycles • Define the link between the SAP modules, business cycles and audit 2 Introduction to Auditing SAP ERP IIA_dsa_Section01.ppt Section 1: SAP Overview Legacy Systems – Features • Historically, organizations used “best of breed” solutions. Legacy environment consisted of numerous discrete systems. Each system had its own database and master data. If one system failed, the others still operated. Segregation of duties was easier to define and control. 3 Introduction to Auditing SAP ERP HR System Syste Sales les System Syst Fixed Assets S System Production duction System S Purchasing asing S System Accounting unting S System • • • • IIA_dsa_Section01.ppt Section 1: SAP Overview Legacy Systems – Problems Can you think of any legacy systems problems? 4 Introduction to Auditing SAP ERP IIA_dsa_Section01.ppt Section 1: SAP Overview What is ERP? An Enterprise Resource Planning system is a packaged business software system that allows a company to: • Automate and integrate the majority of its business processes, producing efficient consistency across the organization • Share common data and practices across the entire enterprise, supported by one-time data entry • Produce and access information in a real-time environment 5 Introduction to Auditing SAP ERP IIA_dsa_Section01.ppt Section 1: SAP Overview ERP – Modular Systems Typically, modular systems that attempt to cover all key functions within a business: • Accounting including GL, AP, AR, FA • Purchasing and Inventory management • Manufacturing including Materials Requirements Planning (MRP – predecessor of ERPs) • Sales and distribution • Human resource including payroll, timesheets, personnel and training records • Others including project management, plant maintenance • Reporting 6 Introduction to Auditing SAP ERP IIA_dsa_Section01.ppt Section 1: SAP Overview ERP – Market Players, Revenue Total ERP Software Revenue Market Share of Top Five Vendors, Worldwide, 2005-2006 SAP, 27.0% Others, 43.7% Oracle, 13.2% Microsoft, 4.0% Sage Software, 6.9% Infor, 5.2% • • • • Source: Gartner Dataquest (June 2007) Total new license revenues in 2006: $17.48 billion “Microsoft” includes Navision & Great Plains “Others” includes smaller, often specialist packages 7 Introduction to Auditing SAP ERP IIA_dsa_Section01.ppt Section 1: SAP Overview SAP – the Company SAP = Systems, Applications, Products in data processing • Founded in 1972 with headquarters in Walldorf, Germany • Is world's largest ERP software company, and the world's thirdlargest independent software supplier overall • Has 43,400 customers in more than 120 countries • Has over 121,000 installations, more than 1500 SAP Partners, over 25 industry specific business solutions • Had revenue €9.4 billion (2006) – software, consulting and maintenance roughly a third each • Employs over 42,750 people in more than 50 countries • Invests an average of 25% of revenue in R&D • Achieves high customer and employee satisfaction 8 Introduction to Auditing SAP ERP IIA_dsa_Section01.ppt Section 1: SAP Overview Company Profile Offices Adelaide Athens Atlanta Auckland Bangkok Barcelona Beijing Berlin Biel Bogota Boston Bratislava Brisbane Brussels Budapest Buenos Aires Calgary Cape Town Chicago Cincinnati Cleveland Copenhagen Dallas Denver Dresden Dubai Dublin Durban Dusseldorf Foster City Hamburg Hoevik Hong Kong Irvine Jeddah Johannesburg Kuala Lumpur Lisbon London Madrid Manila Melbourne Mexico City Milan Minneapolis Monterrey Montreal Moscow Munich Ottawa Paris Parsippany Philadelphia Pittsburg Prague Ratingen s´Hertogenbosch Salzburg Sao Paulo Seattle Singapore St. Louis Stockholm Sydney Tokyo Toronto Vancouver Vienna Walldorf Waltham Warsaw Wayne Wellington Zurich 9 Introduction to Auditing SAP ERP IIA_dsa_Section01.ppt Section 1: SAP Overview SAP Business Partners Business Development Partners Logo and Implementation Partners Technology Partners Platform Partners 10 Introduction to Auditing SAP ERP IIA_dsa_Section01.ppt Section 1: SAP Overview SAP – Solutions • Original product was SAP R/2 on the mainframe introduced in 1974 • SAP R/3 introduced for smaller platforms in October 1992 • Developed using a fourth generation proprietary language developed by SAP called ABAP/4 • Major SAP R/3 versions: ─ 2.2h ─ 3.0d, 3.0e, 3.0f, 3.1g, 3.1h, 3.1i ─ 4.0b ─ 4.5b ─ 4.6b, 4.6c ─ Enterprise 4.7 ─ ECC 6.0 (Product now referred to as SAP ERP) 11 Introduction to Auditing SAP ERP IIA_dsa_Section01.ppt Section 1: SAP Overview Current Solutions • SAP ERP ─ SAP ERP helps enterprises perform financials, human capital management, procurement and logistics, product development and manufacturing, and sales and service, supported by functionality for analytics, corporate services, and end-user service delivery. • SAP Business Suite ─ Set of application solutions for automating business processes • Industry Solutions ─ Specific functionality tailored for industry specific business requirements • SAP xApps ─ Cross-application components that span multiple solutions and business units • SAP NetWeaver ─ Technical platform for SAP and other solutions that provides a flexible infrastructure and seamless integration • SAP Solution Manager ─ SAP Solution Manager combines tools, content, and direct access to SAP to increase the reliability of solutions and lower total cost of ownership. 12 Introduction to Auditing SAP ERP IIA_dsa_Section01.ppt Section 1: SAP Overview SAP Business Suite • • • • • • • Formerly referred to as mySAP.com Set of software solutions SAP Customer Relationship Management SAP ERP SAP Product Lifecycle Management SAP Supplier Relationship Management SAP Supply Chain Management 13 Introduction to Auditing SAP ERP IIA_dsa_Section01.ppt Section 1: SAP Overview SAP ERP • Primary focus for this course • Formerly referred to as R/3 • Set of integrated modules in four main areas: ─ Financials ─ Human Capital Management ─ Operations ─ Corporate Services 14 Introduction to Auditing SAP ERP IIA_dsa_Section01.ppt Section 1: SAP Overview SAP ERP Features and Effects Features • Highly integrated • Comprehensive functionality • Complex data structures • Availability of data • Single point of entry • On-line data capture and real-time update Effects • Requires strong application knowledge • Causes personnel and organizational structure changes • Causes business process changes 15 Introduction to Auditing SAP ERP IIA_dsa_Section01.ppt Section 1: SAP Overview Multinational SAP ERP Supports: • Multiple languages • Multiple currencies Did you know? Twelve million users all over the world use SAP solutions in approximately 121,000 installations. Source: www.sap.com 16 Introduction to Auditing SAP ERP IIA_dsa_Section01.ppt Section 1: SAP Overview SAP Modules – Functional Category Functional Category • Financials Financials ― FI, CO, AA, PS, ECCS • Operations Operations ― Human Capital SD, MM, PM, PP, QM, LO • Human Capital ― PA, PD Corporate Services • Corporate Services − T&E, EHS 17 Introduction to Auditing SAP ERP IIA_dsa_Section01.ppt Section 1: SAP Overview Financials • General Ledger • Accounts Receivable FI • Accounts Payable • Tax and Financial Reports • Special Purpose Ledger • Consolidations 18 Introduction to Auditing SAP ERP IIA_dsa_Section01.ppt Section 1: SAP Overview Controlling • Cost Center Accounting • Profit Center Accounting CO • Product Cost Controlling • Profitability Analysis • Activity Cost Management • Internal Orders 19 Introduction to Auditing SAP ERP IIA_dsa_Section01.ppt Section 1: SAP Overview Asset Accounting • Depreciation AA • Property Values • Insurance Policies • Capital Investment Grants 20 Introduction to Auditing SAP ERP IIA_dsa_Section01.ppt Section 1: SAP Overview Project System • Project Tracking • Work Breakdown Structure PS • Budget Management • Cost and Revenue Planning • Networks and Resources 21 Introduction to Auditing SAP ERP IIA_dsa_Section01.ppt Section 1: SAP Overview Sales and Distribution • Computer Aided Sales • Quotations SD • Sales Order Management • Pricing • Delivery • Invoicing 22 Introduction to Auditing SAP ERP IIA_dsa_Section01.ppt Section 1: SAP Overview Materials Management • Procurement MM • Inventory Management • Vendor Evaluation • Invoice Verification • Warehouse Management 23 Introduction to Auditing SAP ERP IIA_dsa_Section01.ppt Section 1: SAP Overview Plant Maintenance • Plant Maintenance PM • Equipment and Technical Objects • Preventive Maintenance • Service Management • Maintenance Order Management 24 Introduction to Auditing SAP ERP IIA_dsa_Section01.ppt Section 1: SAP Overview Production Planning • Sales & Operations Planning • Demand Management PP • Material Requirements Planning • Production Activity Control • Capacity Planning 25 Introduction to Auditing SAP ERP IIA_dsa_Section01.ppt Section 1: SAP Overview Quality Management • Quality Certificates • Inspection Processing QM • Planning Tools • Quality Control • Quality Notifications 26 Introduction to Auditing SAP ERP IIA_dsa_Section01.ppt Section 1: SAP Overview Human Capital Management • Personnel Administration • Payroll, Benefits HR • Time Management • Planning and Development • Organization Management 27 Introduction to Auditing SAP ERP IIA_dsa_Section01.ppt Section 1: SAP Overview Corporate Services • Travel Management • Real Estate Management CS • Environment, Health, and Safety • Incentive and Commission Management 28 Introduction to Auditing SAP ERP IIA_dsa_Section01.ppt Section 1: SAP Overview Comprehensive Industry Solutions SAP Consumer Products SAP High Tech & Electronics SAP Engineering & Constr. SAP Oil & Gas SAP Utilities SAP Service Provider SAP Health Care SAP Insurance SAP Human Resources SAP SAP Logistics ERP SAP Financials SAP Automotive SAP Public Sector SAP Telecomm. SAP Chemicals SAP Pharmaceuticals SAP Retail SAP Media SAP Banking SAP Aerospace & Defense SAP Mill Products 29 Introduction to Auditing SAP ERP IIA_dsa_Section01.ppt Section 1: SAP Overview SAP Business Processes • Over 1,000 business processes defined by SAP ─ Highly flexible ─ Customized to fit each company ─ Company choice which business processes to implement • Every SAP installation is different ─ It is important to have clear understanding of business processes that are affected by the SAP implementation. ─ These business processes should be mapped to the corresponding SAP modules that are implemented. 30 Introduction to Auditing SAP ERP IIA_dsa_Section01.ppt Section 1: SAP Overview Optimization of Business Processes Order Handling Product Development Customer Service Financial Reporting Personnel Research Marketing/ Production Services Accounting & Sales Development Breakdown by Functions 31 Introduction to Auditing SAP ERP IIA_dsa_Section01.ppt Section 1: SAP Overview Example Business Process – Sales Product Costing Planning MPS Sales Order MRP run Planned Order Production Order Goods Issue Goods Receipt Profitability Analysis Delivery Billing Customer Payment Goods Issue Raw Finished Purchase Requisition Goods Receipt Modules n MM Purchase Order Invoice Receipt Vendor Payment n PP n SD n FI/CO How does this relate to the business process view and the account balances that would need to be audited? 32 Introduction to Auditing SAP ERP IIA_dsa_Section01.ppt Section 1: SAP Overview Flexibility SAP ERP customizing consists of procedures, methods and tools for implementing and adapting the SAP ERP System • Time-consuming • Standard tools • Custom configuration • No programming 33 Introduction to Auditing SAP ERP IIA_dsa_Section01.ppt Section 1: SAP Overview Basis Component • Technical core of SAP ERP • Fully integrated into the application • Features include: ─ ABAP Development Workbench ─ Computer Center Management System ─ Authorization Concept ─ Transport System ─ Database Administration 34 Introduction to Auditing SAP ERP IIA_dsa_Section01.ppt Section 1: SAP Overview Current Technology Environment • As of 4.6c, Basis Component is being replaced by Web Application Server (WAS) • Optional with 4.6c, required for 4.7 (Enterprise) • WAS manages all traditional Basis functions • NetWeaver may also be used with Enterprise ─ Manage integration and communication of multiple systems o Could be SAP solutions or other • SAP ERP is based on SAP Netweaver technology platform. 35 Introduction to Auditing SAP ERP IIA_dsa_Section01.ppt Section 1: SAP Overview Client/Server Architecture • SAP ERP is designed for a client-server environment ─ Distribution of systems and software processes running on multiple computer systems with specialized functions ─ Contrasts with traditional mainframe system in which the central computer performs all processing • Structured with three tiers (or layers) that segregate: ─ The user interface (Presentation Layer) ─ The application processing (Application Layer) ─ The database support (Database Layer) 36 Introduction to Auditing SAP ERP IIA_dsa_Section01.ppt Section 1: SAP Overview Presentation Layer • The presentation layer is the portion of SAP ERP with which users interact directly. ─ Displays information to users ─ Transfers data entered by users to the application server layer • It consists of the SAP ERP Graphical User Interface programs (SAP-GUI). ─ Supported by PC, Mac or workstations ─ Provides the user with the screens (i.e., menus, toolbars, and function keys) required to process SAP ERP transactions ─ Provides the same “look and feel” to users, regardless of the platform 37 Introduction to Auditing SAP ERP IIA_dsa_Section01.ppt Section 1: SAP Overview Application Layer • Application servers that run programs ─ Programs manipulate data provided by the user and the database. • Associated servers that support applications ─ These run background programs, make database changes, format data for printing, route messages between servers, manage locking for SAP objects, etc. • Server Distribution ─ The processing workload is spread among multiple servers (load balancing). ─ Some shared, central directories are required, such as start-up and system profiles, and the central system log. 38 Introduction to Auditing SAP ERP IIA_dsa_Section01.ppt Section 1: SAP Overview Database Layer • This is the relational database system used by all application servers. • It stores the SAP application programs and data. • The SAP technology “overlays” the database vendor’s database management functions. • Current SAP architecture is oriented towards a central database server. 39 Introduction to Auditing SAP ERP IIA_dsa_Section01.ppt Section 1: SAP Overview Distributed Architecture database informatio n end user application server database server PRESENTATION LAYER APPLICATION LAYER DATABASE LAYER 40 Introduction to Auditing SAP ERP IIA_dsa_Section01.ppt Section 1: SAP Overview The SAP ERP Technology Environment Hardware Operating Systems Databases Dialog SAP--GUI SAP UNIX Systems Bull IBM Digital SNI HP SUN AIX HP-UX Digital UNIX AT&T Bull/Zenith Compaq LINUX SOLARIS AS400 ORACLE 8i/9i/10g Informix Online ADABAS D DB2/6000* (for AIX only) Data General Digital HP (Intel) IBM (Intel) Sequent SNI ... Windows NT/2000 ORACLE 8i/9i/10g ADABAS D MS SQL Server Windows 3x, Windows 9x, Windows XP Presentation Manager, Macintosh Languages ABAP/4, C, C+ +, Java 41 Introduction to Auditing SAP ERP IIA_dsa_Section01.ppt Section 1: SAP Overview Audit Cycles • • • • • • • • Revenue Expenditure Inventory Management Fixed Assets Treasury Payroll and Personnel Business processes Or audits specified by your organization, e.g., crossfunctional and operational What types of audits are generally performed in your organization? How can these be mapped to SAP? 42 Introduction to Auditing SAP ERP IIA_dsa_Section01.ppt Section 1: SAP Overview Audit Challenges • SAP Modules ─ Four main functional categories ─ Multitude of modules ─ Multitude of sub-modules • SAP business processes ─ 1000+ processes • Many audit cycles Auditors must determine how all these components interrelate to audit effectively. 43 Introduction to Auditing SAP ERP IIA_dsa_Section01.ppt Section 1: SAP Overview Business/SAP/Audit Process Views Application Level Client Environment Business Model Level - SAP Processes Process Model Implementation Level - SAP Software Model SAP Modules Audit Cycles 44 Organizations’ Audit - Business Cycles Introduction to Auditing SAP ERP IIA_dsa_Section01.ppt Section 1: SAP Overview Relationship of Audit to SAP ─ SAP module functional categories, modules, and components ─ Business cycles audits and SAP modules Audit SAP Processes (Revenue) Account Balances SAP Components (A/R) (Financial Accounting) 45 Introduction to Auditing SAP ERP SAP Modules IIA_dsa_Section01.ppt Section 1: SAP Overview Linking Audit Cycles to SAP Modules Audit Business Cycles SAP Module Functional Category Treasury Fixed Assets Expenditure Revenue Financials Operations Inventory Management Human Capital Payroll and Personnel Corporate Services Basis Component/Web Application Server xApps Industry Solutions 46 NetWeaver Introduction to Auditing SAP ERP IIA_dsa_Section01.ppt Section 1: SAP Overview Quick Quiz • What does ERP stand for? • What core elements constitute the SAP Business Suite? • What operating system must be used to run SAP? • What is the difference between Web Application Server and NetWeaver? 47 Introduction to Auditing SAP ERP IIA_dsa_Section01.ppt Section 1: SAP Overview Section Summary • ERP stands for Enterprise Resource Planning. • The SAP Business Suite is composed of: ─ CRM, ERP, PLM, SRM, and SCM • SAP solutions are based on open technology, allowing them to run on a variety of platforms. ─ The Basis Component (Web Application Server) allows the SAP solutions to run on multiple platforms. • The Web Application Server controls all key processing and development for mySAP Business Suite solutions; NetWeaver provides integration across solutions. 48 Introduction to Auditing SAP ERP