INTRODUCTION TO SAP

SAP AG (ISIN: DE0007164600, FWB: SAP,

NYSE: SAP) is the largest European software enterprise and
the third largest in the world, with headquarters in Walldorf,
Germany.

History
SAP was founded in 1972 as Systemanalyse und Programmentwicklung by five former IBM
engineers in Mannheim, Baden-Wrttemberg (Dietmar Hopp, Hans-Werner Hector, Hasso
Plattner, Klaus Tschira, and Claus Wellenreuther). [1] The acronym was later changed to stand
for Systeme, Anwendungen und Produkte in der Datenverarbeitung ("Systems, Applications
and Products in Data Processing").

Products
SAP's products focus on Enterprise Resource Planning (ERP), which it helped to pioneer.
The company's main product is SAP ERP. The name of its predecessor, SAP R/3 gives a clue
to its functionality: the "R" stands for realtime, the number 3 relates to a 3 tier client-server
architecture (database layer-application layer-presentation layer) 3-tier architecture: database,
application server and client (SAPgui). R/2, which ran on a Mainframe architecture, was the
first SAP version.

Other major product offerings include

Advanced Planner and Optimizer (APO),
Business Information Warehouse (BW),
Customer Relationship Management (CRM),
Supply Chain Management (SCM), Supplier
Relationship Management (SRM), Human
Resource Management Systems (HRMS),
Product Lifecycle Management (PLM),
Exchange Infrastructure (XI), Enterprise
Portal (EP) and SAP Knowledge Warehouse
(KW).

The APO name has been retired and rolled into SCM. The BW name (Business Warehousing)
has now been rolled into the SAP NetWeaver BI (Business Intelligence) suite and functions as
the reporting module.
The company also offers a new technology platform, named SAP NetWeaver which replaces
SAP Business Connector for Integration/middleware capabilities [20] and offers a systematic
approach to Enterprise SOA solutions with a collection of products. While its original
products are typically used by Fortune 500 companies, SAP is now also actively targeting
small and medium sized enterprises (SME) with its SAP Business One and SAP All-in-One.
On September 19th, 2007 SAP announced a new product named SAP Business ByDesign
complementing its portfolio for SME. SAP Business ByDesign was called A1S before.

What is SAP?
SAP is the leading Enterprise Information and Management Package worldwide. Use of this
package makes it possible to track and manage, in real-time, sales, production, finance
accounting and human resources in an enterprise.
What Makes SAP different ?

Traditional computer information systems used by many businesses today have been
developed to accomplish some specific tasks and provide reports and analysis of events that
have already taken place. Examples are accounting general ledger systems. Occasionally,
some systems operate in a "real-time" mode that is, have up to date information in them and
can be used to actually control events. A typical company has many separate systems to
manage different proces ses like production, sales and accounting. Each of these systems has
its own databases and seldom passes information to other systems in a timely manner.

SAP takes a different approach. There is only one information system in an enterprise, SAP.
All applications access common data. Real events in the business initiate transactions.
Accounting is done automatically by events in sales and production. Sales can see when
products can be delivered. Production schedules are driven by sales. The whole system is
designed to be real-time and not historical.

SAP structure embodies what are considered the "best business practices". A company
implementing SAP adapts it operations to it to achieve its efficiencies and power.

The process of adapting procedures to the SAP model involves "Business Process Re-
engineering" which is a logical analysis of the events and relationships that exist in an
enterprise's operations.

SAP Application Modules

SAP has several layers. The Basis System is the heart of the data operations and should be not
evident to higher level or managerial users. Other customizing and implementation tools exist
also. The heart of the system from a manager's viewpoint are the application modules. These
modules may not all be implemented in a typical company but they are all related and are
listed below:

FI Fi nancial Accounting--designed for automated management and external reporting

of general ledger, accounts receivable, accounts payable and other sub-ledger
accounts with a user defined chart of accounts. As entries are made relating to sales
production and payments journal entries are automatically posted. This connection
means that the "books" are designed to reflect the real situation.
CO Controlling--represents the company's flow of cost and revenue . It is a
management instrument for organizational decisions. It too is automatically updated
as events occur.
AM Asset Management--designed to manage and supervise individual aspects of
fixed assets including purchase and sale of assets, depreciation and investment
management.
PS Project System--is designed to support the planning, control and monitoring of
long-term, highly complex projects with defined goals.
WF Workflow--links the integrated SAP application modules with cross-application
technologies, tools and services
IS Industry Solutions--combine the SAP application modules and additional industry-
specific functionality. Special techniques have been developed for industries such as
banking, oil and gas, pharmaceuticals, etc
HR Human Resources--is a complete integrated system for supporting the planning
and control of personnel activities.
PM Plant Ma intenance--In a complex manufacturing process maintenance means
more than sweeping the floors. Equipment must be services and rebuilt. These tasks
affect the production plans.
 MM Materials Management--supports the procurement and inventory functions
occurring in day-to-day business operations such as purchasing, inventory
management, reorder point processing, etc.
QM Quality Management--is a quality control and information system supporting qu
ality planning, inspection, and control for manufacturing and procurement.
PP Production Planning--is used to plan and control the manufacturing activities of a
company. This module includes; bills of material, routings, work centers, sales and
operations planning, master production scheduling, material requirements planning,
shop floor control, production orders, product costing, etc.
SD Sales and Distribution--helps to optimize all the tasks and activities carried out in
sales, delivery and billing. Key elements are; pre-sales support, inquiry processing,
quotation processing, sales order processing, delivery processing, billing and sales
information system.

Each of these Modules may have sub-modules designed for specific tasks as detailed below.

System-Wide Features

SAP uses certain system wide features that should be unde rstood at the outset. These are used
to logically, safely and flexibly organize the data in a business enterprise.

Customizing-- is the configuring of the system to represent your organization's legal

structure, reporting requirements and business processes. Internal reporting is a
managerial tool in the daily operations. External reporting is required by
governmental units controlling the legal structure of the corporation, such as, the IRS
state taxing authorities, SEC etc.
Organizational Elements
o Financial--
client is a legal and organizationally independent unit at the highest
level in SAP
company is an independent legal entity within a client
business areas are used to produce profit and loss statements and
balanced sheets across marketing lines
 < /LI>

o Materials Management
Purchasing units
Plants
o Sales and Distribution
Sales Organization
Distribution channel
Division
Master Data is records that remain in the database over an extended period of time.
Exam ples:
o Customer Master
o Vendor Master
o Material master
o Account Master

This structure eliminates redundant data and is shared by all SAP Modules. It is a
critical aspect of the robustness of the system.

Employee Self Service--your employees have access to the own HR records over the
Internet.
Classification is the assignment of object s to a class. Each class has standard
characteristics.
Matchcodes are query tools used to find specific information using search methods.
Security is administered for objects, profiles and authorizations. Users are only
authorized to see or change the parts of the system required by their job
responsibilities.

Business Processes and SAP Functionality

In order to u nderstand a system like SAP a thorough understanding of the events and
relationships that take place in a business is required. It is not enough to just realize the Sales,
Production, Finance and Accounting have jobs to do in a business. The exact details of each
action, the timing of that action and its interrelationships with every other process must be
understood. In many large operations there may be no person that has a complete grasp of the
situation. Before an operation can be automated or computerized a thorough study of the
business must be undertaken. This task is called Business Process Engineering
Sequential Walk Through

Sales
o Pre-sales activity--planning and availability support for the sales personnel
o Sales Order--The actual entry of the sales order into the system done by the
salesperson at the point of sales perhaps using a PC and Internet connections.
o Determining where the most efficient source of the ordered product is in
inventory and shipping it.
o Delivery
o Customer Billing
o Customer Payment
Production
o Sales and Operations Planning SOP where the sales forecasts are used in a
production planning model to check feasibility.
o Master Production Scheduling MPS--The actual pla n for the whole
production process
o Material Requirements Planning MRP--Where the production plan is actually
converted into raw materials input requirements.
o Planned Order--When materials are available and capacity exists this plan is
created and then converted into a
o Production Order.
o Shop Floor Control where the actual production takes place and is registered
into the system as finished goods.
o Purchasing
Requisition--Once the Production manager plans to manufacture
something a requisition for the raw materials required but not on
hand must be prepared.
Vendor Selection--made by the purchasing department
Purchase order sent
goods receipt increasing inventory
Invoice verification as it is received from vendor
Payment to vendor.

< LI>Finance and Accounting

Sales events must be captured at the proper time into the ledger
system
Inventory must be adjusted to match goods shipped
Inventory must be adjusted to match raw materials received
Inventory must be adjusted to move value from raw materials to work
in process
Inventory must be adjusted to increase finished goods when they are
produced
Accounts Pa yable must be set up for purchases
Accounts Receivable must reflect goods billed but not yet paid for
 Business Process Engineering must not only identify all these steps but must also find
the most efficient way to minimize redundant actions. For example, when sales are
made, inventory and manufacturing plans should be automatically updated. When
manufacturing plans are updated raw materials should be automatically orde red from
vendors. When finished goods are shipped customers should be automatically billed
at the same instant. Real situations are far more complex than the simple explanation
above.

Quick Tour of the SAP User Interface

The SAP R/3 system presents a Windows interface with several of the familiar
Windows functions for screen manipulation. The apparent simplicity of the interf ace
hides the power of the menus residing within the menubar at the top of the screen.
The initial screen shows a menubar with the following selections. The first level sub
menus are listed below to give you an idea of where to start:
o Office
Workplace
Telephone Integration
Appointment Calendar
Room Reservations
Start Workflow
Business Documents

< /LI>

o Logistics
Materials Management
 Sales/distribution
Logistics Execution
Production
Production-process
Plant Maintenance
Customer Service
Quality Management
Logis. controlling
Project Management
Environment Health & Safety
Central Functions
o Accountin g
Financial Accounting
Treasury
Controlling
Enterprise Control
Investmt Mgt.
Project management
Real Estate
o Human Resources
Managers Desktop
Personnel admin.
Time management
Payroll
Training and Event Management
Organizational Management
Travel
Information system
o Information Systems
Executive Information Systems
Logistics
Accounting
Human Resources
Project System
Ad Hoc Reports
General Report System
o Tools
ABAP/4 Workbench
Accelerated SAP
Administration
ALE
Business Communication
Business Documents
Business Framework
Business Workflow
CCMS
Web Development
SAPScript
Hypertext
Find

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