Sap PPT 1

An overview of the world’s leading ERP system
History of SAP
Systems Applications and Products in Data Processing
 German : Systeme, Anwendungen, Produkte in der Datenverarbeitung
 Founded in 1972 by Wellenreuther, Hopp, Hector, Plattner and Tschira

 Re named in 1977
 Before 1977 : Systems Analysis and Program Development (German :
Systemanalyse und Programmentwicklung)
 SAP is both the name of the Company as well as their ERP Product
 SAP system comprises of a number of fully integrated modules, which

covers virtually every aspect of the business
 Three systems developed : R/1, R/2, R/3
 Trades on NYSE: SAP

What is SAP? (the software)
Enterprise Resource Planning software
Quote-to-Cash (Revenue cycle)
Req-to-Check (Expenditure cycle)
Plan-to-Produce (MRP)
Finance and Controlling
Massive accounting package
Tool kit
Series of Modules
Bought and customized to your business
Who Uses SAP?
“the World’s best run companies….”
80% of Fortune 500
 Coke
 Conagra
 Caterpillar
 Exxon Mobile (over 60 instances)
 Chevron
 Marathon Oil
 Cooper Industries
 Nike
 General Electric
 Baker Hughes
 Enron….?
SAP – ERP and Data Flow
Manufacturing most popular
Growth out of MRP R/3

MM SD PP
9 basic modules
FI PLM CO
Interconnected and QM WM HR
independent
Data types
Master data
Vendor master
Customer master
Material master
Transactional data
Sales orders
Payments
Meta data
Financial and Logistics Reporting
Cost Controlling
QtC Quote Sales Order

Inventory
Delivery Billing Customer
Sourcing Payment
Quote to
Cash
Sales & Material

PtP Operations
Demand
Requirements Planned Order
Production Production
Planning Planning Order Control
Planning
Plan to
Produce
RtC Purchase Vendor Purchase

Goods Receipt
Invoice Vendor
Requisition Selection Order Verification Payment
Requisition to Check
Business Information Warehouse

SAP Modules
SD – Sales and FI – Financial Accounting
Distribution
MM – Materials SD FI CO – Controlling
Management
PP – Production Planning MM CO AM – Asset Management
PP AM
SAP R/3
QM HR
QM – Quality HR – Human Resources
Management
PM WF
PM – Plant Maintenance WF – Workflow
WM – Warehouse
WM PS
PS – Project System
Management
Other SAP Options
Other Modules, Components, and Grids
CRM
BI/BW
Treasury
Real Estate
Energy products
SAP Business one
AFS – Apparel Footwear Solution
Industry specific module
Governance, Risk and Compliance
Management Decisions
Data driven analysis
What are important pieces of information for a
material?
SAP material master
 20 different views
 Average 20 fields per view
 Several views change by plant
Real time accounting information

Accounts Receivable
Accounts Payable
Management Decisions
Profitability
What is profitable?
Who is profitable?
Where are we profitable?
Dude, where’s my cash?
Inventory – which materials
Accounts Receivable – which customers
Accounts Payable – which vendors
Others – prepaids, accrued payroll, other expenses
Management Decisions - No More
No longer decisions!
When to pay
What to buy
When to buy
What to make
When to make it
What to count (inventory stock take)
Who to hire (always MBA students)
Management Decision Changes
Removal of rote/routine decisions
Changes the types of decisions
From how much of product X
To should we sell product X
Flattens the organization
Creates new opportunities
How many analysts does it take…
Costs of Implementing SAP
What does it cost?
Hardware
Software
Bioware
Cultural changes
Different organization
Change management
Process changes
Where to start?
Cost of SAP deployment
SAP Implementation Costs
Adult diaper time!
$50-100 million, typical
By experience of companies
One company, $50 million for current system
Previous company, >$250 million
 Everything in-house
 Highly customized
Others
Hershey failed(Trick or Treat!)
Enron went in smooth and easy
SAP Hardware Costs
Do you have an ERP ready data center? – not in $50 MM
Fire detection and prevention
Above 500 year flood level?
In hurricane, earthquake, or tornado zone?
Do you have a hot or cold backup site?
$5-10 million depending on size
Multi-mirrored
Real-time backup
Application, database, load balance
Do you need new PC’s?
Software Costs
$5-15 million up front
SAP licenses (various modules)
Oracle or other database licenses
BW or other analytics
Administration tools
Backup and recovery software (real time?)
Annual licensing/maintenance fees 20%
Hint – select the right state and download
Costs of SAP Expertise
$10-25 million on hardware and software
$40-75 million on bioware

SAP eliminates $10/hr data entry clerks
Now you need $100,000+/yr Basis administrators
Consultants can be expensive

You want the expensive ones
Know business and technical
SAP Consultants
Lots of consultants
Few have the skills
Find, a finder!
Lots of billing rates
SAP Platinum consultant - $300/hr
Quality, independent - $150/hr
Someone who read an SAP book – not worth the time
Good consultants – know the business!
Technical aptitude
Communication skills
Cultural Changes
Immediate fear
Job losses
Job changes
Management oversight
Dashboards
Drilldown
Allocation of costs
Data is a valuable asset
Centralized/Shared processes and resources
Process Changes
What changes?
Nothing
Everything
Optimize your process first!
Streamline
Leverage technology
Only one big change
Document, document, document
Communicate, communicate, communicate
SAP Careers
SAP Business Analyst
Liaison between the business and the techies
Good communication skills
Understanding of local business and industry practices
Technical track
Functional track
Project management
Best – Technofunctional that can manage projects
IT Director
Consultant
Benefits of mySAP ERP
SAP ERP delivers a comprehensive set of integrated, cross-
functional business processes. With SAP ERP, we can gain the
following benefits:
Improve alignment of strategies and operations
Improve productivity and insight
Reduce costs through increased flexibility
Support changing industry requirements
Reduce risk
Improve financial management and corporate governance
Optimize IT spending
Gain higher ROI faster
Retain top performers
Provide immediate access to enterprise information
Is it Worth It?
YES!!!
If done correctly…
Eliminate non-value added steps
Improve management information
Significant soft cost saving
Focus resources

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An overview of the world’s leading ERP system

 Founded in 1972 by Wellenreuther, Hopp, Hector, Plattner and Tschira

 SAP system comprises of a number of fully integrated modules, which

 Three systems developed : R/1, R/2, R/3

 Trades on NYSE: SAP

Growth out of MRP R/3

QtC Quote Sales Order

Sales & Material

RtC Purchase Vendor Purchase

Business Information Warehouse

 Several views change by plant

Real time accounting information

$40-75 million on bioware

Consultants can be expensive

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