Enterprise Systems

Controlling (CO)

-AKA Controlling and Profitability Analysis (CO/PA) -Handles internal accounting including: -cost center accounting -profitability analysis for sales -activity-based accounting -budgeting

Materials Management (MM)

-Acquisition of goods from vendors and management while in stock -purchase order preparation -receiving -recording invoice -interacts with -sales and distribution module (SD) - to process customer orders -Financial accounting module (FI) - the post the receipt of the goods and the vendor invoice -Controlling module (CO) - for the analysis of the costs associated with the purchase

Transaction Data

-Data generated during execution of process steps -requires (organizational data, master data, situational data) -Example: Sales order creation -Organizational elements: Client, Company Code, Sales Area -Master Data: Customer, Material -Situational data: Date, Time, Person

Organizational Data

-Defines the organizational structure of the enterprise -includes definitions of: -companies (subsidiaries, etc), legal entities -divisions based on, product or geographical hierarchy -sales organizations -purchasing organizations -physical facilities: plants, warehouses, distribution centers, storage areas -HR organization (functional areas, reporting relationship) -Rarely changes

Master Data

-Long-term data that typically represent entities associated with various processes (customer, vendor, material) -Typically include -general data (common across company codes) -financial data (CC specific) -Area-specific data (Sales, Purchasing, Plant) -Long term data that represent data sets mostly -Examples (Sales and Distribution) -Customer Master -Material Master -Condition master

Modular Implementation

-Not all companies that implement an ERP system use all of the modules -Company's level of data integration is highest when it uses one vendor to supply all of its modules -Configuration options allow the company to customize the modules it has chosen to fit the company's needs -the most expensive system a company can purchase is an ERP system because it provides the most functionality

SAP ERP Modules

-Production Planning (PP) -Materials Management (MM) -Sales and Distribution (SD) -Plant Maintenance (PM) -Project Systems (PS) -Quality Management (QM) -Financial Accounting (FI) -Management Accounting/Controlling (CO) -Human Resources (HR) -Business Intelligence (BI) Most companies start with Financial Accounting because this is the system every company needs

Material Types

-Raw Materials -Semi-finished goods -Finished goods -trading goods

Sales and Distribution (SD)

-Record sales orders -Shipping -Billing -Interacts with: -Materials management module (MM) - to check the availability of inventory and to record the issue of the goods -financial accounting module (FI) - the post the sale -controlling module (CO) - for profitability analysis related to the sale

Human Capital Management (HCM)

-Recruitment, management and administration of personnel, talent acquisition -Payroll processing -training and travel -benefits -work shifts -reports, performance workflow -e-learning, e-recruitment

Application suite

-all the systems from the same vendor, everything is prepackaged and pre-integrated. -it is more expensive, and you give a lot of negotiating power to the vendor from where you purchase the application

Best of breed

-custom packaged applications from several vendors -isolated to one process -it is the best, and you have more power with the vendor -you have to integrate it yourself, it is expensive, and have to re-enter the information, and upgrade individually

Stage 2: Client-Server Architecture

-desktop application, more scalable -It has three layers (presentation, application, data) -presentation - what the user sees -application - server side -data - these servers connect to the database server

Stage 1: Stand-alone Mainframe Systems

-doesn't connect to networks -limited scalability - limited number of users can use it at a time and very expensive -the monitor did not have any processing capabilities -difficult to change the data structure (custom designed)

ERP systems

-focuses primarily on internal operations of an organization -integrate functional and cross-functional business processes -supports multiple languages and currencies because of globalization of businesses

Stage 3: Service-Oriented Architecture (SOA)

-integrate several client-server applications -enables companies to build composite applications on top of their existing three-tier client-server applications without changing the existing applications -this gives companies an entirely new level of flexibility for an extremely low cost

Financial Accounting (FI)

-plays a central role in the SAP system -incorporates data from other modules into general ledger accounts and financial statements -includes accounts receivable and accounts payable functions to record and mange that data directly and to compete events begun in the SD and MM modules

Finished goods

-produced using other materials -sold to customers -material master data about these materials are used in production and fulfillment

Semi-finished goods

-produced using other materials -used in the production of other materials -neither purchased nor sold -material master data about these materials are used in production

trading goods

-purchased and resold without additional processing -material master data about these materials are used in procurement and fulfillmentT

Raw Materials

-purchased, not sold, used in production -no sales-related view -Material master data about these materials are used in procurement and production

Organizational Data in SAP

Client -highest organization level - represents the enterprise; comprised of many companies Company Code -central organizational element in financial accounting (books are maintained at this level for legal reporting) -identifies legal entities in an enterprise (Client) -legally independent from other companies in the enterprise -client can have multiple company codes, company code must belong to only one client Plant -represents factory, warehouse, office, distribution center, etc.

SAP Modules

Collections of logically related transactions within identifiable business -MM (Buy) - Material Management -PP (Make) - Production Planning -SD (Sell) - Sales and Distribution -FI and CO (Track) - Financial Accounting and Management Accounting/Controlling -HCM (People) - Human Capital Management -WM (Store) - Warehouse Management -EAM (Maintain) - -CS (Service) - Customer Service

SAP Core Applications

Logistics -sales and distribution -materials management -production planning -plant maintenance -quality management Finance -Financial Accounting -Managerial Accounting -Asset Management -Treasury Human Capital Management -Personnel Management -Benefits -Payroll

Material Master Data

Most commonly used master data - used in numerous processes -procurement -fulfillment -production -material planning -asset management -project systems -lifecycle data management

Enterprise Systems -Three stages of evolution

Stage 1: Stand-alone Mainframe Systems Stage 2: Client-Server Architecture Stage 3: Service-Oriented Architecture (SOA)

Types of Enterprise Systems

The ES Application Suite -Enterprise Resource Planning (ERP) -Supply Chain Management (SCM) -Supplier Relationship Management (SRM) Other classifications -best of breed vs. application suite - different ways to acquire systems -on-site vs. software as a service (SaaS)

Data in an Enterprise System

Transactional data - changes the most (purchase orders, dates) Master data - data about customers, employees, vendors, products Organizational - doesn't change as frequently (warehouses, sales organizations, etc.) -entered first in the ERP -associated with the process steps

Service-Oriented Architecture

Web services -used to expand ES (and other system) functionality -Standard interface - input and output Composite applications -connects multiple applications via Web services -build new capabilities without changing the underlying applications