Business Information System using SAP R/3 Week 02 ERP and SAP

Topic Topic : Week 2 Architecture Enterprise System Overview SOA SAP R/3 Business Intelligence SAP All products

Learning Objective After completing this session you will be able to: Discuss the evolution and key business benefi ts of enterprise systems. Explain the architecture of a typical ES. Explain the role of enterprise systems in supporting business processes. Differentiate the different categories of data within SAP® ERP. Identify and analyze the major options for reporting Describe the different types of enterprise systems (ES) and their roles in managing business processes.

Architecture of Enterprise System The architecture of an enterprise system refers to the technical structure of the software, the ways that users interact with the software, and the ways the software is physically managed on computer hardware. Most modern ES have either a three-tier client-server architecture or a service-oriented architecture. There are many different ways to deploy ES in these two architectures.

Architecture of Enterprise System The shift to the three-tier client-server architecture dramatically reduced the costs of acquiring, implementing, and using an ES while significantly increasing the scalability of the systems. Scalability refers to the ability of the hardware and software to support a greater number of users easily over time, USER PCs Application Server Database

Service Oriented Architecture What is SOA? Think about a Restaurant Restaurant provides food: a service After the order is taken, food is produced, served, …: service may consist of other services The menu indicates the service provided: a service description The order is written down, or yelled at, the cook: services communicate through messages SOA : Service Oriented Architecture: SOA is an IT architecture consisting of loosely coupled modular services to support both business and IT requirements.

What is SOA SOA – A Definition By using SOA to integrate and expose the business processes and data inside an ES, companies can now create new composite applications quickly and inexpensively. In essence, SOA enables companies to build composite applications on top of their existing three-tier client-server applications without changing the underlying applications SOA – A Definition An IT architecture composed of software that has been exposed as “Services” – i.e. invoked on demand using a standard communication protocol. “Web Services” – software available as a “service” using Internet protocols. One software application talking to another using a standards-based (i.e. non-proprietary) language over a standards-based communication protocol. Universal “Dial Tone” between software applications An IT architecture that enables “loose coupling” of applications Source: H. Taylor, “Service-Oriented Architecture (SOA) 101 ‘What’s Hype, What’s Real?’“, Juniper Networks, Inc.,2007.

ERP Market ERP market dominated by SAP, Oracle, Microsoft worth USD 40 billion SAP is the biggest and most popular Founded in 1972 by five ex-IBM employees, by 2005, there were 100,600 installations worldwide, with over 25 industry-specific modules in the SAP portfolio. SAP is the world's largest independent software vendor Founded in 1977, Oracle were first to market a reliable relational database The second largest software company after Microsoft Since the 1990s, they have marketed Financial, HR and other solutions and through a series of acquisitions, including PeopleSoft and Siebel is now the second largest ERP vendor after SAP. Microsoft, also started in 1977 dominate the proprietary software market on the desktop and small to medium servers. Microsoft were a big Siebel software user but since Oracle acquired Siebel, they have worked hard to build an ERP product suite of their own and are now probably in third place in ERP

S A P ystem pplication and roduct in Data Processing What is SAP Hasso Plattner Hasso Plattner is CEO, co-chairman, and co-founder of SAP AG. He has served as co-chairman since 1997. In 1972, he founded SAP together with four IBM colleagues. An electrical engineer, he is responsible for strategy, marketing, corporate communications and development of SAP solutions in the areas of discrete manufacturing and service industries. He is also CEO of SAPMarkets. S A P ystem pplication and roduct in Data Processing

What is SAP SAP was founded in 1972 as System analyse und Programment wicklungi n Mannheim,Baden- Württemberg by following five former IBM engineers: 1.Dietmar Hopp 2.Hans Werner Hector 3.Hasso Plattner 4.KlausTschira 5.Claus Wellenreuther

SAP Evolution

The most Complete & Integrated ERP Solutions in the Market What is SAP The most Complete & Integrated ERP Solutions in the Market R/3 Client / Server ABAP/4 FI Financial Accounting CO Controlling PS Project System WF Workflow IS Industry Solutions MM Materials Management HR Human Resources SD Sales & Distribution PP Production Planning QM Quality PM Plant Maintenance LES Logistic Execution IM Investment EC Enterprise Open System Integration Flexibility Designed for All Types of Business Worldwide Usage

SAP NETWEAVER The core capabilities of SAP NetWeaver are the integration of people, information, and process In people integration, it simply means that it enables you to bring people together and help them work more efficiently Information integration means you can bring together information from a variety of locations and have it make sense in the context of what your folks do everyday Process integration means coordinating the flow of work across departments, divisions, and between companies SAP Enterprise Portal: helps create software that brings together all the data and software tools that a person needs to do her job in one consistent user interface SAP Mobile Infrastructure: universal translator for mobile devices SAP Business Intelligence: provides tool for information integration, so what your people see is consistent and accurate SAP Master Data Management: is a system for harmonizing information that is distributed across a wide variety of applications SAP Exchange Infrastructure: Integrates processes and help applications talk to one another

SAP Platform Hardware Operating Systems Databases Dialog SAP-GUI UNIX Systems Data General HP (Intel) IBM (Intel) Hardware AT&T Bull/Zenith Compaq Sequent SNI . . . Bull Digital HP IBM SNI SUN IBM AS/400 Operating Systems AIX Digital UNIX HP-UX SINIX SOLARS Windows NT, Windows Server OS/400 DB2/400 ADABAS D DB2 for AIX INFORMIX-OnLine 7 ORACLE 7 MS SQL ORACLE DB2 SYBASE Databases Dialog SAP-GUI Windows 3.11, Windows 95, Windows NT, OS/2-Warp Windows 3.11, Windows 95, Windows NT, OSF/Motif, OS/2-Warp, Macintosh , Linux, Windows 7 / 8, Languages ABAP/4, C, C+ +, Java and Object Oriented

SAP Users in Indonesia (partial data) MANUFACTURING • Asahimas Flat Glass * • Asian Agri Abadi * • Astra Mobil (ASMO)* • APRIL* • Astra Honda Motor * • Toyota Astra Motor * • Berau Coal* • Belfoods * • Bentoel * • Combiphar * • Conoco Phillips * • Charoen Phokphand* • Domusindo Perdana* • DKSH Tunggal* • Dynaplast * • ECCO Indonesia* • EPSON • Fuchs Oil * • Gaya Motors * • GT Tires * • GT Petrochem * • Jakarana Tama * • KPN • Lion Wings * • Multi Bintang Indonesia • Nestle • PecTech* • Perfetti Van Melle • Procter and Gamble • Sari Husada* • Sayap Mas Utama * • Surya Toto * • Indofood • Unilever • Wings Surya * DISTRIBUTION • APL * • Astra International * • Bentoel * • Dos Ni Roha * • DKSH Tunggal* • Intraco Penta * • Kokoh Inti Arebama* • Lee Cooper * • Sayap Mas Utama * • Tigaraksa Satria * • Wicaksana Overseas * BANKING & FINANCE • Bank Rakyat Indonesia * • Bank Internasional Indonesia • Bank Niaga * • Bhakti Securities * • Ciptadana * • Pentasena * • Sinar Mas * • Trimegah Securities * • 12 other securities companies* TELECOMMUNICATION & UTILITIES • Excelcomindo * • Bakrie Telecom * • Telkom Indonesia * • PLN * • Thames Pam Jaya * • PT Wireless Indonesia RETAIL • Club Store * • Valu$ * • Sri Ratu * • Mitra 10 * • Tops Swalayan • Medicine Shoppe * • M-Studio * • Clairmont Bakery * • Mestronics * • Mitra Adi Perkasa • Sogo • Centro Dept Store * • Yogya *

SAP R/3 : Financials Enterprise Management Capital Budgeting EC EIS Logistics Human Resource Management EC Enterprise Management EIS Consolidation Budgeting Profit Centres TR FI CO Cash Management Treasury Management Market Risk Management Funds Management General Ledger Legal Consolidation Accounts Receivable Accounts Payable Asset Accounting Budgeting Overhead Cost Controlling Activity-Based Costing Product Costing Profitability Analysis IM Capital Budgeting Preparation Budget release Execution

FI CO SAP R/3 : Financials Application Module: Financial Accounting (FI) The FI application module is designed for automated management of accounts receivable, accounts payable, and general ledger accounts with a user- defined chart of accounts Accounts Receivable w Special Purpose Ledger Accounts Payable w Consolidation General Ledger Accounting w Project Systems (PS) Closing and Reporting w Asset Accounting (AM) Application Module: Controlling (CO) The objective of the integrated CO application module is to represent the company’s flow of cost and revenue Overhead Cost Management w Unit Costing Cost Center Planning w Internal Orders Accounting, Reporting w Activity Based Costing Cost Object Controlling w Profitability Analysis CO

SAP R/3 : Logistics Overview Basic data SD Sales planning Project system Customer order processing Profit planning Customers Vendors Material Bill of material, CAD Work plan, plant maintenance plan, inspection plan, CAP Work center Equipment Classification Network Projects Customer requirements SOP Planned requirements Forecasts PP QM Demand management Inspection lot Inspection order Materials planning Rough-cut capacity planning MM Planned orders Direct requisition Purchasing Opening period Inventory management Goods receipt Material valuation Warehouse management Order: - Creation - Release - Confirmation WORKFLOW Word processing MAIL Communication TELEFAX, EDI, Internet Invoice verification Shop floor control Capacity leveling PM Repair Maintenance CAP SD Product costing Shipping, billing, transport

SAP R/3 : Logistics Overview Application Module: Materials Management (MM) MM The MM application module supports the procurement and inventory functions occurring in day-to-day business operations Material Master Data w Purchasing Inventory Management w Invoice Verification Material Valuation w Consumption based MRP Warehouse Management System SD Application Module: Sales and Distribution (SD) The SD application module helps to optimize all the tasks and activities carried out in sales, shipping, and billing Customer Master Data w Pricing / Conditions Sales Processing w Credit Management Shipping w ATP / Requirements Billing

Mega Scenario MM SD FI CO E M P L O Y E E REQUEST-TO-PAYMENT FORECAST Enterprise resource planning (ERP) systems are the world’s largest and most complex ES. ERP systems focus primarily on intra-company processes—and they integrate functional and cross functional business processes. Typical ERP systems support Operations (Production), Human Resources, Finance & Accounting, Sales & Distribution, and Procurement. V E N D O R REQUEST-TO-PAYMENT FORECAST TO-STOCK ORDER TO-CASH C U S T O M E R MM SD Inventory Control and Planning Vendor Management Contract Management Purchase Order Processing Inbound Warehouse Processing Supply Planning Master Production Schedule (MPS)‏ Capacity Planning Detailed Production Schedule Shop Floor Control Assembly and Packing Demand Forecast Sales Forecast Sales Plan Sales Order Processing Delivery Planning Outbound Warehouse Processing Transportation Planning and Shipment Planned/Unplanned Maintenance Process Quality Check Process FI Business Planning and Performance Measurements (BPPM)‏ CO Human Capital Management E M P L O Y E E

Business Model Reference V E N D O R VALUE CHAIN MODEL C U S T O M E R REQUEST-TO-PAYMENT PROCESSES ORDER/FORECAST-TO-STOCK PROCESSES ORDER-TO-CASH PROCESSES Manage Purchase Requisition Manage Demand Management Manage Quotation PO/LC PO/LC Process Purchase Order Master Production Schedule Process Sales Order Manage Inbound Delivery Run MRP – Capacity and Material Plan Process Outbound Delivery INV/BL DO/BL Verify Invoice Detailed Production Schedule Manage Transportation Process Outgoing Payment (Cash Out) Shop Floor Control Process Incoming Payment (Cash In) Packing Manage Campaign and Promotion Raw Material Finished Goods WAREHOUSES Raw Materials, Packaging, etc Finished Goods BUSINESS PLANNING AND PERFORMANCE MEASUREMENT (BPPM)

ERP Extension or SAP New Dimension As more companies acquired ERP systems, the next step in the evolution of ES was to connect these systems so they could support inter-company processes—that is, processes that take place between and among companies. Examples of inter-company systems are supply chain management (SCM) and supplier relationship management (SRM) systems, which connect a company’s ERP system to those of its suppliers. SCM connects a company to other companies that supply the materials it needs to make its products. Typical SCM systems help companies plan for their production requirements and optimize complex transportation and logistics for materials. SRM systems typically manage the overall relationships with the materials suppliers. SRM systems contain functionality to manage the quotation and contracts processes. These systems act as extensions to the procurement and material planning processes of ERP systems. On the other side of the manufacturing and sales processes, customer relationship management (CRM) systems connect a company’s ERP system to those of its customers. CRM systems provide companies with capabilities to manage marketing, sales, and customer service. These systems are an extension of the fulfi llment process of ERP systems. Product lifecycle management (PLM) systems help companies administer the processes of Research, design, and product management. In effect, PLM systems help companies take new product ideas from the virtual drawing board all the way to the manufacturing facility. The collection of these inter-company systems and the underlying intracompany ERP system is called an application suite. Suite vendors, such as SAP and Oracle, provide fairly comprehensive collections of applications that offer an enormous amount o functionality and cover most of the standard business processes.

ERP Extention or SAP New Dimension It is important to note that one of the key benefits of utilizing a complete suite of software is that the data and processes are integrated among the systems in the suite. That is, although they are separate systems, they are designed so that they work together in an integrated manner A fundamental understanding of the key business processes and ERP systems is a prerequisite to studying advanced topics such as supply chain management and customer relationship management because those processes are extensions of the core ERP-enabled business processes

Reporting in Finance Finance has a major stake in the quality and timeliness of financial information and, to a lesser extent, other operational information as well. It would be a significant source for functional requirements for data to support reporting and analysis. This would include all information required for a number of reporting processes 1. Financial statement preparation. This includes business unit or product-level P&Ls, operational reports, and key performance indicators 2. Management reporting. This includes the standard profit and loss (P&L) and balance sheet, but also the cash flow statement and footnotes, which often require data not usually recorded in the ledger or other ERP modules. 3. Planning, budgeting, and forecasting. In addition to the standard financial statements, these processes often require data related to specific planning drivers, such as commodity prices, interest rates, or other internal and external data .

BUSINESS INTELLIGENCE Business intelligence is a general term that refers to the overall capabilities a company uses to collect and analyze data from a variety of sources to better understand its operations and make better managerial decisions. BI Organisation Hierarchy Type of Decision Technology Low Level Middle Level Top Operational Tactical Strategic Directive Expert System Information System EIS Decision Support System MIS Database Management System Electronic Data Processing [Marimin, 2006] Source : [WIliams, 2007] from “The Profit Impact of Business Intelligence”, Steve Williams & Nancy Williams Source: [Marimin,2006] from Prof.Dr.Ir Marimin Msc, Lecturer at Post Graduate programme , University of Budi Luhur

Business Intelligence Components DataWarehouse Technical Team Business Users OLAP Extract Transform Load Finance Logistic Any Sources Query Report Analyze Mine Visualize Act Operational System Data Warehouse & Integration environment Reporting & Analysis Environment

Development for Analysis Reporting Within Enterprise data warehouse implementation , the Operational User is executing the system, such as create orders, sign up customer, enter new data etc Focus is turn the wheels of the organization: Executive users are watching the wheels of the organization, count new orders, asked why new customers signed up, or how many more reservations there are this year than last year etc. The main activity is to build a centralized data warehouse and capture all transactional data from each division in the organization. Once the information is in the system, the reporting analysis is able to provide analytical information to the top executive within the organization. Typical Enterprise data warehouse implementation project, 50% -70% of project effort will be spent on data integration, transformation and loads into staging or cube. Start from analyzing data sources, capture business rules, create master data to provide transaction data which are not in the system, verify and validate transactional data and provide the ETL mechanism per each stage of Enterprise Data Warehouse design concept. Once the Data warehouse design is in place, reporting analysis are able to produce valid information as required by the business users or the management of the organization.

Data Warehouse and Business Intelligence Data Warehouse Server Business Warehouse Report Server Data Sources Consolidate data for Analysis Front End Layer SAP BW Version 7.xx Transformation Data Store Objects (DSO) Data Source Infocube Source System BEx Queries SD MM Dashboard FI CO Analytical Report PP

OLAP & OLTP SAP ERP provides two reporting options—simple lists of data and documents and analytics. Before we examine these options, however, we need to distinguish between the transactional environment and the analytic environment of SAP ERP . The transactional environment of SAP ERP is an online transaction processing (OLTP) system, which, as the name suggests, is designed to capture and store detailed transaction data. The primary function of OLTP is to execute process steps quickly and efficiently; it is optimized for this purpose. OLTP is not used to generate sophisticated reports because it lacks the computing power to parse through and analyze the vast stores of data that most companies accumulate. Consequently, businesses employ OLTP to generate only simple lists and reports. For detailed data analysis, SAP ERP includes an online analytic processing (OLAP) environment in the form of information systems. Instead of using detailed transaction data, these systems use information structures to provide analytic capabilities. Information structures capture and store specified transaction data in an aggregated and summarized form that enables users to analyze the data as needed

OLAP & OLTP The BI Tools Analyze Plan Act What Will Happen Operational Decisions Why is Happening Why did it happen? What happened? Staging Analyze Plan Act OLTP Staging Measure Decide Staging Staging Operational Systems Manage Users of an OLAP system are watching the wheels of the organization, count new orders, asked why new customers signed up, or how many more reservations there are this year than last year etc …… User of an OLTP system turn the wheels of the organization: create orders, sign up customer, enter new data etc … OLTP: Online Transactional Processing OLAP: Online Analytical Processing

Today’s Problem! Today, companies struggle to bridge the gap between strategy and execution to optimize their business performance Decisions made without context Strategy disconnected from operations Strategy Information locked in silos Misaligned action across organization Execution

Connection Strategy and Execution SAP Business Suite NetWeaver Integration NetWeaver Composition EhP SRM PLM SCM CRM ERP Strategy Execution SAP BusinessObjects Ensure Trusted Information Proactively Manage Risk Create Enterprise Visibility Enterprise Performance Management Governance, Risk and Compliance Business Intelligence Information Management Connection Strategy and Execution Unified information Instant access Ensure Business Insight

Strategy and Execution Business objectives Business areas Affecting KPI Operational Data Increased customer satisfaction Sales & Marketing Sales ERP CRM SCM HR Sales and Operations Planning Streamlined order fulfillment Revenue growth Customer service Order to Cash Efficient complaints mgmt. Customer Service & Complaint Mgmt. Optimized portfolio planning & mgmt. Development Innovation Management Product Development Accelerated product innovation Outcome Action Knowledge Information Increased demand planning accuracy Supply Chain Planning & Exec. Procurement Demand & Supply Planning Lower material & energy sourcing costs Supplier Collaboration Procure to Pay Operational efficiency & cost reduction Profitabilty growth Optimized production planning Manufacturing Streamlined production processes & asset utilization Manufacturing Planning Manufacturing Execution Production Higher product quality Manufacturing Visibility Efficient inventory management (according to best-before date) Quality Mgmt. & Compliance Quality Management Improved batch traceability, batch size optimization Supply Chain Planning & Exec. Distribution Reduced operating costs & increased efficiency Warehouse & Inventory Mgmt. Enterprise Mgmt. & Support Finance Efficient accounting activities Analytics Enhanced auditability Financials Regulatory Compliance Legal / Compliance Decreased cost & complexity of regulatory compliance* Quality Mgmt. & Compliance Quality Management

Integration Business Processes & Complete ERP Solution by SAP Complete view of data Integration from Transactional Processing data into Strategic direction ERP Business Intelligence Measurement EPM Balanced Scorecard Framework Finance Finance Strategic KPI Sales Controlling Sales & Distribution Marketing Data sources Material Management Tactical KPI Logistic Logistic HR HR Human Resources Operational KPI Production Others Analytics Complete view of SAP Product Solutions from ERP ,Business Intelligence Software & Tools ETL EDW CUBE ERP タスク データ フロー タスク Dashboard ETL Scorecard Analytic Reports Agnostic